Archive for the 'Mortgages & Finance' Category
If You Ain’t Been Pre-approved, You Ain’t Shoopoo
May 6th, 2008 categories: Home Buyers, Mortgages & Finance
Somewhere at a truck stop in Pennsylvania, you might find a t-shirt that reads:
“If You Ain’t Been Possum Hissed, You Ain’t Shoopoo.”
I wish I could show you a picture of this shirt but all I found was this photo of a possum.
My memory of this very weird shirt, which I wore for Halloween one year when I went dressed as a “Shotgun Wedding” (I was Paw, dragging my Kin to the altar), reminds me of agents who don’t require their clients be pre-approved before showing them homes or presenting offers.
For three years, I worked only as an exclusive buyer’s agent. Only within the last year have I been on the other side, examining offers and am shocked that all agents don’t get their clients pre-approved BEFORE putting in an offer. Even more surprising, I get grief back from agents who try to tell me that a pre-qualification is good enough. Ehhh! Wrong answer.
I’m not going to explain this to agents - if they don’t know, I can’t help them. Read the rest of this entry »
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Five Things Every Home Buyer Should Know About Mortgages and Mortgage Lenders
April 30th, 2008 categories: Mortgages & Finance
1. Mortgage Lenders/Brokers Don’t Owe Any Fiduciary Responsibilities to Borrowers
A fiduciary is one who acts legally on behalf and in the best interests of another. Realtors are required ethically and legally to act as fiduciaries for their clients. Examples of Realtor fiduciary responsibilities are: Disclosure; Reasonable Care; Loyalty and Obedience, just to name a few of them. Unlike Realtors, mortgage lenders and brokers are under no obligation, legally or professionally to look out for your best interests. If a lender does not do CHFA loans, he/she is under no obligation to tell you about CHFA, as an example.
2. Don’t Count on Rate Quotes to Be Accurate
If you’re calling around or surfing the net for the best rates, there are three hazards. First, rates can change throughout the day so unless you are looking at the same time, comparing rates will be inaccurate. Secondly, lenders may purposely give you a low rate quote knowing that you’re not going to lock in right that minute. Surprise, when you are ready to lock in, the rate has gone up. Thirdly, you are not locked in until you lock in - so your rate will probably change. Read the rest of this entry »
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Just How Did We Get Into This Mortgage Mess?
April 23rd, 2008 categories: Mortgages & Finance
My office hosted a luncheon today with Bill McCue of McCue Mortgage. Mr. McCue, in the mortgage business for longer than I’ve been alive, had a lot to say about the mortgage mess we find ourselves in.
In case you’ve been in a hole for the last year, the mortgage mess is as follows: No or low down payment loans almost non-existent, no subprime loans, no stated income loans and increasingly stringent credit and income guidelines coupled with increases in rates of foreclosures/defaults/short sales and housing prices on the decline nationwide. A big pot of yuck.
If you’ve scratched your head in wonderment then I have some answers, thanks in part to Mr. McCue. Caveat for you economists out there - this is a simple man’s explanation. I am only a Realtor, after all:)
A long time ago, if you wanted to buy a home, you went to your local bank. You opened up an account (or already had one) and a local loan officer qualified you for a mortgage. Unless you were borrowing money through FHA or VA, which guaranteed loans in the event you defaulted, banks wanted to ensure you did not default and you had to meet pretty stringent guidelines. Read the rest of this entry »
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Want Some Free Money? How Little Known Loans and Grants Can Help You Buy A House
March 18th, 2008 categories: Mortgages & Finance
Free money is cool. It’s usually hard to find, difficult to qualify for and most real estate agents (and lenders) don’t know about them.
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The Truth About Deducting Private Mortgage Insurance, Part 2
February 27th, 2008 categories: Mortgages & Finance
This has been updated to include new information about refinancing.
Private Mortgage Insurance, or PMI, is
“insurance that protects a lender or investor against loss if a borrower stops making mortgage payments. It makes it possible for you to buy a house with as little as a three percent down payment or less for qualified borrowers, helping you buy a home sooner than you otherwise could. “ PrivateMI.com
Although it protects the lender, the borrower actually pays for it. And until recently, PMI was not a tax deductible item for primary residences.
PMI is now tax deductible for some. Here are the requirements:
- Borrower must have purchased or refinanced* the home using a loan backed by PMI in 2007. For the next three years, ending in 2010, borrowers who pay PMI will also be able to deduct it as long as they meet the other restrictions.
- Only borrowers with an adjusted gross income of $100,000 may deduct 100% of the premium. Families earning up to $109,000 may deduction a portion of the premium.
- Premiums are deductible for the borrower’s primary residence or for a second home. Owners of rental property are already allowed to deduct PMI.
The IRS publishes a 16-page guide to “explain” this further.
*For more about how refinanced mortgages are affected, visit SmartMoney.com for their article.
Contact your tax advisor for more information.
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