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Electronic and smart locks for your home, they are here!

Here is a new article, on my other site:

http://loansbyrogerhowell.com/electronic-and-smart-locks-for-your-home/

smart locks for your home

Electronic locks

The days of leaving a spare key under a rock in your yard may be over.  Thanks to the amazing power we now hold in our hands, the smart phone, we can lock, unlock and monitor our homes without having to carry a key.

Already, my newest car has a fob instead of a key and its a natural step to put the electronic lock into your home.

Electronic locks are not new, I have a couple older ones sitting in my shed. They were quite useful for rental homes, new construction, or homes we would fix and flip.  You would set the code and give it out to whoever needed it.  After the project was done, or the home was rented, you changed the combination.  This is much less expensive than a locksmith and the lock could be taken to a new property if needed.

Some people might be concerned about the electronic nature of securing our homes, but is your home really secure with a manual lock and key when anyone could probably enter by way of a window and rock?  If your phone is dead or power goes out, there would be a back up using a traditional manual key.

If you want a new home with all the latest features like electronic locks, we can get you pre-approved quickly and before you know it, you will be moving into the new home.

Selling by Owner is not all that’s its cracked up to be.

http://www.keepingcurrentmatters.com/wp-content/uploads/2014/05/FSBO-1000.jpg

Who is Fairway of Idaho?

The quickest way to increase your credit score

I’ve been seeing a number of people who have lower credit scores lately.

A common attribute is excessive revolving debt or credit card balances that are close to the limit.

Having a credit card balance that is over 30% of the available limit will lower your credit score.  Being close to or even over the limit will put a hurting on your score.

Recently, a borrower who was over their limit by a few dollars said the credit card company told them to charge up the balance then pay the minimums to pay it off.  The only benefit for that “advice” is to the credit card company who is making interest off them.

Furthermore, with many people cutting back on credit cards, they can hurt them selves by closing accounts they don’t use often.  By reducing the amount of available credit to the ratio of credit in use, you can hurt your score as well.

So……My advice on how to increase your score the fastest, probably by next month is………Pay Down your outstanding credit card balances!

Further example, you have 3 credit cards.  One has 300 with a 500 limit.  The second one is 1500 balance on a 2000 limit and the last one has 400 on a 500 limit.

Pay the 400 balance down to less than 250 first.  Next pay the 1500 balance down to 1000 or less and finally pay down the 300 to 250 or less.  If you are tight on money, maybe the 300 before the 1500.  By reducing the credit used to under 50% of the balance available, you will get more points on your scores.

If you want even more points, the next step is to lower them to less than 30%, and finally to zero every month.  Don’t close them out but keep them open and available with minimal use.

“But  XYZ Bank is offering me a zero percent balance transfer?” I hear this sometimes.  That is great if you are trying to minimize your payments but if you are trying to get qualified for a mortgage, you have a different goal.

I’ll save my thoughts on the balance transfer scam,  strategy for a later post.

More changes to Mortgages this month

On January 10th, new regulations went into effect for residential mortgages.

The “Qualified Mortgage” rule and the “Ability to Repay” rules are now part of the process when obtaining a mortgage.

At first glance, these appear to be major changes to how mortgages are approved but upon further review, it looks like most mortgages already comply with the new rules.  We examined our business the last few years and we estimate that 97% of our loans made would be Qualified Mortgages.  The ones that weren’t were probably commercial or hard money loans from a time when we could broker those types of loans.   As a residential mortgage banker-since August of 2011, we don’t offer commercial or hard money loans.

The Qualified Mortgage rule defines a type of mortgage that can be sold on the secondary market-Fannie Mae and other agencies. This Qualified Mortgage is one where the fees, terms, and features are defined so that in theory, agencies don’t run a high risk when they buy the loans from banks. One of the features is a lender needs to consider the borrowers ability to repay the loan.  This falls into the “DUH, we already do that” category.

Once again, it appears that much to do was made over nothing.  Life in the mortgage business goes on.

 

Will a so-called “government shutdown” affect the mortgage market?

It could, depending on the type of loan you are seeking and what still needs to be done on your loan.

There are several government agencies that come in to play when you seek a home loan.

  1. First of all, borrowers will have their tax returns verified through the IRS with a form 4506t.  The IRS has said its staff will still be operating in the event of a so-called “shutdown” but I wouldn’t take that for a definite that you can get the tax transcripts in a timely manner.  If you are seeking a mortgage, get your mortgage loan officer to order them asap!
  2.   Government insured programs such as VA Loan, FHA loans, and the USDA require a special report called CAVIRS to be run beforehand.  Once again, get it done asap.  If you don’t have a clear CAVIRS, your loan can’t be approved.
  3. Third, the USDA has indicated that its staff might be furloughed in the event of a “shutdown” and that will affect the final approval from USDA that is a part of getting an RD loan.  If you have an RD loan and it’s not ready to close right now, you should have a conversation will all parties about a possible extension if there is a “shutdown.”
  4. Furthermore, the RD’s eligibility map is in limbo over the budget.  Right now, the map is not fully accurate as to what properties are in an eligible area.  I would be hesitant to rely on an RD loan in an area such as Kuna, where they have indicated it is coming off the eligible areas.  We won’t know for sure what parts of Kuna will be eligible and what parts wont.

Anyway, the next week or two could be very exciting to say the least.  The key is to be proactive in the event of a “shutdown” of the Federal Government.

 

Sometimes you wish you could just say this……

Is your lender collecting too much?

I recently had this happen with a lender who I have done a lot of business with in the past.  A number of my past clients were refinancing their VA home loans and paying off this lender with my new VA home loan from a different lender.

The old lender was trying to collect extra interest until the end of the month when we are paying them off between the first and the 14th of this month.  The correct way is to do a daily proration of the interest until the day the old lender receives the payoff.  They are not due any interest from the client as per the note they signed.

When the first of the VA loan clients were paying off their loan, the numbers didn’t add up to what we had set up.  I got to digging into the closing numbers and noticed the payoff amount was several hundred dollars higher.  After checking with the Escrow Officer to see it that is what she had been given, she said the lender stated they don’t do daily prorations of interest.  I immediately called the lender for an answer as to why they are over charging my clients.  It took several phone calls and voice mails, but I got an after hours call back.

The lender’s representative stated first that their systems didn’t calculate daily interest.  I stated there is nothing in the note that says a client is responsible for a whole months interest when they payoff before the end of the month.  After reviewing the clients note, the lender’s agent said she would manually calculate a payoff for the expected date of funding.  She also said that the loan had been placed with Ginnie Mae, a buyer of government insured notes and that GNMA demanded a full month’s interest on any note paid off.

That is their problem, not my clients.  The client didn’t take the loan with the understanding they would be charged for a full month.  It would have been different if it was a term agreed to upfront, but it wasn’t.  The lender has to pay this, not my client!

Now, there are loans that this is disclosed on, FHA loans are not daily prorated for interest due.  As a result, we try to close those towards the end of the month to best benefit the client.

I have a feeling that this lender knew what they are doing is not allowed, but doing it anyway to avoid paying out the extra interest.  They got caught, and I telling my fellow Loan Officers and Realtors about this.  I can’t imagine how many home owners have been overcharged in the past.

 

Getting ready to sell? Here’s how to increase your home’s resell value.

I’ve bought and sold a few dozen homes in my years.  I’ve always started with the simple and inexpensive solutions first.

Carpet, paint, landscaping, and a good deep cleaning will give you a good return on time and money invested.

 

If you have deeper pockets, here what the “experts” are saying: http://tinyurl.com/cdowa6u

Realtors also recommend “staging” the house and sometimes even removing personal belongs so the prospective buyer can visualize themselves in your home.

If you need the name of a great local agent who can give you more tips on how to get the most value of your home, call me.  I work with many great realtors who would love to provide you with this information.

 

 

2013 loan limits for Veterans

For most of the country, the limit for VA loans is $417,000.  The VA loan program goes up to 100% loan to value so you can buy up to a $417,000 house in most counties.  There are some exceptions, and the list is here: http://www.benefits.va.gov/HOMELOANS/documents/docs/2013_county_loan_limits.pdf

 

Here in Idaho, the only county with a limit higher than $417,000 is Teton County.  For those of you outside of Idaho, its on the back side of the Teton mountains and Jackson Hole, WY.  Its a beautiful area with very pricey real estate.

Back in 2005, I financed a bunch of homes in Teton Springs, and most of them were more than the VA limits.  Just for fun, here is their site: http://www.www.tetonsprings.com/real-estate-overview.php

Now, if you live in Nantucket County, MA you can get a VA loan up to $1,094,625.  At the current rates, you would need an income of $11619 per month to support a payment of roughly $5,000 or so.  Even if I could afford it, would I really want that much debt?

Anyway, its fund to dream sometimes.

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