Strategy7 | Premier Mortgage & Wealth Planning Services

Hitting Bottom: Another 2012 Myth?

mike — Mon, 30 Apr 2012 22:58:09 +0000

We have been hearing all the myths of whats to come in 2012 for years now; which isn’t much different than what we can say about the housing market. When will it finally hit bottom? Many people have been hungry for that moment when house prices stabilize and start to creep back up, and have heard of this “bottom” falsely claimed by experts time and time again. In the last few weeks, there have been reports produced which have analysts optimistic that we may have finally found the bottom.

While home values rose 0.5 percent in March from February, the largest monthly increase since May 2006 when the housing recession began, it is still too early to call rising home values a trend. Home values are still expected to see a modest (0.4 percent) decline late into this year or early 2013. But there is hope that the bottoming process is under way and a slow healing process is in front of us.

Take a look at Zillow’s home Value Forecast. The cities to the left show a positive increase in home value, which likely means that they have already reached bottom. Additionally, moving more towards the middle, cities like Baltimore, Los Angeles, and Portland, are expected to reach bottom this year.

These cities, including Portland, or still uncertain enough to make predictions difficult. However, low home values paired with extraordinarily low mortgage rates should serve as a signal to consumers that now is a great time to buy. As more home buyers get off the fence, home sales will continue increasing, depreciation rates will slow, and home prices will begin to stabilize in the long run.

If you are curious to what you can afford, try our Mortgage Calculator, or contact us.

Resources: ABC News http://ow.ly/aCh9z, Zillow Real Estate Research http://ow.ly/aChbG, Time Business http://ow.ly/aChdR

Are You Paying Too Much to Live in Someone Else’s Home?

mike — Mon, 23 Apr 2012 23:19:50 +0000

We are presented with new investment opportunities every day, and while some may seem enticing, there is no denying that home-ownership is still one of the best investments you can make. And its becoming easier to take hold of this opportunity. Over the past 5 years more renters have become qualified to buy a home due to increasing incomes, population growth, reduced home prices and lower mortgage rates. As a result, the minimum income necessary to purchase a median priced home is $40,300, down from $56,600 in 2005.

Financial Benefits of Home-ownership

* It’s a good asset. If you’re seeking a good long-term investment, look no further than a house. Each month that you pay your mortgage, you build equity. The longer you own the home, the more equity you are likely to accrue, which is more than can be said for renting.

* You will provide a boost to the local economy. New homes generate $90,000 in tax revenue, and sales of existing homes generate $60,000 in peripheral activity.

* Enjoy tax deductions and credits. In the U.S., home-ownership offers big tax advantages in the form of deductions for mortgage interest and credits for certain home improvements.

Lifestyle Benefits of Home-ownership

* You are free to redesign your space. You can renovate your home to adapt to the latest design trends or expand to meet the needs of a growing family without the approval of a landlord.

* You will become more invested in your community. Home owners are more likely to vote, volunteer and participate in local government meetings and events.

* Home-ownership is good for your health. 44% of home-owners rate their health as “Excellent” or “Very Good” in contract to only 29% of renters.

Rent vs. Buy

mike — Tue, 10 Apr 2012 20:56:09 +0000

The decision to rent or buy is always a good debate full of pros and cons. When going through this debate there are some important tips to consider…

#1 – Time : When thinking about whether to rent or buy a home, you need to think about the amount of time you plan to stay in that home. If you are planning to live in a place for 5 years or more then you are probably better off buying. There are costs associated with the purchase of a home that are difficult to make back.

#2 – Income Stability : Buying a home and getting into a mortgage payment is a large financial commitment. If you do not have a stable income this mortgage payment could become a burden. Renting however gives you the flexibility of easy change to accommodate the change in your income if it is not as stable.

#3 – Percent of Income : You don’t want to spend more than one third of your income on housing related expenses, which includes mortgage payment, property taxes and insurance, and any other housing related expenses. The smaller this percentage is, the more unpredictability you can suffer and still handle.

#4 – Quality and Inventory : The rental and for sale markets vary in the quality and inventory they offer. When looking for a new home or deciding to rent or buy it is important to compare these two markets and see where you are able to find the place that fits you best. With more people looking to rent, many investors are converting single family homes there were once for sale into rentals.

#5 – Research : Before you decide to buy, you should research the overall health of the neighborhood. There are websites such as Foreclosure.com where you can see the number of foreclosed and distressed homes in the area.

Below are some numbers to consider on a scenario where “Mr & Mrs You” are renting a home that is worth $200,000 or buying the same home that costs $200,000. You can see how the time spent in the home, renting or buying, makes a large difference. Ultimately it is your preference which works best for you. If you want more information or just help looking at your own personal scenario, contact us!

What is a Mortgage?

mike — Wed, 28 Mar 2012 23:57:38 +0000

A Mortgage, or home loan, is a legal contract made between a lender and a borrower that uses the transfer of an interest in property to the lender as a security for a debt. While a mortgage in itself is not a debt, it is the lender’s security for a debt. The lender can take possession of the property if the borrower fails to pay the prearranged home loan payments. Use our mortgage calculator to get an idea of what you may be able to afford.

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What is a Mortgage Refinance and why should I refinance?

mike — Wed, 28 Mar 2012 23:56:20 +0000

A refinance is when the borrower uses the money from a loan to pay off an existing home loan. There a numerous reasons customers refinance the loans they already have, including; to lower the monthly payment or interest rate, to switch from an adjustable rate to a fixed rate, or vice-versa, to refinance for a higher amount in order to pay off other debts or get cash, to use some money out of their equity, or most commonly to improve overall cash flow.

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What’s the difference between a Fixed and Adjustable Rate Mortgage?

mike — Wed, 28 Mar 2012 23:54:20 +0000

With a fixed rate mortgage, the interest rate and the amount you pay each month remain the same over the life of the loan, traditionally 15 or 30 years.

With an adjustable rate mortgage (ARM), the rate fluctuates according to the interest rates in the economy. Initial rates are typically offered at a discounted rate, lower than the rate for fixed mortgages, but will change over time. The ARM rate is capped on how much and how often the rate and/or payments can change in a year and over the life of the loan. When choosing which mortgage is right for you, consider factors that could affect your decision, such as how a higher monthly payment might impact your budget if the rate were to increase and the length of time you plan to stay in your home.

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What is the difference between Interest Rate and APR?

mike — Wed, 28 Mar 2012 23:53:01 +0000

The interest rate is the cost to borrow the money disbursed in the loan. The APR is the total cost of the loan over its life, including costs, points and fees.

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How much do I need for a Down Payment?

mike — Wed, 28 Mar 2012 23:52:04 +0000

You can purchase a new home with as little as 3.5% down, which can be partially or fully gifted. Check out this post to read more details 80% of Portlanders falsely believe you need 20% down to buy a home

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What is LTV?

mike — Wed, 28 Mar 2012 23:51:06 +0000

LTV stands for loan-to value. It is the total amount of your loan on the property divided by its fair market value. The LTV is calculated by the lender to see which type of loan you can qualify for as well as examining the risk of the loan. Higher LTV ratios are generally seen as higher risk and will generally cost the borrower more or will require the borrower to purchase mortgage insurance.

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Do I have to have perfect credit?

mike — Wed, 28 Mar 2012 23:49:57 +0000

While it is true that if your credit score is high you may receive better rates and have more options available to you, this doesn’t mean you can’t obtain a mortgage if you’ve had some slips in the past. Credit is only one factor in the underwriting process, so don’t think that this alone will stop you from getting a loan; however, your credit history needs to demonstrate both willingness and ability to repay on time. Even if you’re sure you have excellent credit, it’s wise to double-check. Straightening out any errors or disputed items now will avoid troublesome holdups down the road when you’re waiting for mortgage approval. For tips to improve your credit check out our Grow Your Credit post.

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What does DTI mean?

mike — Wed, 28 Mar 2012 23:48:11 +0000

Your DTI helps determine how much house you can afford. When looking at a mortgage there is the front end ratio and the back end ratio that make this determination.

The Front Ratio is determined by adding together your proposed monthly mortgage payments, including principle and interest, taxes, insurance and any homeowners association or condominium complex dues. This total is then divided by your total gross income.

The Back Ratio – your DTI (Debt to Income) – is determined by adding together the total mortgage payment as above, plus any other monthly financial obligation including credit card payments, auto loans, or lines of credit, etc. This total is then divided by your gross monthly income. If you have no monthly payments besides your mortgage, your front and back end ratios will be the same.

Calculate an estimate of your DTI:

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Can I get Pre-Approved?

mike — Wed, 28 Mar 2012 23:47:25 +0000

Yes, you can. Your information is reviewed, including your income, assets, and present debt, and a decision is made as to what you qualify for. Once pre-approved, you can look for a new home with the confidence of being a strong buyer, and sellers will feel more comfortable dealing with you. To start the pre-approval process, please visit our eApprove page.

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What are Points?

mike — Wed, 28 Mar 2012 23:46:33 +0000

Points are a one-time fee that a borrower pays to lower the interest rate. A point is a unit of measure that means 1% of the loan payment. So, if you take out a $200,000 loan, one point equals $2,000. Points can be charged as origination fees by the lender, but they can also be charged in order to lower your interest rate, which would lower your monthly payment. Usually, the longer you plan to stay in your home, the more sense it makes to pay discount points.

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What are the Closing Costs?

mike — Wed, 28 Mar 2012 23:45:32 +0000

Closing costs include items like appraisal fees, title insurance fees, attorney fees, pre-paid interest and documentation fees – to name a few. These items are paid by both buyers and sellers and are usually different for each customer due to differences in the type of mortgage, the property location and other factors. You will receive a good faith estimate of your closing costs in advance of your closing date for your review.

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What is a Home Appraisal?

mike — Wed, 28 Mar 2012 23:44:16 +0000

A home appraisal is a survey of a home by a professional appraiser to generate an estimate of the property market value. The appraisal is a detailed report that looks at various factors regarding the home including the condition of the home, the neighborhood, what comparable homes are selling for and how quickly they are selling. The home appraisal is not the same as a home inspection, which should also be completed when buying a new home.

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Do I need a Home Appraisal?

mike — Wed, 28 Mar 2012 23:42:28 +0000

Sometimes an appraisal is not needed; other times a full appraisal must be completed. Only after reviewing your application and collateral information is it determined whether one is needed for your situation.

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What are Property Taxes and Impound accounts?

mike — Wed, 28 Mar 2012 23:41:22 +0000

Property taxes are the taxes that are collected based on assessed value of the real property and are to be paid by the property owner. An impound account is an account set up by the lender for payment of property taxes, hazard insurance and any other recurring expenses such as mortgage insurance and flood insurance. Typically an impound account holds prepaid recurring costs for 2-6 months. Usually loans with a low loan-to-value ratio (higher down payment) do not have an impound account requirement.

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How does Hazard Insurance work?

mike — Wed, 28 Mar 2012 23:40:17 +0000

Hazard insurance is a type of property insurance purchased by homeowners to protect against fire, flood, wind, earthquakes or other disasters. Comprehensive homeowner’s insurance usually covers damage to property, as well as liability for injuries on the property or damage caused to other property. Hazard insurance tends to focus specifically on property damage caused by unique sources. The homeowner is responsible to pay this insurance policy as to protect the investment of the lender, which is why it is usually a requirement at closing. If the home is destroyed or damaged beyond practical repair, the ability of the homeowner to continue paying the mortgage will likely be significantly impaired at the same time the collateral securing the loan would be seriously devalued. Hazard insurance helps guarantee that at least the mortgage will be paid down.

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What is Title Insurance?

mike — Wed, 28 Mar 2012 23:39:37 +0000

Title insurance is protection against loss arising from problems connected to the title to your property. A home may have gone through several ownership changes before you purchased it, and the land on which it stands went through many more. There may be a weak link at any point in that chain of ownership that could emerge to cause trouble. Title insurance covers the insured party for any claims and legal fees that arise out of such problems.

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What is the role of the Escrow Company?

mike — Wed, 28 Mar 2012 23:38:02 +0000

The Escrow Company is a disinterested third party who does not represent anyone in the transaction, but serves an integral role in the closing process. This role begins when an executed contract is delivered to the escrow company, who then begin a Title Search. Once the title to the property is deemed “clear”, the Title Insurance Policy is prepared. Additionally, the escrow company assigns an escrow officer to manage and facilitate the closing by being in contact with all parties involved in the transaction and making sure that all documents are properly gone over and signed. Finally, it is the escrow officer who distributes all signed and executed documents to the appropriate parties to ensure the successful transfer of title from one party to the other.

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FHA announces change in Mortgage Premium

mike — Mon, 26 Mar 2012 21:27:54 +0000

Beginning April 9^th 2012 FHA will be increasing the Annual mortgage insurance premium (MIP) it collects to 1.25% of the loan amount, as well as increasing the upfront premiums (UFMIP) to 1.75% of the loan amount. This is required due to the Temporary Payroll Tax Cut Continuation Act of 2011 (Public Law 112-78) that the President signed on December 23, 2011.

Additionally on June 11^th 2012 the MIP and UFMIP are decreasing for loans that were endorsed on or before May 31^st 2009. The MIP will be dropped to .55% and the UFMIP to .01% of the loan amount.

What does this mean? If you currently have an FHA loan, now is the time to refinance. We will look at your current loan and see if you qualify for the decrease. If your loan was after the deadline we can still help get you into a lower rate before this change takes place. Contact Mike

80% of Portlanders falsely believe you need 20% down to buy a home

mike — Sat, 10 Mar 2012 01:10:32 +0000

Amount Required for Down Payment: one of the biggest misconceptions in the mortgage industry! People in Portland were asked how much they thought was needed to buy a new home, and surprisingly 80% of those asked thought that 20% was the minimum. The truth is, you can purchase a new home with as little as 3.5% down. In addition, the down payment can be partially or fully gifted from family members. When it comes to purchasing a new home, the most important factor is affordability, not down payment. People get into financial trouble not because of how much or how little they can put down, but by getting into a mortgage payment that they simply can not afford to pay every month. Don’t get me wrong – it is crucial for future home owners to have cash reserves to protect against temporary job loss, unexpected repairs and emergencies. I simply think it is important for the consumer to know their options when planning for home ownership, and that the upfront investment is much less than many think.

Grow Your Credit

mike — Wed, 07 Mar 2012 00:28:35 +0000

3 Steps to Great Credit

1. Get a copy of your credit report, and review it periodically. If false information is found, report it. While it may take time to correct, its your credit at stake. Visit https://www.annualcreditreport.com to get a free copy of your credit report, the only completely free source on the web.

2. Keep monthly debt under 25%. Your credit report reflects what you owed at the time of your last billing cycle and the amount of credit you have available. To maintain good credit, only utilize 25% of your available credit, or adopt a habit from people with the highest credit scores and use 10% of your total available credit each month. Resist the urge to cancel your credit cards once you’ve paid them off; doing so can lower your credit score.

3. Put your rewards credit card in time out. Credit cards that offer rewards make it more tempting to use plastic instead of cash for everyday purchases. Even if you pay off the balance each month, the amount you owe at the end of the billing cycle is posted on your credit report. If you plan to purchase a home, begin using cash or your debit card 3-6 months before you wish to secure financing, to enhance your credit worthiness. Your credit score reveals that you can pay off debt responsibility. It doesn’t take into account your income, assets, employment, etc. Thus, it’s just a small piece of the overall financial picture.

Simply Savings

mike — Sat, 03 Mar 2012 01:03:49 +0000

More than 73% of Americans plan to work past the retirement age of 65! Saving for retirement has never been more important. Luckily, there are many options to choose from that are designed to suit your retirement goals. We have listed out the basic pros and cons of each of these options:

Standard Savings Account: PRO Quick and easy way to save each month CON Lower interest rates of return and potential monthly maintenance fees

Money Market: PRO Flexibility and a higher interest yield CON Limited withdrawals; interest often depends upon the balance amount (e.g., The more money you have in the account, the more interest you’re likely to accrue)

Certificate of Deposit (CD): PRO Higher yields than other savings plans; easy way to maintain capital CON No access to the funds prior to maturity without facing a penalty; even if interest rates rise, your money is locked in at the lower rate

Traditional 401k: PRO Your employer contributes a specified amount to the account and may offer a matching contribution of up to 3%; you have control over how the money is invested; taxes are deferred until you withdraw the money CON You can’t access your funds until age 59 1/2; you’ll face a 10% penalty and income taxes if you withdraw the funds early

Individual Retirement Account (IRA): PRO IRAs provide a way for those without an employer-sponsored 401k plan to save for retirement CON There are contribution limits of $5,000 if you’re under age 50 and $6,000 if you’re 50 or older; additionally, with the traditional IRA, withdrawals must begin by age 70 1/2. With Roth IRAs, you may have to pay both state and federal income taxes on your contributions

5 Easy Ways to Save a Buck

mike — Sat, 25 Feb 2012 00:08:35 +0000

Savings looking a little skinny these days?

Make saving money a daily habit with these easy tips:

1. Track your expenses. Part of saving is seeing how much you are actually spending. Keep track of all your daily, weekly, monthly and annual expenses. Doing this will help you see how much you are spending and help you discover the things you can do with out. There are free apps available, such as Mint.com that allow you to input your transactions as they occur so you can keep a running tab of your expenses and budget.

2. Find cheaper alternatives. Save on your monthly expenses such as cable, wireless service or credit cards, by choosing service plans that meet your current needs. Websites such as BillShrink.com let you compare the cost of your current plans to those of leading competitors, they do the shopping around for you!

3. Look for deals on your favorite luxuries. You cant put a price on the idea of working hard and playing hard too. Saving money doesn’t mean you have to give up nights out on the town or out of town for that matter. Use social buying sites such as Groupon or Living Social to find deals that fit your needs and lifestyle.

4. Make saving automatic. Take advantage of direct deposit and online banking. Set up an amount that automatically gets deposited or transferred to your savings account every month. Small or large amount, it will grow over time.

5. Create a budget and stick to it. It’s no secret that impulse purchases can impact your finances. Protect your savings by sticking to your budget. Create a budget for your impulse shopping if necessary.

**BONUS** Enroll for FREE to My Financial Independence Coach and take advantage of step by step guidance to achieve financial freedom!

Drowning? Brand New Solutions for Underwater Homeowners!

mike — Fri, 10 Feb 2012 23:18:12 +0000

While the government cannot fix the housing market on its own, the President believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief when there are measures at hand that can make a meaningful difference, including allowing these homeowners to save thousands of dollars by refinancing at today’s low interest rates.

Key Aspects of This Plan:
- Provide Borrowers an opportunity to refinance and take advantage of historically low interest rates.
- Give Borrowers the chance to rebuild equity through refinancing.
- Setting a single set of standards to make sure borrowers and lenders play by the same rules.

Simple & Straightforward Eligibility Criteria for Borrowers:
- Current on their mortgage payments.
- They must meet a minimum credit score.
- Have a loan that is no larger than the current FHA conforming loan limits in their area.
- The loan they are refinancing is for a single family, owner-occupied principal residence.

How Can This Benefit YOU as a Borrower?
With rates below 4% on 30-year loans, and low 3% on 15-year, this is YOUR opportunity to save hundreds per month and thousands per yer! Contact me to explore your options!

For responsible borrowers, there will be no more barriers and no more excuses!

The Five Phases to Getting More Things Done

mike — Thu, 02 Feb 2012 22:31:51 +0000

Whether you are at the office or planning next weekend’s birthday party, the fact is you can be considered a “Project Manager” in nearly every aspect of your life. So it is only fitting we provide a proven system to help you plan and complete more of your projects this year, so you can enjoy more money, less stress, and more life!First, let’s define a “project”? According to David Allen, the time management guru and author of Getting Things Done, a project is any task that will require more than one action item to complete.This definition alone will completely change how you think of any task going forward. Most people write on their to-do list “Buy New Lawnmower”, and consider this a task. The reality is there are many little steps that go in to this task.

What’s your budget? Gas or electric? How much horsepower?Once you shift how you think of a task, you will understand why so many to-do items never get completed. Now let’s teach you a proven process for planning and completing your projects! Here are David Allen’s “Five Phases of Project Planning”:

Defining Purpose
Outcome Visioning
Brainstorming
Organizing
Identifying Next Actions

Let’s apply these five phases to a popular financial goal, such as paying off consumer debt. The purpose is fairly easy…free up monthly cash flow and reduce stress by paying off your consumer debt.

You’re invited to a special members-only event on February 21st, 2012! Join us for this FREE web event as we bring you International speaker, coach, and author Lou Radja for a live webinar
exclusive for members of MFIC!

*Space is limited. Register Early!

Your outcome visioning is what you believe having no consumer debt would look like, and how you and your family would feel with everything paid off, and what you might enjoy with all that extra cash flow.

Next, you need to brainstorm all the ways to get your consumer debt paid off. How much extra money can you apply to paying off your debt faster? Which debts do you start with? Should you pay a little extra on each debt, or apply all of your extra money to the largest debt, or the highest interest rate?

As you brainstorm, you will see just how many action items are associated with this project. Now you must organize your thoughts. What do you need to do first? You might begin by listing your debts, including the amount owed, interest rate, minimum payments, and any annual fees being charged. Then you may review your budget to find areas to free up money for this project.

Once everything is organized, the fun can start. You now will identify your next actions. Complete the inventory list of current debts. Decide which debts to pay first. Then decide how much extra to pay.

Start thinking of a project as any task requiring more than one action, and practice applying these five phases. Remember, our goal for you as a member of MFIC is to help you enjoy more money, less stress, and more life! Learning how to be more effective when planning and completing your projects, both at work and at home, can help you enjoy all three!

Click here to login to My Financial Independence Coach for more great education and resources.

What is going on out there?

mike — Mon, 16 Jan 2012 03:21:14 +0000

With all the confusing news surrounding the financial markets and real estate, I thought it would be a great time to share a brief video from a trusted source I check in with on a daily basis. Dan Rawitch is an industry expert with 20+ years of experience. His expertise in bond trading helps me track interest rate movement to lock in rates at the right time. Dan strips away all the jargon making the content very easy to understand. I hope you find it useful and informative!

Mike, do you offer financial coaching or planning?

mike — Thu, 25 Aug 2011 16:07:54 +0000

Since my mission at Strategy7 is to spell out the strategy for my clients’ financial well-being, many clients will want to go deeper into topics we briefly touch on during the initial consultation. Cash flow management and debt elimination are typically the most popular topics. I discovered that even though everyones financial lives are unique, the steps needed to improve or enhance their financial position were always the same. In addition, it was hard to schedule the time to connect on the phone or meet in person on a regular basis to provide the accountability they needed and to pass on the next batch of information. The solution is our online financial education source – MFIC, or My Financial Independence Coach.

Visit http://www.myfinancialindependencecoach.com/strategy7 to learn more and to enroll for free.

Market Minute – Aug 3rd, 2011

mike — Wed, 03 Aug 2011 17:44:45 +0000

Rates are improving – are you wondering why? Well, the unfortunate aspect of mortgage rate improvement is that it comes as the bi-product of a failing US economy. Here is what we are seeing in the economy:

Services index is slowest in18 months
ADP jobs report is down
Factory orders are down
DOW has given up 1,000 points

What this all means is: people aren’t buying products and services. We are all holding on to our money and saving it to hedge against job loss and unexpected expenses.

With the economy struggling, investor dollars tend to flow into the safe haven of fixed income investments. This flow of funds into Bonds is what is driving mortgage rates lower, nearing their all-time lows. this trend can reverse very quiuckly, but mortgage rates should remain low for quite some time. When true job growth starts in the US, that is when we will see economic recovery and mortgage rates start to rise.

Are Low Down Payments a Bad Thing?

mike — Wed, 08 Jun 2011 15:48:34 +0000

Many of my clients are shocked to learn that they can purchase a home in today’s real estate market for 3.5% down payment, or $0 down with certain loan programs. In the same breath, they ask how this is possible … “isn’t that the whole reason we are in this mess today?!”. The honest answer is “No”. I will admit, there are certainly homeowners with negative equity that simply walk away from their homes – but what typically drives the foreclosures is the affordability of the monthly payment. In the not-so-distant past, borrowers were able to be qualified on a reduced mortgage payment, either because the payment required was simply interest-only, or that the initial interest rate was very small only to adjust a short while later. This false sense of stability is what got people into homes they truly could not afford.

In today’s lending environment we focus on the affordability component more than ever. If your income can support the full housing payment, in addition to any other monthly debts you have, then whether you put $0 down or 20% down payment on the home – we feel secure in your ability to make your payments and remain in the home. With rates this low, partnered with low prices and low down payment requirements – it is a fantastic time to look into your options.

Portland First Time Home Buyer

admin — Mon, 11 Apr 2011 19:54:25 +0000

Home Buyer Tax Credit Extended for Some BuyersWednesday, April 14, 2010

Many people are unaware that the First Time Home Buyer Tax Credit, as well as the current home owner credit, are extended for one year for Military personnel and the following:

US Foreign Services
US Intelligence
90+ Days of service in the armed forces

The extension will allow for purchase contracts to be accepted on or before April 30th, 2011.

You won’t believe the sweetheart deal that the Indymac boys were given by the FDIC – please watch this short video

Monday, February 8, 2010 http://TwitPWR.com/Dk2/ Quality of Life, at a DiscountThursday, February 4, 2010

Check out this excellent article from Forbes regarding the Portland Real Estate Market:

Quality of Life, at a Discount Portland, Ore., makes our list for much the same reason that San Francisco does: It’s a picturesque, culture-driven city with good local services and amenities. The city is still not particularly cheap for buyers–but it’s cheaper than normal.

A family hoping to put down roots there would normally pay a 62% premium to go from renting to buying. In the third quarter of 2009, however, that premium shrank by 16 percentage points. At the same time, Moody’s Economy.com anticipates that home prices will jump 19% over the next five years. That’s partly because, like San Francisco, Portland has strict government limitations on building and a coastal location that keep sprawl in check.

“Portland has one of the most controlled environments in the country in terms of development rights,” says Stuart Gabriel, director of the Ziman Center for Real Estate at the UCLA Anderson School of Management. “Those supply constraints will push prices up.”

Great new offer from Fannie Mae on their foreclosed propertiesMonday, February 1, 2010 FannieMae Announces 3.5 Percent Seller Assistance on HomePathÂ® Properties
Incentive Part of Ongoing Effort to Stabilize Neighborhoods

WASHINGTON, DC â€” Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePathÂ® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010.

“Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help,” said Terry Edwards, Executive Vice President of Credit Portfolio Management. “Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home.”

Properties eligible for this incentive are listed on www.HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3 percent down.

FHA Changes: How Will They Affect You?Thursday, January 28, 2010

You have heard of the big changes that will take hold this Spring in regards to FHA Financing â€“ but I think it is important to take them in context and see how much (if any) these changes will affect you as a home buyer.

To quickly summarize the changes coming, here they are:

The Upfront mortgage insurance fee will increase by .500% to 2.25%.
The seller concessions have been decreased from 6% of the sales price to 3%.
For credit challenged borrowers (sub 580 credit scores), the minimum down payment required will be 10%.

Joe is a home buyer and has found a home priced at $250,000. He is planning on the 3.5% down payment option and having his closing costs credited by the seller. The closing costs are $5100 and the prepaid taxes, insurance and interest total $1750 for a total cost to close of $6850. Under the new FHA guidelines, we have 3%, or $7500, that the seller can credit on this price point, so we have the closing costs covered with room to spare.

The upfront mortgage insurance that is financed into the loan would currently total $4221.88 (1.750%). When added to our base loan amount of $241,250 we have a total loan amount of $245,471.88. At a rate of 5% the payment is 1317.75. When the upfront premium is changed to 2.25%, the funding fee for this borrower would equal $5428.13, taking the loan amount to $246,678.13 with a payment of $1324.22. The borrowerâ€™s payment is virtually the same, differing by only $6.47.

Lastly, Joe does not have great credit. We review his credit and notice that his mid score is 605. He has some late pays hurting his score but also has a credit card that is maxed out. He holds two other cards but they both have small balances. We advise Joe to transfer the balance across all 3 cards to get his balance on each card below 50% of the limit of each card (preferably below 33% of the limit). Joe makes the changes and we review his score the beginning of the following month â€“ are mid score is now above 620, so we move forward with this loan approval.

FHA lenders (not FHA directly) have typically required borrowers to have a 620 mid score in order to lend to them. There are a few niche lenders that go as low as 530, but they require something else in return which is normally a larger investment from the borrower to offset the risk. The new change being made with FHA will not have much impact other than requiring these niche lenders to obtain 10% down payments on these risky borrowers before FHA will insure the loan.

I hope this example helps illustrate the new FHA changes and their true impact on you as a home buyer. Please call or email me anytime if you have questions.

Barney Frank Looking to Dismantle Fannie & FreddieMonday, January 25, 2010 Financial Services Committee Chairman Barney Frank (D-Mass) is looking to do away with Fannie Mae and Freddie Mac, the government chartered institutions that securitize mortgages. Mr. Frank’s intention is to improve the oversight and regulation of this industry but unfortunately, he has no plan for how to replace these vital organizations if removed.

The purpose of Fannie & Freddie is to securitize mortgages so that they may be traded in the secondary market, freeing up bank/lender funds to loan more money to home buyers. This process keeps the market liquid and allows for the demand of borrowers to be met. Of course there might be a better way to conduct this process, but until one has been developed and purposed, let’s hope we stay the course and not run into new issues in the housing market while we are still inching our way toward a recovery. In addition, making this announcement will only damage the stock value of these companies; totaling 5.4 trillion in bond assets and 1.7 trillion in unsecured debt.
Recent Changes to FHA LoansFriday, January 22, 2010 As a First Time Home Buyer, using the FHA loan is a very important tool in acquiring a home with lower out-of-pocket cost and very favorable terms. The recent changes are attracting a lot of attention, however they will not have much impact on your buying power. Most importantly, these changes will help ensure that the FHA stays around and helps new buyers become homeowners during this amazing real estate market.

The basic changes are:

The Upfront Mortgage Insurance premium has been increased .500% to 2.25%. This is typically financed into your loan. It does increase the loan amount, but in all honesty at the low prices and low rates of interest, this change will very little impact on your loan.
For borrowers with credit scores below 580, 10% will be the minimum down payment amount. This change makes perfect sense, and any of my clients that are in that credit score range work with me to improve their credit before buying a home to take advantage of better rates and lower downpayment requirements.
Decrease the allowable seller concessions from 6% to 3%. In some instances, this change might negatively impact a purchase in which considerable credits are being negotiated to the buyer. However, in the case of covering your closing costs, 3% will typically cover that amount – and any repairs the seller would like to credit you money for versus fix can now be requested to be completed by them before you take ownership of the home.

These changes will start in mid Spring and Summer, so if you are considering buying a home, now is a great time to get prepared.