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Good morning, Memphis! You are on the Real Estate Mortgage Shoppe program with me, Jo Garner, Mortgage Officer with Evolve Bank and Trust. Our co-host today is Attorney Ron Cohen affliated with Ballin Ballin and Fishman and co-owner of Premium Title company.
Ron, you have been offering solutions to some of our listeners with their real estate title challenges. Tell us a little about yourself and what you do.
Our featured guest today is Tom King, a certified Shelby County property tax appeal expert with King and Vaughn Consulting. And you are also a real estate appraiser with about 35 years experience. Tell us a little about yourself and what you do.
Ron is going to be talking about real estate boundary lines and easements today. I think Ms. O’leary’s cow may wander in for a moment later in the show. This cow has been on this show before and tends to ignore property lines and engages in trespassing at out hours of the night.
Our topic today is “Mortgage Limits, Boundary Lines Can Help With Neighbors & Strangers” But whatever you want to talk about–if it is connected to real estate, your mortgage, your credit–we want to talk with you on the air about it. Give us a call at (901) 535-WREC. That number again is 901 535 9732.
(Jo) Believe it or not mortgage rates reached another record low this week when the Federal Reserve started their aggressive purchasing spree of mortgage-backed securities—$40 BILLION dollars per month buying spree. It is true that the contrived demand for these bonds are pulling mortgage rates down, but rates could be even lower if Fannie Mae and Freddie Mac, the largest purchaser of mortgages, had not been forced to raise their fees on newly originated loans. And in November Fannie Mae and Freddie Mac are being directed to raise the fees on their mortgages again, adding approximately $100 to the cost of a $100K loan.
The 30-year fixed-rate mortgage fell to 3.25 percent from 3.81 percent. The 15-year fixed-rate mortgage fell to 2.75 percent from 3.04 percent. The 5/1 adjustable-rate mortgage fell to 2.69 percent from 2.75 percent.The 30-year fixed jumbo rate fell to 4.32 percent from 4.36 percent.
(Jo) The extraordinarily low mortgage rates are a huge benefit to homeowners and home buyers getting their home financing at a fraction of the interest costs of what the normal market would pay. That is, the low rates are benefiting those homebuyers and homeowners refinancing who can QUALIFY for these loans. The tightening loan restrictions are presenting challenges to more and more homeowners and purchasers.
My very capable assistant, Susan Belew and I have some solutions to some of the challenges but in some cases it is a waiting game for borrowers with credit issues or borrowers with too much debt and not enough income.
Word to the wise: If you qualify to purchase a home today, if you qualify to refinance a home today—do it today.
Word to the wise: Give us a call. Let’s take a few minutes to review your financing goals on that purchase loan or refinance. We can do the numbers and see what it will take to make the transaction a success story for you. To reach me directly OFF the air, call me at 901 482 0354. That number again is 901 482 0354.
The Home Affordable Refinance Program is still a popular request from homeowners who are underwater on their mortgages and even homeowners who are NOT underwater because the appraisal value is not an issue on this program. Even if you owe more on your house than the house is currently worth, you can still take advantage of rates in the 2’s and 3’s and 4’s. If you want to see if you qualify for this program, just call me at 901 482 0354 and Susan and I can do a quick evaluation for you and give you a good estimate of your rate and terms.
FHA Streamline refinances and VA refinances are other ways to refinance without worrying about the value of your home.
There is a saying that “Cash Is King”. Well, cash out refinances are becoming more popular these last few days. People who have quite a bit of equity in their home are opting to refinance and take cash out from the equity with loans in the 2’s and 3’s on a fixed rate. They plan to use the extra money to invest in real estate properties or for investing at a higher return in other places. It looks like they will win big if inflation eventually takes off.
Home purchases have been picking up in the Mid-South. We are gradually converting from a buyers market to a sellers market in many areas.
Our topic today is “Mortgage Limits, Boundary Lines Can Help With Neighbors & Strangers” Attorney Ron Cohen is here today to answer your real estate legal questions. Ron, how do boundary lines and easement lines affect our properties?
Questions for Ron Cohen to answer:
1. What is an easement and what is the difference between an easement and a license?
2. How would a homeowner go about determining where their property boundary lines and easements are?
3. Do you recommend getting a survey if you are purchasing a home?
4. Do you have a story from your past customers of dealing with the easement and boundary line issue?
Questions for Tom King to answer:
1. How have you seen where boundary lines, easements and licenses affected appraisal values on homes you have appraised in the past?
2. Tom shared a couple of stories about how boundary lines affect appraisal values. One example was of a homeowner whose land was landlocked from the road by two other properties. Because there was no firm license of egress and ingress the value was dropped by 75%.
3. Tom shared another story of how appraisal values are effected by easements, boundaries and licenses.
Questions for Jo Garner to answer:
1. You were discussing the fact that mortgage regulations have been tightening. How is this affecting borrowers today?
A. First of all, when a borrower runs into difficulty with a loan regulation, Susan and I try and find ways to get around a road block. There is usually an alternative to help make the loan work.
B. Funds to close must be properly verified in order for the borrower to use the money. For instance, you can’t use money you’ve hidden under the mattress anymore. The money you use must be verified in a bank account -yours or the bank account belonging to the person who is giving you the money. If you have large deposits other than payroll showing on your bank statement, you need to document the source of those deposits. Susan and I work with your bank to help you document that.
C. For instance, we have had a few customers whose last 2 years tax returns showed a loss from a side business they ran outside their primary job. A few times we have been able to add some of the expenses back to income such as depreciation, which is just a paper loss. Other times we have been able to add a co-signer or in come cases we have had their CPA write a letter stating that the side business was closed so we do not have to count the loss at all.
D. Credit can be a challenge. Each loan program has a minimum limit on credit scores. For some of the down payment assistance programs the minimum score is 620. For other programs the minimum is 640 and so on. If a borrower has a score that is too low for one of our programs but is fairly close, Susan and I can do a Credit Simulation for our customer to get an idea of what they need to pay down or what they need to do to get their credit score the highest with the least amount of investment and in the least amount of time.
2. Give us an example of what you can do for some homeowners out there with our current rate environment?
Here’s an example of a borrower who owed about $150,000 on their mortgage. The original balance was around 165,000 with a 5.75% rate on a 30 yr loan with a principal and interest payment of $963/mo. If the borrower wanted to refinance to another 30 yr loan to save cash flow, then their new rate on a 3.5% interest rate would be 674/mo–a monthly savings of $289/mo. If they had decided to shorten the term to a 15 yr, their principal and interest payment would be $1,018/mo ($55 higher than they are paying now but they would save tens of thousands of dollars over the term of the loan-40 something thousand dollars.
Tom King of King and Vaughn Consulting has helped a number of our clients by appealing their property taxes and getting a further reduction in their house payments by lowering the property taxes.
Attorney Ron Cohen, co-owner of Premium Title has saved my customers an average of about $250 to $500 off normal closing costs because of their competitive pricing structure.
Over all -its fun to be in the mortgage business right now because of what we can do to help people.
3. story of the homeowner who added on to their home here in Memphis without a permit and without checking the survey on their property. They discovered too late that the family room they added with the brick fireplace —the addition sat over a MLGW utility easement. If MLGW needed to access through that easement, the whole end of the family room addition would need to be torn down. Oops!
Real Estate Tip of the Week: Ron Cohen to offer his advice to be alert and be informed. Review the seller’s survey before you purchase the property or order one yourself.
Jo Garner to make two announcements:
Talk Shoppe offers free education and networking to anyone interested in real estate or business. The Talk Shoppe events are held at the Better Business Bureau and this Wednesday 9AM to 10AM they are hosting the City-Wide Networking Party where you can build your business contacts. Talk Shoppe is hosting and the Small Business Chamber, Business Over Coffee, NuAge Networking and National Association of Women Business Owners will be there. For more information go to www.TalkShoppe.BIZ
Next Saturday here on the Real Estate Mortgage Shoppe program we will have Lynn Lanigan of Lanigan World-Wide Moving company. She’s going to give us some tips on how to Move On Up more efficiently and cost-effectively.
Rons’ notes:
An easement is a right to use the land of another.
License:
A license is permission to enter the land of another for a particular purpose.
An example is a theatre ticket.
Easements are usually written.
Licenses are usually oral.
Easements are usually permanent.
Licenses are usually temporary in nature.
Easement usually run with the land.
Licenses are usually personal to the licensee.
Easements cannot be revoked, but licenses can.
Creation of Easements:
Easement are usually by grant (like in a deed) or agreement.
Examples of easements:
Party walls.
Implied Easements:
Example of implied easement:
Underground sewer line on Lot 1 passing to catch basin on Lot 2. Sale of Lot 1 creates an easement across Lot 2 to access the catch basin.
Easement of Necessity.
Example:
Ingress and egress.
Scenic easements.
Conservation easements.
SO WHO NEEDS TO KNOW ALL THIS STUFF???
Well, here comes Mrs. O’Leary again bounding across your property with her doggone bell ringin cow in the middle of the night disturbing your much needed beauty rest.
What to do, what to do.
Last month you chased her off of your property by pulling out your warranty deed and informing her that you own a covenant of quiet enjoyment. But now, she has returned with a copy of an easement agreement.
Holy cow! What are we to do?
After you rub the slumber out of your eyes, you examine the agreement closely only to discover that the easement merely allows her to travel over the eastern portion of your property where the driveway is located. Problem solved. See ya later Mrs. O’Leary and take your cow with you.
Jo Garner, Mortgage Loan Officer Evolve Bank and Trust (901) 482 0354 jogarner@mindspring.com www.MoneyShoppe.NET
Tom King of King and Vaughan Consulting 901 487-6989 Shelby County real estate property tax appeal experts
Ron A. Cohen
Of Counsel: Kusper & Raucci, Chartered
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