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Hidden Gem

by Blake Miller

If you are interested in the full article, click here.

Lock in Low Rates With 10% Down Using a HELOC

by Samia S. Morgan

For your clients who are looking to make a smaller down payment on properties up to $1,176,000, the second mortgage option is still a great option! Freddie Mac reports an average increase of around 0.25% since December in mortgage rates. As rates begin to slowly increase, this presents a good opportunity for buyers with smaller down payments to secure a great rate.

Completed simultaneously with a first mortgage, a second mortgage allows buyers to:
Put as little as 15% cash down on purchase prices up to $1,176,000
Put as little as 10% cash down on purchase prices up to $834,000
Eliminate the need for mortgage insurance
Purchase money second mortgages offer up to a $350,000 credit line – with low fees and easier cash reserve requirements than most jumbo loans. They can be a good option for clients who want more buying power while avoiding additional private mortgage insurance.
For example, a $1,000,000 home can be purchased with as little as $150,000 down, with a $625,500 first mortgage and a $224,500 second mortgage to cover the balance.
Aside from lowering the down payment necessary for many borrowers, a second mortgage can add the benefit of avoiding the cost of mortgage insurance. Mortgage insurance protects lenders from loss if the borrower loses their home through foreclosure. It is required for home loan borrowers who have less than 20% down payment or less than 20% equity in their home.  The cost of borrowing to offset mortgage insurance is almost always lower than the premium for mortgage insurance, the money paid goes towards the equity of the home, and can end up saving buyers hundreds of dollars monthly.

If you’re interested in learning more about second mortgages or how to help your clients make better financial decisions when purchasing a home, don’t hesitate to give me a call, or have your clients call me directly.

Best regards,
Andy
 

Opposites Attract

by Blake Miller

If you are interested in the full article, click here.

Sooner is Better than Later

by Pat Zaby

 

 
Better
Homeowners
Pat Zaby
Seminars & Systems
5023 Sea Pines Drive
Dallas, TX 75287
(972) 407-1337
Pat@PatZaby.com
www.PatZaby.com
Sooner is Better than Later

Buyers who have delayed purchasing a home due to concerns about what might happen to the tax laws affecting home ownership should feel comfortable about getting back in the market. The recent legislation passed by Congress and signed by the President continues to value homes as a favored investment.

 

For a summary of specific real estate provisions in the "Fiscal Cliff" bill, click here.

Whether the delayed purchase is for a home to live in as your principal residence or to use as rental property, taking action sooner is better than later.

Reasons to buy now:

  1. The house payment with taxes and insurance is probably cheaper than the rent.
  2. Rents will continue to rise making the difference even greater in the future.
  3. Lock-in the principal & interest payment with a fixed-rate mortgage.
  4. 30 year mortgage terms are available to most borrowers.
  5. The mortgage interest deduction is intact for the majority of taxpayers.
  6. The capital gain exclusion for principal residences up to $500,000 remains in place.
  7. Prices are going up due to lower inventories and several years of low housing starts.
Contact me about any specific questions you have or information you need.

 

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What's It Going to Take?

by Pat Zaby

More Expensive Than Expected

by Pat Zaby

 

Better
Homeowners
Pat Zaby
Seminars & Systems
5023 Sea Pines Drive
Dallas, TX 75287
(972) 407-1337
Pat@PatZaby.com
www.PatZaby.com
More Expensive Than Expected

The 3.5% down payment on FHA loans could be more expensive for buyers than expected. Beginning April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35% which may not even be noticeable to most would-be homeowners.

 

The staggering increase will occur on 6/3/2013 when FHA's policy on the duration of the required mortgage insurance will be increased for the life of the mortgage. It basically doubles the amount of total MIP if the loan is paid to term.

 Example: Purchase Price $175,000 
with 3.5% down payment at 4% mortgage rate on 30 year term

 

Current

After 6/3/13

MIP duration

78% of original loan

Life of mortgage

Cumulative premium

$20,838.24

$42,447.93

Currently, the MIP is required for approximately 9 years 9 months with normal amortization. The new program would require the MIP for the life of the loan. In this example, the initial monthly MIP is $196.88 which decreases based on amortization.

There are buyers that qualify on income and credit who may not have the necessary additional down payment required for 80% and 90% conventional loans. The 3.5% FHA program has provided a great vehicle to get into a home with a minimum amount of cash.

For homeowners that expect to stay in their home for ten years or less, the new changes might not have much financial impact. Homeowners who expect to be in their home long term can refinance with a conventional loan without mortgage insurance once the equity has increased due to amortization and appreciation.

For buyers to avoid these increases, they will need to act now to get the FHA commitment issued prior to these change dates.


 
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Brimming with Blooms

by Robyn Roehm Cannon

If you are interested in the full article, click here.

Refinancing Again

by Pat Zaby

Refinancing Again

We're constantly bombarded by lenders to refinance our mortgage under a variety of programs. The volume of offers can almost make you numb to the rational consideration.

There are common rules of thumbs that homeowners and agents use such as not refinancing more often than every two years or there must be at least 2% savings from your previous mortgage rate may not always be accurate.

The reality is that if you can refinance for a lower rate and you'll be in the home long enough to recapture the cost of refinancing, it should be considered. The costs of previous refinancing that haven't been recaptured by monthly savings may need to be added to the costs of the new refinance.

Take a look at the chart that shows the average rates according to Freddie Mac for 2012. They are lower today than they were in January of 2012 and for the ten years before that.

Refinancing may save you a substantial amount of money, especially if you're going to be in your home for a long time. It is definitely worth investigating. To get a quick idea of what your savings could be, use this refinancing calculator.

Your Deduction...Your Choice

by Pat Zaby

 

 
Better
Homeowners
Pat Zaby
Seminars & Systems
5023 Sea Pines Drive
Dallas, TX 75287
(972) 407-1337
Pat@PatZaby.com
www.PatZaby.com

Taxpayers are allowed to decide each year whether to take the standard deduction or to itemize their deduction when filing their personal income tax returns.  Roughly, 75% of households with more than $75,000 income and most homeowners itemize their deductions.

The 2012 standard deduction, available to all taxpayers, regardless of whether they own a home, is $11,900 for married filing jointly and $5,950 for single taxpayers.

Let's look at an example of a homeowner couple with a $150,000 mortgage at 3.5%.  The standard deduction would give them $2,650 more than the total of their interest paid and property taxes of approximately $9,250.  If they were in the 28% tax bracket, the actual tax savings would be $742.00.

When mortgage rates were considerably higher, many people expected the interest and property taxes to easily exceed the standard deduction but with today's low rates, a comparison is certainly justified.

There are other things that could come into consideration like charitable contributions, medical expenses and casualty losses.  Tax professionals will compare available alternatives to find the one that will benefit the taxpayer most.

For more information, see www.IRS.gov and consult a tax advisor.


Springs Delicious Chaperones

by Brenda Crow

If you are interested in the full article, click here.

Displaying blog entries 1-10 of 17

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