Welcome to the David Moberly Mortgage Group
Thanks for stopping by, I know that the mortgage loan shopping process may not be the most glamorous part of your home buying experience, but trust me when I say that it will have the most effect on your overall payment and the speed of your purchase transaction. You owe it to yourselves to speak to a mortgage professional about your home loan as soon as you decide you’d like to begin the process of purchasing a home. Home Loans may seem very intimidating, but as mortgage consultant my number one priority is making that process simple for you to understand. Say goodbye to confusing closing cost explanations, deceiving loan products and a mortgage lender that is only interested in making a sale. Your home loan experience with me will be comfortable, confidential and I promise that whether it is your first or your 5th home loan, you will understand every component of your mortgage when we are done.
Buy-Downs | DM Mortgage Group | Boise Idaho
Buy-Downs… What are they and what are they good for?
Estate, use this savvy info to position yourselves as the expert (not to mention extremely interesting) in investment and forward this on to your poor, uneducated friends! 
Buy-Downs… What are they and what are they good for?Have ya ever wondered what a buy down is? No? Oh… awkward… well, the next time the conversation ventures towards Real Estate, use this savvy info to position yourselves as the expert (not to mention extremely interesting) in investment and forward this on to your poor, uneducated friends!
Buy-downs are not very complicated once you see a scenario played out where a buy-down is utilized. Buy-Downs are simply delaying payment on a portion of the principle and interest for the length of time the Buy-Down is in effect (typically one or two years). This can ease a buyer into a house payment while allowing them a little extra cash flow for the first year or two of home ownership to furnish the home or build up some savings. These became very popular with the construction boom because many builders would wrap a buy-down in the price of their homes with the hopes of luring first-time home buyers with a low introductory payment.
|
Explanation of Buy-down – 2/1 Buy-down
|
|||
|
Scenario 1: 100K @ 4.75% with 3.5% Down
|
|||
|
Payment
|
Savings
|
Annual Savings
|
|
|
Principle + Interest
|
508.42
|
0.00
|
0.00
|
|
Year 1 Payment
|
397.89
|
110.53
|
1326.36
|
|
Year 2 Payment
|
451.38
|
57.04
|
684.48
|
|
Total cost for Buy-down:
|
2010.84
|
||
|
Scenario 2: 200K @ 4.75% with 3.5% Down
|
|||
|
Payment
|
Savings
|
Annual Savings
|
|
|
Principle + Interest
|
1016.85
|
0.00
|
0.00
|
|
Year 1 Payment
|
795.78
|
221.07
|
2652.84
|
|
Year 2 Payment
|
902.75
|
114.10
|
1369.20
|
|
Total Cost for Buy-down
|
4022.04
|
||
In this scenario, the total cost for the buy-down is about 2% of the purchase price and that is typical for a loan at 4.5% – 5% APR. You may also have noticed that I calculated a down payment of 3.5% and here is why: A buy-down does a buyer no good if they have to pay it at time of closing. Or if they have to pay extra in closing costs to secure a buy-down, again this is of no benefit to the buyer. The easiest way to utilize a buy-down is to include the cost of the buy-down with closing costs in the purchase contract. This amount will most certainly be over the Conventional guidelines of 3% maximum seller contributions, so FHA ends up being the best way to do that, because the seller can contribute up to 6% of the purchase price and still be within FHA guidelines.
Now, I’d like to conclude this informative little email with a couple of relevant points:
- Buy-Downs end up costing about 2% as mentioned earlier, so often it makes more sense to buy the rate down with those 2 points, rather than just lowering the payment for a couple of years. Typically, 2 points will lower the interest rate by as much as .5% – .75% – that might make more sense for the buyer in the long run.
- For Realtors – Lenders don’t typically love buy-downs due to it being one more complication added to the process. While I’m willing to do whatever it takes to make you successful, it’s important to keep the buyer’s best interest in mind, and sometimes sophisticated (a.k.a. complicated) loan programs add to the stress of the buyer and decrease from the satisfaction (a.k.a. referrals) of the buyer as well. Keep that in mind when offering tricky solutions to the cost of home ownership.
Top 11 Listing Tips for 2011 from Real Estate sales Author Van Deeb
Van has won over 100 Real Estate Sales awards, has built 2 successful Realty brokerages, and is an acclaimed Real Estate Salesmotivational speaker.
Here are some tips he offers for finding new listings and utilizing them effectively:
Finding New Listings:
1. Call Expired listings before initial visits. Let the potential seller know that you have “exciting news,” and come prepared with market analysis and positive goals
2. Expired Listing Night – Twice a week visit 3 – 4 expired listings. Present yourself as “expired listing expert,” taking charge of their expectations. Never criticize other agents, set yourself apart by confidence and expertise
3. Present every listing appointment as if the potential client is already an active client. -Arrive at your appointment with a custom portfolio for the client, record relevant information throughout your conversation and ask for a tour of the home.
4. Sell the client on yourself first. If they don’t like you, they won’t hire you – even if you appear professional. Make conversation from items in home, pets, etc.
5. Share your strategies with the clients to foster teamwork. Remind them that you don’t get paid until their home sells, and affirm in their mind that you are the best agent for the job. Bring testimonials or other items that verify your professionalism and expertise.
6. Don’t turn down overpriced Listing opportunities. Remember that every listing has at least one buyer, so these are opportunities to expand your business. Work with the seller to show them that the market, not the agent determines appropriate price. Even if you lose the seller, you may find additional buyers and you have increased your past client database.
Utilizing Your Listings for Maximum Sales:
1. Put your phone number, not your home seller’s phone number for scheduling showings. This helps you stay in touch with other realtors and potential buyers. Never miss an opportunity to connect with another agent or potential buyer
2. Foster relationships with other realtors – they will want to help you sell if they like you. Follow up with phone calls and note cards thanking agents for showing your listings
3. Call potential buyers back when they call with listing questions. Instead of answering all questions immediately, offer to call back within 30 minutes and track down 8 – 10 other listings that you can offer if they don’t like your listing, or buyer gives impression that your listing is overpriced.
4. Be proactive in overcoming objections and connecting with new buyers. Having a market analysis for your listing or being knowledgeable with other properties available will keep your foot in the door even if your listing is overpriced.
5. Capture all of your Leads – using programs like HBM, or Sikku will help you monitor all interest for your listings and may turn into purchase business in the future. Some of these programs are completely free, and can help you capture leads off your existing listings.
Good luck with your sales, and as always – please contact me if there is anything I can do for you to help you build your business!
80-15-5 loans made simple? | Mortgages Boise Meridian Idaho
Here’s a great tip to help your buyers get more house, with less down and a lower monthly payment because they are not required to pay for Mortgage Insurance.
80-15-5 loans are sometimes called piggyback loans; they are a creative way to finance a home purchase. Borrowers who don’t have a lot of cash, or would rather not tap into other equity prefer this arrangement, and since the payments are usually lower, it allows you to qualify for a larger mortgage. While this may be old news to many of you, I still talk to many folks that think the days of “creative financing” are behind us now and the only way to avoid MI premiums is with a whopping 20% Down payment.
Without further delay, here’s the deal:
Using this type of loan, you pay 5% down, and then get one loan for 80% of the purchase price, thereby avoiding the expense of private mortgage insurance, and a second loan for the remaining 15%. One advantage of doing this, besides the obvious avoidance of MI, is that your payment is all principle and interest (more tax savings). You can also opt to pay off the second loan earlier and thereby reduce your total payment. Often times, this 2nd loan of 15% has a stigma of being expensive, thereby raising the monthly payment enough to offset the savings of having no MI, but for buyers with good credit (720+) there are 2nd loan products out there at or below market pricing! Also, with very minimal closing costs, that the overall payment (both loans) for the borrower is usually even lower than a standard Principle and Interest payment of a 95% loan-to-value mortgage.
This can help you qualify a buyer for the home of their dreams, not simply what is in their perceived price range. This also can position your buyers to pay off that 2nd loan early and to have a much lower mortgage payment in a few years, rather than having no way of lowering their payment outside of refinancing. From a lending perspective, one of the greatest advantages to you, your buyer and the lender is that with this loan product, we avoid the hassle (and sometimes deal-breaking impossibility) of acquiring Mortgage Insurance. I’m sure you’ve all heard a horror story of a deal being lost due to an
evil MI company refusing to insure a loan (it happens).
So the benefits are obvious, but you’re thinking, “What’s the catch?” Great question – the positives are extensive, but there are a few negatives (in sales we call these caveats) to consider:
1st Negative: these 2nd loans are typically only available in a 15 year term. In the long run, that’s a benefit, but the principle amount due can be high enough to offset the savings on interest and MI.
2nd Negative: these are almost always ARM loans, so if a buyer is just barely in their buying range, serious inflation can cause some real harm. We all know that rates are on the rise, so it is imperative that we qualify buyers based on what is best for them, not simply what they can afford now.
3rd and last Negative: there are price limitations on what lenders are willing to offer 90% LTV with. Typically, 15% 2nd loan products are limited to a maximum of approximately 28 – 30K. For higher loan values than that, the LTV ratio will drop from 90% to 85 – 87% max, so for homes priced over 300K, be careful what you promise your buyers.
Feel free to ignore or forget these details and immediately pass on all lending questions to a mortgage professional (that’s why they pay me the big dollars), but these tips are designed to make you look brilliant and help you to give your buyers informed ideas. Please call with any and all additional questions, I’m here to help you and build your business any way that you need!
Rural Development Loans Made Simple | Boise Mortgages
Most of you have probably used or thought about using Rural Development loans in the past, and today’s topic focuses on some great reasons why you should do that more. RD loans have had a negative stigma attached to them (location limitations, funds availability, appraisal requirements, etc) but there are a ton of reasons to at least think about going RD for your rural area clients. And to be honest, let’s face it: RD loans are a pain for me, the lender, not you. Why wouldn’t you want to get your buyers an incredible loan program with no money down and no mortgage insurance, all at a rate comparable to FHA rates? Well, there are some obstacles to RD financing but a whole lot of positives too, so without further delay, here’s the gist of RD loans:
The Great News:
- Provides 100% Financing for existing homes or new construction
- LTV can actually exceed 100% to include Guarantee Fee
- No Down Payment Required
- No 1st Time Home Buyer Requirement
- No Mortgage Insurance Required
- No Pre-Payment penalty
- Market rates for 30 year fixed mortgages
- No maximum Mortgage limits
Now, here are a few things to be aware of:
- There are income limitations: 1 – 4 person households: $74,050; 5 – 8 person families: $97,750
- As a conventional loan, RD products are restricted to conventional ratios – 29% front end (house payment) and 41% back end (all debt payments) ratios apply; however, for construction newer than 2006, you can add 2% to the maximum for both of those ratios
- RD loans must have automated approval from the GUS system used by the USDA, so prequalification can take a little longer than usual
- Because RD loans are underwritten by USDA, allow an additional week for processing and underwriting the file before planning your close
- The most obvious limitation is allowable location. RD loans are restricted to areas the USDA deems as “rural communities,” so not all rural areas apply
I have attached a map of qualifying areas within the Treasure Valley, use this to determine eligibility and please feel free to call or email with any questions you have. I’d love to talk about marketing strategies for RD loans, and other great ways to utilize this great product to close some deals!
Great Tax-Saving Tips for 2010 Home Owners!
Many thanks to Jay Pinkerton, Certified Public Accountant, for these great tips on maximizing your deductions using your mortgage! Some of these tips apply to all home owners, and some for Rental Property owners, so be sure to consult with a CPA before claiming home-ownership related deductions.
- Mortgage Interest – Self explanatory; your mortgage servicing company will send you a statement of all the interest paid in 2010. This along with interest paid on a Home Equity Line of Credit (HELOC) are fully deductible. Hint… Huge deduction.
- Prepaid Mortgage Insurance – While this is not eligible for deduction on the year of purchase, it can be amortized over the next 7 years with your tax returns.
- Real Estate Taxes – Don’t confuse this with your escrow payment, only the amount actually paid for taxes is deductible.
- Depreciation – Normal wear and tear – especially helpful in a slumping economy.
- Hazard Insurance – if your home is a rental or part of it is used as a business, a portion of your annual Hazard Insurance premium is a deductible item.
- Other fees associated with the mortgage – Late fees, early payoff penalties, or other fees associated with the mortgage are tax deductible as long as you were charged these fees with no additional services from your mortgage servicing co.
These tips are not meant to be used without the assistance of a qualified tax accountant. Please refer your questions to Jay Pinkerton, (208) 794–3793, or any other professional CPA.
Here are some Money-Saving Tips for 2011 | Boise Mortgages
Don’t put off setting up a financial plan – Utilize a personal inventory process and set realistic short- and long-term goals. A qualified financial advisor can help you learn more. Thanks to JT from Waddell and Reed for these great financial tips! For additional questions, call JT.
2. Increase savings, reduce debt. Develop a monthly budget to provide you a clear picture of current and projected expenses, separating recurring expenses from fluctuating. Find out where your money is going and see if you can reduce spending and increase savings. The power of compounding is on your side, so the sooner you get started, the better. Your budget also can assist you with what you can spend without denying yourself the things you need. Set a goal, such as reducing your debt by $2,000 for the year. Use credit as little as possible, paying above the minimum whenever possible.
3. Be financially prepared for emergencies. Ideally, having several months of living expenses put aside for an emergency is the best recommendation. This also can help you to avoid using credit to make ends meet during an emergency.
4. Save up for big-ticket purchases. Plan ahead to replace appliances, furniture or a car. Rather than using credit, have a savings plan and budget for these items.
5.Explore ways to fund your children’s education. Consider options, such as college savings plans, or Coverdell ESAs. Before selecting a savings option, sit down with a financial advisor to determine which one best fits your overall plan.
6. Examine your insurance coverage. Ask yourself a few questions with regard to your current policy: Has your mortgage payment gone up? Has other debt increased as your income has gone up? Would your children be able to attend college if you were gone? Do you have disability coverage? Have you considered long-term care? Be sure that
you and your spouse have examined all the issues—not just for today, but for your future to ensure that you have adequate coverage.
7. Consider an estate plan. An estate plan can protect your loved ones and your assets, providing for distribution of your property and helping to determine how much will go to your beneficiaries, to your charities or to Uncle Sam. Failing to have a will or an estate plan can exhaust some estates through fees and other costs related to estate administration.
8. Plan your retirement. Ask yourself when you want to retire. Then, find out if you are saving enough for the standard of living you want after retirement. Think about current and anticipated sources of income before finalizing any plan. Ask yourself how much you will need each month to maintain your standard of living without depleting your retirement resources too soon. To achieve the right answers, you will need to ask yourself the right questions.
Jonathan Belnap | Financial Advisor
carefully guiding families through financial rapids
Waddell & Reed | Boise Division
225 N. 9th St. Suite 420 | Boise, ID 83702
O: 208-338-0771 | F: 208-338-0781 | T: 1-800-375-6157
jbelnap@wradvisors.com |www.southernidaho.wrfa.com
