Home Buyers Take a Break In November

Americans have had the grace to be able to speak mostly positive about the Real Estate industry concerning its climb from recession this year, but November was not a month to keep that same route. The seasonally adjusted rate of new homes dropped by 11.3% . This was the lowest since April...355,000 for November and 345,000 in April.
The positive outlook for new construction left hopes of an expectation of 438,000 annualized rate, but by the consensus of economists in Briefing.com, we received word on a lesser amount of 400,000.
CNN Money experts suspect that this is a result of the change from the original tax credit of $8,000 that will allow a little release of pressure to buy so soon...the timeline to use these moneys was extended. Now Americans chasing that tax advantage can procrastinate a little without racing against a clock. Piggy backing on the positive reason for the negative turn, it's to be figured in that Americans are a little leery about spending money on down payment and so forth knowing that the Christmas shopping season was right around the corner in this less than stable employment market as well.
I expect the Real Estate market to show signs of life and reflect positive numbers in January and February.

Off the Topic of Mortgage and the Economy a Bit

We are in a world of variance. The natural byproduct of variation is deviance, because there is difference where there is variation and therefore a deviational measure. There are two forms of the definition of deviance. One definition is, deviance describes actions or behaviors that violate cultural norms etc... The other is used in statistics and relates to the difference between one variable or a group of variables to another...usually in measuring similar profiles against one another but not limited to that.
I was inspired by a message today from a Christian writer named Dr. James Denison. The message was titled The Noble Peace Prize and the Topic was The Peace of Christmas. Click Here for the link. Every spiritual person in America is not Christian, but all the good religions in the world teach a common good. You see, the humans on Earth come in a large variety of ethnic and culture groups, and the religions of the world come also in a large variety. We may all pass judgment upon our opposite spiritual beliefs, but I believe the deviation between each of the people from one religion to the next measures greater than the all out difference between what teachings each religion teaches from one to the next. Meaning, we the people of the religions make our selves more different by our free will to judge one another than the spiritual text that defines us. Obama has the ability to pioneer a road that has never been traveled, and unless we all join together and make the best of the trip, the road traveled will be bumpy whether it should be or not, and the ability to maximize the hopeful positive outcome if it does turn out good is limited by the negative resistance America's deviance has on it. As a whole, lets not be deviant to eachother and all work positively to a common interest.
Note: What I chose to write about in this blog was not intended to reflect the purpose of the message I was inspired by. It was just an angle of life that has weighed heavy on my mind recently and I took away another meaning in addition to what was shared.

So we have a positive forecast for the bailout money that was used to bailout the mortgage industry. The TARP that is used to help create jobs and so forth is foreseen to be a loss. We have a decision to make lets say. We are going to turn a profit in the end from it. As a business owner say with a large bit of debt, do you A) Take the profit and pay down your debit and hope that business continues to produce so you can continue, or B) take your profit and immediately apply it to a part of your business that isn't producing in hopes to get the entire "engine" efficiently making money? If you put the money into a part of the company that is not producing and it continues to not produce, you lose that money right?
The Democrats support plan B above and the republicans support plan A. There is a chance that both options turn out positive, but I guess the argument is, which one will work more...I'm assuming the economy turns around that is.

Bernanke sees end value in bailout...Fannie Freddie moneys profit to come

In a CNN money article titled Bernanke: Fed will make profit on bailout, we read that the head of the Federal Reserve is feeling confident that the money spent in the Fannie and Freddie bailout has a good chance to become a profit for the government. Hearing this so soon comes as a surprise because all I hear on the streets is negative. Anytime I search out economic updates and read articles from well credited writers on the economy, it seems like I hear more and more positive posts...soothsayers speak negative but media writers positive. For example, if you ask your local family member friend who forwards all the politcal emails, or "the next guy", the feeling is negative.
Is America's team a good comparison to America's voting public? It seems like the Dallas Cowboy fan is a good metaphor to a profile of the American citizen as it relates to a fan or not of the political games played during these up and down times. When the market is thick, dense, and bullish, the American is smiling and has all hope and no worries. Then, any negative dip, their ready to shoot their quarterback but reserve just enough spirit to have an open mind for the next "game". Winning a couple games isn't good enough for the Cowboy fan. They have to win the Super Bowl or the season is a bust. It appears that we are winning little games one day, one week, and months at a time in our economy...do we have to win it all at once for the majority to be happy. Progress, not perfection is my way of looking at it.
When Bernanke spoke of the money the government will make back and profit from, he was not speaking of the Troubled Asset Relief Program. The TARP program is not expected to have the same positive turnout as the bailout money, and the positive side to that is that it wasn't as large as the bailout...win one big battle and lose a smaller.
Tracking the programs and their returns.

RESPA Reform Changes...New GFE and HUD-1

Are you ready for the changes that the Federal Government have for us in the mortgage industry under RESPA reform effective January 1, 2010? The new version of the Good Faith Estimate or GFE as we speak in the mortgage business (Martian Language), and the HUD-1 HUD 1 settlement statement or 2010 is what I'm speaking more specifically about.
If you are in or have originated your loan before January 1st, you can continue to close the loan after January 1st under the old GFE/Good Faith Estimate, but the title company will close it on the new HUD-1.
What if you are using two loans to buy or refinance your home...like a piggy back and a first for example? You will issue a GFE for both loans and the title company will have two HUD-1's as well. No biggy there.
The Loan Officer AND the borrower will likely benefit from this if used properly. The design of the change is to empower the borrower a little more by "force", to be more accountable in their process of shopping, and in the same, hold the Lender/Loan Officer accountable for their GFE quote in the beginning. In my opinion, the change is a positive for the lender, but that is because I have never bait and switched or mislead intentionally. In the past, I have had a hard time getting through to borrowers that were a little suspect in the entire shopping process as a whole because of the reputation that comes with mortgage. Therefore, my explanation of how to shop, when they were doing it all wrong, was in one ear and out the other. NOW, the honest loan officers in the industry can relax and let the system force the borrower to shop properly.

The lenders and loan officers that have built their business on smoke and mirrors sales tactics with the GFE's and survived on selling rather than consulting will feel haunted now. Here is why. The GFE, the official one governed by RESPA, is not allowed to be issued unless there is a property...this is good because the uneducated shopper (speaking of buyers and not refinance prospects here) would many times spin their wheels shopping lenders before they ever found a home and then months later when they found the home, they would use which ever company they found the months before. That makes no sense, because a lot can change in a week, must less a month or more down the road. Now, when there is a property and a borrower asks for a Good Faith Estimate, that lender is held accountable at closing by the "system" in the new law. The final documents at closing will put the numbers from the GFE side by side with the final numbers on the HUD-1. If these numbers do not match up, or stay within variance by law, the lender is held accountable for the difference. You see where the dishonest loan officer here will not like the new style? I like it, and many of the loan officers in this industry I am friends with like it because now we don't have to worry about "frisbying" out our GFE wondering if some dishonest sales type is our competition where we'll lose a prospect to a lesser deal and lesser loan officer.
Lets get clear on something. There are circumstances in a transaction process that would require rates or fees to change midway through, and the new laws have made room for those and defined the circumstances that will allow a lender to change the settlement variables from the original GFE. Just make sure that you the borrower, or you the loan officer have your client sign the "Change of Circumstance Affidavit" at least 3 days before you want to close the loan...that is part of the new law. If the APR or fees change from the originally disclosed Truth In Lending or Good Faith Estimate (no called the 2010), you will need to redisclose and sign the GFE and Truth In Lending 3 days before close.

Google site verification

How to find information on the Public and Private Schools of Frisco?

When trying to decide what city to move to, research has proven that one of the biggest concerns for location are the schools in which are associated with the target living areas...Frisco is a good example of that.

In many of America's fastest growing markets move up buyers and first time buyers search out the preferred school districts first. Cities with growing housing markets are well aware of this variable and therefore build the foundation of what their city stands for with the schools as a major component.

Frisco, along with most of Collin County is a good example of this. Frisco has become a huge city of young families where the population of children is growing quickly.
If you are looking to find information about the public and private schools in the different parts of Frisco, please go to the neighborhood navigator and do your research. They have provided a good list and done the research for you.

Tax Credit Extension...Almost There and It Includes Move Up Buyers

The Senate has done their part in a 85-2 vote to move the tax credit forward. Now, Obama can put his blessing on the bill this week or next and it'll be official. This makes it a farely certain deal now.
For move up buyers to qualify, they have to have owned a home for 5 years of the last 8. Stay tuned for more when it lands.
The income qualifications were raised, and that should help include more folks.

Frisco One Time Close...Custom Home Build

One Time Close for Frisco and McKinney Texas Mortgages...it's a TRUE One Time Close too.

Building your own Custom Home? check this out!

This loan includes financing for both the construction and permanent loan in one closing. That means saving the expense of dual loan fees and the worry of having to re-qualify for a permanent loan after the home is complete.

-The interest-rate is fixed and secure from beginning to end! You can relax and enjoy the security and peace of mind that comes from knowing the permanent interest rate before construction even begins.

-Rely on our investor’s years of experience in construction lending.

-No “per-draw” fees. Unlike most lenders, our construction loan includes free monthly draw inspections!

Use the one time close for a number of purpose...Major Remodel
Custom Construction or Major Remodel of an Owner Occupied Single Family Residence or
Second Home.
Only 10% down payment required!

Tear Down and Rebuild:
Regardless of when the property was purchased, if the old house is being completely demolished in order to rebuild a new home, the 10% down payment or equity required is derived from the appraised value of the home AFTER the remodel/rebuild, or the total of the fixed price construction contract, plus the current site value (only), plus closing costs, whichever is less.

Loan Payments to Investor:
During Construction: Borrower(s) will be billed “interest only” each month based on the total portion of the loan amount that has been disbursed. After
the project is 100% complete, the loan will automatically convert to permanent
financing at the same interest rate, with monthly principal and interest payments fully amortized over the term of the loan.

After Conversion to Permanent Loan:
After conversion, the borrower has the
option of making their monthly payments manually or via the “E-Z Pay”
method (automatic withdrawal from a checking account of Borrower(s)choice).

Word on Extending Tax Credit for 2010

Have you been wondering, will the First Time Buyer Tax Credit stimulus package really go away as the timeline by law defines, or will they extend it?
Without disclosing the name of the person who forwarded the letter to me, and who was addressed on the letter, I did see the official letter from Washington that was written on October 5, 2009 that talked about this. My understanding of the letter lead me to believe that it would be possible that as the current tax advantage opportunity expires, there is possibility that a new one would be set forth including not just First Time Buyers. The new one MIGHT increase the amount one might get for the tax credit, and it would include anyone buying a primary residence rather than just the first time buyer.
Keep your fingers crossed!

Fannie Refi or Refinance Plus

Are you looking to see if you fit into the guidelines for the Fannie Mae program designed to help current home owners with a good pay history on their current home loan but may not have enough equity in their home due to poor market conditions, but want to take advantage of the super low rates our market is offering?
The Fannie Mae Refi Plus very possibly is your answer. This loan provides a competitively-priced, streamline refinance option to qualified borrowers who currently have a Fannie Mae® loan. This option is only available to Fannie Mae customers who have demonstrated their ability to repay their mortgage and have verified their information as part of their original loan. As a result, these borrowers may qualify to refinance with minimal documentation requirements.
If your existing loan did not come with monthly mortgage insurance, you may refinance under this loan and have a new loan to value over that 80% threshold that normal would call for a demanded mortgage insurance, but you will not be required to have it...that is if your middle credit score from the three credit bureaus is above 700. In general, this loan is available for new borrowers with a minimum credit score of 620.
Here is a list of loans that can NOT be paid off with the refi plus:

• 2nd liens
• Interest-only loans
• 3/1 Fixed Period ARMs
• Balloon mortgages
• MyCommunityMortgage®
• HomeStyle® Renovation
• Flex 97
• Loans subject to any outstanding repurchase request from Fannie Mae

The cost for this refinance can be slightly cheaper than a normal refinance due to the possibility of having appraisal waivers or exterior appraisal needs only.

Too see if your loan is a Fannie Mae loan and possibly eligible for this opportunity, go here.
If you are interested in seeing if your home is eligible and you are approved, my team can do that work for you if you would just call us at 469-450-2723...we'll need your current loan number from your current mortgage statement, your current interest rate, the balance on any loans you have on the property, and the type of loan you have.
"DON'T KEEP US A SECRET"!

Extend Home Buyer Tax Credit of $8,000 for Frisco Home Buyers

The question I see as a mortgage person in Frisco Texas a lot this year is, "Do I think that the first time Home Buyer Tax Credit will be extended to 2010." My response is, "I sure should be", because it seems like it has given a lot of folks the extra steam they needed to get going in a job market and home market that isn't necessarily one that prods you toward buying a home right now.
In search of statistics to see who is doing their homework to show the government that this Tax Credit is the one stimulus that should be more permanent than any other, it seems like it's an overwhelming YES from the masses to extend it.
In a Weichart poll of around 1,000 Realtors, 71% revealed that the tax credit had the largest positive response in their business in 2009. Of that poll, 92% thought that the market would decline after November if the Tax Credit wasn't reinstated and 97% were in favor of reinstating it.
If you get the chance, vote to reinstate...it's good for the home market and what's good for the home market is good for you. Reason being, the Chief Economist of Stewart Title, the leader in the title industry in the United States, made note in a an economic forecast I attend earlier this year that every single recession that our nation has seen in it's history was turned around first by the housing market. If history defines the present as it normally does, we need to first stimulate our housing market before we expect to see any permanent positive changes in our nations overall economy, including consumer spending, decrease in unemployment, and increase in jobs, obviously.

September 28, 2009 Frisco Mortgage Newsletter

Service First Frisco Mortgage Planner's Newsletter
SFMC Advocate's Cognition Circular
September 2009

As Your Mortgage Consultants for Life at Service First Mortgage,
we have teamed with, on purpose intent, alliances that help us provide the fullest of services for you. For example, have you seen an interesting home and wondered about the price?No need to wonder , and no need to call a high-pressure sales agent who will just make you feel obligated. The agents we align with are not the high pressure variety and our relationships with them make it possible for us to get the information on that home for you, for free and with no-obligation. Then, if you want to see the home, we can refer you to one of our Realtor friends that we know have a track record of happy clients.

Don't keep us a secret! (:

Sincerely,

Brad Lynch &
Michael GreinerService First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

How To Escape From The "Always More" Mind
You may know someone who skitters from one task to another, never enjoying an accomplishment before moving on to the next thing to be accomplished or mastered. And what does get done is never enough. In The Heroine's Journey by Maureen Murdock, this is called "The myth of never being enough." When you're stuck in this mindset, you're never satisfied with what you do, because something deep inside yourself tells you, "It's not enough." You're always thinking ahead. You agree that what you're engaged in currently is not enough. If you're gardening, you feel you should be working on your report, and if you're working on your report, you feel you should be gardening. Murdock recommends this exercise for overcoming this tyrannical way of thinking. Take a piece of paper and divide it into three columns. In the first column write, "I planted daisies." In the second column write, "I am satisfied." In the third column write, "And that's enough!" Though it's a simple exercise, Murdock says that if you practice it whenever you catch yourself being a self-critical, unsatisfied tyrant, that feeling of "not enough" will gradually disappear from your mind.

Write It/$ave it!!
Are you spending more money than you need to? It's a nagging worry, especially these days. Fortunately, you don't need an advanced degree in finance and accounting to analyze your spending. Try this: Keep track of your spending for one week. Just one week - longer, and you'll probably get too busy. But you can hold onto your receipts and add them up for seven days. At the end of the week, separate and categorize your expenses (use a spreadsheet if that helps you visualize better). You'll see what you're spending your money on, and chances are you'll find at least a few areas where you can cut back.

Bonus Block!!!!

If you're a logophile - a lover of words - you might find yourself cringing as you read these words! · Police were called to a day-care center where a three-year-old was resisting a rest.· When fish are in schools they sometimes take debate.· The short fortune teller who escaped from prison was a small medium at large.· The dead batteries were given out free of charge.· A dentist and a manicurist fought tooth and nail.· A calendar's days are numbered.· With her marriage she got a new name and a dress.· If you take a laptop computer for a run, you could jog your memory.· When she saw her first strands of gray hair, she thought she'd dye.· Acupuncture: a jab well done.

About Service First Mortgage
At Service First Mortgage, we work "By Referral Only". This makes it possible for us to spend 100% of our time with our current loyal clients for life, rather than chasing down our next "deal". If you or someone you know needs a mortgage consultant they can trust, please give us a call or email us.
"Don't Keep Us a Secret"!
Service First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

Halloween Riddles

Q: How do you mend a broken jack-o-lantern?
A: With a pumpkin patch.

Q: What did one ghost say to another ghost?
A: “Do you believe in people?”

Q: Why don’t mummies take vacations?
A: They’re afraid they’ll relax and unwind.

Q: Why didn’t the skeleton dance at the party?
A: He had no body to dance with.

Biweekly Mortgage NewsLetter

If you are interested in receiving this Biweekly Newsletter every other Monday, please email me at brad.lynch@servicefirstmtg.com and I'll be sure you get them.

SFMC Advocate's Cognition Circular
September 2009
Dear Brad,
As Your Mortgage Consultants for Life at Service First Mortgage, Brad Lynch & Michael Greiner are always interested in your feedback or thoughts. Therefore, please email or call us with things you think we are not including but would like for us to include in our biweekly newsletter.
Brad - bl@fmillc.com
Michael - mg@fmillc.comWe look forward to hearing from you as always!

Sincerely,

Brad Lynch &
Michael GreinerService First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

Shattering Windows Myths
Since we are seeing so much rain lately.
- Thank ABC 7 News for this cool picture!
There are a number of outdated beliefs about storms and window safety that the Institute for Business & Home Safety (IBHS) would like to set straight. For instance, "Open the windows during a storm to relieve the pressure that could build up and cause more damage." If you've never heard this advice before, don't pay any attention to it now. If you or someone you know believes it, read on for the IBHS's expert recommendations:
1. Do NOT open windows during a storm. This doesn't relieve pressure - it just lets damaging wind and rain into your home.
2. Tape does NOT protect your windows from flying debris. It might keep more of the glass together when impacted, but will not keep it in place.
3. Window film does NOT provide much protection from the impact of debris. It does, however, hold glass shards together when the window breaks. Also, some thicker "structural" film has passed the "small missile" test, which applies to things like gravel and similarly sized objects.

Stressed Out? Take These Steps Our work lives are often filled with what can seem like unbearable amounts of stress. And while some of those stresses are unavoidable, there's a lot you can do to start to whittle those high levels of stress down to something that feels at least manageable. Here are a few suggestions: Know when to say "No." That means you have to first understand your own limits. Then set limits on others so they don't encroach on your time by pressuring you to take on tasks or responsibilities that will throw you out of balance. If possible, avoid people who consistently stress you out. If your boss is the culprit, you might not be able to do this. And you can't steer clear of everyone who inadvertently or occasionally causes you anxiety. But you can avoid people who have a history of leaving you feeling stressed after you've tried to change the situation and they haven't responded. Don't expose yourself to unnecessary environmental stressors. For instance, if you read the news on the Internet during your break, but it leaves you feeling tense, stop reading the news on your break. Do something that relaxes you instead: Go for a short walk, knit, meditate, work a puzzle. Learn to manage your time. Letting projects go until the deadline is upon you will undoubtedly cause you stress. Work at a steady pace - and don't procrastinate. Procrastination can affect the quality of your work and leave you feeling anxious and strained for prolonged periods.
About Service First Mortgage
At Service First Mortgage, we work "By Referral Only". This makes it possible for us to spend 100% of our time with our current loyal clients for life, rather than chasing down our next "deal". If you or someone you know needs a mortgage consultant they can trust, please give us a call or email us.
"Don't Keep Us a Secret"!
Service First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

In This Issue
Shattering Windows Myth
Stressed Out? Take These Steps
Quotes
Mortgage Consultant for Life Featured Article...From Recession to Recovery
Today's Rates
30yr fixed 4.875%
15yr fixed 4.375%
FHA 30yr 4.875%
VA 30yr 4.875%

Rates above do very depending on loan size, and purchase of "points".
Quotes

The best time to plant a tree was 20 years ago. The second best time is now.- Chinese Proverb My dad always used to say, "If you're falling off a cliff, you may as well try to fly. You have nothing to lose."- Captain John Sheridan Everyone driving slower than you is an idiot. Everyone driving faster than you is a maniac.- George Carlin
Mortgage Blog For Life
Mortgage Calculator
Brad'sTestimonials

Join Our Mailing List
Quiz Question:
To be answered in next Newsletter edition:

The terms ruck, lineout, and maul pertain to what sport?
Previous quiz answer was:
Question: What is the team of Moses Horwitz,
Louis Feinberg, and Jerome Horwitz more popularly known as?Answer: The Three Stooges.Source: www.threestooges.com
From Recession to Recovery. What's in Stake?
As we move into a recovery from recession, we don't necessarily go from a constant increase from month to month of unemployment numbers to back to average. First we see a decline in the increase...and we have. Ted Jones, Chief Economist of Stewart Title North Texas, says that every recovery in our nations history from recession was sparked by an increase in the real estate market, and we recently saw that in reports.
The Federal Reserve Chairman, Ben Bernanke said that the Central Bank plans to keep rates low. Ben's focus to keep rates low will hopefullly minimize inflation and typical mortgage rate hikes that forecasts have suggested for the coming year...although some guru's of the money world still believe we will see rates at least in the 7% range by this time next year. You can't afford the same house today if you buy in a year at 7%....that's a huge monthly difference.

Mortgage Rates as the Economy Recovers

Moving.com continues to do an excellent job of telling the public about the daily progress of our economy and how it relates to mortgage rates...just in case the layman wanted to keep an eye on the economy in publicity that can be read and understood by anyone.
Today, bonds started out in negative fashion as the morning report in retail level sales came out not just good, but better than research would have expected. That is a good sign of recovery in our economic times...as I always say, "what's good for our economy, many times is not good for low mortgage rates". In the end for today in comparison to yesterday, rates came out a tad higher...by .125% in discount point (for the layman. That "ain't" much).

This retail level establishments report is announced by The Commerce Department. This is an important report, in case you wanted to take mental note for long term memory, as apposed to trying to add the huge number of reports that we see from day to day in the Stock Market that don't necessarily have a huge influence like this one. The retail level establishments report is important as it makes up two thirds of the U.S. economy.

Furthermore, this blog is piggy backing the recent blog post I made in the Frisco Economic Forecast a couple weeks back, in regards specifically to what rates may do in the coming 6-8 months...if you haven't read it, go read it. Remember, sitting here today with the 30 year fixed FHA and Conventional rates at 4.875%, a 7% to 7.875% rate on that price range you are holding off on today will bring a monthly payment well more than $100 a month higher at the expected higher rates than the ones today. That means you will probably settle for a lesser house in 6-8 months than you would now.

Super Low Rates Again, Frisco! Employment-Bad, Earnings-Good

We have seen consecutive days all week long of a better mortgage rate market. Rates are now at rock bottom again, and I think maybe for the last time before we see the recovery of our economy begin to ramp up. Ted Jones, the Chief Economist of Stewart Title North Texas, believes that the recovery will also bring higher rates. This means that because signs show that we are closer now than ever in the recent years to a recovery, we are also closer to interest rates going up...unless Bernanke has something super up his sleeve.

The unemployment report by the Labor Department reported that we still saw 216,000 jobs lost last month, so we are still seeing a large number of people losing jobs, but we saw less job losses than The Labor Department expected...so that is better than we hoped, therefore moving in the right direction.

Earnings on the other hand are doing better. There was a .3% increase in earnings...meaning the people in America are losing jobs, but the ones keeping there jobs are seeing an overall increase in their pay.

Take note on this thought. As we start the recovery in America, and interest rates for mortgages start going up, we'll have a larger qualifying number of possible home buyers, but since rates will be higher, the monthly costs for the homes will be higher. My point: The principle and interest payment for a $200,000 loan today at 4.875% is $1,058.97. Rates are expected to go as high as 7.5% in the next two years. These means that same home with the $200,000 loan at 7.5% would have a payment of $1,398.76...$339.79 more a month. So the home that you want and can afford today, may not be the home you can afford to buy in two years.

If you are looking to move in the next couple years, it may be time to buy now before you can't afford it in the years to come. If you would like a better explanation of how waiting may price you out of the market, go to Ted's Blog and read what he says.

Frisco Mortgage Newsletter September 2009 E1

Service First Mortgage Newsletter
September 2009

Your Mortgage Consultants for Life at Service First Mortgage, Brad Lynch and Michael Greiner, want to welcome you to our first newsletter. You can expect one every other week.
SO, WELCOME!

Our goal is to deliver you quality information regarding our industry, industry news, and mortgage rate updates. As usual, and by choice, we have been performing our services under the pressure of a REFERRAL ONLY business. We decided that a biweekly newsletter by email would be another great way for our past clients and other advocates to share us with their friends, family, and coworkers so that our list of clients for life can continue to grow for years to come.Short and brief will be our focus as we send these out. This way, you can quickly and easily scan through titles and subtitles to see if each edition involves a subject that you might be interested in.

Sincerely,

Brad Lynch and Michael GreinerService First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

Make Your Home Safer
Top 5 Home Hazards:
Our homes are supposed to be our safe havens - and most of the time they are. But every year, more than 33 million people are injured by consumer products in their "safe havens." Here are the "Top Five Hidden Home Hazards," according to the U.S. Consumer Product Safety Commission (CPSC):

1. Magnets. As the number of children's products containing magnets has increased, so have injuries. When these tiny magnets fall out of toys, children are tempted to swallow them. Though a single magnet may not cause a tragedy, two or more magnets (or a magnet and any other metal item) are cause for alarm. They can attract to one another through the intestinal wall and pinch or twist the intestines - causing holes, blockages, infections, even death.
   
2. Recalled products. The CPSC can get recalled items off retailers' shelves, but once a product is inside your home, you have to be on the lookout. Pay attention to the recall announcements and check for those items in your home.
   
3. Tip-overs. It can be fatal for a child to pull over a large item like a television or a bookcase. Make sure such items are stable in their positions, and monitor children who go near them.
4. Windows and coverings. Curtain and blind cords are a choking hazard and should always be kept out of the reach of children. Don't rely on window screens to prevent children from falling out. Screens are designed to keep bugs out, not kids in.
5. Pool and spa drains. Pool drain suction can be strong enough to hold an adult under water. However, most incidents involve children. Missing or broken drain covers are often the reason for these accidents. For pool owners: Install a safety vacuum release system that detects drain blockage and alters the pool pump or water circulation to prevent an accident. For parents and guardians: Check the drains, or at least determine where they are, before allowing children to use the pool.
   

How To Train Your Brain
If you want to keep your brain fit, it isn't enough just to read a master tome like Ulysses. Researchers believe that the most effective way to keep your brain in top shape is to do activities that pull you out of routines and expose your senses to new things. Here are simple three brain exercises: Brush your teeth with the other hand. If you're right-handed, brush your teeth with your left. It may take a little more time, but it pulls your brain out of its normal routine and forces it to use the other side of its circuits. Place clocks and pictures upside down for a day. This forces you to reorient and reinterpret familiar objects, which makes the brain use spatial networks it hasn't used in a long time. Close your eyes. As you make your way around the house, close your eyes and force your brain to exercise the connections between your sense of touch and spatial memory.

About Service First Mortgage
At Service First Mortgage, we work "By Referral Only". This makes it possible for us to spend 100% of our time with our current loyal clients for life, rather than chasing down our next "deal". If you or someone you know needs a mortgage consultant they can trust, please give us a call or email us.
"Don't Keep Us a Secret"!
Service First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

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A successful person is one who can lay a firm foundation with the bricks that others throw at him or her. - David Brinkley

They say that time changes things, but you actually have to change them yourself.- Andy Warhol

You grow up the day you have your first real laugh - at yourself.- Ethel Barrymore

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To be answered in next Newsletter edition:

What is the team of Moses Horwitz, Louis Feinberg, and Jerome Horwitz more popularly known as?

2009 Frisco Economic Forecast by Stewart Title North Texas

How is the Frisco buyer's market effected by the economy and how might home sales finish out in 2009 in relation to the first half of the year? Will 2010 be a better year for the home buying and mortgage markets than 2009?

2009 Stewart Title Economic Forecast

Discussion at Park Cities Club
with Ted C. Jones, PhD, Senior VP — Chief Economist for Stewart Title Guaranty Company

Please Join Ted C. Jones, PhD for this discussion

Ted is the Director of Investor Relations for Stewart Information Services Corporation and also Senior Vice President-Chief Economist for Stewart Title Guaranty Company...he addresses the information needs of stockholders, conducts on-going research and supports economic and financial analysis for the company and its customers. An accomplished speaker, he typically gives more than 150 presentations on real estate and the economic outlook each year.

Wednesday, September 2ND
3:00pm – 5:00pm
Park Cities Club
5956 Sherry Lane – Top Floor
view map
Hosted by:
The Mavis Kilgore Team
Stewart Title North Dallas Office
Space is Limited So Please Reply Early!
RSVP to teresa.lynch@stewart.com

Frisco Home Appreciation w/ Arrival of NBA League Team

You have to think that when a city brings in professional sports like Frisco has been doing in the last 5-10 years with the Minor League's Baseball team, the Frisco Rough Riders, the Major League soccer team FC Dallas, Arena Football's Frisco Thunder, Frisco's Texas Tornado minor hockey league team, and now NBA's D-League coming to Frisco Tx, the sport loving residence of this great city could very well see an appreciation in their home and property values soon. COME ON BULL MARKET!!!
Looks like Donnie Nelson will be the principal owner and operator. Congrats Frisco Texas!

Frisco Home Buyer Breathes Easy After Close of Home

Press Release
Frisco Home Buyer Breathes Easy at Closing

Frisco, TX - August, 18 2009 - Laura was buying in a time where, so she heard, "nobody could qualify for a home unless you had $20k or $30k to put down"...that just simply was not true and she found out the EASY way.

Brett Arends of the Wallstreet Journal said, "...the closely watched Case-Shiller Home Price Index, which tracks home prices across 20 major cities nationwide, the three-year housing slump slowed sharply in April and May." The National Association of Realtors reported that the inventory of unsold homes has come down. Like me, you ask, "how is this the case if nobody could qualify for a home loan..."?

You like me, hear the nightmare stories on the news and in the paper, but major media is selling their news and over dramatizing it and Laura, one of my recent clients found that out after they brought under $10,000 cash to closing on her $166,000 home. The fact of the matter is, today's loans aren't that hard to qualify for if you have decent credit and a job, it's just that there are so few experienced Loan Officers that know how to utilize the tools and opportunities banks are offering.

Service First Mortgage strives to live up to its name as it provides a full range of mortgage financing services to its clients and the real estate community through the execution of excellent customer service via a highly knowledgeable staff and professional business environment.# # #

WCR Newsletter for the Third Quarter

August Mortgage Rates Starting to Hike...Mortgage Trend Last Couple Months

In July, the national average for the 30 year fixed mortgage at one point got as low as 5.25%. Please note, from my long experience in this industry, I'm not sure where the national average is derived because it's always .125% or .25% higher than what most people in my market are seeing. None the less, I'm just using this as an illustration of how rates have moved upward in the recent months. Today, the national average is 5.47%. That is a full .25% higher than July's best rates. Going back to May, rates were at 4.75%. So, from May to August 7th, rates have increased over a half a point, or more than .5%.
If this becomes the trend, like economic forecasters have said it would eventually this year leading into 2010, by January we could see rates hit the 7% mark. If you are waiting on buying a home, or have not checked out of your refinance "procrastinator's anonymous class" yet, this would be the time. Take a look at this first chart on BankRate.com to see what it looks like in an image...for you brain type people that need pictures to subscribe to your long term memory.
On the positive side of this mortgage interest rate hike, I received my investment portfolio statement today and I made some money. Come on economy!

Frisco Mortgage News, FHA and Taylor Bean and Whitaker

The Federal Housing Administration or FHA suspended Taylor, Bean & Whitaker Mortgage Corp. Tuesday from making loans insured by the federal agency. This is another blow to one of the largest FHA lenders left, and how long they will be suspended, I don't know yet.
JAMES R. HAGERTY and LINGLING WEI wrote,
"The FHA said the Ocala, Fla.-based lender failed to submit a required annual financial report and to disclose to the FHA "certain irregular transactions that raised concerns of fraud." Taylor Bean has 30 days to appeal the suspension.
More
Colonial and Taylor Bean Offices Raided
Taylor Bean was the 12th largest U.S. mortgage lender in the first six months of this year, according to Inside Mortgage Finance, a trade publication. Among originators of FHA loans, Taylor Bean was the third largest in May, with a market share of 4%, according to the publication. Only Bank of America Corp. and Wells Fargo & Co. were larger.
Taylor Bean's woes are a major blow for hundreds of brokers and smaller mortgage banks that sell the loans they originate to the privately owned company. Those small mortgage companies will have to scramble to find new partners if they are to remain in the booming FHA lending business.
FHA loans have surged in popularity over the past two years as other sources of mortgage funding have dried up.

Lee B. Farkas, chairman of Taylor Bean, said in response to questions that he was unaware of the FHA action.

Ginnie Mae, a government agency that guarantees payments to holders of securities backed by FHA loans, said Taylor Bean is also barred from issuing securities backed by Ginnie. Ginnie said it will take control of nearly $25 billion of mortgage securities issued by Taylor Bean.
The moves came a day after federal agents raided the Florida offices of Colonial BancGroup Inc. and Taylor Bean. Taylor had been leading a group of investors that proposed to shore up Colonial by taking a stake in the Alabama-based bank but that transaction fell through last week amid heavy losses at Colonial."

Wow, right!?!?! It was said over a year now that the true broker would slowly be pushed out of this industry, and this is another blow to support that fact.

Frisco Mortgage Tweets on Twitter

Just in case you were wanting to have a Mortgage person on Twitter, here is a my link.
http://twitter.com/Frisco_Mortgage

Refinance Current 30 yr Mortgage Into a 15 Year and Compare Advantages

Why are the majority of Frisco and Texas refinance applicants more interested in lowering their monthly payment rather than accumulating fast equity and ownership of their home?
Get your mind right and think with "lazer accuracy" and taking a better option with a slightly higher monthly may taste really good.
After talking to the car salesman, you wonder, "Can I afford an extra $300 right now if I just trade in my perfectly good PAID OFF car for A newer one? Does it make financial sense"?...and you rack your brain to try to make it make since.
Refinancing from a current 30 year fixed mortgage to a 15 year fixed mortgage make LOTS of since. Rates are probably higher than when you bought years ago, and the 15 year rates are lower than the present 30 year rates, so it makes the switch to the lower term feasable and does not kill your bank account. So, you can increase your payment by $200-$300 and refinance your home into a 15 year note and MAN THIS MAKES SINCE!

Let me illustrate how your sacrifice of an extra $200-$300 a month can make you really happy in just 3-5 years my.
Example:
Appraised Value Home of $200,000, with a current rate of 6%, and a current principle and interest (not including taxes and insurance) of $959 a month, current loan amount after buying this home 3 years ago with an original loan of $160,000 is now $153,734. Moving along as is, the balance on the loan in 5 more years (8th official year as this example is estimating figuring that the refinance is on a home that has been owned for 3 years to now)is just $140,435. Then, after 5 more years or 10 years from the prospective refinance this example chose not to take, the loan amount is $122,497.
Now lets say in this case that the person decided to take a 15 year mortgage and refinance their home that they have had for 3 years. The pay off of the 3 year old loan would be $153,734 as mentioned above, and the rate might be at 4.75%, after rolling in all the costs to refinance (I way over estimated to make my point), the new loan amount would be $160,000, and the new Principle and Interest payment would increase by exactly $285 a month. After the first year alone, your new loan would be paid down to $152,503 (you made up your cost to refinance in the first year). Now look at the details below to see what your new loan would be moving forward through the years and the savings you have made comparible to if you were still in the 30 year loan.
Year 2 balance of new loan - $144,643
Year 3 balance of new loan - $136,402
Year 4 balance of new loan - $127,760
Year 5 balance of new loan - $118,698 (savings of $21,737) This means you have $21,737 more in paid equity/principle in your home in just 5 years from refinancing than you would have if you stayed in your current 30 year loan. Graduating up to a larger home might be more possible now with that kind of equity when you sell.
Year 10 balance of new loan - $66,350 (savings of $56,147) This means that just after 10 years from the refinancing you made up $56,147 more in equity than you would have.
NOTE: IF YOUR HOME IS A HIGHER VALUE HOME, START THE MULTIPLYING AND START SAVING NOW.

Who To Believe While Shopping Your Loan

I was reading a blog on Money Magazine today about the best way to find a home loan. You can see that edition at this link (Money Magazine)
Sarah Max explained,
"When the easy money was flowing, you could get a great deal on a mortgage from just about anyone. But in today's credit-challenged world, all the avenues for finding a mortgage come with their own set of problems."

This is simple and a great intro to where we are at now in the industry. She went on to explain how the many banks have become very tough and tightened their standards and so forth. You see, brokers really have no direct relation with the money they loan, and that many times leads to a situation where more brokers than bankers would be willing to loan and "push" a loan that a banker or bank my turn down. Sarah makes mention of this in her message.

This is where I start to wonder, "is the helper trying to help the shopper in this case, speaking of Sarah with Money Magazine writing an article targeting the needed help of mortgage shoppers, or is she helping advertise the mortgage lead generating giants in our industry that typically support the broker and banker portions that established business by pushy sales rather than honestly earning referrals. Let me be clear though...I am not saying all bankers or brokers that purchase leads are not to be trusted, but I would place a bet on it that if you did the research you'd find there are more less qualified Loan Officers working primarily on purchasing leads rather than the Loan Officer who has made relationships through honesty and hard work. "Bonds between people keep one honest. If you don't have a bond with someone, you have nothing to lose"...for being dishonest that is.

Now this is where Sarah crosses me a little on whether she's helping the shopper or the major lead company. Sarah says,
"And while online lending sites hold the promise of one-stop shopping, some have developed a reputation for playing bait-and-switch on rates and not fully disclosing fees. All this adds up to a major shopping hassle. If you want to get the best rate, you'll need to tap at least two of the sources below. Scour the Web. Shopping for a mortgage online has come a long way from the days of one-size-fits-all rate listings. At some sites, including Bankrate.com, MortgageMarvel.com, and Zillow.com, you can now shop anonymously and get accurate rates. Keep in mind that all these sites act as referral services, so eventually you'll have to close the deal with a bank or mortgage broker."

The aforementioned lending website companies as I may bring attention to are lead generating companies. Sarah even mentions that you will shop their rates and fees and eventually be dumped onto a banker or broker. There is very little accountability between the bankrate.com type company and the lead purchaser loan officer for the receiver of the lead to be, should I say, less than straight forward or not slippery. That being said, Sarah is suggesting to avoid the "bait and switchers" and mentions it nearly just like that, yet she suggests to her readers to check with these lead generating sites that sell their leads to entities with more probable numbers of bait and switch type loan officers. THAT is why I wonder if maybe a blog such as this is contradicting...efforts to educate and help mortgage shoppers crossed with the demand for advertising and keeping relationships with the people who probably advertise with them, creates a less than conducive atmosphere sometimes.

Here is what I suggest. Those large "engines" such as the aforementioned bankrate.com's and so forth are large enough that they know they have to be on target when advertising and therefore will list their rates and fees pretty accurate to current competitive market costs...lending laws watch them closer than the small guys and therefore they are held more accountable many times. Now since it is obvious that today's market isn't forgiving to the person who prioritizes the "cheapest" loan, but first prioritizes the evaluation of trusting the loan officer with the most competitive rate, use the big "engines" to gauge what is competitive and then shop different lenders by your personal character "radar". If you feel rushed or feel like you are being pushed at all, trust in the old adage, "if it's a good deal, it don't have to be committed on today". Be sure YOU the buyer/shopper define committed right. Committed should mean to you in the mortgage industry, I've spent money. A lender may say, "sir, I realize you are shopping and I feel like rates will be higher tomorrow. Do you mind if I lock your loan?" As long as they don't require upfront non-refundable money if you don't use them, and you intend on using them if it works out, let them lock it for you.
Best of luck in your home shopping!

Renting a Home vs. Buying a Home...things that make you go, HUH

Here’s a quick note to let you know how I can help you or anyone you feel comfortable introducing me to, in making the decision whether they should stop renting and buy now, or stay where they are at.

If you are like me, you know at least one or two people who are renting an apartment and you have probably wondered, "why do they not own, I know they both or he/she has a decent job." Sometimes there are legitimate reasons for renting, and sometimes people can buy and either don't know they can, or just have put it off for so long, they need a friend or family member to help them bring it back to their consciousness...but most of the time when people find out that in today’s economy they can buy a home for 30 percent less than they could a year or two ago – they get excited!

The next time you’re in a conversation with a friend, family member or neighbor and they mention that they’d love to take advantage of this buyers’ market and buy a home that’s selling for 30 percent less than it may have been selling for a year or two ago, would you stop, take out your cell phone, look up my number (469-450-2723) and call me immediately? I’ll send you our free report, How to Stop Spending Money on Rent and Own a Home Instead, because it will give them all the answers they need now to make a smart decision about what to do next.

Leave the Middle for Your Mortgage Planner and the End for you, Mr. Bottom Line Thinker

This message is for those bottom line type buying a home or refinancing for the 2ND, 3rd, 4Th, and 5Th time. You only know enough to endanger the possibility of having correct expectations. In mortgage, it's not the loan consultants job to meet your expectations, but it is his job to set your expectations and then try to exceed them. It doesn't matter how many loans you have been involved in, you have no business setting your own expectations except of course for what you pay and the obvious...the middle is best set by your mortgage planner.
Many of those ultra macho, "I'm a spunky business thinker" type when it comes to knowing about getting a loan, think they are the "Bo knows" of mortgage because they have a history of closing loans. Quote me if you like, in the mortgage industry right now, June 2009, there are NO EASY loans...only a little exaggeration there, but "Mr thinker" reading this should not think that he knows mortgage and because he makes a million dollars a year and is only buying a $200k home, he is the exception, and "this should be easy". STOP it. Just for a minute TAKE ADVICE and turn your "I'm getting sold radar" off and not just hear, but listen and realize that you might not know it all.
For the bottom line thinkers, John Maxwell says, you have the "ability to focus on results and maximize return to reap the full potential of your thinking". Mr bottom line thinker, relieve yourself from thinking you might have a clue in how the transaction process might go for your transaction so you can not just hear but listen to your mortgage planner tell you what the transaction process is going to look like, so your expectations are 100% advised expectations and not 50/50 expectations...50 being your own and 50 being your advised. Remember, you aren't a transaction or process thinker when you are outside your strong suit. You are a bottom line thinker and if you want to be happy at the end of the transaction where your bottom line gratification happens, then let the middle be led by your advisor.

Mortgage Planner Small Print Disclosure: Notice there are no explanations of why you should be sure and set your goal to have 100% advised expectations right now rather than 50/50. If the mortgage planner your talking to exudes a character that you can't trust for that 100% and let go of your 50%, then it's time to switch. If I tried to explain why the transaction process in mortgage is shifty and why, I wouldn't know to whether to start at number 1 reason, or number 50 and if I started anywhere in between, it would not end up being a good example for one of the reasons your loan has turbulence within the middle of your transaction.
Love, Listen, and Learn from your Mortgage Planner for Life and if you can't do all three, maybe it's time to change.

Frisco Home Sales and Average Prices...Expectations for Future Foreclosures

Home Sales up
Given what our market has been through, lets think with our common sense and jump to some apparent obvious conclusions about what we would expect. With the enormous number of foreclosures, and short sales that have a negative affect on house prices, and the fact that so many buyers were eliminated from the buying game when mortgage qualification guidelines tightened, we know why and where the drop in home prices on average came from. Right? That all seems like commons sense. Now that value of all homes in America just about are less than they were a year or more ago, anyone buying those homes today would be buying them at a lower amount then before...more common sense. So when we here reports that the number of homes sold in April or May this year is a little from last year, but the average price per home is less, we shouldn't be pessimistic and say, "who cares that the number of homes sold increased cause prices are down". That is not a fair statement because the homes sold today have to be less on average and the number of homes sold increasing is the best first sign we can expect. Right?
CNN reported, "Existing home sales rose 2.9% while the median sales price fell 15.4% to $170,200".

Average Sale price down
Lets not worry so much about the average sale price of homes just yet. America saw too many job losses and pay cuts for us to have a bustling appreciation on sales prices just yet. Let Americans get some placebo going in the right direction and as we start making an extra dollar, we'll get right back on into our good ole American ways...spend and leverage "babe"! Once that happens, then we can focus on home prices. Keep this note on your fridge though, over correction is in the forecast for 2010 and mortgage rates are expected to be in the high 7% range at best...they might have started that assent last week by the way the volatile market is playing out. We had two interest rate "worsenings" just today.

The foreclosure numbers haven't stopped, and there are more to be expected.
Forbes reported that in March the unemployment rate went to 8.5%, the highest in 25 years. Economic forecasters figure that we'll see a continued problem in foreclosures at least through this summer and fall.

Tax Credit Will NOT Be Available for Downpayment

$8000 FTHB Tax Credit Cannot be used For Downpayment As of Today
The SECRETARY of HUD made an announcement Monday and a HUD/FHA letter was published on the website Monday night stating the the $8000 could be used for upfront down payment (although the mortgage letter was vague at best)...the new DIRECTOR of HUD pulled that Mortgagee letter Thursday morning and is no longer even available on the HUD website because it appeared to violate a federal law that became effective October 1, 2008.
Here is the hyperlink to all Mortgagee Letters: Notice ML 09-15 has been pulled.
This theoretical program is now off the table and cannot NOT be used until there is a real concept of how to offer to your borrowers with real answers as to where the money might come from.
Before this happens there would need to be:
1. State agencies approved WITH MONEY for the down payment (Note that Texas IS working on this currently and we will probably (note that I said probably) have more information by June 1, 2009)
2. A Change to the HUD guidelines on the timeframe that is allowable for a loan….currently must be amortized over 10 years with no balloon.
3. A change to the IRS guidelines allowing your refund to be assigned to a state or non-profit entity.

It is also important to know that some mortgage companies in the area have already closed loans in which they allowed the buyer to use the $8000 as their down payment.
The problem is that those loans cannot now get insured or securitized. As of right now (today), buyers cannot close an FHA or Conventional loan using the $8000 as a down payment.

$8,000 Tax Credit Towards FHA Downpayment

HUD Secretary Donovan appeared at a NAR yesterday, and this is an exact excerpt of his remarks:

"We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to "monetize" the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly."

Okay - so what does that MEAN? It means that they are about to "officially" put their stamp on approving the process (and authority) on who/where/why/when a first-time homebuyer can get a LOAN for the $8000 tax credit - to be used as part of the required down payment!

THIS IS HUGE! As soon as the "official" announcement is out, we will get it to you. For now, if you are inside the transaction process of buying a home, all you can do is cross your fingers that this happens soon enough that you can take advatage of this if you choose. If you are considering on buying a house, know that this may drag on a month or two...be prepared to wait if you must.

No Payment for 2 Months After Purchasing a Home or Refinancing

There are a number of ways that you can structure or plan a closing so that you can maximize your specific needs when financing a home today. Assuming you have a choice on your closing day, here are three typical options.
Option number 1: The typical and assumed closing at the end of the month...
If you have bought a home lately, or refinanced, you might have heard someone in the transaction sphere of influence mention the large volume of closings that come together at the end of ever month. The idea is that if you close at the end of the month, you pay less prepaid interest. What that means is this; If you close on your home on say April the 30Th, the last day of the month, then you only borrowed money for your new loan for one day in April. They do not tack that one day on to the first payment of your loan, so you pay that up front at closing. You can see how if you closed at the first of the month how you would be required to come out pocket up front/at closing by much more money. In this scenario, you close on April 30Th and pay one day of interest up front at closing, you have no payment at all in May, and your first payment is due June 1st but isn't counted negatively in any way until June 15Th. That is a 45 day no payment closing, and it works for refinancing and purchases

Option number 2: Close on your home loan the 1st day of the month...May 1st.
There is 31 days in May, and since you'll have funds loaned to you all 31 days of that month with no mortgage payment, you'll pay 31 days worth of interest at closing. AH, but you don't have a payment in June at all. Your first payment is due July 1st and it is not late until July 15Th. That is two and a half months, or 75 days with no mortgage payment.

Option number 3: Close your home on the 1st day of the month with a "short pay"...May 1st
In a short pay, you do it all opposite of what the above options provide. You pay interest in days backward, and you make your first payment the very first month coming up. If you close on May 1st, you pay 1 day of interest up front, and your first payment is due June 1st and not late until June the 15Th. In this scenario, you don't have a "mortgage payment" in May, so you still ultimately get a month with no mortgage.

Here are the calculations for closing scenarios for options 1-3 Using a new loan amount of $270,000 and a new interest rate of 4.875%. Please take not that two of the closings are on the same day, and the other one is 1 day before the other:
Option #1...Close April 30Th;1 day of interest = $36.56 paid at time of closing
No payment due until June 1st of $1,429 a month (Principle and interest on $270k at 4.875%)
31 days of May you have no payment...
Pay all other closing costs PLUS $36.56 AND then come up with 1st payment of $1,429 in June. From day of closing until June first you spend a total of = $1,465 and then another mortgage payment of $1,429 July 1st
Money spent total from closing to July first = $2,894

Option #2...Close May 1st 31 days of interest = $1,096 paid at time of closing
No payment until July 1st of $1,429 a month (Principle and interest on $270k at 4.875%)
31 days of May you have no payment, 30 days of June you have no payment...
Pay all other closing costs PLUS $1,096 AND then come up with 1st payment of $1,429 in July. From day of closing until June first you spend a total of = $1,465
Money spent total from closing to July first = $2,525


Option #3...Close May 1st using a "short pay"
1 day of interest = $36.56 paid at time of closing
Payment due June 1st of $1,429 a month (Principle and interest on $270k at 4.875%)
30 days of May no payment...
Pay all other closing costs PLUS $36.56 AND then come up with 1st payment of $1,429 in June. From day of closing until June first you spend a total of = $1,465
Money spent total from closing to July first = $2,894

The number 2 option here appears to save you $369 out of pocket in your closing scenarios. I know some of you are thinking, "that's it! I'm going that route, and there is no discussion". Others are taking a little longer look at it and seeing how the options for cash in the pocket for a little longer in the front might help here, but "yada yada yada". Good! How ever you feel the options help you, that is what matters. Remember though, the majority of loans close at the end of the month and lender offices are busy busy busy towards the end of the month with such a work load, so consider closing at a different point in the month to avoid getting stuck in the traffic...you might have a hiccup in the process and when there is traffic, the slower you will be able to "get rid of you hiccup".

Lowest Interest Rate In History...30 year fixed

What is the standard for the lowest interest rate in history?Freddie Mac, one of the governing bodies of home loans in America, reported that their survey on rates goes back as far as 1971, and 4.78% last week was the lowest National average for a 30 year fixed loan. As of today, the rates have worked their way above that standard again, but word and hope is that they will return and break that record once again before 2009 ends. "Place your bets though", because banks and lenders are VERY stingy with their money right now and the trend shows that the lower rates get, the harder they make it for economic data to influence the recent minuscule drops we have seen compared to the healthy increases from said economic data on the adverse side.
President Obama made note in a recent home refinance talk about his recognition of these record breaking rates, and said further, "But he warned people to watch out for scam artists." He was speaking about the lenders asking for up front money to refinance a home...this is typically a non-reimbursement fee they call application fee. Many lenders collect for an appraisal up front, but this money is sometimes reimbursable and in the end is used directly toward the cost of the appraisal rather than padding the pocket of the "scam artist" type loan person. So, do not get this mixed up with the "scammer's" upfront fee.

The Fed Buys Treasuries to Ripen Mortgage Back Securities...Mortgage Rates Better

Lets all get on the same page first. Why does U.S. mortgage interest rates benefit from the Fed buying up Treasuries?
Lets think first before I move on, the common law of supply and demand. So the Federal Reserve plans to buy up to $300 billion of Treasuries and increase purchases of mortgage-backed bonds. This will mean there is less of a supply...supply goes down, and demand goes up. So, the Fed is trying to lower rates by reducing the supply of outstanding mortgage bonds, boosting their price (when demand goes up, the merchant can increase their selling price) and lowering yields. That would allow banks to reduce the rates on new mortgages and still sell mortgage securities at a profit. Well, if the bank is getting a better "bang for their buck", they don't have to charge such a high rate when loaning us money to make their profit.
Why is everyone running around "willy nilly" refinancing if the rates are going to get better? The American government, American leaders, and American economists bleed the same color blood that we do, and if they all knew the answer beyond a shadow of a doubt, we wouldn't be where we are at right now.

Remember, the ultimate goal of all this is that rates get low enough for home buyers to come out of the wood work and buy homes. Bloomberg.com's Brian Louis reported Mike Larson, a real estate analyst of saying,

"Lower mortgage rates by themselves also may not be enough to spark demand for home purchases. For consumers who’ve lost their jobs or are worried about losing their jobs, low mortgage rates won’t be enough to prompt them to commit to buying a house, Larson said."

My advice to the families considering refinancing is, if it makes since for you to refinance with today's interest rates, and you can see a benefit for you and your family's financial future, "pull the trigger".
BEST OF LUCK IN YOUR REFINANCING!

Article From Star Telegram...Worry Free Mortgage and Linda Davidson

Andrea Jares of the Star Telegram wrote about our Worry Free Mortgage. Linda Davidson, one of our "Celebs" at Service First Mortgage was selected to be interviewed and reflect on this new loan program, and here is how Andrea Jares covered it...

Linda Davidson doesn’t want job worries to keep you from buying a house.

Davidson, a mortgage banker with Garland-based Service First Mortgage Corp., is among a group of local lenders and home builders offering a so-called "worry-free mortgage" that will pay your note for six months if you lose your job within two years.

For $525, a buyer can add this protection to a mortgage for coverage of up to $1,800 a month. It also comes with budget help and financial counseling and will spot you if a big, unexpected bill comes up.

With the "worry-free" program and the $8,000 home-buyer tax refund from the government, her business has really taken off, Davidson said.

"We are slammed," she said.

Craig Brown of Addison is among those signing up to be worry-free.

Although he isn’t particularly worried about losing his job, Brown said he believes that anything can happen. So now that he’s shopping for his first house, he’s taking extra precaution by signing up for the new option.

"I’m at the point where I’d have to be convinced out of it," he said.

Easing consumer worries

The worry-free mortgage is among the latest programs aimed at easing consumer concerns enough to get them to open their pocketbooks. Hyundai Motor America is offering a similar deal: If you buy a new Hyundai and lose your job within a year, you can give the car back.

Davidson said she received a call a couple of years ago from the Rainy Day Foundation, which administers the worry-free mortgage program. But with unemployment at less than 4 percent, she opted not to use it.

But about a month ago, after seeing a commercial advertising the Hyundai deal, she decided to give the Rainy Day Foundation a call back. The foundation is a nonprofit that offers educational services and mortgage protection for home buyers, and works with FHA, VA and USDA loans.

Davidson said the worry-free protection could be appealing to buyers hoping to protect themselves or to a seller, who might want to add it to make a home stand out to prospective buyers.

"I think this will be big for the next two to three years," she said.

She’s been offering the mortgage now for about three weeks through www.myworryfreemortgage.com.

Several options

A handful of other mortgage lenders in North Texas are offering these mortgages, with home builders such as Lennar, Meritage, HistoryMaker, Morrison Homes and Gehan adding the program to their options, said Rick Del Sontro, chief executive of the Rainy Day Foundation.

The Washington, D.C.-based foundation has been around for six years. But it was when the nonprofit launched the HELP (Homeowner Education and Loan Protection) program 14 months ago, that interest soared.

The organization is handling 2,000 mortgages a month, Del Sontro said.

But even though the job-loss protection option may catch people’s attention, it is only part of what the foundation does.

"Only a third of FHA defaults are because of job loss," Del Sontro said.

To help with the other two-thirds, the foundation offers help for a large, unexpected one-time expense, such as a car repair or a high out-of-pocket insurance deductable. In those cases, a homeowner can apply to have the bill paid by the foundation.

Last year, the foundation gave away $4 million in these grants; the foundation is on track to give away twice that amount this year, Del Sontro said.

Foundation representatives also call periodically to help with finances or budgeting.

What, me worry?

Brown, who works in pro- duct development and marketing of textile products, is looking for a home in Carrollton, Plano or Frisco under $125,000.

He thinks the peace of mind that comes from the worry-free mortgage is worth the extra price.

While he’s making lots of decisions about what his next house will be like, one thing he won’t have to worry about is how to pay the mortgage if something should happen to his job.

"You never know," Brown said. "People you’d never think would be out of a job are asking me if my company is hiring."

Give me a call if you are interested in adding this program in the purchase of your next home.
Brad Lynch
Sr. Loan Officer @ Service First Mortgage
bl@fmillc.com
469-450-2723

Rates Getting Lower and Tomorrows Employment Reports Could Help More

Rates were great today, 3/5/2009, but I need interest rates for a 30 year fixed loan to get below 4.875% and 4.5% for a 15 year fixed. The one thing that could help that scenario to happen is that there be a increase in the unemployement rate in tomorrow morning's report, a drop in payrolls, and little or no incresase in earnings.
How can I track tomorrows outcome in such reports? The forecasts for unemployment are .3% increase to 7.9%. So if you Google "todays unemployment report" after say 8:30am Eastern Time and compare the findings to the above, you will at least have hope that lenders open with better rates...they don't always follow as we plan or hope.

First Time Home Buyer Tax Credit

The First Time Home Buyer Tax Credit Basics
This is a dollar for dollar credit you get on your taxes at the end of the tax season the year you buy your first home. Dollar for dollar means, there is no formula of deduction where you hear some nice big pretty number of $8,000 and then you get a small percentage of that in cash with your tax refund. If you qualify for all $8,000, that will be the amount directly added on to your end of the year tax refund. If you get $2,500 at the end of the year and qualify for say, $2500 in First Time Buyer Tax Credit, then you'll get $5,000.
Please see my previous Blog called "Housing and Economic Act and Tax Credit..."about this tax credit from it's original inception, and then read on below here to see how it has evolved to a great opportunity for First Time Buyers in the year of 2009.
Here are the details of the Tax Credit. There are listed below the "Original Version" and "Updated Version". There were changes made that made this credit a lot more opportunistic for Americans, and that is the "Updated Version" to each of the guidelines I've listed below.

Amount of Credit
Original Calculation: Lesser of 10 percent of cost of home or $7500
Updated Version: Maximum credit amount increased to $8000

All principal residences eligible.

Refundable
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.
No change

Purchasers will continue to receive refund for unused amount when tax return is filed.

Income Limit
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).
No change

First-time Home buyer Only
Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.
No change. Still available for first-time purchasers only. Three-year rule continues to apply.

Repayment
Original: Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.
Updated Version: No repayment for purchases on or after January 1, 2009 and before December 1, 2009

Recapture- (means that if you do the below...sell the home, there could be within the guidelines stated here, a requirement for you to pay back the tax credit.)
Original: If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.
Updated Version: If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.

Feel free to call me for more specifics. Brad Lynch 469-450-2723

January Retail Sales Data may not help rates today...

After a couple days of low rates, we in the mortgage "circle" were hoping for the January Retail Sales Data report to come back negative...again, it's not good for the economy for negative reports, but for interest rates it might have helped. The expectations were a fall of .3% and it increased by 1%. Right off, that might lead us to believe that we would definitely see an increase in rates today. On the other hand, there was quite a bit of momentum in a bettering market towards the end of the day yesterday, and we have hope at the most, that rates at least stalemate today and don't go up.

How is the Government going to get mortgage rates down to 4%?

Too often, the media passes over a story and doesn't do a good job explaining HOW. Sometimes the "HOW" is more simple than we expect, but if so, take a minute to mention it. The question, "how is the government going to get rates down to 4%," is obvious once noted and reminded of what happened with Fannie Mae and Freddie Mac a while back.

The government bought into the conservatorship for Fannie and Freddie, so they could directly demand the Treasury to issue bonds and fund the housing agencies(CLICK HERE for previous Blog on Conservatorship). In turn, their lower costs for funds would allow for a lowering of mortgage rates. In a Blog at Marketplace.com, they make a good point about offering rates at 4%...4% doesn't offer much compensation for overhead (default, prepayment risk, and underwriting).

Anyway, the government has the conservatorship on Fannie and Freddie and has lots of money...they can make it happen.

The Worry Free Mortgage

Is there a Home Loan similar to the one Hyundai has for their cars where when you get fired, you have a worry free option?The Worry Free Home Loan was invented and Service First Mortgage is offering it to insure that a home buyer doesn't lose his home if they lose their job.

This is a market where even disciplined and responsible home owners have the risk of Bankruptcy or foreclosure.
The loan plan can provide you the security you need when deciding to buy a house in an economy that isn't strong enough to trust. This Worry Free Loan works like an insurance policy if you were to loose your job in the first two years of ownership. If you were to lose your job, the Worry Free Loan will pay your mortgage payment, Principle AND Interest, for you. Beyond the first two years, there is a free extended plan that kicks in to support you in hardship as well.

Alrighty, what is the cost for this "so called Worry Free Loan"? Right? You were thinking that? (:
It is a program that can go side by side with your regular loan for a price ranging from $300-$600 at closing that the seller or Custom Home Builder can pay for you. Call Brad Lynch if you are interested further in this loan. !!!469-450-BRAD!!!

Should I pay points/origination...CONT'D/Part II

Should I pay points/origination?
If you haven't read part I of this Blog, please click on this hyper link...Part I or scroll to the Blog title previous to this one below.
...YES!!! Pay points.
First off, somewhere in the time continuum's past, the word "point" became a trigger word that people hear and focus in on. The way I see it, it's a block for understanding how to shop or understand how to effectively shop your loan. I can tell you this, as a long time loan officer, when I hear a client ask about "points" or mention that their father, brother, uncle, or spouse asked them to ask about "points", I right now know there is a possibility I will have a hard time explaining mortgage and explain how to structure a loan for this person because they are "cursed" with the "point block".
That being said, if it makes since, pay points! Lots and lots and lots of points! OK, I'm exaggerating...but yes, pay points when it makes since. The interest rate that families are getting today, at this point in time, they will unlikely be able to refinance into a lower rate that makes since for the duration of that loan's life. So, there is no fear that they pay up front money to get the best rate and then rates drop months or a year later and now they refinance again and double the cost that they are trying to make up for the savings of the refinance.
There is a less obvious reason to pay points now, and many/most loan consultants won't "go there" with their client, lenders, investors, and banks are being really greedy with their incentives that pay the commissions and overhead for their loan officers. (I also don't "go there" with many clients because some clients are not interested in how or why, they are only interested in, "what's in it for me". I try to profile clients that care about me as a business relationship, not a slave that happens to have the key to the door that they have to get through to get a loan.) It used to be easy to go to a client and say, "George, I can offer you 5.5% with no origination/points, or I can offer you 5.375% with you paying .5% in origination/points, or 5.25% with you paying a full 1% origination/point." Reason being, the lending establishments would pay much larger incentives to loan officers that would offer .125% above the rock bottom lowest rate and then every .125% increase to the next and so forth as the rate that is offered moves up. Well now, we loan consultants would have to literally move an interest rate that we offer where the borrower has to pay 1% origination up .5% or .875% to be compensated enough to waive the origination/point...that blows the deal for a refinance because the payment increases to much.
What does that mean to me, the refinancing borrower or home buyer?That means that you need to ask your mortgage consultant for the lowest rate possible and ask him what kind of origination and discount must be paid for that rate. If you want your lender to waive origination/discounts/points, you are setting yourself up for trouble in this market.
Good luck! Go and buy a home or refinance to help your country through this recession.

Should I pay points/origination on my refinance?

Should I pay points/origination on my refinance?
YES! If you are going to be there for a while.

I'll update this shortly...going to a meeting and can't wait to share. In the meanwhile, read this that I copied and pasted from CNNMoney and their trusty writer Les Christie. He does a great job expressing this.
"CNNMoney.com

Mortgage borrowing today: What you need to know
Wednesday February 4, 1:35 pm ET

By Les Christie, CNNMoney.com staff writer

If you're shopping for a mortgage these days, it's a whole new world out there.
"There have been a huge number of changes over the past few years in mortgage borrowing," said Gibran Nicholas, founder of the CMPS Institute, which trains and certifies mortgage advisors.
Of course, many of the subprime loans that helped fuel the housing boom - those that didn't require borrowers to show any proof of income, or that let homeowners make minimum payments - are are simply no longer available.
But even buyers looking for a traditional mortgage are now faced with different factors to consider.
Here is what you need to know:
Paying up-front points. Borrowers can pay points - one-time, up-front fees - in order to reduce their mortgage's interest rate over the life of the loan. One point represents 1% of the mortgage value.
But they often assume that they should never pay points, according to Alan Rosenbaum, founder of mortgage broker Guardhill Financial. That's a mistake, in his opinion.
When interest rates were high, paying points didn't make sense because borrowers were very likely to refinance after rates dropped. They wouldn't hold their original loans long enough to recoup their up-front costs.
But now borrowers can get a lot more bang for their buck. The old rule of thumb was that paying one point at closing could lower their mortgage's interest rate by a quarter percentage point or so.
"Today the spread is worth a half point to a full point on the rate," said Rosenbaum.
It means paying $2,000 on a $200,000 mortgage at closing can shave as much as a whole percentage point off the loan's interest rate, changing a 6% loan to 5%.
That would save $126 a month, and pay for itself in 16 months. Even if the rate were only lowered to 5.5%, that would still save $64 a month, paying for itself in 32 months.
Still, not everyone is convinced. Rosenbaum recently had a client who chose a 15-year fixed rate loan at 5.875% with zero up-front points on a $800,000 loan, instead of paying a point to get a 5.375% loan.
Had the borrower chosen to pay that point, he would have recouped that cost in about three years, and then gone on to save more than $200 a month for the remaining 12 years of the loan.
Of course, there are caveats. Buyers who are planning to refinance or sell within a few years shouldn't pay points, since the strategy simply doesn't pay in the short term.
Making more than the minimum down payment. If you can afford to put 25%, 30% or more down, should you do it?
Most lenders require a minimum down payment of 20%; anything less and borrowers will need to obtain private mortgage insurance.
And if a buyer could afford to put more than 20% down, it was generally assumed that they should.
The traditional thinking was, "If you have the capital to commit, why not?" said Keith Gumbinger of mortgage research firm HSH Associates. "It will give you a smaller balance to pay off. But now, in light of declining home markets, not everyone would agree with that."
High down payments can be wiped out in severely declining markets.
Nicholas said he knows of a couple in Arizona who put a whopping $400,000 down on a million dollar house a couple of years ago. That gave them, they thought, a nice home equity cushion should they run into financial trouble.
"But prices are down so much, the couple still fell underwater," he said. "It would have been better to conserve that cash in case home prices continue to decline."
Locking in the mortgage rate. Many borrowers choose not to lock in when rates are falling, as they have been, since they assume that the deals will only get better.
But that's often a mistake.
"We almost always recommend that if you have the numbers that make your deal work, then lock it in," said Gumbinger.
His reason: Interest rates tend to jump up much faster than they inch down, meaning that buyers are much more likely to get stuck with a higher mortgage rate than they are to get lower one because they waited.
Besides, locking in at the currently very affordable rates can give borrowers peace of mind, which is no small matter when you're trying to buy a house.
"You'll sleep better at night," said Gumbinger."