As 2011 comes to a close, I pose the question I asked 9 months ago, should you buy or keep renting? It is a question I hear almost daily from first time homebuyers and those who lost homes when the housing bubble burst. Well, I have some good news!
Category Archives: Mortgage Blog
Before purchasing a home, it is vital that you have a better understanding of title insurance policies that are available for both lender and homeowner protection. If obtaining a mortgage, title insurance will be a requirement to shelter the lender for the full amount of the loan until it is completely paid off.
The answer lies on Wall Street – specifically the trading of Mortgage Backed Securities (MBS). MBS trading can result in a dramatically higher or lower payment when you are ready to lock in your rate. Unfortunately, the indicators needed to see these real-time MBS trading feeds, are not readily available to the public. The big question is – are they keeping track of rates in real-time and making you aware of sudden changes in the market? Read the rest of this entry »
A decade ago, our culture didn’t place much emphasis on living a “green” lifestyle. Thankfully, the importance of making daily decisions that benefit the environment are finally permeating the American psyche. As consumers, we are starting to understand that the way a home is built or designed, has a huge impact on how much energy we consume. We understand that small changes; like lowering the thermostat, watering our lawn less, or changing a light bulb or two, will not solve our energy crisis – we need big changes. Read the rest of this entry »
Well, if you are a first-time home buyer and you don’t mind filling out a few extra forms, this tax credit can save you thousands. It’s a Mortgage Credit Certificate (MCC) issued by certain state and local governments that allows a taxpayer to claim a credit for a portion of the mortgage interest paid during a given year.
Let’s talk about the difference between a “tax credit” and a “tax deduction”. A tax credit is a dollar-for-dollar savings that lowers your total federal income tax liability by the value of the credit. Whereas, a tax deduction only reduces a percentage of the amount deducted. We are talking quarters versus dollars here. Tax credits can be more valuable than deductions, although somewhat more difficult to qualify for. Read the rest of this entry »
The Energy Efficient Mortgage (EEM) is one of the best kept secrets in our business. Why? Because most people have no idea what it is and don’t want to invest the time to learn about its’ cost saving powers. In a world of sound-bites, tweets, and bumper-sticker one-liners, who has time to learn about energy-efficient mortgages? Boooring…
Why should you care about an EEM? Congress mandated a pilot program in 1992 (that went national in 1995) to help homebuyers or homeowners borrow more money to help pay for energy-efficient improvements or upgrades. The result is an energy-efficient home with lower monthly utility bills and a decreased footprint on the environment. And it’s all done without tapping into your savings.
You can finance these energy-saving features to new or existing homes as part of a FHA or VA insured loan. The goal here, is that the money you save on your energy bill from these improvements (i.e. duct sealing, new windows, energy-efficient water heaters, new heating and air-conditioning systems, etc.), will exceed the slightly higher monthly mortgage payment.
If you have a mortgage and you let your homeowner’s insurance lapse, or the bank servicing your loan (“the servicer”) lets it lapse, that very same bank can legally order new insurance called “force-placed insurance” for you. And surprise. It’s not cheap. Just ask Hilda Sultan, of Florida, who was billed $33,000. (see video below)
As a mortgage loan originator for almost a decade, I have never dealt with this in my practice until it happened to one of my past clients. I tried to research the subject objectively, but the further I got, the more examples I found of this inherently abhorrent scam.
Are you getting that itch to buy a home? Or maybe you are in the other camp, and can’t even think of buying until the market truly changes course, and homes start to appreciate. Maybe you are one of many Californians who don’t have a job and buying a home is not an option for you. Thankfully, the long-standing myth that it is better to own than rent has been finally silenced. Just like the horror stories of the great depression told by our grandparents, we too need to share our experience of the current great recession to future homebuyers. We need to remind them that buying a home is based on careful research, hard numbers, and not the buying frenzy mind-set that blinded so many leading up to the crash.
We have been lulled into a false sense of comfort with rates being so low, and now that they are starting to rise, we pretend it’s not happening and look the other way. I can’t tell you how many clients have asked, “when are rates going back down?” I have one client who insists the 30 year fixed rate will soon go to 4% at which time he is going to refinance his current 6% mortgage. We have a good relationship. I tell him he’s nuts and should have refinanced a year ago, but he is adamant – rates will go down. The mantra, the customer is always right echos in my head, but this time it’s just noise. It’s OK to take your chips off the table and to say I’m done gambling. Read the rest of this entry »