Good morning, Memphis. Good morning across the country on IHEART radio. You’re on the Real Estate Mortgage Shoppe program and I’m your host, Jo Garner, Mortgage Professional with Evolve Bank and Trust. Co-hosting today we have Tom King, appraiser with Bill King Company.
We want to talk with you about WHATEVER real estate topic you want to discuss. Our general topic is “It’s All In The Numbers- Preparation Is Key To Saving Tens of Thousands On Real Estate Transactions” Get in on the conversation with us by calling < 901 535-WREC 901 535-9732>
(Jo asks Tom) What real estate topics are hot on the appraisal front this week?
<Tom talks about the trends he is seeing in his area of the business and then Tom asks Jo what trends she is seeing on the lending side of the market>
- (Jo) Tom, let’s look at the numbers. After the Employment Situation Report yesterday showed slightly less job creation than expected, mortgage rates slid back down a little bit from the high point they had started on Monday. 30YR FIXED – 4.25 FHA/VA – 3.75% 15 YEAR FIXED – 3.375% 5 YEAR ARMS – 3.0-3.50% depending on the lender
- Construction spending in June fell slightly below that in May the Census Bureau said
- Freddie Mac vice president and chief economist, said, “The housing market realized a significant shift in the second quarter of this year from a largely refinance market to a purchase market. Over 25 million American borrowers refinanced, saving approximately 70 billion dollars in interest costs—and if you have not refinanced—call us right now on the air at 901 535 WREC or call me directly off the air at 901 482-0354—(901) 482-0354.
- Here’s some more numbers: Forty percent of those who refinanced in the second quarter selected shorter term loans and more people pulled some extra cash out on refinances in the 2nd quarter than before. Freddie Mac said that, in light of the wide spread appreciation in home prices over the last two years, both lower rates and shorter terms assure that homeowners are building wealth through home equity acquisition. But not the millennial generation—the population born in the 80’ up through the early 2000’s. They have been noticeably absent from the first-time homebuyer market for some time now.
< Tom talks about the fact that more adult children are living with parents and other reasons why the younger crowd is not as interested in buying as before—saddled with student loans and paying higher taxes—they also remember more of the real estate crash and its fall out than all the wealth built in real estate by the generations before them…>
(Jo) We have solutions the millennial generation—you can buy real estate a with lower prices today and many times can get down payment assistance to help with move-in costs—so not a lot of money needed out of pocket. If you have student loans deferred or, you can get them consolidated and select a very low payment plan to keep from breaking your budget. Team up with an experienced loan officer and an experienced realtor who will lead you around any pitfalls along the way. Besides, the house payment per month is usually LESS per month than paying rent.
(Jo) Talking about numbers— A carton of milk costs $4.00 or $5.00 –the organic kind anyway— and so many people will spend more time trying to save a couple of bucks buying a carton of milk than they will spend trying to lower their interest costs on the mortgage. It’s not that hard—just call your loan officer and let THEM do some numbers for you. Even though more people are BUYING houses right now, refinances are still very profitable options for others. We even have some refinance products that don’t even require an appraisal! If you’re wanting to buy a house, let Susan and me do the numbers for you on the specific house that interests you. We can get the preapproval letter out to you very quickly. My very experienced assistant, Susan Belew, and I would like very much to work some scenarios for you. Just give us a call right now at 901 535-WREC or call us directly off the air at 901 482-0354 901 482-0354 or catch us on the blog www.MortgageLoansBlog.com
(Jo) We’re talking about how a little preparation can save you tens of thousands of dollars on a real estate transaction. Questions you want to ask yourself are, “How long do you plan on staying in the house?” “Do you plan to have any major changes in income over the next 2- to 4 years? Do you plan on having any changes in assets, like the sale of an additional property with a lot of equity? If you plan on staying in the house for over 3 to 5 years and you plan on retiring during that time— what will be comfortable for you on a house note once you retire? If you have a chunk of money coming to your perhaps we can structure your loan on an adjustable rate with some safety caps and once you have paid extra principal for a sizeable amount during the first couple of years, you could actually have your payment reduced significantly even if the interest rates goes up—because on an adjustable rate, your payments are calculated at each adjustment period only on the balance owed which is now significantly less. People have saved tens of thousands of dollars using this trick.
For Example:You start out with a $200K loan at the low rate of 3.5% on an adjustable rate that is fixed for the first 3 years. But you sell a property or get an inheritance or other big chunk of cash and use it to pay down the balance on the mortgage by $75,000 within the first 3 years of the loan. You start out with a principal and interest payment of $898/mo. But when you pay down the $75K to extra principal, even if your rate goes up to the max within the annual safety cap of 5.5%, your principal and interest payment would only be $710/mo because the payment was calculated on the UNPAID balance.
The easiest example of saving money is just converting your 30 year mortgage at a higher rate and go to a lower rate with a shorter term. You can save tens of thousands of dollars just shortening the terms.
As an appraiser, what can YOU do, Tom, to save people who are making real estate decisions?
2nd segment after 9:15 break—
It’s time for the Look Back Memphis Trivia Contest brought to you by notable Memphis historian Jimmy Ogle. Jimmy Ogle gives free walking tours in Downtown Memphis during the Spring and Autumn. Go to jimmyogle.com for the 2014 Spring season schedule and locations. Our Look Back Memphis Trivia Contest SPONSOR is Marlene Foster of ADT Security Services—the number one security system. Give Marlene a call at 901 232-6277. She will take good care of you Marlene is giving away a $25 gift card to the first person who calls with the correct answer to our Trivia Contest. If you know the answer, call us on the air at (901) 535 WREC. (901) 535 9732.
Here’s our trivia question : Who am I? (go to hints)
Garner # 23 07/30/14
Gayoso House
Question:
Hint: I was the most elegant hotel in Memphis in the 19th century!
Hint: My name is the only 18th century name of a Spanish military leader in public use in Memphis still.
Hint: I once housed Haverty’s and Goldsmith’s Department Store.
Last Hint: My first building burned in 1899, but I was re-built in 1901.
Answer: Gayoso House. The Gayoso was built by Robertson Topp, a wealthy planter. He was involved in the development of South Memphis, an area of houses, commercial buildings, and a hotel designed to grace the young city with high architectural style. He commissioned James Dakin to design the structure, which was constructed in 1842. The hotel was named for Governor Manuel Luis Gayoso de Lemos, Spanish governor of the Natchez district.
The Gayoso House became a Memphis landmark, an oasis of luxury frequented by visitors of the city. With its own waterworks, gasworks, bakeries, wine cellar, and sewer system, the hotel offered amenities far beyond those available to the rest of Memphis. The indoor plumbing included marble tubs and silver faucets as well as flush toilets. It’s Greek Revival portico was easily recognizable from the river. In the late 1850s, Topp continued his efforts to bring architectural distinction to Memphis, and hired the Cincinnati firm of Isaiah Rogers to build an addition that doubled the Gayoso’s original 150 rooms. The addition featured wrought iron balconies overlooking the Mississippi. During the Civil War, the Gayoso served as the Union Headquarters during the Union’s occupation of Memphis.
The Apartments at Peabody Place featuring Gayoso House is located in the heart of downtown’s historic block in Memphis, TN. This beautiful property offers incredible architectural details such as exquisite moldings, stained glass, soaring ceilings, original ceramic tile floors and bay windows. With over 24 floor plans, each unit is unique. These fabulous features reflect the property’s original historical character as the Gayoso Hotel.
Last Week: French Fort. The residential subdivision French Fort was established in 1960, but was disconnected from the downtown core during the interstate construction project of the mid-60s. There are about 150 privately owned homes in the neighborhood, with well-manicured lawns and a very quiet environment, to be right in the middle of the I-55, two railroad bridges and Crump Avenue! To access the area, drive west on Crump to Exit 12C (Metal Museum Drive).As we all know, Memphis was founded on the fourth Chickasaw Bluff in 1819. But animals, Native-Americans and European explorers “settled” the area in the preceding centuries. At the highest part of the bluff, on Assumption Day, August 15, 1739, Fort Assumption was erected by Sieur de Bienville, French Governor of Louisiana. This was the first structure built by Europeans in Shelby County, and the third such in Tennessee, and the occupation last only a few months.
Fort Pickering was later established on the south bluffs by the expanding United States in the early 1800s, and was occupied by Union troops during the Civil War. A Marine Hosptial was established in 1885, expanded in 1939 and later became a location for the Army Reserve in the 1990s. The first of three strategic bridges was opened in 1892 in this area. In 1887 a public park named Jackson Mounds open on the site of the two ceremonial Chickasaw mounds and in 1913 was renamed DeSoto Park. In 1995, Chickasaw Heritage Park became the name of the park and in 2012, a statue entitled “Legacies” by Vinny Bagwell was dedicated to the Native-American, Hispanic-American and African-American heritage of Memphis. The National Ornamental Metal Museum opened doors in 1979.
Jimmy Ogle gives free walking tours in Downtown Memphis during the Spring and Autumn.
Go to jimmyogle.com for the 2014 Spring season schedule and locations.
Shelby County Courthouse: Third Thursday each month at 12:00 noon
TUESDAY TOURS: Tuesdays at 11:45 a.m. for about four blocks from a different street corner each week, beginning again on September 16!
Questions answered by Tom King:
- 1. Talk about the different types of appraisals you do such as relocation appraisals, estate appraisals, litigation appraisals and appraisals for cash buyers.
- 2. Which method of determining value do you use when you appraise rental property—the sales comparable method or the income method or both?
3. What improvements can you make to your home that will add the most value dollar-for-dollar?
4. What is a review appraisal and when do you need one?
Questions answered by Jo Garner
- 1. You were talking earlier about ways to save money on refinance transactions but what are some things you can do to save money on financing for purchasing a home?
As a buyer-the shorter the term on a loan the less you pay in interest expense. For instance if you are buying a home with a $200,000 loan on a 30 yr term at 4.25%, after the 30 year term you would have paid total principal and interest payments of $984/mo x 360 months = $354,240 If you get a slightly shorter term of 20 yrs at 4.125% your total payments after 20 yrs would be $$1,225/mo x 240 months = $294,000 a savings of over $60,000 in total payments.
- On the 30 yr you would pay a total of $ 154K in interest alone. On the 20 yr you would pay in total interest cost $94K in total interest expense.
- OR, if you get the 30 yr term with the smallest payment, you can always opt to prepay the principal to get rid of the loan sooner. With just one extra principal and interest payment per year every year, you can reduce the term by about 8 years.
- 2. You have talked about several different ways to get rid of extra expenses on mortgage financing. What are some other tricks you have up your sleeve?
Another rule of thumb for anyone buying a house and getting a mortgage or refinancing a mortgage, try to avoid payment private mortgage insurance. Private mortgage insurance only helps the lender and not you as the borrower—so don’t pay it. On Conventional loans with over 80% loan-to-value, mortgage companies tack on private mortgage insurance per month or in a lump sum up front—your choice. To avoid private mortgage insurance on these loans, you have to put down at least 20% to get the loan amount under 80% of the value or sales price whichever is lower. Or we can work with the bank and do an 80% first mortgage for you and let the bank come in with a 2nd lien loan for 10% of the value or sales price whichever is lower. That would only require that you come up with 10% down payment, your first mortgage is only at 80% loan-to-value and the piggy-back little 2nd lien loan covering the 10% gap. And Susan and I have other solutions for getting you in with no private mortgage insurance for even less money down. Call us and we can tell you about it. Our direct number is 901 482-0354.
3 Saving money by how you write the contract.
If you are a buyer and you want to minimize what you pay at closing, you might consider offering a little more for the house and asking the seller to pay your closing costs and prepaid taxes and insurance. This will save you -dollar-for –dollar in fees. If you’re the Seller, get a copy of the prospective buyer’s transactional summary with closing costs estimates from their lender. This way you can see exactly how much the buyer will need to cover their closing costs and prepaid taxes and insurance. There’s no sense offering to pay up to 6% of the sales price for the buyer’s costs, if the lender shows they only need 4%.
4th Segment 9:45AM REAL ESTATE TIP OF THE WEEK (Tom offers a money-saving or time-saving tip to listeners )
Jo’s announcements:
- 1. Talk Shoppe offers free networking and education to anyone interested in real estate or business. This Wednesday July 30th, 2014 9AM to 10AM “Updated Changes For Realtors On How To Buy HUD foreclosures & Using the Neighborhood Stabilization Program” by Brenda Allen, Broker Realtor at Leaving A Legacy Realty. Talk Shoppe offers these free events to the public at the YMCA Corporate office 6373 Quail Hollow Rd 2nd floor in Memphis at the corner of Massey Rd and Quail Hollow.
For more information about Talk Shoppe go to www.TalkShoppe.BIZ
- Mark your calendars for the YMCA’s Golf Tournament coming up Oct 3 at Colonial Country Club. Proceeds benefit youth serving programs at YMCA’s across the Mid-South. For more information they can call our office at 901.766.7677
- 3. Join us every Saturday on the Real Estate Mortgage Shoppe program. For today’s podcast and others, go to www.MortgageLoansBlog.com We want to hear from you on how we can make our show better. If you have suggestions, call me directly at (901) 482 0354.
Transitional Music: 9:15AM “The Gambler” by Kenny Rogers; 9:30 AM “21” Roger Miller and Dean Martin 9:45AM “Counting Stars” One Republic
Tom King, Appraiser for over 35 years.. (901) 487-6989
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Jo Garner’s Bio
Jo Garner is a mortgage officer with extensive knowledge in tailoring mortgages to her customers who are refinancing or purchasing homes all over the country. She offers conventional, FHA, VA or other loan programs for refinancing and purchases.
Jo can help you look at rent vs buy, when it makes sense to refinance, how to get the best deal on your home purchase financing.
Jo Garner has been in the real estate/financing business for 25 years in Memphis, TN. She got her start in Portland, Maine where she first began her real estate career. She received her real estate education from the University of Southern Maine and was personally mentored in San Diego, California by Robert G. Allen, author of Nothing Down, Creating Wealth and The Challenge.
On moving back to West Tennessee in 1987, she went into business buying and selling discounted owner-financed notes secured on real estate. In 1990 Jo went to work for a residential mortgage company and has been a mortgage loan officer for over 20 years. Her goal is to offer excellent, affordable service to her customers, tailoring the loan programs to the specific needs of her clients.
In addition to her work in the mortgage field, Jo Garner is the primary sponsor and founder of Talk Shoppe in Memphis. She hosts the Real Estate Mortgage Shoppe program on News Radio AM 600 WREC in Memphis and on IHEART radio 9A to 10A CST every Saturday.
For real estate financing solutions, plug into the Real Estate Mortgage Shoppe program. You can find mortgage rates, FHA Streamline refinance with no out-of-pocket costs, refinancing options, home purchase loan programs, answers and real estate, money-saving tips and more.