Tennessee Mortgage Professional, Brian Short, demonstrates why it is important for mortgage loan customers to use a mortgage professional who will not be simply guessing when it comes to very important final numbers on any mortgage transaction.  www.ProMortgageMatters.com

Tennessee Mortgage Professional, Brian Short, outlines why it is essential for home loan mortgage borrowers to utilize the services of a state licensed mortgage professional to secure their home mortgage.

How many times have you gone out to look at a possible house to buy and discover that you like everything about the house BUT – the windows, the flooring, the size of the closets, the way the bonus room is finished out (or not finished out) or the number of bathrooms? How many times have you thought, “There is no reason to move? We could just stay here in this house for 5-10 more years. Everything about this house still fits our needs BUT – the age of the kitchen and bathrooms, the size or number of bedrooms, the roof and siding need replacing, or the basement still leaks.”

What many homeowners and homebuyers don’t realize is that there is a loan available which will allow for the cost of repairs or renovation to be “rolled in” to a new loan used to buy or refinance an existing home. This loan is referred to by the Federal Housing Administration (FHA) as the 203k loan but I like to call it the “BUT Loan” – for those who like everything about that house – BUT…!

Just think about your current home. Would you like to update the kitchen with granite countertops, new appliances and the latest cabinets? What could you do to your master bathroom to make it more useful or roomy when you both are getting ready for the day or to make room for your Jacuzzi tub which would help you unwind at the end of a busy day? Do the kids need an extra bathroom now that they are getting older? Do you love your neighborhood and everything about your location but desire to build a new master bedroom or family room to give your growing family the space they need?

Have you been shopping to buy a new house closer to work or the schools you like but can’t find a house which has what you need? Are you hoping to move out and far away from the rush of the sprawling city but are only finding old farm houses and houses which are very dated?

The FHA 203k – or the “BUT Loan” will allow you to borrow the money you need to make the house you are considering your DREAM HOUSE since you will be allowed to have the extra money upfront to contract with skilled workmen who will come in and kick out all of the “BUTS” which are keeping you from loving your house. The appraiser will assign the value of your new loan based on the final improved condition of your house after the repairs and renovation is complete. Matter of fact, if you are buying a new home you can even roll in the mortgage payments – up to 6 months – if you are unable to live in you new house while the rehabilitation is being completed.

The down payment on the purchase of a house using the 203k would still only be 3.5% of the improved value and if you are using the this loan to update or improve your current house this entire project could likely be completed at no out-of-pocket cost to you as a home owner except for an appraisal which would cost less than $500 and could likely be refunded at the closing. All other costs could likely be rolled into the new historically low rate loan.

Do you know of family members who are hoping to buy a foreclosed house at a great low price but keep finding houses which are beat up, stripped of the appliances or in dire need of repair or updating? The FHA 203k will make their dreams come true when they find out that they can pick out their own cabinets, counter tops, appliances, flooring, siding, paint and wallpaper and not have to drag out these projects over the next 1-3 years. They can have all of these updates and repairs completed even before they move in and roll all of these costs into their low rate 30 or 15 year mortgage.

This loan takes only a couple of weeks longer to close than a normal purchase or refinance loan to make sure all of the repairs have been carefully calculated and the work has been outlined in detail. Nearly any house would qualify for this “BUT Loan” and many borrowers – even those with some credit blemishes in their past – will qualify for this loan when they might have difficulty getting a conventional loan – with no money allowed to pay for the repairs.

If this sounds like something you might want to know more about check out the website: www.REbuildTennessee.com for more details and some “before and after” photos of houses which have benefitted from the “BUT Loan”. Happy dreaming!

Brian Short (NMLS # 168856) is a nationally certified, state licensed mortgage professional with over 13 years of experience as a “Dream Maker and Problem Solver” in middle Tennessee who works for AmeriFirst Home Mortgage (NMLS # 110139). He can be contacted through his website: www.ProMortgageMatters.com.

Unless Congress prohibits these proposals, beginning October 1, 2011, each of these 13 counties, including Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, Wilson, will see their maximum FHA loan limit decrease $39,200 to a new lower maximum FHA loan limit of $393,300. 

Counties Affected by Possible Decrease in FHA Loan Limits for Loans

The current FHA maximum loan limit in these 13 counties was set at $432,500 in 2008 as a part of the Housing and Economic and Recovery Act during the waning days of the Bush administration in an attempt to stabilize the fragile housing and credit industries. 

This 9% decrease in FHA maximum loan limits in middle Tennessee will affect less than .5% of all of the FHA loans being originated in these middle Tennessee counties.  HUD decision to lower these maximum loan limits is an attempt to ward off the Republican critics in the US House of Representatives who are proposing changes to the FHA mortgage insurance program to limit the expansion of the risk of taxpayer supported programs in hope that private players and investors will re-enter the mortgage industry to replace what the Federal Government discontinues subsidizing.

Last year 32,126 FHA loans were closed in these 13 middle Tennessee counties and the new decrease in loan limits would have affected 138 of those transactions.  The argument could be made that Tennesseans borrowing more than $393,300 to buy or refinance a house would have been able to use other loan programs or that other non-government programs would be developed if FHA would move out of this particular high-end market.  Statistically, these higher-end mortgages have preformed much better than the lower-end mortgages but HUD would argue that these loans are not part of their stated mission to target “lower and middle-income borrowers” when they are using taxpayer money to operate a program insuring home mortgages at more than 150% higher than the Area Median House Price.

What is the expected outcome of such a move if Congress does not block these proposals for home buyers in Tennessee? 

Minimal.  Most first-time home buyers or home buyers with a scarred credit profile are not buying homes $400,000+ homes with only a 3.5% down payment as currently required by HUD for FHA insured loans. 

The initial potential panic caused by news reports of such proposals may cause a handful of buyers to get off the fence to get approved for their high-end FHA insured mortgage in order to beat the October 1, 2011 deadline but because so few Tennesseans will be affected by this proposal, only 138 in 2010, the Tennessee Congressional Delegation would likely not support any legislation thwarting efforts by HUD to continue to solidify the government supported mortgage insurance program – especially if these changes will affect only a few wealthy Tennessee home buyers.

Sgt. Joe Friday (Jack Webb) from 50's & 60's hit TV show Dragnet

Buying a home has always been a big decision. But for some people today it’s a difficult decision because of all the conflicting information coming from the media. To make matters worse, that information is often outdated…or even inaccurate.

If you know anyone who is thinking of purchasing a home this year, please share the following information with them:

FACT 1. Mortgage options are still plentiful for borrowers with good credit scores and documented income. All assets & income will need to be fully documented in most all cases for the past 2 years.

FACT 2. There are still programs available, like FHA, that allow as little as 3.5% down payment, and many others that allow less than 20% down.  VA Loans still allow an eligible Veteran to buy a house up to $417,000 with $0 down payment!

FACT 3. Jumbo mortgages are still available on loan amounts even in excess of $2 million dollars.

FACT 4. Vacation/second home financing can be obtained with as little as 25% down, even with jumbo mortgages.

FACT 5. There are FHA Renovation (203k) Mortgages available which can be used to update or repair an existing home. Small projects (under $35,000) can usually be done in such a way where the homeowner or buyer can use up to one-half of this money upfront to purchase materials and then pay the contractor once the project is completed. 

FACT 6. Senior citizens can use their current equity in their home and actually relocate and buy a house and have NO MONTHLY PAYMENT on their new home for the REST OF THEIR LIVES.  The FHA Reverse (Home Equity Conversion) Mortgage can be used by those 62 years of age or older to refinance their currnet home or buy their idea retirement home.

FACT 7. As of today, rates on most mortgages are still at historically low levels when compared to the last 30 years.  Every indication is that rates will likely begin to increase before the end of 2011 – so delay if low interest rates are desired.

FACT 8. Most homes are selling at a big discount relative to 5 years ago.

Make sure your friends and family know the facts! Owning the home of their dreams may not be as hard as they think. Send your friends and family this link and let them know I would be happy to meet with them and help them determine what options are available in their personal situation.

Getting pre-approved for a mortgage BEFORE speaking to a Realtor could help make them a much stronger buyer in the eyes of a seller.

If there’s anyway I can lend a hand, I’ll be happy to do so. Thanks for your help and continued support, and if you have any questions about your own situation call or email me anytime!

FREE Tennessee Real Estate Commission Approved CE Class (Course # 6657)

Thursday, May 26th – 9:30 a.m. – 12:30 p.m.
The Hotel Preston
733 Briley Parkway, Nashville, TN 37217

• AmeriFirst Home Mortgage (NMLS #110139/TREC TN Sponsor #1528) &
  Nashville Title Insurance Corporation

• Cordially invite you to attend a 3-hour Continuing Education Course (6657) entitled:
  FHA 203k Renovation Loan

• Guest Trainer:
  Joseph P. Daly, GRI – FHA 203k Lending Manager
  AmeriFirst Home Mortgage
  Branch Office: 308 Seaboard Lane, Suite 108, Franklin, TN 37067

Grow your business and make more money by learning how 203k loans can help you move your “hard to sell” listings while giving your buyers an opportunity to borrow additional monies for repairs, upgrades, and other home improvements… based on the future-value of the property.

• This TREC Approved Course (#6657) is being offered by TREC Approved Provider (#1528): AMERIFIRST HOME MORTGAGE. For more information regarding this class please contact: E-Mail: BShort@AmeriFirst.com or Call: 615-302-0809

Click Here to Register for this FREE Class.

For more information about the FHA 203K Rehabilitation Loan go to www.REbuildTennessee.com.

The housing market still faces many challenges. High unemployment, foreclosures and other distress sales are keeping negative pressure on prices. This of course is good news if you are looking to buy as low rates and lower prices have brought affordability to record levels.

How Affordable? -Since 1963, it has cost an average of approximately 43% of ‘per capita’ or individual income to finance the cost of a median priced home (20% down payment and prevailing 30 year fixed rate mortgage). Right now, it’s only about half of that cost at approximately 22%.

Are you holding off on a purchase for fear that prices might fall further? – Chances are that some sellers might be thinking the same thing. If you’re smart about it, you can use that as an advantage to strike the best possible deal on a home today for once sellers believe that prices have bottomed or are going back up, your advantage will be gone.

 Rates are low today, who knows about tomorrow? – Gambling on the expectation of a lower price tomorrow at the risk of higher rates can cost much more in the long run than locking in a sure thing today. Ex. $200,000 30 Yr. fixed loan @ 5% = $1073/mo. today vs. $180,000 @ 7% = $1197 per month later.

Own, Rent or Borrow – One way or another, a home is something we all need every day. The numbers here tell the story and it’s no secret that values have fallen, yet over time, that’s not the case. As you can see by the chart, values over the last 10 years show very healthy appreciation. Can you say the same thing about stocks over the same period?

 We don’t get a history lesson in the news because the news is about the moment and the more dramatic the better. That’s what sells advertising and that’s how they get paid. For the rest of us, taking a rational, longer term view of things makes more sense. This is particularly true when it comes to a home, for this is something we are likely to own for many years rather than just moments.

In August of 2010 the National Association of Realtors released a research study highlighting some of the social benefits of homeownership.

Their list included:

- Homeownership stabilizes neighborhoods.

- Homeowners are more likely to participate civically.

- Homeownership produces higher life satisfaction.

- Homeownership fosters less neighbor crime.

- Homeownership and housing stability lower teenage pregnancy and public assistance.

- Homeownership fosters quality property maintenance and improvement.

Most recently the NAR released these timely reminders:

“Good jobs enable people to achieve the American dream of home ownership. And every time a house is built, bought, or sold, jobs are created-lots of them-right here at home.”

- Home sales in this country generate more than 2.5 million private-sector jobs in an average year. For every two homes sold, a job is created.

- Each home sale touches 80 different occupations.

- Every home purchased pumps up to $60,000 into the economy over time for furniture, home improvements, and related items.

- Housing accounts for more than 15% of the Gross Domestic Product, making it a key driver in our national economy.

- Housing has led this country out of six of the last eight recessions.

“America needs jobs. Housing creates jobs. That’s one of the many reasons home ownership matters to people, to communities, to America.”

“Strong federal government support of home ownership equals strong support for American jobs. We urge the Obama Administration and the U.S. Congress—as they debate the new federal budget and reform proposals for the nation’s mortgage finance system—to continue federal support for home ownership.”

“Jobs and Home Ownership. You can’t have one without the other.”

By Brian Short, CMC, CRMS, GMA

Tom and Sherry were looking for their “DREAM  HOUSE” and had been saving, planning, praying and preparing for months – even years – for this day.  Their Realtor had set-up viewing appointments on two other occasions when the three of them had spent over a half a day driving by houses and going into several on the list of their very detailed agent who was doing he could to narrow down what would be the ideal house for these seasoned home-buyers. 

This would be their third house since they were married 27 years ago and they wanted this house to be their last move.  Their kids were now on their own and this house would be the special house for the two of them for years to come.  The price of the houses available were unbelievable and the current low-interest rates allowed them to afford much more of a house than they originally expected.

Today they saw four houses and Tom and Sherry were now facing a dilemma:

1. The FIRST house was just what they were hoping for BUT the previous owner had not kept it in good shape and it needed new carpet, kitchen counter-tops and paint – inside and outside.  Now what could they do?  They didn’t have the money for these repairs in addition to their down payment and closing costs.

2. The SECOND house was in much better shape BUT they needed an additional bathroom and the kitchen appliances were dated and were a color that Sherry could not stomach.  Now what could they do?  They didn’t have the money for these improvements in addition to their down payment and closing costs.

3. The THIRD house was prefect, BUT it was older and the windows needed to be replaced with more energy-efficient windows and some additional insulation was needed in the attic to help make this home more energy-efficient.  Now what could they do?  They didn’t have the money for these energy-efficient improvements in addition to their down payment and closing costs.

4. The FINAL house they saw was just what they wanted BUT the bonus room would need to finished in order for them to have the space they needed to for their home-office and study they needed for Tom and Sherry’s desks and work spaces.  Now what could they do?  They didn’t have the money for this bonus room build-out in addition to their down payment and closing costs.

We are now offering the FHA 203k Rehabilitation Loan Program which would make ANY of these “BUT” HOUSES become the “DREAM HOUSE” for Tom and Sherry because they could borrow the money they need to make any of these updates or improvements – even before they move into their new house.  One half of the money they need to complete these projects would be fronted to the contractor so he could purchase materials and supplies and then he would receive the balance upon completion of the project. 

Any of these projects would qualify – all the way up to $35,000 and this extra money would simply be added to their loan balance at about $6 per month per $1,000.  Therefore, if their project cost them $20,000 to complete, their monthly payment would only increase by $120.  A small price to pay in order to have their “DREAM HOUSE”!  This could all be completed with one loan, one loan transaction and one smooth closing!

Get out there and find YOUR next DREAM HOUSE and don’t let a few “BUT’s” get in your way jumping in on these historically low-interest rates and an abundance of great inventory!

Contact Brian Short at BShort@AmeriFirst.com or CLICK HERE for more information.

From the AmeriFirst Home Mortgage company newsletter (Nov-Dec, 2010)

1. Approach everything with a student mentality.

Life’s about learning, not about knowing.

2. Take time to learn and reflect from the past.

 Ask the right questions like, “What did I do right?” and “What would I do differently next time?” Reflection clears the mind and you make sense of the past and gives you direction going into the future.

3. Everything you do, do with confidence.

Speak with confidence, walk with confidence. Handle all situations in a calm, confident manner. If you’re not confident, just fake it until you make it.

4. Always improve to the percentage that the task requires.

The task takes 30% more skill than you have, step it up 30%.

5. Working smart is the way to go but if you’re going for the gold you will have to kick it into high gear more often than not and put in the extra hours–hard work still rules, provided it’s at the right task.

6. Step it up a notch.

 Step up your game. Don’t just hang out, have a party. Don’t just build a business, build an empire. Don’t just watch TV, watch box office hits. “If your going to do something stupid at least do it right”.

7. Save and invest your money—10-20% at least.

8. When you get a good relationship, whether business partner/client or personal, don’t take it for granted and don’t try to over impress or get needy.

 People are attracted to you or your business because of who you were when they first met you. You might have made a really good impression, but kicked it afterwards somewhere along the line for various reasons. Put simply, keep your relationships. Don’t get needy, take them for granted, give less and less, devalue or become stagnant.

9. Know what you want.

At the end of the day, no matter how many goals you have there are always those few that would do it for you, even if the rest never materialized. Focus on the few that will change everything. 10. Don’t expect too many things out of ONE year!