John Neil

I'm happy to announce that Shane Calder of Cornerstone Real Estate has been selected as MortgageLogan.com's Realtor of the month. Shane Calder is a true professional and Logan Utah is lucky to have him as a real estate agent. I had the opportunity to ask Shane a few questions about himself and real estate and this is what he had to say...

1. Why did you choose Real Estate to make a career?

Helping people buy or sell real estate is a huge responsibility. I like the fact that you are helping people purchase something that they want. You don't have to use shady salesman techniques to make someone purchase or sell a home. They want to do it. If I do my job, people are happy and that is the best reward in working in real estate.

2. What do you like about Real Estate?

The real estate market is ever changing. The key to being a successful real estate agent is staying on top of the changes and adapting to the current market. It is difficult and challenging. I find myself stepping out of my comfort zone to be successful. Approaching people is not the easiest thing for me. My constant drive is I am helping people make the most important decision of their life, and I want to make sure that it is the right one.

3. Is there anything unique about the Logan Utah Real Estate market compared to other areas of Utah?

The most unique thing about the Logan, Utah market is that it has been fairly constant. Even though the rest of Utah and the country took a big jump and then a fall, Logan has remained unusually consistent.

4. Where do you see yourself in 10 years?

In ten years I see myself still in the real estate market. I want to expand into residential and commercial development. Currently, I am studying those fields and really excited about the outlook on Cache Valley.

5. Tell us a little bit about yourself and your company.

I live with my wife and two children in Nibley. We love Cache Valley and look forward to being here a long time. I have been doing real estate for a little over 4 years now, and love the endless possibilities that it possesses. I have worked with investing, residential, and commercial properties. We enjoy the beautiful scenery, endless outdoor activities, and going to Utah State University sporting events.

Thank you Shane for being MortgageLogan.com's Realtor of the month. If you or someone you know is in need of exceptional real estate service, you can contact Shane Calder at 435-760-2009 or email him at shane@utahcornerstone.com.

I have created a new website called Logan Utah Mortgages which I believe will be very useful for anyone looking to purchase a home or refinance an existing mortgage in Logan, Utah and surrounding areas. My hope is that I can provide information that will help somebody make a better informed decison about their mortgage.

I appreciate any and all feedback, negative or positive. Let me know what you think! Thanks in advance!

Utah First Time Home buyer: 10 Dos and Don'ts!

1. Do hire a real estate agent: Hiring a real estate agent won't cost you anything (in the state of Utah the real estate agents commission is paid by the seller) and it could save you a ton of money. A good real estate agent will not only make sure the transaction goes smoothly but that you don't get taken advantage of.

2. Do get a home inspection: A good Realtor will also recommend this to you. A home inspection in Utah will run you anywhere from $200 to $300 but it could save you thousands in the long run. A licensed home inspector will check all the components of the home and can detect things that can't be seen with the naked eye. I recently had a borrower whose inspector found Asbestos in the home he was going to buy. The repairs would have cost him thousands. Luckily he only spent $250 and moved on.

3. Do attend a first time home buyer workshop: In most cities in Utah you can find a home ownership workshop sponsored by either a local University or a local real estate professional. In most cases, these workshops are free and can give you some much needed insight into the world of buying a home.

4. Do establish a realistic budget: What you can afford and what you can qualify for can be two very different things, even in today's climate. It would behoove first time home-buyers to establish a realistic budget to see how much they can afford. In particular, they will need to analyze how much they are currently paying in rent and how much more they will pay for a mortgage (including property taxes and insurance), utility costs of a the new home, annual home repair costs, etc.

5. Do get pre-approved first: Most real estate agents will want you to meet with a loan officer to get pre-approved before they will take you out looking for homes. When you do meet with your loan officer, make sure to bring your last 2 years tax returns with W'2s, Last 2 pay stubs, and last 2 checking and savings account statements. By bringing these documents, the loan officer can give you an official pre-approval and not just a pre-qualification.

Don'ts for Utah First Time Home buyers

1. Don't rush into buying a home just to get the $8,000 tax credit: $8,000 is a lot of money but if you buy the wrong home which requires constant repairs, that $8000 won't last very long and you'll wish you took more time finding the right home.

2. Don't gamble with the interest rate if you are comfortable with the payments: When you finally have a home under contract your loan officer will give you the option of locking or floating the interest rate. My advice is this: Nobody knows the future of interest rates and if you are comfortable with the payments, lock it! Getting a little bit lower rate is not worth the risk of having to take a higher rate and a payment that is more than you budgeted for.

3. Don't do any repairs on the home until after escrow has closed: Once again a Realtor would never allow their buyer to do something so stupid, but I have heard of buyers that did extensive repairs and spent a significant amount of money on a home only to find out that the deal wasn't going to work out.

4. Don't try to time the market. The housing market is kind of like the stock market in that you will never be able to pinpoint the bottom until everything has turned up. How else can you pinpoint the bottom? Teal estate can be a great hedge against inflation but more importantly it is a home. Focus on personal lifestyle needs more than trying to time the market.

5. Don't get a loan from a company that advertises "creative financing"."Creative financing" is just a euphemism for "you are going to get screwed". Stick to the basic loan programs which are easy to understand and, more importantly, are affordable.

When you are buying a home you can't always rely on your loan officer to tell you what you can afford. The fact is that what you can qualify for and what you are comfortable with can be two very different things. To find out if you are truly comfortable with a potential monthly payment there are a few things that you should do...

Develop a Realistic Budget
You should develop a monthly budget and write down every single monthly cost and include a contingency fund of 10% for the unexpected. After the mortgage payment, do you still have enough to put some into savings? into an emergency fund? Are you going to have to cut out cable/Internet, eating out, or other luxuries that you can't do without? If you are uncomfortable with your answers, look for a different house.

The Industry Standards
You could also use the standard "housing ratio" and "debt to income ratio" which underwriters use to determine whether the payments are affordable. Those standards are that you shouldn't spend more than 28% of your gross monthly income on your mortgage payments and that you shouldn't be spending more than 41% of your gross monthly income on your mortgage payments along with other monthly debts (e.g. car payments, credit card payments, student loans, etc.)

It's possible to get approved if your ratios are higher than these standards, if you have very good credit or a large down payment for example. But unless you live very frugally it's likely that you will struggle with a mortgage payment that high.

Account for all increases!
you need to look at your current housing expenses and take into account all of the increases that you will see if you buy a new home. You will need to ask yourself at least these questions...

• How much more is the new mortgage payment (including hazard insurance and property taxes) vs. our current rent payments?
• How much more or less will the utility bills be?
• How much do we need to set aside each month for potential home repairs? (Studies show that you will pay 3.5% annually of the purchase price for a new home and 4.5% for an older home)
• Is there an HOA fee that we need to account for?

*You also need to find out how much more of a tax refund you will get because mortgage interest is tax deductible.

The Eight Hour Rule
If you have taken all of the above steps and passed there is still one more test that you need to be aware of. You can always fall back on the eight hour test to determine whether you will be comfortable with a new mortgage payment. If you find yourself reaching for the Tylenol PM at 2 am, chances are that you will not be comfortable with your new mortgage payment.

For those that are interested in purchasing a home in Logan, Utah, I will be teaching a first time home buyers class on October 15th, 2009 in conference room 305 of the University Inn on Utah State University Campus from 6:30pm to 8:00pm. Those in attendance will learn about...

-The $8,000 tax credit
-The $4,000 home run 2 grant
-The $7,500 "Welcome Home Own in Logan" grant
-The BRAG down payment assistance program

Some other topics that will also be taught are...

-What you need to qualify
-How to make the loan process go smoother
-How to effectively shop for a mortgage loan
-How to buy a multi-family property and save money on your mortgage payments

Other topics that may be taught...

-100% financing options
-How to buy a home with a co-signer

If you are interested in attending this class, please contact John Neil at 435-770-2709 or john@mortgagesbywms.com to register.