All posts in Mortgage Education 101

Is A No Closing Cost Mortgage The Way To Go?

by Justin Miller on May 16, 2012 in Conventional Loans, FHA Loans, Jumbo Mortgages, Mortgage Education 101 with No comments

 

 

 

 

 

 

 

The answer is that it depends on the individual buying and their goals.  With a refinance right now it can be a great option because if rates are to drop further you can refinance again.  If you plan on holding onto the mortgage for a long period of time then it might make more sense to pay the closing costs.  Keep in mind that nothing is free in life and the catch here it that the interest rate will be higher than if you pay the closing costs on your own.

This is where a Mortgage Professional comes into play and you need to make sure you are being given all of the options available so you as the borrower can determine what is best for you and never have any regrets.

Will Homes Ever Be Cheaper Than Now?

by Justin Miller on May 3, 2012 in Mortgage Education 101 with No comments

 

 

 

 

 

 

There is no way to know that for sure right now but I feel if you don’t buy sometime this year you will have missed out.  Now it does depend where you are buying because everything is local.  My personal opinion is that now is the time to buy in Fort Lauderdale and the South Florida area.  You need to be sure you are buying in a good area, with good schools, etc. as it’s tough to generalize and say everyone is good to buy because I don’t feel that is the case.

Check out this article from CNNMoney – “Buying a Home Won’t Get Much Cheaper.”

“That could have a significant impact on the market overall in terms of providing a rising floor to home values,” he said.

In some markets hit hard by foreclosures, the turnaround in prices is already underway. Phoenix recorded an 8.4% jump in home prices during the three months ended April 30, compared with the three months ended January 31, according to Clear Capital.

“It’s crazy,” said Tanya Marchiol, founder of Team Investments, a Phoenix real estate investing firm. “Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000.”

Miami saw a 4.6% increase quarter-over-quarter through April, andTampa, Fla., was up 4.4%, according to Clear Capital.

Mortgage Insurance Choices

by Justin Miller on April 11, 2012 in Conventional Loans, Mortgage Education 101 with No comments

 

 

 

 

 

 

 

It is so important that when you are working with a Mortgage Professional that you are being given all the different loan options.  If you have been following my Blog for a long time now you would know that I am a fan of a big, long mortgage.   This is now more important than ever as FHA has increased their mortgage insurance premiums.

Did you know that there is borrower paid monthly premiums, borrower paid single premiums, lender paid mortgage insurance, etc?  Did you know that there are different mortgage insurance companies with different premiums?   Most people do not know this and actually most Mortgage Professionals don’t either.

How do you know which one is the best for you?  You can do that by contacting me to see your different options.

The Perfect Loan – What’s Needed To Close

by Justin Miller on April 10, 2012 in Conventional Loans, FHA Loans, Mortgage Education 101 with No comments

 

 

 

 

 

 

This is the best article I have ever read from Forbes and anyone looking to get a mortgage MUST read this.

“THE PERFECT LOAN FILE“  – here is one paragraph that can occur a lot throughout the loan process:

It all comes down to your proof. If the lender asks for a specific document, give them exactly what they are asking for, not what “should be OK,” – because it won’t be. This is where the approval process tends to go off the rails, when the lender asks for specific documentation and the borrower supplies something else. Here, too, is where both sides get frustrated. So if the
lender asks for a bank statement and there are 5 pages for that bank statement, send them all 5 pages, and not just the summary. If you send them the summary page and they ask again, don’t complain that the lender keeps asking for the same thing when you never sent it in the first place. This may sound elementary, but the vast majority of mortgage approval process woes stem from scenarios just like this.

 

The Cost of Owning A Home Versus The Price of The Home

by Justin Miller on March 23, 2012 in Interest Rates, Mortgage Education 101 with No comments

 

 

 

 

 

 

 

 

This goes back to what I have said time and time again but every 1% increase in interest rates reduces your buying power 11%.  This is one of the reasons you are seeing so many articles about why now is the time to buy.

You have to take a look at this chart from KCMBlog.com illustrating the impact of interest rates on your mortgage payment.  Interest rates will go up and when they start to you will see a large increase in a short period of time.

Advice From A Billionnaire

by Justin Miller on March 17, 2012 in Mortgage Education 101 with No comments

 

 

 

 

 

 

 

This is a must watch video with Warren Buffett on owning a home.  You can fast forward it to 5 minutes and 10 seconds to hear what he has to say.

The best financial advice you can get is not from a family member, co-worker or a friend. If you want to get good at golf you get someone who is good at golf to coach you.  A billionaire is one of them.

The most expensive advice you will ever receive is the advice from your financially struggling friends and relatives that are not wealthy and have no plans of becoming wealthy. - Robert Kiyosaki

Buying A Home With Your IRA

by Justin Miller on March 14, 2012 in Mortgage Education 101 with No comments

 

 

 

 

 

 

 

Please make sure to always consult your tax professional and financial planner but I thought the article from CNBC, “Buy Foreclosures With Your IRA,” was very informative and may or may not be right for some.

It may sound risky, but with strong rental demand and relatively little supply of single-family homes, it could be far less risky than the stock market. That’s because your gains are largely coming from rental income, not home appreciation, which is why this works so well in today’s market.

Buy vs. Rent

by Justin Miller on February 24, 2012 in Mortgage Education 101 with No comments

 

 

 

 

 

 

 

This was a great article in the Sun Sentinel , “Rent vs. buy: Decisions comes down to job, finances.”  If you are comfortable with your job and have the money saved for a down payment, closing costs, prepaids, and reserves leftover after closing it couldn’t be a better time to buy in Fort Lauderdale and South Florida as rents continue to rise.

Interest rates are at historic lows and once they do rise they are going to jump and I would imagine the jump will be a half a point or more.  Keep in mind every 1% increase in interest rates reduces your buying power by 11%.

Have We Hit A Bottom In The Housing Market?

by Justin Miller on January 30, 2012 in Mortgage Education 101 with No comments

There is no way to tell and I am not in the business of calling a bottom.  What I do know is that in Fort Lauderdale and South Florida home prices are extremely attractive, rates are low, and rents are rising.  If you feel secure with your job, have money saved, and will hold onto the house for at least 10 years now might be the best time to buy.  Remember, every 1% increase in an interest rate it reduces your buying power by 11%.

In an interview with Robert Shiller when asked about whether we have hit bottom he said “When people phrase is that way, they say ‘we’ve reached the bottom.’ That suggests that we have the expectation of a major turning point right now. But I don’t see that. I don’t see any reason to think that prices are going to start heading up dramatically now. We do have some good news. Permits are up. Notably, the National Association of Homebuilders Housing Market Index is up and that’s a forward-looking index. But it’s not up very much. If you look at the rate of change it looks dramatic but it’s still at a low level.”

I feel he hit it right on the nose.  It’s a really good interview and I highly recommend reading it.

To Mortgage or Not To Mortgage: That Is The Question

by Justin Miller on January 28, 2012 in Mortgage Education 101 with No comments

I have heard so many people talk about getting a 15 year fixed mortgage versus a 30 year fixed mortgage or buying cash.  I am sure you have heard me quote Ric Edelman in the past about the reasons to carry a big, long mortgage and he’s correct.

In this article, “Don’t rush to pay off your mortgage,” I think they describe it best by saying “When it comes to home loans, we’ve become a nation of debt-a-phobes.”  It is easy to think that leverage is bad after experiencing the worst downturn since the Great Depression but it’s not when used correctly.

“You could save a lot of interest by choosing a 15-year loan over a 30-year — about $63,000 after taxes on a $200,000 loan for someone in the 28 percent tax bracket. But ask yourself whether you can really afford the higher monthly payment — in this case, $1,420 versus $955. Have you maxed out your 401(k) and built up an emergency fund? Paid off credit cards? Funded insurance policies and, if you desire, college savings? If you haven’t, choose the 30-year loan. And if you have, choose the 30-year loan anyway and put the difference between the two payments in a savings or investment account. You’ll build up a nest egg that might keep you afloat (and in your house) if you lose your job or get sick. The strategy requires discipline; setting up automatic payments helps.”

A mortgage is a financial tool when used correctly and you can build a larger net worth by taking out a bigger and longer mortgage when putting your leftover monies to work elsewhere.

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