Rising Rates & Affordability: “How Much Can You Finance with $960/Month?”

March 15, 2017

As rates rise, affordability dwindles.  If you want more home for the same monthly payment, acting before rate rise further may be a direct path to success.

Each example here shows the principal and interest payment for a 30-year, fixed-rate loan.

1) Loan of $200,000 – Interest rate: 4.00% / 4.25% APR – Payment = $955

2) Loan of $180,000 – Interest rate: 5.00% / 5.27% APR – Payment = $966

3) Loan of $160,000 – Interest rate of 6.00% / 6.29% APR – Payment = $959

It’s pretty amazing that a rate increase of just 2% can impact affordability by as much as $40,000.  Rates have been artificially low for some time now due to Fed intervention.  As this stimulus is removed, the usual result is the rates to rise.  Rates have already started rising just in expectation of a change in Feb policy.

Act NOW to buy the house you desire without the risk of losing your opportunity to lock-in these amazing low rates.  I can help you or those you know get a low interest rate loan before further increases go into effect.

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On Our Own

November 9, 2016
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Belinda and me enjoying a late summer beach trip.

I am beginning to understand that vacations can be grouped into at least three different categories – especially for those of us with large families!  There were the vacations you took BEFORE kids during those early years of your marriage, the vacations you took WITH the kids and finally, those you have taken (or will take) AFTER your kids are gone – or are too busy to take with you!

For the two of us, we are now entering into the third phase of our vacations.  We started having kids over 30 years ago and I can count on one hand the trips we have taken without any kids during these years.  We’ve taken some great trips with our kids to beaches, mountains, national parks, historic cities and sites and amusement parks.  Most of those trips where designed to keep kids happy, entertained, fed, well-rested and healthy.  They have been fast paced, jam-packed and expensive – even when we tried to cut costs.

Our kids tell amusing stories to each other and their friends about “sneaking” into hotel and resort rooms 2 or 3 at a time because a few places where we stayed were not designed for a family of 5 kids under the age of 10 – just so we could all stay in the same room or condo.  Other stories include when their little sister actually slept in a make-shift “bed” in the bathtub during one trip because there were not enough beds for all five girls!  (Please don’t report us to the authorities!)

This year’s “Short Family Vacation” was actually planned during a time when we thought several of our girls would be able to join us at a beach-side location where several of them had expressed an interest in visiting again.  However, when it got closer to the designated week for our vacation only one of our grown daughters and her roommate were able to join us – and for only a couple of days.  Although slightly disappointing to us, we realize that our new reality is that our girls have moved out (except for our youngest who is a busy college senior) and are now very engaged with their lives and their time-off from work and family responsibilities may not coincide with our “Short Family Vacations”.

Similarly, I’ve heard others relate housing needs to these three vacation categories – BEFORE kids (starter homes), WITH kids (that house with all of those bedrooms and bathrooms and a big back yard) and AFTER the kids have moved out (the house with the master bedroom on the main floor and a much smaller yard!).  Many people who are changing their housing needs require the home loan services I provide.

As you or those you know find themselves starting-out, scaling-up or scaling-down I am able to be the experienced and trusted “Dream Maker, Problem Solver” to provide the tailor-made home loan solutions – so that no one in your family will find themselves sleeping in a bathtub!  Can I count on you to give my name to the next friend, neighbor, co-worker or family member who would benefit from my home loan expertise and hands-on customer care?


Change for the Better!

November 3, 2016
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Brian Short and AW Pickel – A couple of guys who are good at this business, people like them and they’ve got honest faces!

Twenty years ago a former college buddy of mine invited me to join him in the mortgage industry by telling me, “Brian, you’d be good at this business!  People seem to like you, you’ve got an honest face and you’d still be serving people by helping them buy, fix-up and refinance their houses!”  A year later I called him up and agreed to come to work with him by opening up a new office for his company in Franklin and thus, I began my new career as a Mortgage Professional.

 

I worked for his company for several years before eventually starting my own mortgage company and then managing branch offices and divisions for a few other companies and a local bank before I circled back around to, once again, open up a new branch office for my college friend, AW Pickel, in Franklin two years ago.

 

amcap-logoNow we are teaming up together again to start up a new division for AmCap Mortgage, Ltd, a 15-year-old mortgage lender based in Houston, TX to initially start new branches in Tennessee, Kansas, Missouri and Nebraska.  Our group will continue to keep the focus on offering amazing customer service to our borrowers while offering a wide array of home loan programs to help the most people possible.  Our industry continues to experience unbelievable changes and it takes a very nimble approach to mortgage lending to keep up with and adapt to those changes.  We believe that our association with AmCap Mortgage, Ltd will give us that platform to bring amazing changes to our customers, employees and industry for the better!

 

Gleaning the best from my past associations to bring with me to our new venture is the best way to describe our passion for smart growth – personally and professionally.  However, much hasn’t changed.  I’m still working very closely with those who first introduced me to the mortgage industry twenty years ago and I’m still in the business of being that “Dream Maker and Problem Solver” that any prospective home buyer or current home owner needs in their corner when evaluating their home loan financing options.

 

I’m also looking for hardworking, people-oriented problem solvers to join our team in Tennessee and in other states if you know of those who “would be good at this business, have an honest face, and desire to help those people who like them!”  I really appreciate it when you DON’T KEEP ME A SECRET!  Your confidence and trust in me is what keeps my steady stream of loans closing.  Can I count on you to give my name to the next friend, neighbor, co-worker or family member who would benefit from my home loan expertise and hands-on customer care?


Tax Refund = Down Payment?

April 15, 2016

By Brian Short, CMC, CRMS, GMA

In my 18 years as a “Dream Maker, Problem Solver” mortgage professional, I have observed that one of the most disappointing set-backs for a new home buyer is the lack of down payment.  Often times, the prospective home buyer is already in the habit of using some of his or her monthly income for housing by paying rent to a landlord or a roommate, but rounding up several thousand dollars for a down payment can keep many from being qualified to buy a house.

With this being said, there are many loan programs which allow a buyer to buy a house with as little as 3% of the sales price for down payment and some where the down payment can be a gift from a close family member.  There are other loans where a buyer can buy a house with $0 down payment if the buy is a veteran or is buy a house in a rural area or in a city with less than 35,000 population with certain income restrictions.  Even with these very generous federal government home loan options, the lack of a down payment can be the hurdle which will keep a new home buyer from moving forward, especially if they are not currently home owners who are selling a home prior to buying their next home.

tax_refundMY APRIL 15th SOLUTION?   Use this year’s Federal Income Tax Refund for a down payment or for “seed money” to begin a down payment saving account to which a prospective home buy can add a portion each pay period.  It is timely that on this 2016 Tax Day we are reminded that many US workers will receive refunds of anywhere from a few hundred to several thousand dollars in the next few weeks and this money can be used to help BUILD WEALTH rather than buy things which are quickly consumed or used up.

Many financial advisers still consider Real Estate to be a very secure and cost effective way to build wealth and invest for the future.  Who do you know who needs to contact me for help on how to find their down payment solutions for their home purchase?  I can show those you know who dream of home ownership or of buying their NEXT dream home how to move forward in this current maze of home loan options!


“All You Want to do is Ride Around Sally!”

March 9, 2016

Rock and Roll Hall of Fame inductee Wilson Pickett released his R & B chart-topping hit “Mustang Sally” in 1966 which includes a very catchy chorus where the Alabama born singer and songwriter sings:

“All you want to do is ride around Sally, ride, Sally, ride.
All you want to do is ride around Sally, ride, Sally, ride.
All you want to do is ride around Sally, ride, Sally, ride.”

When it comes to home buying, many buyers will spend the first several days simply “riding around” looking at houses and neighborhoods to determine where they might want to live or what houses are selling for in different areas of town.  This is not a bad strategy especially if a buyer is not familiar with the possible inventory available to be purchased.  However, this plan can lead to a very frustrating home buying process if Real Estate agents and sellers are contacted BEFORE the buyer knows their home financing options and requirements.

As fun as it can be to see floor plans, master-suites, kitchen layouts and back yards, this information can tempt a prospective buyer to begin to forge ahead with unkeepable promises and a unreasonable timetables for a closing date with no regard for what might be required from a home lender who is loaning them the money to buy this dream home.  Income and down payment requirements,  employment and credit history, and loan program guidelines may all impact the timeline for if and when any buyer may be in a position to buy any house they may find.

Although many home buyers feel that contacting a Realtor or stopping by to talk to a seller is the first step in determining if buying a house is possible, in reality, the first step for most home buyers is to consult with a full-service home lender who can do a thorough evaluation of the buyer and match them with possible home loan programs to make this a stress-free home buying process with no last minute surprises.

Step 1 in buying a house is to get a pre-approval from a Nationally Certified, State Licensed home loan professional.  As Wilson “The Wicked” Pickett sings:

“Slow your mustang down…[and] …put your flat feet on the ground.”

Who do you know who is spending all of their time “riding around” rather than actually talking to a Dream-Maker and Problem Solver who can help them know when and where they should be “riding around”?  Contact me.  I can help.

 


The 5 Steps You Must Take in the Next 2 Months if You Plan to Buy a House This Year!

January 21, 2016

We are now three weeks into the new year.  Energy levels depleted by the holidays have begun to return.  You may have already blown most of your New Year’s Resolutions.  The college football bowls are finished up.  You’re back into your work and family routine.  Downton Abbey is back on PBS and in between “snow days” you’re beginning to make your Super Bowl plans.  What better time to begin to think about your needs and desires for a new home in 2016?!?

I have worked with hundreds of home buyers over the past 18 years as a nationally certified, state licensed mortgage professional and I have found some who have made great preparations to enter into the largest single purchase they will ever make in their lives and I have also met some who are woefully unprepared.  Those who prepare well generally experience a much smoother process and avoid being hit with additional fees for extensions and delays.  If the right steps are taken BEFORE you actually go out to look for a house the new home buyer will find the process manageable, systematic and successful.  Those who rush into a home purchase contract with a seller and Realtors without taking these steps will generally experience an immense amount of stress, confusion and unnecessary pressure from everyone involved in the process – and will be tempted to give up after spending $1,000 – $2,000 of their hard earned and saved money.

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Follow these 5 simple steps to ensure that your home buying process is a success in 2016 and in the future.

What can a prospective home buyer do now to prepare for their upcoming home purchase later this year?  Here are the steps I would recommend:

  1. Get your tax returns for the past 2 years finished and get copies ready to pass off.  Your mortgage professional will be required to submit your completed tax returns and W-2’s for the past 2 years to the underwriter who will approve your loan.  Borrowers who have not completed their taxes or can’t find their returns will delay the underwriting process.  The Loan Processor who will take your file from your mortgage originator and prepare it for underwriting will need to verify the tax returns you submit as the same as what was submitted to the IRS.  This takes a few days and will cause additional delays if your tax returns are not prepared correctly and available to be submitted when you have an accepted offer to buy a house.
  2. Locate and provide your pay stubs for the past 30 days.  It is required for any loan to show that the buyer has the ability to repay the new loan.  You must show a consistent and reliable income stream from somewhere.  Most borrowers can do this with pay stubs from a company where they work.  If the buyer is self-employed it is still possible to do this with tax returns and a year-to-date Profit and Loss statement.  Find your pay stubs if they are on a HR website with your company and begin downloading them each pay period so you have them available to pass off to your originator or his assistant.  Again, this information will be verified by the Processor to make sure that the employer agrees with the information that is found on the pay stub.
  3. Locate and provide your bank statements and all retirement account statements for the past 2 months.  I find is amazing when I hear a borrower tell me that their bank “doesn’t do bank statements any more” when in reality they just don’t know how to navigate within the online banking website of the bank where they have been a customer for many years.  Take the time, now, too find, print or download bank statements every month and save them to a folder on your computer or in your home office cabinet so you will have the bank statements required to get your loan approved.  You will need at least 2 months of statements and in some cases you might need 12 months of statements to show rent payment or the receipt of child support or some other income source you desire to use to help you qualify for your new loan.
  4. Talk to a licensed mortgage professional to help you explore you loan options early.  There aren’t as many loan programs available to a home buyer as there were back before the Credit Crash of 2008 but there still are many options and most mortgage companies will be able to offer many of the same programs.  Banks will generally have fewer options but they also can offer many options to a prospective home buyer.  Your licensed mortgage professional will evaluate the documents we listed above and help you explore which home loan option would be best suited for you.  Some programs are only available for first-time home buyers.  Some programs are only available for those wishing to buy a house outside the city limits or in certain counties.  An experienced, licensed professional will keep up with the ongoing changes in the program requirements and be able to help the new home buyer know what needs to be done in preparation for approval for best loan fit and where the buyer should be looking to find their next home to purchase.
  5. Prepare your down payment and cash required to close your loan.  After talking to your licensed mortgage professional the prospective home buyer will have a good feel for how much cash and down payment will be required – if any.  Some loans allow for the seller to pay for the buyer’s closing costs and require NO DOWN PAYMENT!  Even if no down payment is required, many programs will require the buyer to show that they have 2-3 months of house payments in the bank – just in case the bottom falls out regarding a job or extended health issue.  It is important for the borrower to demonstrate to the underwriter that they know how to manage a checking and savings account and that there are no recent overdrafts on their bank statements.  Get control of your banking accounts and manage your cash flow so it will be easy to prove to the mortgage underwriter that you are now ready to take on a new house payment for the next 30 years and that you can make this payment on time, every time.

This year can be a year of amazing new beginnings and one where life-time accomplishments can be made.  However, without making the necessary preparations in advance, it could also be one of set-backs, disappointments, frustrations and failures.  Follow these steps above to make this year an unimaginable milestone for  well-deserved successes!

Brian Short is a nationally certified, state licensed, dream maker and problem solver who helps provide home loans with LeaderOne Financial Corp.  He can be reached HERE or by calling 615-302-0809.


Where Do I Go From Here?

January 12, 2016

You may be aware that I am the father of five very amazing daughters!  My wife and I often joke about what we missed during the 80’s and 90’s because for nearly 20 years, beginning in 1984, we were very busy with little girls. Part of living in a very active, colorful and energetic household of little girls was watching, singing, playing, dressing up like and reading Disney princess musicals.  The Little Mermaid, Aladdin, Cinderella, Snow White, Beauty and the Beast, Mulan and Pocahontas were all danced to, dreamed about, reenacted and sung with vigor around the Short house during those memorable years.

One of the songs which comes out of those years is a song sung in Pocahontas II by the daughter of the Indian chief entitled “Where Do I Go From Here?”  This song is sung in the movie as Pocahontas encounters a crossroads and she is reflecting on what she has heard from many in her life as she contemplates her next move.  The chorus in this song is this:SIGNPOST_3-253

“But where do I go from here?
So many voices ringing in my ear.
Which is the voice that I was meant to hear?
How will I know?
Where do I go from here?”

Many who are contemplating an upcoming home purchase must feel the same way!  Radio and TV Ads, direct mail, social media, neighbors, brothers-in-law – they ALL freely offer their advice, even when NOT asked!  They are sure, from their experience,  who should be called, what should be required, where one should look, and how long it should take!  However, their experiences are generally very limited to their own few transactions and in light of their own unique circumstances.

What many “would-be, well-intentioned” advisers don’t tell you is that they have a very limited experience in the process of buying (or refinancing) a house.  The TRUTH is that many of the national loan program guidelines are changing often and individual companies often have their own overlaying restrictions which are added to the federal government-mandated qualifying guidelines.

Most honest Realtors, Real Estate Attorneys, insurance agents, home builders, financial planners and CPA’s will admit that keeping up with home loan requirements is not part of their daily or weekly routine and therefore the borrower should wisely start their home buying (or refinancing) process by contacting a nationally certified, state licensed, experienced mortgage professional who has the information and attention to keep the unique needs of the borrower at the forefront of the available financing options being considered.

In answering the wanna-be, home buyer (or homeowner who desires to refinance their home loan) when asking, “Where Do I Go From Here?”,  I recommend contacting a local, experienced mortgage professional who can be reached and trusted to help the borrower reach their goals.  How can I help you?