Bob Wilson

The first step for a homebuyer is to figure out how much you really can afford. You must have a budget to start with. If you don’t have a budget and want to buy a home, you have to crack down and put your thinking cap on and develop a budget. Making a budget is important. It shows you the actual expenses that you have and lets you know whether the expense of home buying will work for you. Let’s say that you have your budget in line and now you have your monthly dollar amount that you can use to spend on a mortgage. Let’s also say that it is $250/mo. above your current rent. O.k. now live within your budget. Start by setting aside into savings the additional $250/mo. Try it for 3 months. How did it go? If it went well you might have the right amount. Now unless your income qualifies you for the USDA 100%* loan or you are a veteran, you are going to need cash in a savings account (min. 30 days) to use for closing costs and a down payment. At this point you should pray that you do qualify for one of the two no down payment programs. Here’s why. The minimum down payment will be 3.5% with F.H.A. financing. That is actually a pretty minimal down payment considering the total amount of money borrowed. For a $200,000 home you would need $7,000. Let’s continue to look at that sales figure since there are some homes in that price range. It is definitely lower than the county average but quite doable. For a loan at 5% and the balance, after the down, will be $193,000. The monthly payment will be $1,036.07. Not too bad. Now don’t forget to add the taxes each month. With local bonds and other Mello-Roos projects I normally do well at computing them at 1.1%. That would be $2,200 per year, or $183.33/mo. in addition to your monthly principal and interest payment. Also, you need to add hazard insurance. Normally you can take the purchase price and multiply by .35%. That number is $700 per year or $58.33/mo. Also to be added. Our total monthly payment is now $1,277.73/mo. If you have to use conventional (NON-FHA) financing you’ll have to deal with mortgage insurance on top of hazard and taxes and it can be quite costly. This article doesn’t allow space to even cover the many ways to fund or pay for that. That insurance covers the difference between your purchase and 80% of the homes value. With a 95% purchase you are looking at coverage for the 15% remainder. This mortgage insurance can be added to your monthly payment or put in escrow to be in addition to your closing costs. I’ve seen it as much as 3%, so it really can be costly. If you can avoid it please do so. Any financing takes a lot of patience on your part. It takes communication with a lender that can get the answers for you. It takes commitment on your part to get the home of your dreams. As always if you have questions, please call me. I’m here to answer them. Bob Wilson 209-532-6610 WWW.financialaccessinc.net * A family of 4 can qualify on the “Direct” program with an maximum income of $46,000 (this loan may help with the monthly payment). A family of 4 can qualify on the “Guarantee” program with a maximum income of $70,750

No there isn't a battle a brewin' but certainly we need to pay attention to what is going on and how to keep up and actually get your name and brand out on the net. The internet is the best tool to use to brand your product, package it up and put it in front of the largest audience possible, bar none. It is the media of choice of all major corporations for promoting their products and getting recognition that leaves those that don't participate in the dust. Our last President may have been selected by a savvy campaign that had the internet as it's primary target. Unless you're putting up a Super Bowl ad most people will not even know you. You must expand your presence on the web. How do you do that? Good question. Make yourself visible on as many social networks that you can keep up with. Don't do any of them half way. Active rain gives a person the opportunity to post blogs and get input from others in our industry. I'm able to connect and possibly find an agent in another part of the state that can help my client re-locate or visa-versa. Where Active rain falls short I've found great success with TWITTER. I know it sounds like a small tree or something but it is the most viral social network out there. Realtors are using it with great success. Check out my friend @blogboy2 . He utilizes the many free applications that are available. Some are for your twitter grade, some are for deleting followers that aren't following you and still others can put posts up for you while you're away from your computer. With all this convenience twitter has become an internet sensation. One coffee shop owner actually started taking orders for his coffee over tweeter, can you imagine that? His business increased 3-fold. Not only was it hip and fit perfectly with his audience but it created a convenience that could not be paralleled anywhere else. So what is TWITTER? You sign up and post a 140 charachter message. Mike is constantly putting information up about the Real estate market or a new listing link. The limit is only by what you can imagine. My success has come by following high profile TWITTER's and posting information about rates and market conditions. You are encouraged to Re-tweet information and promote your followers. You may have noticed that it comes along with it's own language. Phrases like "twitter love" getting people to follow someone or "twitteraholics" someone that is on twitter all the time. Now don't throw out your Active Rain. This blog is certainly over 140 characters. We also have a nearly exclusive community here. We can bump ideas off of each other and try out new techniques. Active Rain actually is keeping up by having a way to link your posts directly to TWITTER. So the title up to 140 characters will post on twitter with a link to the whole blog. Cool huh? So here is the bottom line. Active Rain has it's purpose but can't keep up with the technology of a social network like TWITTER. TWITTER while it isn't able to keep up so far, it is where we can connect at a deeper level. I'll give TWITTER 8*'s and Active Rain 6*'s out of 10. TWEET-on!

On January 5th the Federal Reserve Bank began purchasing Mortgage Backed Securities. The total cost will be $500 Billion. If the Treasury yield reaction is any indication of what is to come, we should be into some real good rates by the time they are finished purchasing them in mid "09". My advice is don't wait. I have seen way too much fluctuation in the rates since last year. Also, this Friday the G.D.P. is going to fall off a cliff for the December #'s if the private sector #'s are any indication. We are in for a bumpy ride. I can't see the market sustaining its small gains in the last week and a half. This always has a direct effect on where the investor’s cash will end up. Oil, gold and other commodities have seen some surging based on uncertainty in the market. Yes, even the bond market has had recent surges based on investors and not just what the Fed is doing. What does all this mean? How does this affect me? What will happen to my rates? All legitimate questions. Here is my opinion and outlook: 1. If you have an opportunity to modify (recast) your loan, do it. This can get both the interest rate down and the loan balance down. Remember the foreclosure across the street has affected your home value. So in essence, because of their dire straights (self inflicted or not) your homes value has plummeted. Can you see how that would solve the sales price if a client could modify their loan and get a lower principle to pay-off? Now remember this isn’t a re-finance. Most lenders require a home to be off the market for 6 mos. for this to happen, this is a loan modification dealing directly with their lender. 2. Now if your loan to value is below the 80% mark because you did it right, then you need to take a strong look at your interest rate. If you are 1%above the current ZERO POINT rate (01/07/09 - 4.875 "ZERO POINT) then a refi could help. I really like to recommend that you stay within a timeframe similar to your current one. I.e. if you have been paying 10 years then just get a 20yr loan. No need to extend it unless you really need a lower payment. Just get it paid off and the fees for doing the refinance will be made up in 3 to 4 years if it is 1% lower on the rate. 3. Rates are expected to drop slowly until April but again the lowest is anticipated to be 4.5% and in this market if I have the rate I want I'll lock it immediately. It is so volatile out there. 4. No one can forecast exactly what will happen but one thing for certain is that for our economy to get going, low home loan rates have to bee a part of it. I have spoke to one self proclaimed "guru" who says 3% loans will be coming but who knows. Even if a direct style program from the Fed were in place who know what guidelines they would use! Maybe lower D.T.I. ratios or buyer's only or first time buyers only. Whatever the future holds for housing affordability let's all be ready to give the best advice possible to our clients.

Here's the set up. You're shopping for the best interest rate. You're on-line and you see it. 1/2 to 3/4 points below anything you've seen or heard of. You're thinking "Bonanza" (not the t.v. show - for those of my generation) I'm really going to get a good deal. Now if you've ever listened to Clark Howard on the radio you hear these alarms going off - bells, whistles, sirens etc. That is exactly what should be happening at this point. Really cool things can happen but here is what you need to do.

#1 Get a written G.F.E. ( It still may be bogus ) This tells you what the costs are. Are you paying points? What is the processing Fee? Is there an Origination fee? It should even show you the "rebate" if any, that the originator is getting. Show it to someone that you trust that can explain it to you.

#2 Is the loan locked? Get something "In writing" that shows that the loan is locked. Preferably from the lender, not the Broker. If the loan isn't locked ask why? Is there some information the lender needs. A loan can be locked with a signed 1003 (loan application) and a 1008 (transmittal summary) with most lenders.

#3 Do you have an "approval" from the lender. Not from the Broker but the lender. Not a pre-qual letter but an approval. Get something in writing from the Broker that shows that you have been approved. If you can, get the letter from the lender that shows your approved. This shows that your Brokerage has submitted the loan and you are approved. The actual paperwork from the lender shows the % rate and the terms.. ie 30 yr. Fixed.

#4 After following these steps have you seen any changes in the figures... In the person you are dealing withs attitude... In the response times... etc? If your answer is yes to any of these then those sirens, bells and whistles should be going off again. And, my advice is to Run to the nearest exit - Do not pass go, do not collect $200