Good morning Memphis! Good morning IHEART listeners around the country! You’re on the Real Estate Mortgage Shoppe program where we are talking about “Mortgage Rates & Tax Rates Shake, Rattle & Roll—Taking A Calm Course of Action.” But we want to talk with you about WHATEVER real estate or financing question or challenge you have. Give us a call on the air at 901 535-WREC or 901 535 9732. I’m your host, Jo Garner, mortgage professional with Evolve Bank and Trust. Our co-host today is Tom King, certified Shelby County Real Estate Property Tax Appeal Expert with King and Vaughan Consulting.
Up until this week, mortgage rates were shaking and rattling in June and July but this week August 5th through August 9th 2013, we slipped into an even roll. The shaking was going on starting with the June 19th Federal Reserve meeting when investors realized how much the market would react to the Fed was going to taper off buying into the mortgage securities market. Mortgage rates went into convulsions and spiked up faster than any time in the mortgage history of mortgage rates. Since June 19th the rates have moved up and down and yesterday the 30 yr rate was lower than it has been since July 23rd. 30 year fixed rate loans are around 4.375% to 4.5% with no points. You can get a lower rate if you want to pay a little more.
30YR FIXED – 4.5% FHA/VA – 4.25% 15 YEAR FIXED – 3.625%-3.75% 5 YEAR ARMS – 3.0-3.25% depending on the lender The Friday after Labor Day should cause some more rattling of the market when the August Employment numbers are released.
Tom the two most common customer calls I am getting lately are for people wanting to do a cash out refinance on a fixed rate where they get money back at closing to reinvest somewhere else. These homeowners are either paying off other higher interest rate debt or they are taking the money to invest somewhere else to MAKE more money. Others are taking the money out of their homes to use to buy more real estate.
Which brings me to the next group of customers. The prices on houses are still very reasonable and with rates still in the 3’s and 4’s, you can get a great deal buying a house with payments still very low compared to a few years ago. Here is a perfect example: In 2006, at the height of the real estate boom, you could buy a house for a median price of $250,000 paying 20% down with an average interest rate of 6.75% for a fixed rate 30-year term. Your principal and interest payment on the loan would have been about $1,300 per month. Today buying the same house at a median price of about $204,000 with a 30-year fixed rate of 4.5% no points with 20% down would give you a principal and interest payment of about $827 per month—that is $475 per month LESS than you would have paid for the same house in 2006. $475/mo less in payments for the same house times 12 months is $5,700 per year in savings year after year. THAT is recognizing the unique opportunity we have today to purchase a home with very comfortable terms.
Tom, one of my specialties is to take the time to find income on the tax returns for my self employed borrowers. Over the last few weeks we have been able to approve and close loans for self employed borrowers that had been turned down at other companies. Realtors have called me distraught because their client was turned down by another mortgage company shortly before it was time to close. They’re saying “please help my client.”
Nothing like the pressure of having the moving company scheduled to move your stuff, your boxes are packed and your lender calls to say “oops, sorry, you don’t make enough income to qualify for the home loan.” If you have good credit and you’ve been turned down by a bank for your home loan, CALL ME . You can reach me directly off the air at 901 482 0354. That number again is 901 482 0354 You can also connect with me on my blog www.mortgageloansblog.com
I have plenty of success stories to share about helping customers with good credit get their loans approved even after they have been turned down somewhere else—especially when it comes to self-employed borrowers or people with convoluted tax returns. You need an experienced loan officer who knows how to dig and find income. Sometimes the answer is just realigning the debts.
Yesterday a business owner sent me all pages of his personal and business tax returns for 2011 and 2012. Since his income dropped in 2012 from 2011, we needed a preapproval that would only require the last year’s tax return and not a full 2 years. Fannie Mae, in this case, was requiring 2 year’s tax returns but Freddie Mac, on this loan, only asked for 2012. Voila’, we had our preapproval on terms very favorable to my client. If you are refinancing or purchasing a home, you need an EXPERIENCED loan officer who knows how to keep you rolling to your closing with very few bumps in the road.
(Jo says) Tom, the tax rate going up recently on our Shelby County properties has caused some Shaking and Rattling. I think you just finished appealing several hundreds of properties. What comes now for those homeowners?
Questions answered by Tom King:
1. The national stats say that sales are up 14% on real estate sales an some realtors are reporting that in some parts of Memphis values are going up. What is your opinion of real estate values in the Memphis area?
2. This is the time of year when we focus on the King of Rock n Roll Elvis Presley. Didn’t you appraise Elvis’s house at one time?
3. What if you have appealed your taxes by the deadline? What comes next?
4. What specifically is the time line on a tax appeal?
Questions answered by Jo Garner
1. How do you advise your mortgage customers during a rising interest rate environment?
If you are purchasing a home, if it is possible without killing the deal, ask the seller to pay the maximum allowed for your closing cost and prepaid taxes and insurance. If I recently had a young couple in my office and they were buying their first house. Since their budget was tight they insisted on a payment not to exceed “x” amount. In order to keep their payment within their means, ,we needed a lower rate and it was going to cost close to 1% of the loan amount over and above normal closing costs. Since the price of the home was close to $100,000, 1% of the loan amount would have cost them a wopping $950 extra—and that was money they just didn’t have. BUT, when we read through their home purchase contract, it said the sellers were willing to pay the maximum of 6% of the price of the home toward the buyer’s costs. . Much to the buyer’s surprise the amount the seller agreed to pay on their behalf was enough to pay ALL of their closing costs, prepaid property taxes and homeowners insurance with just enough left over to cover the extra 1% needed to buy the rate down.
My customers got the payment they wanted for no extra money out of THEIR pocket. If it is someone else besides you paying the costs to buy down the rate, then go for it—it doesn’t matter how long you’re staying in the house—you’re not paying the points anyway. But if you did have to pay that, let’s say, 1% to get the rate down, it normally takes roughly 5 years to recapture your investment. Call me and I can do these quick calculations for you. Call me directly at 901 482 0354. 901 482 0354.
2. What are some tips you can offer to keep my mortgage process smooth?
A. Work with an experienced loan officer. Beware of working with a mortgage officer on a 1-800 number. So many times these are people who know only a little about the mortgage business and aren’t qualified to work out bugs on your credit or your tax return. They are either inexperienced or just too busy taking new business.
B. When the loan officer or processer asked you for supporting documentation, get it to her within 24 to 48 hours. You may think you have plenty of time before your closing date, but it takes time in processing and underwriting and if you run up on an unexpected snag, you need time to work it out and still close on time.
C. Lock in on a rate that provides terms that help you meet your goal. If the deal works for you today, do it today.
BRING OUT MAGIC BINOCULARS
Markets have been shaking, rattling and rolling for thousands of years. We can learn so much from our own history. We can learn so much from the people who were in the marketplace long before we came along.
For those of you who have been regular listeners on the Real Estate Mortgage Shoppe program, you know about our magic binoculars. If you look through one end, you can see glimpses from way back in history. If you look through the other end, you can vaguely see into the future.
Tom, there has been a lot of publicity about the Rowland Jones Darnell House, otherwise known as the Nineteenth Century Club property. This is the historic Colonial Revival home built around 1907 that is about to be demolished if Memphis Heritage organization is not able to raise enough donations by Monday to fight the demolition. Let’s look back into history sometime around the early 1900’s and see if we can focus in on the 19th Century Club property.
While Tom is adjusting the lenses and trying to get us focused, let me share some interesting facts about Mr. Darnell who built the Rowland Jones Darnell house that is News right now.
Mr. Darnell built the Rowland Jones Darnell house around 1907 at 1433 Union Ave Memphis, TN . He was born in 1864 and died in 1916 at the age of 62 with a heart disorder.
Leading lumber dealer of Memphis, Tn.
President Darnell-Love Lumber Company Leland, Ms.
Member of the National Lumber Exporters Association
Vice president of the local lumberman’s club
Member of Tennesse Business Mens Chess, check and whist clubs
The members of the National Lumber Association set some very important guidelines for lumber inspections, rail and river transportation that have been bedrock for the developments for this industry today. They set rules for ethics and also set up guidelines for international lumber trading. Memphis, TN was the lumber capital of the nation at that time.
Wow, Tom, that looks like Mr. Rowland Jones Darnell himself standing under the magnificent front porch with several gentlemen in dark suits with the high shirt collars and ties. Wow some of those guys look really young—and very handsome all dressed up like that. From what we can see and barely hear, it sounds like they are about to go into Mr. Darnell’s home for a meeting of the lumber association. These gentlemen sure are young to be presidents and treasurers of major companies and lumber organizations.
If you want to make a contribution to help keep Mr. Darnell’s 1907 historic home intact and available as a reminder of our history contact the Memphis Heritage Organization at 901.272.2727 or visit them on the web at memphisheritage.org.
Real Estate Tip of the Week-
People tend to want to run out and pay off a bunch of debt first before they go see their loan officer about qualifying for a loan. Its sort of like staying up all night before the cleaning service you hired comes to clean your house the next morning. Not good strategy. My tip of the week is to leave your finances just like they are. Let an experienced loan officer look at your debt-to-income ratios and your assets. Most of the loan underwriting software programs put much more priority on the borrow having money in the bank rather than a lower debt-to-income ratio. So don’t go pay off debt. Let the loan officer help you with a plan that will help you get the deal you want on you financing.
Jo has two announcements: Talk Shoppe offers free education and networking to anyone interested in business or real estate. Talk Shoppe meets at DeVry University 6401 Poplar in Memphis every Wednesday 9A to 10A . This Wednesday Jeremy Veldman of Memphis Cash Cow will be talking about “Build Your Customer Base Using Automated Systems.” For more information about Talk Shoppe go to www.TalkShoppe.BIZ
Next Saturday right here on the Real Estate Mortgage Shoppe program Pat Goldstein, voted # 1 real estate associate of the year, will be giving us tips on how to get the best deal buying or selling your home.
Transition Songs: “All Shook Up” by Elvis Presley; “Shake, Rattle and Roll” by Elvis Presley, “Whole Lot of Shakin Going On” by Elvis Presley
Jo Garner’s Bio
www.MortgageLoansBlog.com www.MoneyShoppe.NET (901) 482 0354 jogarner@mindspring.com
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 over 20 years. 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. www.TalkShoppe.BIZ She was also the editor of Power Shoppe, a free weekly ezine designed for real estate professionals and others indirectly connected to the real estate industry and currently publishes on her blog www.MortgageLoansBlog.com .
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.