Archive for category fha loans
I’m so happy to announce my new book “Your Mortgage As Your Financial Tool, Not Your Financial Burden” is now available on Amazon. I’d love for you to give me your opinion of this educational mortgage buying guide. http://www.amazon.com/dp/B00IJG8IRY
I hope the information in this book helps you, your friends, and your family make more informed decisions regarding the biggest financial investment of most people’s lives.
Please drop me a line as a book review. All feedback is welcome. http://www.amazon.com/dp/B00IJG8IRY
In addition, if you or anyone you know needs a great mortgage banker in Maryland, Virginia, Washington D.C, North Carolina, Georgia, or Pennsylvania call me at 410-908-5987.
Thank you for being a friend,
Manager of Wealth
Just before the spring home buying season kicks in for 2014 , Manager of Wealth LLC is delivering a new book on Mortgage financing. This Dynamic book Your Mortgage as Your Financial Tool and not Your Financial Burden explains how mortgages work and how to pick the right mortgage and mortgage professional for your mortgage financing needs. Look out for special early promotional specials.
Get your hands on this home buying and refinancing guide at a special discounted price.
Wishing your Wealth Wellness and Wisdom
Manager of Wealth
As all of the world braces for a possible downturn in the US economy caused by a shutdown of the Federal government , I want to encourage small business owners to keep your eye on the ball and do not put to much stock in the present moment. Moments like these are when less visionary companies make a lot of bad moves.
Because business anticipate a slow down in business they start cutting jobs, slowing production and worst of all cutting back on marketing. Advertising less has never been the solution to any money problem. Advertising better and more directly to the right client is a good move. But cutting advertising when things slow down is the easiest way to kill your business.
Let me share a tragic example from the real estate business that I saw first hand.
When I would travel to the south for my real estate development business I would always come across the best agents from the same real estate firm. As I moved around Atlanta I kept hearing the name of the owner and her agency and I always heard how well they were doing in the market. Not long after I began hearing the name I was invited to an invent that the firm was giving. I had never send a more professional, elegant, and sharp group of real estate professionals in my fifteen years in the business. This firm was minority and woman owned and I was especially impressed with the quality this team exuded.
It saddened me that when the real estate crash hit I began to hear their name less and less. They became less visible and most of their real estate agents left the firm or left the real estate business totally. The truth is the crash in their market, if seen properly, should have been a cash cow for this team of professionals.
The Atlanta market was a prefect storm for the real estate professional. Not only did you have one of the highest foreclosure rates in the country but you also had one of the highest population grow rates in the country. No matter the economy everyone has to live somewhere and all those foreclosed homes needed to be resold. It is not rare today that almost every home sold today in that market has 2 or 3 offers made on it by either homeowners or investors.
I believe that if the owner of this firm would have see this market crash for the opportunity that it was and translated that to her team they would be even larger than they had ever been. The perception of a bad market tricked this firm into shrinking back and missing out on the opportunity to fully take advantage of the market.
I watched a small firm buy as many as 35 homes per month for four years after the crash and sell them to Austrialian investors. In the same Atlanta market that native Atlantians quit on.
Here are the four steps that should have been taken and implemented by the firm:
1. Access how the business opportunity has changed or is changing
2.Figure out who is buying and what their buying and how many potential buyers there are
3.Put a marketing plan and action plan together for your team and go over it until you have total buy-in from your team
4. Market like crazy to the available buyers because most of your competition will be doing what they have always done or they will quit.
I hope you can apply this insight to your business and thrive from whatever changes come your way. Their is always a buyer in every market. Find your buyer no matter what happens with the federal government in the short term.
Wishing you Wealth, Wisdom and Wellness,
Manager of Wealth
For the last few decades most borrowers, lenders, and real estate professionals have regarded the FHA Loan as the least expensive loan option for purchasing a home. The low 3.5% down payment and low mortgage insurance rates made buying a home more affordable for borrowers.
Now there has been a sea change in the mortgage world and FHA is fast becoming one of the more expensive options. The FHA loan is still the best you can do if you have less than stellar credit. And now with so many options to repair and enhance your credit score it makes sense to do this before applying for a mortgage so that you can get the best options.
If you don’t know how get the credit score you need, read my last blog post Bad Credit to Great Credit in Three Easy Steps and Why you need it Now? http://wp.me/pWK6G-99
What happened to our Beloved FHA? Congress, that’s what happened!
Currently under the current FHA guidelines a borrower purchasing a 30 year mortgage will pay 1.75% in an upfront PMI payment and 1.75% per year in PMI payments for the life of the loan. It used to be that once you had 22% equity in the property your mortgage insurance would go away but in 2013 Congress made PMI insurance permanent. You pay until the loan is paid off. Most borrowers get a FHA loan thinking they are going to pay PMI insurance for only five years but the truth will cost those borrowers tens of thousands more in PMI insurance over the life of the loan. See the example below:
Example: $250,000 purchase – FHA loan
3.5% down payment –$ 8750.00
Upfront PMI – $ 4221.88
Loan amount –$ 245,461.88 assuming sellers pays all of closing cost
Monthly PMI – $265.92
Monthly payment excluding taxes and insurance at 4% – $1437.79
Mortgage insurance paid over the life of the loan $126,655.20, many borrowers took FHA loans thinking they would only pay for 5 years ($21,109.20) but congress changed the rules.
FHA is only good if there is no other affordable option; and luckily there is a better way to go.
Now there is a conventional loan product with the mortgage insurance paid upfront and included in the interest rate offered. This product eliminates so much of the cost of purchasing because there is no upfront PMI or monthly PMI. A conventional loan with Lender Paid Mortgage insurance or LPMI is the way to go. Most borrowers know of this option because it is rarely offered.
3% down payment –$7,500.00
Up front PMI – 0.00
Monthly PMI -0.00
Loan amount – $242,500.00 assuming seller pays all the closing cost
Monthly Mortgage payment excluding taxes and insurance assuming 4.25% – $1192.95
As you can see the savings between the FHA and the LPMI are $330.74 per month or $119,066.40 over the life of the loan. This is why educated borrowers are making a move away from the FHA program and looking to LPMI as a better way to finance property. Not only is the capital needed up front less but the lifetime cost is less. In addition, the higher interest rate gives a larger tax deduction at the same time.
Current FHA loan holders can use this program in get out of current FHA loans and PMI insurance provided they meet the guidelines. People are saving tens of thousands walking away from FHA.
Give me a call at 410-908-5987 if I can be of service to you and your family.
Wishing you Wealth Wellness and Wisdom
Manager of Wealth
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