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!

Advertisements

“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.

 


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?


Winning the Heart of Your Special Woman!

February 13, 2015

I heart my houseOK, gentlemen. The pressure is on!  What to buy your special woman this Valentine’s Day? Flowers die in a week. Chocolates are eaten up in a day or two. Jewelry can only be worn occasionally. This year, why not buy her the HOUSE you both have wanted for years! Great interest rates and new $0 down or low down-payment programs are available for almost any home buyer. Contact me and let me help you know your home financing options. I’m local, licensed, certified and have 17 years of lending experience – Ready to go to work for you or those you know.


The HomePath Renovation Buyers Guide eBook

January 19, 2013

by Brian Short

Navigating Renovation Mortgage BCS Cover The HomePath Renovation Buyers Guide with Brian Short – Today’s housing market offers a diverse selection of homes for buyers. One option you have available is a HomePath-eligible home. These Fannie Mae-owned properties are often priced relatively low. Some of them need a little TLC. That’s where the HomePath Renovation mortgage comes into play.

This free 13-page guide will answer several questions including:

  • What is a renovation mortgage?
  • What are the benefits to HomePath financing?
  • What makes a home a renovation mortgage candidate?

This free eBook is just 13 pages, and will take you through the renovation mortgage process, specifically the HomePath Renovation mortgage option.


The “BUT Loan”?

July 21, 2011

By Brian Short, CMC®, CRMS®, GMA®

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.


Choosing Your Mortgage Professional

June 20, 2009
By Brian Short, CMC, CRMS, GMA
 
“Shopping for a Mortgage Professional is much like shopping for a medical doctor or an attorney. Choosing your medical or legal care based on “who is the cheapest” may not really be the best strategy. You want you choose a professional who is trained, certified, experienced and has a good reputation.” 
 
Often times, this is my response to those asking for me to give them a detailed list of all their closing costs if they select me and my company to provide the financing for their upcoming home purchase or refinance of their current home.
 
I have heard of real estate industry partners telling their customers that choosing a mortgage professional is as simple as getting a “Good Faith Estimate” and comparing the costs contained on those documents.  This sets up the borrower to work with the “best liar”, too early in the 30-60 day process of finding a home, rather than getting the most professional financing help to get the deal closed correctly.
 
How can this be?  Aren’t all “Good Faith Estimates” accurate?  Aren’t all mortgage professionals the same?  Aren’t all mortgage companies the same? 
The truth is: the numbers on the “Good Faith Estimate” given too early in the process are RARELY CORRECT!  You see, the numbers on that document are affected by one or more of the following 13 variables below:

-> Sales pricegood-faith-estimate

-> Appraised value

-> Loan amount

-> Borrower’s employment status and history

-> Credit scores and payment history

-> Amount and source of down-payment

-> Date of closing

-> Immigration or citizenship status of the borrower

-> The housing type and location (Single family dwelling, Duplex, Condo, Townhouse, PUD, suburban, rural, urban, etc.)

-> The county where the home is located

-> Mortgage Interest Rate

-> The Term (length) of the Loan

-> The Title Company being used to close the loan

I have worked for several mortgage companies during my mortgage career and even owned my own company for 5 years. I know that some “loan guys” will “low-ball” the initial estimate, only to pull out the “surprise” at the closing table when your options for making any changes are very limited.  Of the 21 separate line-item fees on the “Good Faith Estimate” I give to my borrowers when they sign their loan application forms and disclosures, only one of those fees is the same for every loan and is not dependent on any of the variables listed above.

Mortgage interest rates change daily (sometime, even more often!). I could simply print off a “Good Faith Estimate” with made up numbers as some customers request (as other “loan guys” may do) but it will not be accurate because of all of these variables I have mentioned.  That process of collecting “Good Faith Estimates” prior to having all of the above variables identified will very time-consuming and wasted effort by the borrower and “loan guys” passing out worthless forms with inaccurate numbers.

My goal is to take the worry and uncertainty out of the process of originating, processing, underwriting and closing the loan.  I help guide my borrowers through their negotiations with their seller by providing honest numbers as they become available rather than simply making up numbers to get “my hook set”.

I have been in the business for over 11 years and nearly 100% of my business comes from referral and repeat business. A businessman can not build that kind of business by being a con-man, cheating others or participating in the bait-and-switch tactics that have riddled this industry for years.

This helps my my borrowers understand how I have built my business and how I provide a level of confidence and professionalism which will make my borrower’s Real Estate purchase a very smooth and cost effective transaction over the next.

So, you ask, how should I select the Mortgage Professional to close my loan for me?  I’m glad you asked.  Allow me to give you a few guidelines for starters:

1. Choose a Mortgage Professional who is EXPERIENCED.  Was he selling shoes or washing cars last week and then some buddy of his talked him into “trying out the mortgage business”?  Does he really know what he’s doing?  Has he been originating mortgage for 5-10 years?  Does he do this full-time or this just a hobby or part-time gig? 

NAMBCertified2. Choose a Mortgage Professional who is CERTIFIED.  Has proven to anyone that he knows the laws, the process, the programs and theory and mechanics behind the mortgage industry.  Has he taken courses and exams to measure his competency?  Is his certification a national designation? Is his certification from a professional association who can objectively measure and monitor his expertise or from some mail-order outfit looking to make few bucks?

3. Choose a Mortgage Professional with a GOOD REPUTATION.  Is your selection a true professional who is respected and well-known in his industry.  Who knows him and what kind of work he does?  Who has ever closed a loan with him?  Who can speak for his level of trustworthiness, honesty and attention to detail?  What do you know of his character and personality?

4. Choose a Mortgage Professional who is a PROFESSIONAL.  Does your choice know the market, the industry, the community, the history, the trends and your desires?  Is he a member of his professional association?  Has he been awarded and recognized by his peers and fellow business associates for his contribution to the industry and community?

During the month that your loan is supposed to close it is the most important transaction in your Mortgage Professional’s office.  “Getting it cheap” doesn’t mean much when your “loan guy” drops the ball and makes a mess of the whole deal simply because  he has “never seen anything like this before.”  That stack of bogus “Good Faith Estimates” collected 30-60 days prior to your closing will mean very little when you find out that returning phone calls, diligently following up on underwriting conditions, and working long hours to insure that all of the bases are covered on your deal are not his priority or part of his work ethic.

Paper is cheap, and ink toner to print fictitious loan estimates is even cheaper.  Experience, Certification, a Good Reputation and Professionalism are priceless life-long attributes and qualities you want in your Mortgage Professional.  Leave the spreading of such worthless papers to those lying, low-balling, bait-n-switching, short-termers who do not deserve to work with someone like you who, understandably, expect it to get done right the first time.