February 16, 2012 By Leave a Comment
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A good article from KCM about why interest rates are slightly higher.
Before the end of the year, Congress and the President agreed to extend the payroll tax cut. In that bill, there were two items of interest for those involved in real estate.
1.) The hike in the Guarantee Fees charged by the GSEs Fannie Mae and Freddie Mac.
The 10 basis point increase in the fees has translated to a .375% to .5% increase in mortgage rates for conventional loans. Many customers who started their loans a couple of months ago are being “surprised” with higher than expected rates. Heck, everything you read in the papers says rates are at historic lows and will likely stay there through 2014. Many consumers feel as if their lender is being unscrupulous. However, your lender has fallen victim to the increase in Guarantee Fees and how the secondary market is passing on the cost. What looks like possible lender greed is just a passing on of the increased expense imposed by the government. Sadly, the increased revenue isn’t even being used to help aid an ailing Fannie Mae or Freddie Mac. It is being turned over to the US Treasury to cover the temporary extension of the payroll tax cut.
2.) Permission for HUD to increase the insurance premiums they charge on FHA loans.
If you remember, HUD charges two insurance premiums – a monthly one and an up-front one that is usually added into the loan. Most recently, they reduced the up-front mortgage insurance premium (UFMIP) and dramatically raised the monthly fee (MMIP). It is widely anticipated that, maybe as soon as April, we will see a hike in the UFMIP with no adjustment to the MMIP. While this will help shore up the reserves in the insurance fund, it will simultaneously make buying a home more expensive. No one knows the effective date or amount of the increase. Buyers should look to buy before the increase in fees.
We always hear how our government officials tuck away things in their bills. In this case, while the headlines during the holidays praised Washington for preserving the payroll tax cut, they may have hurt us more in the long run.
by DEAN HARTMAN on FEBRUARY 16, 2012
A Unique Video About Money
December 7, 2011 By Leave a Comment
This is a unique video that shows all of the flights in the world over a 24 hour period. All we ever hear is how people do not have money to do anything such as buying a home, buying a car, buying anything. Well it takes money to fly. No one having the ability to buy a home is a mindset that we need to get out of our heads.
Is this video a funny/unique way to show that there people out there with money…yes it is. I hope it helps. It’s also kind of cool to see all of those planes in the air…
Is Now The Time to Buy Investment Properties in Atlanta?
July 19, 2011 By Leave a Comment
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I am not able to see into the future. If I could, I would be rich and retired right now. I do believe that in the future, real estate; especially here in Metro Atlanta, will go up in value. Let’s call that an educated guess.
I can no more call the real estate bottom than I can call the bottom of the stock market. However, I do believe we are either very close or already there. Of course, we will not know when the bottom is until we have moved past it.
I am a believer in real estate and investing in real estate. I think if you have the time, money, knowledge and the “want to”…it is a great time to buy investment homes here in Atlanta.
A couple of things you should know when buying an investment property:
- You will need a 20% down payment. 25% down will get you an even better interest rate.
- You need a minimum credit score of 640. The lower your credit score, the higher your interest rate.
- My belief is that single family homes are better investments than are condos. I have nothing against condos, that is just a personal thing with me and my money.
- I believe it is a great time to buy a home, keep it and rent it. There are a lot of high quality renters out there right now. Those are the folks who can’t qualify for a mortgage (there are a lot of them) but are gainfully employed and will make a good renter.
- Flipping is very hard to do. Mainly because it is so hard for the buyers of a flip to get a mortgage. There are many obstacles to get a mortgage for a flip, too many to discuss in this blog post.
So find yourself an excellent real estate agent ( I can help you find one), a good lender (me) and start your investment property portfolio today!
Why It’s a Good Time to Refinance Your FHA Mortgage
July 11, 2011 By Leave a Comment
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It is a great time to refinance your FHA mortgage for several reasons.
- Interest rates are low…really low.
- You can save hundred of dollars each month and thousands of dollars in interest over the life of your loan.
- If you are underwater on your home, you don’t have to get an appraisal if you can pay your closing costs and prepaids out of pocket.
- Did you understand the part about not needing an appraisal!!! If not, please call me today!
I would love to help Atlanta homeowners save money each month and improve their standard of living and/or just help to make life a little easier as far as making ends meet each month. Oh yea…did I mention the no appraisal part?
If you need to save some money each month…let me help!
What to Expect When Getting a Mortgage in Atlanta
July 6, 2011 By Leave a Comment
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When buying a home there are several things you need to be prepared to do. This applies if the home is located in Atlanta, West Cobb or elsewhere in the state of Georgia.
- Have two years worth of W-2′s. If you are self-employed or have commission income which is over 25% of your income, you need to show two years worth of tax returns.
- Have one month’s worth of pay stubs.
- Show two months worth of bank statements…all pages even if blank.
- Be able to document any deposits in your bank statements that are not easy to identify (automatic payroll deposit/tax refund, etc.). This part can be a pain for people who tend to have a lot of cash deposits that are larger than $250 or so.
- Have a credit score higher than 640. Your credit score will have an effect on your interest rate. FHA and VA loans are not as credit score sensitive as conventional and Jumbo loans.
- Be patient. Your loan officer wants to help you close your loan. I will not ask for documentation or items that I do not need.
It requires more documentation than ever to obtain a mortgage these days. Fannie Mae, Freddie Mac, HUD and private lenders require more documentation than was ever needed before. That is the reality of today’s mortgage environment. The good news is that interest rates are super low and you will get a great purchase price on your new home.
Let me know if I can help or if you have any questions.
Buying a Home if You Are Self-Employed
May 15, 2011 By Leave a Comment
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One of the hardest things to do in today’s mortgage environment is to qualify for a loan if you are self – employed. It’s not that self – employed borrowers are high risk or automatically have credit problems. Quite the contrary, a lot of people who own their own business are successful, make a good living, have excellent credit, etc.
The problem is being able to show enough income so that you can qualify for a mortgage. Like all Americans, self-employed individuals want to take advantage of any tax breaks available to them. If you are an S-corporation, there are a lot of tax breaks available to you that are not available to the average W-2 employee.
Someone who is self-employed may actually make well over $100,000/yr. However, after they take advantage of the tax breaks available to them…they might only show income of $45,000/yr. They might be able to qualify for a mortgage; but it might not be the amount they want to borrow due to the lower income which must be used to qualify the borrower.
In the past we could do a “stated income” loan. The borrower states his or her income (real income) and pays a higher interest rate so that they do not have to show their income taxes, and the lower income after they take their tax breaks. These loans are no longer available due to government reform. Politicians call them liar loans these days. I feel they were good loans when used in a responsible manner. Telling your real income is not a liar loan…and individuals should not be punished for taking the same tax breaks that companies are allowed to take.
As with most things related to the mortgage industry, things are cyclical. The pendulum has swung too far one way, after being too far the other way in the past. Hopefully in the not too distant future, we will get things back to the middle where they should be.
Then we can hopefully get self – employed buyers back into the market in a big way!
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