Today's potential new home owner's often have obstacles to financing "homes in need of repair". As guidelines have tightened underwriters review everything.
An option for foreclosed homes and for people looking to refinance is the FHA Limited Repair Streamline 203K Program. This program allows for either the purchase of or the refinance of properties in need of limited repairs--all in one loan. The loan is underwritten once and there is no need for anything to be re-reviewed and closed again upon completion.
As home equity lines are becoming a thing of the past, or severely limited in the loan to value utilized, this seems to be a new option for those "cosmetic repairs" that one once was able to do with an equity line. The FHA Limited Repair Streamline 203K Program goes by normal FHA guidelines and the Energy Efficient Mortgage may also be utilized as well.
Highlights:
One cannot finance major improvements in this process but they can do a variety of allowed improvements.
*photo complements of flickr.com
Points or "buying down" the rate is becoming more typical than before. Guidelines have constricted and the cost of borrowing money for even the best of customer's has increased.
Typically, one point is equivalent to 1% of the loan amount. Lets exemplify this and we will assume that a borrower is putting 10% down on a $200,000 home. Their credit falls into the average category now for a "conforming" loan with their respective score being a 661. The loan amount proposed then, assuming they are covering their own closing costs is now $180,000. They have a "pricing add-on" of .1% for the loan size (less than $200,000), they have a credit score "pricing add-on" of 1%, and the cost today to break even at par would be at a rate of 6.25% in order to minimize their cost.
180,000 Loan amount @ 6.25% interest/30 years = $1108.29 monthly (before tax and insurance)
As an alternative they could pay an extra point and buy the rate down to 5.875%. They are now at 1% of the loan or $1800 in additional closing costs but the savings far exceed the cost.
180,000 Loan amount @ 5.875% interest/30 years = $1064.77 monthly (before tax and insurance)
People have always assumed the worst and thought of closing costs as the enemy.
The cost of money over time though is your enemy. It will take the borrower 3.45 years to see the cost of that point but if this is the "dream home" that point makes sense. The biggest point here is that as a loan officer you should offer options. It is like you deciding upon sprinkles or no sprinkles on that ice cream cone. Providing guidance and advise to rely on is key in any major financial decision. 
*IMAGE complements of flickr.com
This week we are ending and about to begin a new era as a new president will be elected Tuesday, November 4, 2008. As talk continues about how bad the economy is one thing remains--people need money!
In 1976, the year of the Bicentennial Celebration, mortgage rates averaged a whopping 8.87% for the year for a thirty year fixed rate mortgage (www.freddiemac.com). It was an era of new optimism, a new point in history, and an election year.
As we move forward in time interest rates hit some of their highest points in history before 1984. In 1984 they averaged a mere 13.88% (www.freddiemac.com). Now, how many of you would want to pay that today?
Our economy is suffering. Life though involves suffering and change. Keep this in mind when you think of where we are today. Average rates today are just over 6.46% (www.freddiemac.com) throughout
the U.S. Money is available to borrow! Lets' encourage each other and our clients on the positives of home ownership down the road. I do realize that many of us do not "realize" those benefits today.
I am including rate snapshots and examples which show the cost of money is far cheaper today than in many election years previously.
Year Rate Loan Amount
1976 8.87% @ $100,000=$795.29 monthly (before tax/insurance)
1980 13.74% @ $100,000=$1,164.32 monthly (before tax/insurance)
1984 13.88% @ $100,000=$1,175.38 monthly (before tax/insurance)
.... (progress forward)
2000 8.05% @ $100,000=$737.25 monthly (before tax/insurance)
2004 5.84% @ $100,000=$589.30 monthly (before tax/insurance)
2008 6.46% @ $100,000=$629.44 monthly (before tax/insurance)
In 2008, today is a great day to be in this business while serving and guiding clients throughout the lending process.
*image complement of www.flickr.com
*rate information complements of www.freddiemac.com
Wednesday, October 29, 2008
Image by pouwerkerk via Flickr
Green advertising--Do you cringe in terror or embrace the changes?
In college, my Information Services instructor thought that it was better for us to "learn by error" than to actually learn what and how to do basic functions utilizing computers and Office products. I will give him credit though for having had triplets a few weeks prior.
My first mobile phone was an installed Motorola in 1992 and I became addicted to getting a new cell practically every year since. With each new model we get new bells and whistles and that definitely adds to their allure for me.
Today's new homeowners are more technologically savvy than ever.
Personally, are you hanging with the times or lingering in the past? Even your kids are likely able to work circles around you.
Answer this:
Do you make yourself available 24/7?
Can you answer every phone call? No
At least with the advent of services such as sumotext or textmymls both of which allows your customers' and potential customer's to gather information about you, your listings, and/or your services 24 hours a day 7 days a week you can be. The great thing about these products is that they also gather the number and time of the call. They do allow you to set your response to the texter and time frame for doing so.
My next question though is this---"Does your current broker, preferred mortgage provider, or title company provide or assist you with this type of service?" If not, you are missing the boat.
See www.sumotext.com or www.textmymls.com for more information.
Thursday, October 23, 2008
Image by Southernpixel via Flickr Things to do in Central Alabama ![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=0898138a-5c2a-4712-89aa-e1397db685f4)
Posted by Eric McGowan at 6:06 PM 
Labels: Alabama, Bass Pro Shops, Birmingham, birmingham alabama, OlpcXo, Robert Trent Jones, Society and Culture, United States
"Your Neighborhood Lender Serving You For 9 Years". Professional, Courteous, Customer Driven. Look to your friend and neighbor for peace of mind at your next life-changing event.
"Your Neighborhood Lender For 9 Years Now!"
Having worked in residential and consumer lending for over 8 years--I am your neighborhood lender. I am able to assist clients in all fifty states. I am a proud graduate of Faulkner University in Montgomery, Alabama with a degree in Business Administration. I am also an Auburn Tiger Fan. My first "real job" was with Walgreen's Pharmacy out of college. Later on, I transitioned into other retail and customer service positions. Finally, in 2000, I landed a position with Washington Mutual. While there I found a new calling. That position allowed me tremendous insight and opportunity into understanding the world of consumer lending. I started off as a trainee and became an assistant manager. I have processed and reviewed credit, made underwriting decisions, and was very "hands on" throughout the lending process. Since then I have not looked back. Customer satisfaction is my highest priority. I aim to serve, and repeat customers can attest to that with each transaction.
Central Alabama Mortgages; Trussville, Alabama Real Estate; Trussville, Alabama Mortgages; St. Clair County Alabama Mortgages; St. Clair County Alabama Real Estate; Alabama Real Estate; Alabama Mortgages
Now able to assist customers with mortgages in all fifty states.
Hobbies:
I have various hobbies but home improvement I would say is at the top of the list. I completely remodeled my last home and did a great deal of the work myself. I also enjoy various music genres. These can range anywhere from country to pop, to dance, and even club mixes. This year I also picked up another hobby--my Pembroke Welsh Corgi. She is just about 30 pounds now and full of energy.
When not working or walking 'little miss red' I also venture into cooking and trying new recipes.
Community Service:
Rotary
For more information about the Central Alabama area and moving here please visit the following:
My Blog www.stclairlender.blogspot.com
Birmingham Chamber of Commerce
Trussville Chamber of Commerce
This is a great place to live and work, just visit and you will see.
And, one cannot forget about the school rivalry between Auburn University -- "War Eagle" and The University of Alabama -- "Roll Tide".
Proudly affiliated with Amerisave Mortgage Corporation--one of the few certified upfront mortgage lenders in the country.
Areas of expertise include processing REO foreclosure dispositions, aiding consumers with home purchases for both existing homes and new construction, and providing refinance options for consumers. Being able to help someone achieve their American Dream, pay for their child's college education, or even helping them obtain money for home improvement helps to make this work rewarding.
Having worked for several major lenders during my tenure I have a vast knowledge of products and adapt easily in changing environments.
Current loan programs include the following:
Eric was always there to answer all of my questions and he helped me refinance and then finance my new home. N S
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