The Mortgage Blog

I recently had to calm a client down because they thought they were being singled out when they were asked to show up to an open house with a pre-approval letter.  I am not sure exactly how it was communicated to them but I did assure them that they are not being singled out.  It had been about 10 years since they bought a house and lot's of changes have occurred in our industry since then. So to those of you who are reading this and have heard of the preapproval process let me say this... GET ONE. You owe it to yourself and to your Real Estate Agent.  The process of buying a house has changed today and it won't be changing back anytime soon.  There are too many variables that need to be reviewed before you should have the confidence of putting in an offer.  To name a few, FICO score, maximum qualifying ratios, the interest rate used in qualifying, ever changing mortgage guidelines.  A seasoned mortgage broker must carefully review this information before arming you with a preapproval.  And a seasoned Real Estate Agent needs the preapproval before they drive you all over Town setting up walk throughs.  The listing agent will need your preapproval letter before accepting your offer, a deposit and a handshake just doesn't cut it anymore.

 So if you are interested in buying a home, look for a Mortgage Broker who offers free preapproval services.  The process is quick and painless and once you are done it is usually good for 30 days. 

Happy house hunting!

John Milano 

Still unsure if you should be buying a home? Maybe this will push you over the edge. Lets assume your renting for $950.00 plus utilities. Now lets take a mid range priced home at $125,000 with $4,000 in real estate taxes. As of this writing, assuming your credit score is above 640 and rates remain at this level (4.437 APR) this is how your payment will shake out.

FHA Financing:        $125,000
                            -   4,375 down payment
                            ________
                            $120,625
                            +   1,206 financed mortgage insurance
                            ________
                            $121,831 Loan Amount

Principle and Interest:  $599.34
Monthly Taxes:           $333.33
Hazard Insurance:       $  40.00
Monthly mtg ins:         $115.60
                                ______
Total Housing Payment:$1,088.27

Only $138.27 more than your rent!! This is not even taking into consideration your tax savings. Now go back just a few years when rates were hovering around 7% and your talking about another $211.00 dollars more a month using the same example.  WHAT ARE YOU WAITING FOR?? Worried about your job? Well you still need shelter, can't live with mom and dad your entire life. I know you can't beat the food but aren't your feet starting to fall off the bed you had when you were ten?  All jokes aside, don't let this rate environment get away from you.  It won't be here for ever. Get pre-approved now!

At CenterPointe Mortgage pre-approvals are always fast, easy and free. 

John Milano
CenterPointe Mortgage

Email me at john@centerpointemortgage.com

Well if your counting minutes the days just got shorter. This I think ranks right up there with New Years Eve resolutions. Lets face it you probably knew the days were getting shorter or somebody reminded you. Either way the question is have you accomplished what you set out to do this year? Ok so I am somewhat biased but I truly believe that if you don't own a home your missing the boat, or at least the patio,swimming pool, private yard, and pride of ownership...etc,etc.

Renting is getting more expensive now that financing is getting harder and harder, thats just the way it goes.  For the last 5 years landlords have starved as anyone who could fog a mirror could get a mortgage, the table has now turned. Mortgages are more costly, credit scores are now dictating who gets financed and the guidelines have toughened up. That does not mean you should throw in the towel, on the contrary what you should do is call your local mortgage broker and find out how to get pre-approved.  Low credit scores won't go away by avoiding them and a professional loan officer can help guide you on ways to improve your score.  They see these situations every day and more than likely can help you without the high cost of "credit restoration" firms. So you may not be able to buy today but at least get yourself on the right track because after all, the days are only getting shorter!

If you would like a confidential pre-approval consultation, please visit us at www.centerpointemortgage.com/getpreapproved.

Home Sellers: Read This Before Listing Your Home!

In todays real estate market it seems as though all sellers are looking to save a buck by selling their home on their own. That may be fine but you should know what you are up against.  Below is a list of potential problems that could arise when trying to sell your home on your own.

1. Using A For Sale By Owner Company

There are some companies for a flat fee as low as $500.00 will offer you a "how to listing packet".  Usually you are required to advertise the property on your own, prepare your own "spread sheet" and hold your own open houses. The problem often is that the homeowner has no idea how to properly advertise their home or manage an open house. Knowing what the interest rate environment is like is very important in regards to showing potential buyers the total cost of owning your home. 

2. Paying A Realtor A Flat Fee To List The Property In The MLS

This is becoming more popular with Realtors who are looking to make a quick buck.  The home seller usually completes a bona fide listing contract for a flat fee, again this can be as low as $500.00.  In return the agent inputs their information into the multiple listing service which is the site that professional agents use to list and sell homes.  This is a proprietary site that is only available to licensed Real Estate agents.  What the homeowner doesn't realize is that professional agents are not going to bother to show a home that has no selling commission.  So in other words your home is overlooked. Even if you are willing to pay a small commission it still doesn't relieve you of supplying accurate property condition disclosures, reviewing purchase contracts that could be very complex, properly showing your home and disclosing all potential defects.

3. Under Selling Your Home

Thats right, under selling.  This is a tough market and many times a homeseller wears their heart on their sleeve when it comes to selling their own home.  I have seen instances in divorce cases, estate sales and relocation where the homeowner is so filled with emotion or needs to get out fast that they take the first offer that comes in. In the case of a death, the remaining spouse just wants out of the home and all the memories.  A professional Realtor can sperate the emotion from the transaction and many times get the homeowner more money.

4. Over Pricing Your Home

Otherwise known as the "Taj Mahal" syndrome. Every homeowner thinks their house is worth more than it actually is.  I remember hearing a story where the homeowner was asking $5,000 more because they used Martha Stewart paint instead of Glidden or Dutch Boy.  In their mind it was high quality custom paint. FYI...buyers don't care.  Over pricing a home will lead to extended time on the market which leads to the abyss.  When homes are on the market to long buyers immediately think something must be wrong.  NOT KNOWING THE PROPER VALUE OF A HOME IS THE NUMBER ONE MISTAKE THAT FOR SALE BY OWNERS MAKE.

5. How Do You Separate The Tire Kickers From Potential Buyers?

Lets face it the term nosey neighbors came from somewhere. Are you going to open your house to everyone? Including potential thieves? That's right it has been known to happpen.  While you are distracted with a neighbor your other guest is upstairs ripping off your jewelery. Even if you do end up with a potential buyer do you know how to confirm that they are pre-approved?  Just when you think the transaction went smoother than you could have ever thought, 60 days later your potential buyer just got declined from the lender. Can you say "start all over again"?

If you still think you have the patience and determination to sell your home on your own at least KNOW YOUR VALUE.  For a limited time we will offer you a FREE property analysis.  This is the same tool a Professional Real Estate Agent would use to determine value.  It is not just by asking your neighbor what they sold or bought their house for.  This report takes into consideration your specific demographics, home sales in your surrounding market and most important it separates short sales, foreclosures, relo sales and distress sales from your homes potential selling price.

Please click www.centerpointemortgage.com/sellingyourhome complete the form at the bottom of the page and we will have a specialist contact you for your free home valuation report.

To many of my loyal blog readers i'm sure this is going to sound repetitive, but I really can't say it enough...GET OUT THERE AND BUY!  As of this writing we are seeing APR's (annual percentage rate) in the very low 4 percent range.  This is truly amazing, it is like legally stealing money from the Banks.  I am pushing so hard on this because I still remember when I was buying my first home, rates were 11.5%!!  There is a very interesting change of events happening and I don't want you to be a victim.  And that is, Landlords are back in the drivers seat again.  So that means higher rents. Why? Because many mortgage programs are now extinct and you no longer can just fog a mirror to get approved.  You actually have to have some money and good credit.  But with that said, you can still by a home with as little as 3.5% down and the seller can still help pay closing cost.

Think of it this way, to buy a $120,000 home with taxes of $3,500 annually, your total mortgage payment all in would be about $971.00.  That same amount would probably get you a very small apartment with strict rules on how you can "make it your own".  And remember, no tax write off's no pride of ownership and no equity build up.  Do you see what I am getting at?  Once these rates start ticking up again you will loose purchase power and possibly the opportunity to get into a starter home that a few years back may have been considered a move up home.  Don't delay anymore get pre-approved or at least start investigating what you need to do to get the ball rolling.  And of course, I am here for any questions you may have.

Good Luck

John Milano

Email:  john@centerpointemortgage.com