Growth of Calif. real estate licenses at 39-month low
May 23, 2007
It's about time people quit jumping into real estate thinking they will get rich quick. It's agents and lenders like these who give the industry as a whole a bad name.
Growth of Calif. real estate licenses at 39-month low
May 23, 2007
The OC Register has an article up today showing the number of new real estate licencees in the state of California. The amount of new licensees is at a 39 month low.
It’s about time people quit jumping into real estate thinking they will get rich quick.  It’s agents and lenders like these who give the industry as a whole a bad name. 
More: continued here
Property Taxes Can Get You
May 16, 2007
When you purchase a property, for the most part, lenders allow you to elect to impound your taxes and your home owners insurance or not to. This allows you the choice to either pay your taxes seperately or to include them in the monthly payment that you send to the mortgage company every month. As far as the amount of tax you pay, it makes no difference the method you choose. If you send a little bit every month with your mortgage payment or if you send the taxes twice a year on your own (this means your mortgage is not impounded) you'll still be paying the same amount in property taxes.
People don't impound their taxes and insurance because of money. When you have impounds, you have to pay roughly 3 to 6 months worth of taxes up front, depending on what time of year it is. That way, when the next tax bill comes to the lender, the money is already there ready to pay the bill. Each subsequent bill after that can be paid with the extra money that you send every single month with your mortgage payment specifically to your impound account. When given the choice, most don't want to part with the upfront money required when setting up an impound account so they just don't set one up.
The problem is that when you purchase your property not only will you have to pay your normal property tax bill, but during the first year you will be assessed a supplemental tax bill, which can amount to a few thousand dollars in addition to your typical tax bill. This can catch a borrower off guard and be enough to start that borrower on a crash course leading to late mortgage payments. Some borrowers may never recover because they didn't plan ahead.
Moral of the story: Plan ahead. Coach your borrowers. We want to keep our clients for life both as real estate agents and lenders. If we do a good job coaching our borrowers and checking up on them, they will be in better shape to handle what's coming their way and your clients will appreciate that.
If you help your clients get into a home and they lose it to foreclosure, the chances of them being your happy past client dissappear!
Property Taxes Can Get You
May 16, 2007
When you purchase a property, for the most part, lenders allow you to elect to impound your taxes and your home owners insurance or not to. This allows you the choice to either pay your taxes seperately or to include them in the monthly payment that you send to the mortgage company every month. As far as the amount of tax you pay, it makes no difference the method you choose. If you send a little bit every month with your mortgage payment or if you send the taxes twice a year on your own (this means your mortgage is not impounded) you’ll still be paying the same amount in property taxes.
People don′t impound their taxes and insurance because of money.  When you have impounds, you have to pay roughly 3 to 6 months worth of taxes up front, depending on what time of year it is.  That way, when the next tax bill comes to the lender, the money is already there ready to pay the bill.  Each subsequent bill after that can be paid with the extra money that you send every single month with your mortgage payment specifically to your impound account.  When given the choice, most don’t want to part with the upfront money required when setting up an impound account so they just don’t set one up. 
The problem is that when you purchase your property not only will you have to pay your normal property tax bill, but during the first year you will be assessed a supplemental tax bill, which can amount to a few thousand dollars in addition to your typical tax bill. This can catch a borrower off guard and be enough to start that borrower on a crash course leading to late mortgage payments. Some borrowers may never recover because they didn’t plan ahead.
Moral of the story: Plan ahead. Coach your borrowers. We want to keep our clients for life both as real estate agents and lenders. If we do a good job coaching our borrowers and checking up on them, they will be in better shape to handle what’s coming their way and your clients will appreciate that. 
If you help your clients get into a home and they lose it to foreclosure, the chances of them being your happy past client dissappear!
More: continued here
Congress Looking At Lending Rules?
May 10, 2007
I read this article posted on the Press Enterprise web site yesterday. It's title is what I titled this entry although without the question mark.
The very first sentence of this article sums it up: "Congress is looking at potential changes to home lending practices,..."
When government steps in to create lending rules and guidelines, it's going to be a very bad day for homeowners and those who want to be homeowners. Money will be restricted so much that very few will be able to qualify. Loans exist because someone is willing to give them. Ultimately, we as loan originators need to cousel our clients and make sure they fully understand the loan they are choosing. A loan that is fixed for 5 years and then switches to adjustable is a great loan for a family that plans ahead and moves before 5 years is up. There are a lot of families where it makes sense to have a 5 year fixed because of the lower interest rate and because the family knows that they will be moving in 5 years of less.
Option ARM loans were GREAT for investors and savvy borrowers when the MTA index was super low 3 years ago. The 30 year fixed payment based on that MTA was in the 4%s. That loan made sense in the right situation. Obviously for some people it's the wrong loan, but that doesn't mean that you should eliminate it so that no one can have it.
Thoughts or Comments?
Loan Calculator
 | ||
 | ||
 | ||
