David Krushinsky

Thinking About Going Green on your Phoenix Home Mortgage? VA Energy Efficient Mortgage (EEM) Program May Be The Solution

The VA Energy Efficient Mortgage Program allows a veteran, using a VA Home Loan, to upgrade their Phoenix home at the time of purchase or as a refinance, if the borrower already owns the property. The program allows the veteran to finance up to $6,000 in cost of those upgrades into their home mortgage. This is a great program for those who want help protect the environment and save money.

Allowable energy efficient improvements include, but are not limited to, the following items:

• Solar heating systems, including solar systems for heating water for domestic use
• Solar heating and cooling systems
• Caulking and weather-stripping
• Furnace efficiency modifications limited to replacement burners, boilers, or furnaces designed to reduce the firing rate or to achieve a reduction in the amount of fuel consumed as a result of increased combustion efficiency, devices for modifying flue openings which will increase the efficiency of the heating system, and electrical or mechanical furnace ignition systems which replace standing gas pilot lights.
• Clock thermostats
• New or additional ceiling, attic, wall and floor insulation
• Water heater insulation
• Storm windows and/or doors, including thermal windows and/or doors
• Heat pumps
• Vapor barriers

A loan for existing property or a new home may be increased by up to $6,000 for energy efficiency improvements at the option of the lender and veteran at any time up to the loan closing without VA's prior approval. The lender will need evidence of the cost of improvements, such as a copy of the bid(s) or contract itemizing the improvements and their cost, and the lender's determination that the increase in monthly mortgage payments does not exceed the likely reduction in monthly utility costs.

Upon closing, the funds added to your loan amount for the energy efficient improvements will be held in an escrow account until your improvements are completed. Once you notify the lender that the improvements are completed, an inspection is done to verify completion and the funds will then be released.

For more information on VA home mortgages in Phoenix please contact The David Krushinsky Team at 602-695-7575 or david.krushinsky@wjbradley.com. Before you begin your real estate search for properties in Phoenix you should get pre-qualified.

When purchasing or refinancing a home in Phoenix, one of the most difficult decisions you will have to make is whether to lock in your interest rate or let it float. For first-time homebuyers or borrowers that are less familiar with the process, here is a brief description of the terms. "Locking" an interest rate means finalizing a rate commitment with the lender that a specific interest rate will be held for you, at a certain price, for a specified period of time. At that time, you are guaranteed that interest rate regardless of whether the market improves or declines. The standard time periods for interest rate locks range from 15-60 days; however certain loan products and programs may carry different options. The alternative option is referred to as "Floating". This simply means that you are waiting to see what daily impact the market may have on mortgage rates until you decide to lock your rate. Borrowers typically utilize this option in an attempt to reap the rewards if there is an improvement in the market; however this also leaves the borrower vulnerable to potential downturns as well.

In a market when rates are either steadily increasing or decreasing, this decision is a little more apparent. However, in an economy where mortgage rates and other factors driving the market are extremely volatile, the decision is much more difficult.

It is a common misconception that when the Federal Reserve implements a rate cut that it is immediately correlated to a reduction in mortgage rates. While the federal funds rate contributes to the movement in mortgage rates, the two are not directly related. In fact, mortgage rates are based on mortgage backed securities or bonds and are strongly correlated with yields on the 10-Year Treasury note. Bond sales prices are similar to that of a stock in that they fluctuate continuously through any given trading day. Bonds are largely affected by various economic forces that influence the ever changing demand for bonds within the market. Each week various economic reports are released that influence the movement within the bond markets. Some of the key economic factors that have the greatest impact are unemployment percentages, inflationary fears, economic strength and the overall movement of money in and out of the markets. Like stocks, most fluctuation is caused by consumer and investor emotions.

Typically, if the demand for bonds is high then mortgage rates will go down. Conversely, if bond sales are down then interest rates tend to go up. A few quick tips that highlight the probable movement in mortgage rates based upon various changes in the market are as follows:

•· Release of Good Economic News - Increase in Mortgage Rates

•· Release of Bad Economic News - Decrease in Mortgage Rates

•· Increase in Stock Market - Increase in Mortgage Rates

•· Decrease/Correction in Stock Market - Decrease in Mortgage Rates

It is not unlikely for mortgage rates to change more than once in a given day. Unfortunately, investors are much quicker to re-price mortgage rates for the worse than they are to increase them in a positive direction for the borrowers.

The critical elements in deciding whether to lock or float are not only understanding what causes mortgage rates to fluctuate, but also paying close attention to the key economic indicators that determine this behavior to ensure you are able to react in a timely manner. In order to better assist my clients make an educated and informed decision, I post a daily blog entitled "FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation". Here, borrowers can find daily summarized updates of market conditions and other economic news that directly impact mortgage rates. This article also provides a recommendation based upon the prevailing market conditions.

Please contact the Krushinsky Team at 602-695-7575 or david.krushinsky@wjbradley.com for any additional information and questions.

It's been a tough battle over the last 4 years for a large majority of homeowners in similar circumstances as property values tumbled. Many people have already lost their jobs because of the widespread financial hardship we have faced as not only a nation but globally. One of the results of the global crisis is the inability of homeowners to pay for their mortgages and sell their homes. It's easy to make your payments when there's a monthly income, but with so many people getting laid off, most can no longer afford to pay for all their monthly obligations. We've created this article to address the question by so many homeowners, "What will it take to purchase a new home after a short sale, deed-in-lieu, foreclosure and/or bankruptcy?"

Here are the current guidelines to purchase a home after a short sale, deed-in-lieu, foreclosure and/or bankruptcy for Fannie Mae, Freddie Mac, FHA, VA and USDA loans.

FNMA – Federal National Mortgage Association Guidelines (Conventional Mortgages)

Guidelines changed regarding these issues on June 25, 2008 with Announcement 08-16.

• Short Sale: FNMA refers to these as “Preforeclosure Sales” and requires a 2 year waiting period after the sale, with acceptable re-established credit.
• Deed-in-Lieu: minimum waiting period of 4 years, with a minimum of 10% down required for 7 years. There is a 2 year exception for extenuating circumstances.
• Foreclosure: standard of 5 years waiting period, with minimum of 10% down & 680 credit score for 7 years. Primary residences only, no second homes or investment property loans for 7 years. There is a 3 year exception for extenuating circumstances.
• Bankruptcy: Chapter 7 requires a 4 year waiting period, but there is a 2 year exception for extenuating circumstances. Chapter 13 is 2 years from discharge date or 4 years if the Chapter 13 is dismissed (not completed).

FHLMC – Federal Home Loan Mortgage Corporation Guidelines (Convnetional Mortgages)

Guidelines changed regarding these issues with the release of Bulletin October 17, 2008. FHLMC isn't as user-friendly with their updates in comparison to FNMA. Instead of listing the specific changes in their Bulletins like FNMA, you must refer to their guidelines to find the changes. The ones related to our topic are found in Chapter 37-7.

• Short Sale: FHLMC refers to these as “Short Payoffs” and requires a 4 year waiting period after the sale, with acceptable re-established credit. There is an exception for extenuating circumstances of 2 years.
• Deed-in-Lieu: minimum waiting period of 4 years, with a minimum of 10% down required for 7 years.
• Foreclosure: standard of 5 years waiting period, with minimum of 10% down for 7 years. Primary residences only, no second homes or investment property loans for 7 years. There is an exception for extenuating circumstances of 3 years.
• Bankruptcy: Chapter 7 requires a 4 year waiting period. Chapter 13 is 2 years from discharge date or 4 years if the Chapter 13 is dismissed (not completed).

FHA – Federal Housing Administration

• Short Sales, Deed-in-Lieu’s or Foreclosures: They are all treated the same. A great source for the guidelines can be found at http://www.fha-lending.com/CD/HUD%204155r-5.pdf. All require a standard of 3 years waiting period required. There is an exception for extenuating circumstances.
• Bankruptcy: Chapter 7 requires a 2 year waiting period, minimum 12 months with extenuating circumstances. Chapter 13 requires 12 months of timely payments and must have court’s authorization.

VA – Veterans Administration

• The credit requirements are the same as FHA. More information can be found at: http://www.homeloans.va.gov/veteran.htm

RD – Rural Development

A part of the U.S. Department of Agriculture. The credit requirements are mostly the same as FHA & VA. More information can be found at http://www.rurdev.usda.gov/CA/pdf%20files%20and%20documents/GRH%20UNDERWRITING%20GUIDEL.pdf

• Bankruptcy: minimum 3 year waiting period required, no difference between Chapter 7 or 13. Extenuating circumstances may be considered for exceptions.

I strongly recommend checking out some of the links I’ve included if you have questions. If your facing any of these events I recommend documenting the circumstances while the situation is taking place.

Federal Trade Commission estimates as many as 9 million Americans have their identities stolen each year. Some identity victims can resolve their problems quickly, while others spend hundreds of dollars and many years repairing damage to their name and credit. Some consumers victimized by identity theft may lose out on job opportunities, or be denied loans for education, purchasing a home or a car because of the negative information that has been reported on their credit.

How do thieves steal an identity???

• Dumpster Diving - They rummage through trash looking for bills or other paper with your personal information on it.
• Skimming - They steal credit/debit card numbers by using a special storage device when processing your card.
• Phishing - They pretend to be financial institutions or companies and send spam or pop-up messages to get you to reveal your personal information.
• Changing Your Address - They divert your billing statements to another location by completing a change of address form.
• Old-Fashioned Stealing- They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They steal personnel records, or bribe employees who have access.
• Pretexting - They use false pretenses to obtain your personal information from financial institutions, telephone companies, and other sources.

How you can protect yourself from the dangers of identity theft???

• Conduct a Credit Check-up - Visit www.annualcreditreport.com to obtain a free credit report every 12 months. Review all three of your credit reports and look for any suspicious activity, unusual or inaccurate names or addresses, or any inquires that were done without your knowledge. In many states, you may place a 90-day "Fraud Alert" on your credit report, which further restricts access to your credit information. Simply call one of the three main credit bureaus to activate the alert. Equifax, 800-525-6285 www.equifax.com; Experian, 888-397-3742 www.experian.com; TransUnion, 800-680-7289 www.transunion.com.
• Dont Give It Up- Avoid falling prey to phishing scams, both over the phone and through email. In a phishing scam, identity thieves pretend to be someone from your bank or a credit institution and simply ask you for your personal information. If someone contacts you and requests any personal information, don't give it to them. Verify who is requesting the data and why, and then call the institution yourself. One extra phone call could save you a lot of trouble and money.
• Opt-out of Special Offers - Visit www.optoutprescreen.com to cut down on the pre-approved offers from credit card and insurance companies. It's also good idea to opt out prior to the refinancing of your home, as you may become part of a "trigger lead" to the credit bureau's, who sell your information to number of companies. It only takes a few minutes to opt out, but it could spare you a lot of junk mail and could possibly save you from identity theft.
• Protect Your Trash- The items you discard, including credit card offers, ATM receipts, bank statements, credit statements/receipts and utility bills, all contain personal information. With a bit of effort, thieves can collect this information and use it to steal your identity. To minimize this possibility, buy a shredder and use it. Similarly, when you discard an old credit card, be sure to destroy them completely first.
• Be Careful In What You Carry- Don't carry your social Security card, passport, or birth certificate in your wallet or purse. Also, only carry as many credit cards that are absolutely necessary. It has also been suggested that you photocopy everything you carry in your wallet to make canceling things easier in the event that your wallet is stolen.

Being the victim of identity theft can be extremely devastating not only because it's your money being stolen, but your name. Identity thieves can be very skilled at finding their targets and then exploiting their findings. For this reason, to protect yourself you need to stay all the more alert and knowledgeable. Call the Federal Trade Commission toll-free, 877-438-4338, or go to www.consumer.gov/idtheft for a step-by-step advice about what to do if your're a victim of ID theft.

For more information on applying for a home mortgage in Phoenix, please contact The Krushinsky Team at 602-695-7575 or david.krushinsky@wjbradley.com.

So you've decided to purchase a home in Moon Valley and you want to get the best deal on your mortgage. You get on Google and type in Phoenix Home Mortgage to check rates but all the advertisements have this other rate with the letters APR next to it. What is APR and why should you be concerned about it when you're financing your home in Moon Valley?

Annual Percentage Rate (APR) is a tool that consumers can use as a starting point to compare loan programs. However, it's important to keep in mind that APR is not a perfect system, and not all lenders calculate APR in the same way. While the Federal Truth-in-Lending Act does require mortgage brokers or lenders to disclose APR to the consumer, there is no rule written in stone for calculating this number that each and every lender agrees upon.

The "nominal rate" is the basic interest rate charged on the money you borrow (the principal). The "annual percentage rate" - or APR - factors in some of the upfront costs that vary from one loan to another (like points, fees and mortgage insurance) and spreads them over the life of the loan. (Other fees - like document preparation and application fees, title insurance, or appraisals - aren't included.)

In theory, you'll pay the same amount for two loans with the same APR - if you stick with that loan for the full 15-year or 30-year term. But few people do; most either refinance their mortgage or sell their house and move on long before their original mortgage is paid off. If you plan to move in a few years, you may want the loan with the lowest upfront costs, regardless of the APR.

How it works

Here's an example of how a comparison of APRs works in the case of two loan offers for a 30-year, fixed-rate loan of $150,000:

Offer A: Quotes an interest rate of 6.5 percent, plus one discount point and an origination fee of 2 percent.

Offer B: Quotes an interest rate of 6.4 percent, but charges two discount points, the same origination fee, and higher closing costs.

While the second loan may carry a lower interest rate and a lower monthly payment, a comparison of the APRs indicates that it is actually slightly more expensive overall because of the higher upfront fees:

Bottom line... be careful and think twice about those advertised low rates when they are accompanied by higher fees.

If you're thinking about refinancing your existing mortgage or buying a new home in the Moon Valley area in Phoenix, contact the Krushinsky Team at 602-695-7575 or david.krushinsky@wjbradley.com. Get pre-approved before you begin the search for your new home.