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ST. GEORGE HOME BUYERS: Get Power with a Pre-Approval

by Jeremy Larkin - St. George Real Estate Ninja

Pre-approvals are the real deal! Recent studies show that Buyers who get "pre-approved" are significantly more likely to actually CLOSE on a home as those who are just "pre-qualified." β€‹Is there even a difference? YES. 

In a prequalification scenario, you call a Lender, tell them your income over the phone and perhaps​ they run your credit, after which they say, "you're good to go." The problem with this? It's like calling your Heart Surgeon  and just explaining the symptoms over the phone. Can you even imagine it? NO WAY. That Doc would IMMEDIATELY SAY, "I can't diagnose you over the phone. Come in for a full checkup." 

Enter stage right: The PRE-APPROVAL. In this scenario, a Lender who's worth their weight in salt...and gold, and a bunch of other stuff, has the Buyer bring in FULL documentation of employment, income, and pulls credit. They are literally saying, "barring a major disaster (like the purchase of a speedboat) and pending a signed sales contract between Buyer and Seller, you're GOLDEN for $_____. That's power for 2 reasons:

1. You're not wasting your time. You know what's real and you're armed for battle if you find the home of your dreams.  

2. Sellers in today's market DEMAND Buyers get a strong pre-approval, especially​ banks selling foreclosed homes. 

Check out the vid below on this subject by KW International. In the meantime we want to thank Matt Hickman of Academy Mortgage for some fine insights on this subject - he's one of the very best. If you'd like to inquire with Matt about YOUR home loan, he can be reached at 435-632-6811, or matt.hickman@academymortgage.com to discuss a home loan pre-approval. 

The (eternal) Real Estate Question: Rent or Buy?

by Blake Banch - First Colony Mortgage

We are all likely growing a little tired of the cliché, “Now is the time to buy”.  I have personally been hearing that since 2006, when frankly, it wasn’t the time to buy. 

Those closest to me know that I am a numbers nerd, (amongst other nerd classifications I also fit into).  I might also need some work on my faith because I need to SEE the numbers to believe.  I just read this article on CNNmoney.com and it said the following.

“To determine whether it makes more sound financial sense to rent or buy, economists generally use a rule of thumb: They divide the purchase price of a home by the annual rent of a similar property. Anything over a 15, and you should rent because it will cost you less over a period of time. Below 15? Start looking for homes.”

Ok, so let's test this "rent or buy" equation right here in our own town shall we?

I ran some numbers on St. George using about 10 different properties.  I used some real life active listings (not short sales…homes you can actually buy) from my good friend and rock star realtor Jeremy Larkin and some similar rental properties from Jensen Property Management, Preferred Property Management, and Monarch Property Management’s websites. I compared rents and list prices of similar homes and I came up with a composite of 11.4.

According to this equation…….BUY!!!!!

Here's the full CNN "Rent or Buy" Article.

 

Blake Bench is a professional Mortgage Loan Officer with First Colony Mortgage in St. George, UT. He's also a "Real Estate Jedi" - you know, one of the GOOD GUYS. He can be reached at (435) 705-4128 or blakeb@firstcolonymortgage.com or check out his MORTGAGE BLOG.

Getting a Mortgage? Don't expect any favors from your old bank.

by Jeremy Larkin

Are people getting mortgages? YES. Is it as easy as it used to be? THANK HEAVENS NO.

We've recently had many would-be Buyer clients tell us that they met with their "old bank" and the bank wouldn't just give them a home mortgage loan right there on the spot.

That was 2005, (or maybe 1935?), this is 2010 - post real estate melt-down. The banks learned their lessons so don't plan on running down to your old Savings & Loan and saying, "Barney, how's the wife and kids? I need a loan - where do I sign?"

We've all got to jump through the hoops of the mortgage system now, and that's just fine.

Buzz, Woody & Govt. Mortgage Bailouts

by Jeremy Larkin

"Dumbed Down" Transcript:

We're gonna keep this short and sweet, but don't misenterpret the length for poor quality. What I'm about to say regarding your mortgage could save you THOUSANDS:

In a world of uncertainty, 2 things ARE certain:

1. Toy Story 3 premieres this Friday.

2. Many people are getting mortgage refinances even though they have negative equity.

In this week's episode Jeremy Larkin talks about "how" people with no equity, even 2nd mortgages are getting refinances. I know what you are saying - "WHAT? You mean I can refinance my home even if I owe too much on it?"

MAYBE. It depends on if it's a Freddie Mac or Fannie Mae loan. Watch the video to learn more. This has recently come to my attention by way of some precious chat time with my one of my favorite Mortgage Professionals - Blake Bench of First Colony Mortgage.

On the Toy Story note, the Larkin Group has got to rednezvous with Star Command...AND grow their Facebook fan base to 200 members. If we hit that mark by the end of tomorrow, we will be drawing for a $50.00 Toy Story 3 Ticket package!

How do you do this? Just visit our facebook page: http://www.facebook.com/pages/Saint-George-UT/The-Larkin-Group/84042546052  Check the page out. If you like it and feel like we are sharing an important or authentic message, click "like." If you dont' like it? Well then don't - it's your call!

THEN simply click on the "suggest to friends" tab on the left and follow instructions.

Until then, here is a link to Blake's full video report on refinancing your potentially underwater mortgage: Southern Utah Home Loans

$8000.00 Tax Credit used as a Down Payment?

by Blake Bench

Don't you just LOVE the $8000.00 first-time home buyer tax credit? I'm sure I will get a variety of answers to that question. If you are buying you SHOULD love it and if you aren't your answer will vary based on your political opionons. Regardless, it is a really great tool that has been instrumental in the "jump-start" of real estate again in the good old USA.

There is a lot of buzz out in the real estate world right now about the first time home buyer tax credit being used as a down payment.

 As things are right now, you don't get the tax credit until after you close so you can't use it as a down payment unless you can get mom and dad to "float" you the money for a few weeks. This is completely legal and ethical, and we are seeing many home buyers do just that. Those that don't need the money as downpayment are spending it on home repairs and upgrades.  

Essentially, your family would have to give you a "gift" and then have you pay them back with the money from the tax credit.

There are plans in the works to change that rule and provide a way for buyers to used the tax credit as a down payment, applicable at closing. It would have to work in a similar fashion, since Uncle Sam is not going to send you 8 grand until you prove that you have purchased a home, but may provide a way for buyers to cut the "gifter" out of the picture. 

I want YOU to buy a house!

There are some kinks yet to be worked out because lenders don't want to be left holding the bag if the buyers don't repay them with the tax credit. I don't blame them...

In whatever form it comes it will be a welcomed addition and hopefully provide many more first time home buyers the means to not only purchase a home, but to do so in a more "cautious" manner than we saw in the previous hyped-up, $0-down-driven real estate boom.

Thoughts? Questions?

Blake Bench is a professional mortgage planner with Bank of America in St. George, UT. He can be reached at (435) 705-4128 or blake.bench@bankofamerica.com.

The average US citizen looks at NAR (National Association of Realtors) as nothing more than another lobbying group that spends its' days and nights telling buyers that every day is the "right time to buy."

What people (this includes Realtors themselves) don't realize is that they are doing a CRITICAL work for the country in getting legistation passed that benefits us all. So what did they do this time? Nothing besides creating an opportunity for 1st-time home buyers to get $8000.00 of FREE MONEY from the government!

Yes, FREE, so long as you hold the home for at least 3 years. That is pretty easy since I am counseling ALL of my clients to buy for the long-term.

Many thanks to one of my lending partners, Blake Bench of Countrywide Home Loans, for this timely breakdown of how the latest ("latest implying one of MANY bailouts...) multi-GAZILLION dollar (gazillion with a "g") bailout legislation.

This sign is posted on the doors of Congress....

The information is not only timely, but downright critical to not only those of us either working in the industry, or trying to buy or sell real estate right, but the greater populiation at large. Until we get the real estate markets more healthy, there will be major financial pain worldwide.

The only thing most of us hear about the bailout package is that GM and others want taxpayers to pick up the tab on a few million transmissions.....good to know, but not relevant to real estate. Here it is:

  • Tax Credit: The tax credit for first time home buyers has gone up from $7,500 to $8,000. I also understand that this new amount doesn't have to be repaid. I have been helping buyers see that they could use this money to repay a gift from a relative. Maybe then they can come up with a down payment. (I wish that they had passed the $15,000 credit for any homebuyer but sometimes when you wish upon a star your dreams don't come true.) I have to add the disclaimer for all buyers to talk to their accountant or tax advisor about this since I am not licensed to give that type of advice.  Here is a breakdown of the tax credit:

 

Still not making sense? Here is a step-by-step explanation: 2009 Tax Credit Explained

  • Help for struggling home owners: Many borrowers from the last few years put nothing down or very little down toward the purchase of their home. With home values now lower many are upside down and can't refinance. New legislation may allow them to refinance with LTV's up to 105% of the homes current value if they have stayed current on their payments. I am going to call all of my database and see if I can help them lower their payments.
  • Modifications: Billions of dollars are set aside to help people modify their loans without refinancing. They do not have to have missed payments to qualify for this.
  • Keeping Interest Rates Low: Bear in mind that current interest rates are "artificial" in nature and WILL NOT stay this low for ever. (This subject merits its' own discussion) These "artificial" rates are part of the government's plan to "prop up" the ailing economy. Treasury and Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to ensure stability and liquidity. The Treasury will also provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down

Departing from Blake's starter course on the bailout, let me add the following advice: Make sure you completely understand the rules, regulations and consequences (good and bad) of things like tax credits and local "grants" for home buyers.

In the meantime, chime in with any key information or ideas you have on this bailout business!

Fannie and Freddie Suspend Foreclosures

by Jeremy Larkin

This is straight from CNN.com:

NEW YORK (CNNMoney.com) -- Mortgage giantsFannie Mae and Freddie Mac have directed their network of servicers to halt all foreclosure and eviction proceedings between Nov. 26 2008 and Jan. 9, 2009, meant to give a recently announced rescue plan time to work.

The Streamlined Modification Program, set to launch Dec. 15, enables delinquent borrowers to get a modified mortgage that lowers payments to no more than 38% of their gross incomes.

"By delaying these foreclosure sales, the nation's servicers will have the opportunity to work with more borrowers who could qualify for a modification under the new [program]," said Freddie Mac CEO David M. Moffett in a statement.

Hmmmm.....like so much of the news we have seen lately, this news leaves homeowners saying "that sounds great, but what does it REALLY mean for me?"

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This was interesting:

Freddie has told its servicers to immediately contact the 6,000 borrowers who already have auction sales or evictions scheduled for between the specified dates to tell them the sales are postponed. Fannie estimated that 10,000 of its borrowers will be affected. Borrowers facing eviction between Nov. 20 and Nov. 26 were not expected to get relief.

 

 

As an Industry Professional, it is truly a crazy time. We are being contracted to do things that would have made your head spin had we mentioned 3 years ago. One of those tasks is a "Home Retention Consulation."

This is a process in which licensed agents, like myself, are contracted with to go and contact homeowners who are #1 - in default on their loan, and #2 - not responding to lender contact about the situation.

I was contracted with this past week to work with a group called "Titanium Solutions" to do just this. The goal is to first make contact, and ultimately assist the borrower in making a loan modification, much like that described above, so they can keep the home. It's better for the bank, and if the borrower can get their finances in order, much better for them and their credit. Everyone wins, really.

"Home Loan Consultant'......who would have THUNK it?!?!?!? Stay tuned for more!

Full article HERE.

 

 

Borrowing Buyers From the Future: A Real Estate Time-Travel Drama

by Jeremy Larkin

So a lot of people (see: "Sellers") have been wondering what the *$%! happened to their home equity and this crazy housing market in general, and for many months now I have been repeatedly put to the test of "describing" the status of the current housing market, which to fully explain requires some time travel.  

Well, yesterday in a Keller Williams sales meeting the Universe smiled upon me and gave me the gift I had been looking for....NO, not a week in Hawaii far from the foreclosures, short sales and general cry of pain I hear on a daily basis. Rather, a CARTOON depicting the history of the housing market and what led us to this deep, dark place called a....(shhh, keep this to yourself...)..."Housing Crisis."

**IF YOU HAVE ANY INTEREST AT ALL IN THE HOUSING MARKET, THIS IS FOR YOU. IF YOU HAVE LOTS OF INTEREST IN THE HOUSING MARKET, THIS IS REALLY FOR YOU. IF YOU WANT TO LOOK SMARTER THAN ANY OF YOUR FRIENDS, THEN THIS CLIP IS REALLY, REALLY, REALLY FOR YOU.**

So sit back, make sure the Flux Capacitor is calibrated, set the dial to the 'funk' of 1970, and enjoy 7 1/2 minutes of the absolute BEST explanation of this housing mess I've EVER SEEN, courtesy of John Burns, a Real Estate Consultant who spends his days analyzing housing data all over the country.

I WOULD LOVE to get some of your opinions on this clip...please feel free to comment below!

 

Aspiring First-time Home Buyers who have been sitting on the proverbial real estate fence may see their "ship" coming in this year in the form of a new Federal Housing initiatives.

In the latest move by the U.S. government to stop the national housing & economic bleed, first-time buyers will be able to take advantage of a temporary tax credit of up to $7500.00.

The stipulations look like this:

-Home must be purchased between April 9, 2008 and July 1, 2009

-Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for full credit

-Only primary residences qualify (no 2nd homes, rentals, etc)

It's no doubt that one of the challenges the encomy faces in getting jump-started is that of fewer financing options for today's buyer. The Media isn't helping either, but despite their mass over-dramatization of the issue, we have to expand rather than contract to beat this current situation. One of the best ways to do that is to get first-time buyers off the fence and into the equity-producing tax shelters we call home ownership.

Don't Forget New FHA Limits
One program that has made a HUGE comeback this year and, quite frankly, seems to work on 99% of the deals I've seen it used in, is the FHA loan. New loan limits for FHA will be the greater of $271,050 or 115% of an area's median home price.

Conforming loan limits for Freddie Mac and Fannie Mae will be the greater of $417,000 or 115% of the an area's median home price; up to $625,000. In Washington County this will be $417,000.

Get detailed info here: http://www.federalhousingtaxcredit.com/.

 

Historic Fed Rate drop cuts both ways for Borrowers...What about you?

by Jeremy Larkin

FIrst of all, I'm NOT a mortgage specialist, so what you get here is my best summary based on personal research. (meaning you might want to stop reading now if you really appreciate authoritative mortgage commentary!) On the heels of its surprise rate cut of .75 basis points last week, the Federal Reserve cut key interest rates again, the fifth straight cut since September 2007.  In short, economic data suggests the US is on the brink of recession, and the Fed is acting accordingly.

Who benefits from this cut?
I am LOVING this cut as a HELOC borrower! If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit (HELOCs) and variable rate charge cards are the types of loans that will have an interest rate reduction on their next statement.

What does this mean for long-term rates?
Long-term mortgage rates could actually increase after yesterday's cut, based on historical performance and recent trends. Wierd to some, I know, but it's just the way it is.

How does the economic stimulus package fit into the picture?
The economic stimulus package from Congress and the White House could be a double-edged sword for borrowers. Combined with recent Fed actions, the package could create inflation and bring about higher long-term interest rates.

On the positive side, conforming loan limits are likely to be raised from the current $417,000 to upwards of $625,000. This means great potential savings for purchase and refinance candidates who live in high-cost areas across the country.

The reality is that as always, "timing the market" is next to impossible, and if you want to know a little secret - some of the most savvy investors I know are on the lookout for purchases to hold long-term RIGHT NOW. As far as economic stimulus goes, I'm not seeing immediate improvements in the local market, so the jury is still out.

Displaying blog entries 1-10 of 10

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Photo of Jeremy Larkin - The Larkin Group Real Estate
Jeremy Larkin - The Larkin Group
Keller Williams Realty
50 E 100 S, Suite 300
St. George UT 84770
435.767.9886
Fax: 435-359-5085

St. George Real Estate - Your premier destination for St. George,Utah Real Estate Listings, Home Values, MLS Search, REO/Foreclosure Info &  St. George Real Estate Statistics.  Serving St. George, Santa Clara, Ivins, Washington, Hurricane, LaVerkin, Toquerville & more! Specializing in REO/foreclosure properties, frustrated Sellers, First-Time home buyers, and Investors. Looking for the most LOCAL St. George, Utah real estate information available? Your search is over!