Jim Cunningham's Blog

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

Jim's Soapbox (September 2008)

Jim Cunningham (Nova Home Loans - BK#0902429) — Tue, 28 Oct 2008 19:05:24 -0700

Jim's Soapbox

(Arizona Real Estate Newsletter - September 08)

GOOD NEWS - It looks like the real estate market has taken another big step in the right direction. The rates on conforming loans have dropped significantly since last week, and many people will be able to take advantage. This rate drop should continue to increase Purchase volume and begin a potential Refinance mini-boom.

Fannie & Freddie

In case you haven't heard yet, the Federal Government took control of Fannie Mae & Freddie Mac over this past weekend. This has added an immediate sense of stability because future changes to their loan programs will have to go through congress now. The potential long term effects of this Government intervention are still uncertain, however, the short term effects have been amazing. RATES ARE LOWER.

Conforming 30 & 15 year fixed rates have fallen about .5% in the last 72 Hours. Good borrowers can get a 30 year fixed rate at 5.875% without paying any points (buy down). Obviously this is good news for people currently entertaining purchases - but is even BETTER news for people looking to refinance. If you have been holding off on refinancing because rates were not attractive in the mid 6's, now is a great time to pull the trigger.

ARMs, FHA, VA, and Jumbo rates have also fallen a little bit, but not as much as the fixed products under a $417,000 loan amount.

These windows of opportunity have been short lived over the last 24 months. It is a good time to get aggressive.

Split Mortgage Insurance - the way to save $$$

When there is a single lien against a property of over 80% to the value of that property, there is typically Mortgage Insurance. This is an actual insurance policy that you pay for on a monthly basis as part of your mortgage payment. The funny part is that it is not cheap, it can last for the first 10 years of your loan, and you cannot even write it off your taxes. The real funny part is that this insurance is not for you - it is actually insurance for the bank. While this is a great position for the bank, it is a non-benefit situation for you.

I work with a bank that offers a product called Split Mortgage Insurance (SMI). You can "buy down" the rate of your Mortgage Insurance on either a refinance or a purchase. The savings on the SMI is usually $50 per month per $100,000 financed. So if you have Mortgage Insurance on a $300,000 loan you can save roughly $150/month through SMI. It is not very expensive to buy it down and you usually break even on the investment within 12 months.

In a purchase, you can use seller concessions to buy down the SMI & in a refinance you can have your lender pay for it. It is one of the well kept secrets to help keep you monthly payment lower. If you currently have regular Mortgage Insurance please give me a call.

*** If you know someone who would benefit from my educational newsletters, please forward their name and email address to me and I will add them to our educational circle.

All Best!!

Jim

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

Jim's Soapbox (October 08)

Jim Cunningham (Nova Home Loans - BK#0902429) — Mon, 27 Oct 2008 18:14:49 -0700

Jim's Soapbox

(Arizona Real Estate Newsletter - October 08)

THE GOOD NEWS - New home sales rose 2.7% Nationwide in September - according to the Associated Press. This came as a surprise to many who thought it was going to drop again after an awful August where new home sales dropped 12%. This bounce-back of volume did not really shock me but the reason I mention this to you is that the West was the driving force in September sales. Here is the breakdown of that National average by region.

West +22.7%

South +0.7%

Midwest - 5.7%

East -21.4%

I find this exciting because the fastest cure for the Southwest to get out of this declining market funk is to reduce available inventory. And unsold new homes make up a large percentage of that inventory here in Arizona.

The Prime Rate

The Feds have recently lowered the Prime rate by .5%, and there is widespread speculation that they will lower it again on the 29^th of October. This upcoming reduction should be another .5% bringing the prime rate to a net 4%. This will tie the lowest prime has ever been (with 2003). I will admit that this will not solve all the credit problems, but it does reduce the interest payments for those people with current Home Equity balances they cannot refinance.

Other economic experts say that a .5% cut will not have any real effect on the market. But, if a larger cut happens (say .75% to 1.00%) lowing the prime rate into the 3s, it will have a more significant impact on the credit crunch. I guess they are giving a lot of weight to the "New Historic Low" headlines newspapers would give it.

What does that mean to 30 year rates??

The overall goal of this maneuver is to reduce interest rates on the prime side and on the 30 year fixed side (bond market). The last time they predicted a large cut in prime (Feb 08), the 30 year rates came down briefly in anticipation of the prime cut before the event itself. Once they cut Prime, the 30 year rates went up almost a half a point in one day. Will that happen again this time... who knows? My advice to people who are holding out on a transaction to see rates drop (on 10/30) is "don't get burned." If you have the rate to make something happen today you should lock in and pull the trigger.

The Election & Who is to Blame

With all of the current campaigning for the presidency, there has been some outstanding finger-pointing by both parties accusing the other for the housing debacle. I have seen everything from White Paper articles, Blogs, video magazines, news reports, and political internet ads accusing all kinds of individuals for our current Economic problems. I have seen "hard evidence" that the following people are solely to blame for this credit crunch issue; Jimmy Carter, Bill Clinton, George W Bush, Indy Mac, Oprah, Oil Companies, every Democrat that ran for public office since 1977, the French, the Director of Freddie Mac, Freddie Mercury (Freddie Mac's nephew), and even yours truly - Jim the subprime Loan Shark. This may seem a bit sarcastic, because it is. J

In my opinion, as someone who has been in the trenches of the housing market for the last 7 years, there are probably well over 100,000 people who should shoulder the blame for this problem. The common denominator for these 100,000 people was simply greed. There were not enough level heads when the housing market was going really good to restrain the lenders & Wall Street.

I am not absolving Realtors, Appraisers, Loan Officers, Underwriters, Lenders, Borrowers, and the like for their part. However, what about the CFO of the A.I.G. Insurance company? What was his motivation to not diversify his portfolio into other vehicles except for Moderate Risk Mortgage Backed Securities? Was it Greed? I would bet on it.

If you wish to wrap your brain around the US financial numbers of the last 10 years I have an unbiased report with lots of good charts and graphs. It is a report from Casey Research called "The Crisis in Pictures". You do not have to be an MIT graduate to read it (but an MIT graduate did give it to me - thanks Laura). Please respond to this email, requesting a copy of the report, and I will send it as a PDF. I highly suggest reading it if you have the 10 minutes to spare.

*** If you know someone who would benefit from my educational newsletters, please forward their name and email address to me and I will add them to our educational circle.

All Best!!

Jim

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

Fannie Mae, Freddie Mac & Government: What it means to you in the short term

Jim Cunningham (Nova Home Loans - BK#0902429) — Tue, 09 Sep 2008 13:19:07 -0700

In case you haven't heard yet, the Federal Government took control of Fannie Mae & Freddie Mac over this last weekend. This means (among other things) that all changes to their loan programs will have to go through congress now. The potential long term effects of this Government intervention are still uncertain, however, the short term effects have been amazing. RATES ARE LOWER.

30 year rates have fallen about .5% in the last 24 Hours. Good borrowers can get a 30 year rate at 5.875% (without a buy down) as of 6:00 this morning. This is good news for people currently entertaining purchases - but is even BETTER news for people looking to refinance. If you have been holding off on refinancing because rates were too high in the mid 6's, now is the time to call your lender and watch rates fall this week. I think there is a strong potential to hit 5.5 sometime this week.

These windows of opportunity have been short lived over the last 18 months. It is a good time to get aggressive.

Jim Cunningham

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

Worst underwriting experience ever...

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 27 Aug 2008 18:13:02 -0700

I am writing this blog with the intent of warning all other Loan Officers to avoid the following lender unless you want to waste a lot of time and effort. If you like using the combination of logic and communication when dealing with underwriters please do not submit files here.

I recently submitted a file to Washington Federal Savings (Jumbo Cash Out to 90% Full doc). I admit this product looks sexy, because not many places have it. This is the main reason I pursued this lender.

Long story short - I submitted the file and it was declined after 3 weeks (at the Seattle corporate office) for insufficient income. They decided that they were only going to recognize my borrowers 100K/ year salary. They were not going to recognize the bonuses my borrower had earned over the previous 30 months.(Problem #1) They sent me a conditional loan approval asking for more income.

Instead of producing more income (not possiblr) we lowered his debt, and I sent back a satisfaction of the condition. They put me at the back of the line of underwriting because 10 days had passed since they sent me that conditions. (Problem #2) Three more weeks go by and they push it through the underwriting channels like they had never had the file before. (Problem #3) They then send me a declination with no explanation - also. there is no phone number or underwriter's name available. (Problem #4)

I call my local branch/AE to see if I can have a phone number to have a cconversation with the underwriting manager who declined my file to see if there is any additional documentation or additional conditions they can give me to satisfy. The answer I got from the regional manager was "The Seattle underwriters are really busy, and I am not allowing you to call them". (Problem #5) You have go to be kidding me!!!

One of the biggest ways I help my clients is to not accept the first NO that comes my way from an underwriter. I try to work every possible solution for my clients before I give up. I know there is usually a way that I can satisfy this underwriter's requests if I could only have contact with them.

Washington Federal Savings is far more interested in saying No than finding a way to say YES. I will not waste my time ever again with an underwriter that I cannot communicate with. It is not in my client's best interest and therefore not in my best interest either. Beware as you begin to deal with them.

Jim Cunningham

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

Jim's Soapbox (August 08 Newsletter)

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 20 Aug 2008 17:53:16 -0700

First off, I would like to proudly announce that July was a great step in the right direction for both me and the mortgage industry here in Arizona. The amount of Purchase Contracts that crossed my desk doubled in July, and I even had a couple of refinances as well.

Tunnel Lights Approaching

There is light at the end of the housing tunnel for about 40% of the United States. And more importantly, 60% of us are unknowingly already out of the tunnel. The following is from a White Paper/RISMedia report edited by John Benson. For those of you who regularly read the Soapbox know that I have never been a fan of Big Media, thus the following article really spoke out to me.

When it comes to the national housing market, there is a lot of gloom and doom in the daily newspaper. Just look at a few recent headlines:

•· "Home Builder Sentiment, So. California Home Prices Crumble" - USA Today, 7/16/08

•· "Home Builders Post Steep Losses as Value of Unsold Land Slips" - New York Times, 7/27/2008

•· "Home Prices In May Took A Steep Fall" - The Wall Street Journal, 7/30/2008

"Thank God the economy is not as bad as you read in the newspaper every day." - Phil Gramm, top economic advisor to Sen. John McCain (R-AZ) Lost amid the uproar caused by Gramm's proclamation that the U.S. is a "nation of whiners" was a breath of economic fresh air to Realtors nationwide.

The economic recession that the United States is facing has been portrayed in the media as being brought about by the rising cost of oil and the "burst bubble" in the housing market. There is no denying that the cost of oil continues to stand at near record levels. But while the bubble has burst on the housing market, is it really still a nationwide problem?

A recent report contributed to RISMedia, "Why 60% of the U.S. Can Stop Worrying about the Housing Market," simply states "no."

While home values did fall as the bubble burst, the media continues to report constant drops across the nation in national home values. The Office of Federal Housing Enterprise Oversight's (OFHEO) House Price Index (HPI) tells a different story than the media is reporting. Citing data from home sales and appraisals for refinancing, OFHEO reported in May that 35 states saw a positive home value price change in the first quarter of 2008. In addition, 164 MSAs (Metropolitan Statistical Areas) showed positive first quarter appreciation when compared to the same quarter of 2007...

...According to PMI Mortgage Insurance Company's "Economic & Real Estate Trends" report for summer 2008, almost 68% of the nation's 322 remaining MSAs experienced positive appreciation during the quarter when MSAs located in California, Florida, Nevada, and Arizona are removed from PMI's calculations.

Question - If the numbers from the end of this report excluded Arizona should it be considered good news? Heck yes!! The bubble bust over two years ago and now 63% of the nation experienced appreciation in their property from Q1 2007. That is an excellent sign that the worst is over and the remaining hard-hit areas (like AZ) are soon to follow. It is true that AZ still has a large supply of homes available, but we also have 10,000+ people (net) moving to Maricopa County every month. The end of the down cycle will be soon - even if they do not say it on TV!

Decreasing Home Values = Good News??

If your home value dropped since you last financed or purchased it, you might be able to turn it towards your advantage. Your Homeowners Insurance premiums are based primarily on the replacement value of your home. So if the replacement value of your home has dropped over the last 2 to 3 years, you should call your insurance agent to see if your Homeowners Insurance premiums should go down as well. It won't make you rich,... but you might save a couple hundred bucks a year.

Here is the name of the Insurance Broker that I have worked with for years, and trust very highly. I suggest that you compare your current policy with what she has available using today's property value.

April Irish - Hill Insurance Services

480.368.5222

airish@hill-ins.com

*** If you know someone who would benefit from my educational newsletters, please forward their name and email address to me and I will add them to our educational circle.

All Best!!

Jim

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

Jim's Soapbox (July 08 Newsletter)

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 20 Aug 2008 17:45:09 -0700

Bank Owned Property & Short Sale Property

The majority of purchases I have seen in the last 9 months are primarily buyers who are looking at either Bank Owned properties or homes that are being sold "short" to avoid foreclosure. There are simply not that many people looking to buy from private owners these days. Rather, everyone is looking for a smoking deal!

There is no arguing the point that these types of homes will be sold under their appraised value, giving you an immediate equity position. But, like many great deals - there can be a great deal of pain in your butt to actually get the home. My advice to anyone looking to get a bank owned/short sale home is to be ready to be extremely patient.

Bank Owned

A house that falls into foreclosure is eventually possessed by the bank in first lien position on the home's Title. This is what we call a Bank Owned house. When you negotiate to purchase a Bank Owned home, you will be dealing with an unemotional seller who would like to recoup as much of their loss as possible, and they would like to sell the house quickly. Truth be told, banks prefer to lend money over owning & selling property.

When dealing with a Bank Owned homes (sometimes called a R.E.O.), be prepared to compete against several other buyers simultaneously. Usually the bank will price the home under its appraised value and take offers for up to 3 or 4 weeks before accepting a contract. They will then take the strongest offer. The "strength" of the offer will be a combination of how much the buyers offer, and how much of it they are financing. An all cash buyer will appear stronger than another borrower financing 97%.

Be prepared to outbid people who will offer more than the list price. If you need seller concessions to cover your closing costs, you should bid high enough above the asking price so that the bank will closely net that figure. Also, be prepared for the banks to reject your offer if you are asking too much in concessions to purchase the property.

Many REO properties will be listed and sold "as is", meaning that they are not interested in fixing anything broken before you take possession. In the case of a government loan (especially FHA) items like the water heater, sink, and the arcadia door will all need to be fixed before your loan will go through. Be prepared to pay for the potential repairs yourself, or experience an escrow hold back during your purchase. The key is to remain patient and prepare yourself to lose negotiations on 2 or 3 houses before you actually get a contract on one you like.

Short Sales

If you think that buying a REO sounds aggravating - check into a Short Sale transaction. A Short Sale happens when the homeowner sells the property to a buyer at a loss to the bank. The seller usually entertains this idea before they slip into Bankruptcy or Foreclosure. This maneuver can actually be in the bank's best interest too, if it saves them money over the alternative of the foreclosure proceedings and selling another REO. It is definitely in the seller's best interest because a Short Sale is not nearly as bad to your credit or well being as a Foreclosure is.

So if both parties (Bank & Seller) benefit from the Short Sale what is the problem??

In my opinion - banks are great at lending money -but they are basically inept at selling houses in a timely manner. I cannot speak on behalf of any specific bank, but I would surmise that they are way too bureaucratic to do anything effectively. A bank will not identify an "acceptable" short sale value for a home until that property has actually been listed and there is a contract on the table. They will then take up to 90 days (no kidding) to give an answer. Many times that answer is no, because the offer is too low and the bank cannot justify that much loss on the current loan. The crazy part is that you can't even ask the bank what an acceptable amount is until you have a contract in hand. You are basically throwing "manure" against the wall and seeing what sticks.

In some cases, the bank will actually respond to the original contract with a counter offer identifying the minimum value they will accept, but that is not often. In the event that you are trying to purchase a short sale property that has 2 liens against it (a 1^st & 2^nd Mortgage) held by separate lenders - you can double the aggravation and the headaches.

Also, the lien-holding bank reserves the right to cancel the deal any time during escrow for any reason they see fit. So, until you sign your loan docs (and it funds and records) they can cancel your purchase. DO NOT FALL IN LOVE WITH A SHORT SALE PROPERTY - it will break your heart and usually will.

However, if you have the patience and temperament for 6 months of negotiations - a short sale property can be a bargain!

*** If you know someone who would benefit from my educational newsletters, please forward their name and email address to me and I will add them to our educational circle.

All Best!!

Jim

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

100% FHA Financing Still Alive & Kicking

Jim Cunningham (Nova Home Loans - BK#0902429) — Mon, 11 Aug 2008 15:50:53 -0700

Things are currently changing at a record pace within the mortgage industry. Loan guidelines, programs, and parameters are changing on a weekly basis. Some of the changes have been for the better here in Arizona, but many have been more restrictive to the first time home buyer and real estate investor. I am happy to inform you as of this very moment (8/11/08) 100% financing is still alive and well for borrowers who qualify.

FHA purchases are designed to have a 3% down payment. For years there have been institutions that will "assist" borrowers who need help with the 3% down. The function of these institutions is referred to as Down Payment Assistance or DPA. The most prominent DPA entities (i.e. Ameridream and Nehemiah) will take a 3% gift from the seller and grant it to the buyer to constitute your down payment. The Federal government made ovations to eliminate the DPA programs as of October 2008. Fortunately, enough petition signatures were gathered over the past few weeks to extend the existence of current DPAs indefinitely.

The combination of Down Payment Assistance with negotiated seller contributions (for closing costs & prepaids) creates a platform for home ownership without any money due at the closing table. This is most likely not the best program for everyone looking to buy, but it does give another option to own a home without need a large sum of money to qualify. The USDA Rural Housing program is the other 100% program currently available.

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

Should I buy a house or rent one?

Jim Cunningham (Nova Home Loans - BK#0902429) — Fri, 01 Aug 2008 16:52:31 -0700

This is an excellent question to ask yourself before taking action. Despite the economy being sluggish, and fuel prices skyrocketing, the old rules of thumb are still accurate. Here are a few questions to address before you change your address.

•· Can I afford the monthly payments?

Keeping your housing payment to 35% of your monthly gross income is a conservative target. If your potential mortgage payment is significantly higher than 35% you should probably rent a little longer until you identify cheaper housing, or increase your income.

•· Can I afford a down payment?

The availability of 100% (no money down) financing is all but over. As of Oct 1^st, you will need a down payment to attain housing. There are still Teacher A+ programs ranging from 2% down to 5% down (not including closing costs). Of course, the more you put down, the less expensive your monthly payment will be. Nonetheless, if you have 3% to 5% of the purchase price, you can cosider yourself in a strong position to buy a home. If you are coming up short of that mark you should probably keep renting and try to save a little every month.

•· What are the long term benefits?

As a home owner you will have the benefits of future equity. Here in Arizona the worst is over and the depreciation has leveled off. We should all see appreciation in property values within the next 2 years. You have the ability to redecorate and change the décor of the home. You also have nice income tax benefits by owning a home.

As a renter you will have the benefit of no maintenance responsibilty in the home. If something breaks, the landlord will come and fix or replace it. Also, you do not have to worry about having to sell the home if you move. Some owners have the ability to keep the home as a rental, but by and large, most people have to sell before the buy again - and it may not sell quickly.

•· How long will I live there?

There is no disputing that the longer you wish to live somewhere that the more advantages it is to own your home. The growth in equity will definitely have large benefits over renting.

•· Is my credit strong enough?

In general, mortgage lenders are going to want to see that your middle FICO score (on a trimerge report) is over 680. Ther are still programs that will work for scores under 680. But, you will have more finance options at better rates if you ave over the 680 line.

The key here is to find out what your credit score is before you want to make your move. In some cases you credit score can be fixed/improved by putting effort in to clean it over a 60-90 day period. I recommend either a free credit report from the internet - or contact a mortgage lender that will pull your credit and give you council.

Jim

JIM CUNNINGHAM

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

How do I check my Credit Report?

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 23 Jul 2008 17:38:41 -0700

Here is a little advice for anyone looking to get a copy of the credit report before they start the whole application process.

There are many ways to get your hands on a credit report today. But like many things in life, you get what you pay for. There are three major credit reporting bureaus and all three of them are relevant in the mortgage industry; Experian, Equifax, and Transunion. All three of these bureaus can be found on the internet and all three of them will allow you to request a free copy of your credit report.

•· experian.com

•· transunion.com

•· equifax.com

After you receive a copy of your credit report they will try to enroll you into a credit monitoring service with a monthly fee. In some cases, they automatically enroll you and you have to contact them to turn off this service. We are not saying that the credit monitoring service is not without value, but you do not have to pay them just to view your credit. If you find an inaccuracy, you will have to pay a fee to the bureau and then you can dispute the credit item on-line. We recommend direct contact with the bureaus to eliminate the delays and additional fees of middle-men.

There are other popular on-line services that will give you a credit report for free too. The well advertised freecreditreport.com is a good example. They will give you a single bureau (Experian) report for no cost. However, you will begin a free trial membership in their credit monitoring program as well. If you don't cancel your membership within 7-days, you will be billed monthly until you cancel. To dispute any inaccuracies on your report you may have to pay extra fees. It is the same type structure as dealing with Experian directly.

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

What is a LSR?

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 23 Jul 2008 13:27:44 -0700

I have had several inquiries as to the function of a LSR - so here goes...

LSR is an acronym for Loan Status Report. After an application is taken by a lender, and they perform their due diligence to approve you in good faith, you get a Loan Status Report. This document states that you have consulted with a lender and you are pre-approved to purchase a house. The letter will have a maximum dollar value on it indicating how much money you have been approved for. It will also indicate what kind of financing you are approved for and the amount of your down payment. This letter is usually submitted with a purchase contract to notify the seller that you have your money, and you are a serious buyer.

We recommend that you always request a custom LSR for each offer you submit. We are firm believers in showing that you are only approved for the amount you are willing to offer. By submitting a LSR showing that you are approved for more money then you are offering, it will sometimes influence the seller to not reduce their price during negotiation because you obviously have the money to pay more.

To acquire a LSR you are going to need to provide the lender with a significant amount of accurate information. Here is a short list of items that they will definitely ask you.

•· Name

•· Social Security number

•· Contact Information

•· Residential address for the last 2 years

•· Work history for the last 2 years

•· Income

•· Assets

•· Let them pull your credit

There are many other questions a lender can ask you to qualify you for a LSR that are specific to every borrower.

JIM CUNNINGHAMJim Cunningham

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

Jim's Soapbox (June 08 Newsletter)

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 25 Jun 2008 18:25:27 -0700

Jim's Soapbox

(Arizona Real Estate Newsletter - June 08)

You may have heard recently that this is a great time to purchase investment property. One reason for this is because you can now "cash flow" them again. That sounds like a pretty good idea, but what does that really translate into? What really makes this a better time to buy and hold investment property rather than 18 months ago?

I would like to give you a brief overview on the two major concepts of making money on investment property, and why it is a perfect time to acquire and hold an investment property.

Fix & Flip

I am sure many of you have heard of the term "fix & flip". This is a good money making technique when the real estate market is steady and the volatility is predictable. The concept is to buy a property that is undervalued compared to the other homes in the area and fix it up. The typical targeted repairs are items like new floors, carpet, paint, window treatments, landscaping, kitchen & bathrooms cabinets, etc.. Ideally, these repairs take only 1-3 months, and then you list the property for sale at a much higher price. The goal is to make enough to cover your repair costs, the temporary mortgage payments, and walk away with $20K - $60K profit on that property. The key to success is to have the right property and to turn the property as quickly as possible.

Obviously, this doesn't always work as planned, and sometimes you lose money on the deal. Factors that contribute to losing money on a Fix & Flip property are the repair costs being too high, the repairs taking way too long, or the property not selling quickly. Sadly, some Fix & Flippers got stuck with property over a year ago when the market turned, and either took a loss selling it below cost or turned it into a rental property. This is not the ideal strategy to own rental property, because most of these people are still taking a monthly loss renting these properties today. I feel that I am an authority on this topic, because I own one of these types of properties myself.

Cash Flow

This is the concept used to identify property that will make good rentals. The word "Cash flow" refers to the amount of cash a rental home generates and uses on a monthly basis. Cash flow can be used as an indication of a rental home's financial strength. When it comes to renting out your investment property you would prefer it to have a positive cash flow, whereas you are making a profit on a monthly basis. Due to the high price of housing in Metro Phoenix it is more difficult to find homes with a positive cash flow, but it is not impossible. Here are some of the factors we look at to determine a property's cash flow.

You should first calculate the monthly cost of the property (sometimes called the nut). You need to consider all costs associated with the property including the Mortgage Payment (Principal, Interest, Taxes & Insurance), Property Management Fees, HOA Dues, Pool Service, Home Warranty, Etc. This monthly cost will not only be covered by your renters, but will also have to be covered by you during times when the property is not rented. Also, take into account if you need immediate repairs to the home to make it ready for renters.

Next, you have to calculate how much you can rent the home for. I highly suggest using a seasoned property manager to help you in this analysis. Not only can this person help you identify the right rental rate, but can also help identify the current occupancy of rentals within the area. That should give you an idea of how long it will take to rent your property. I highly suggest Alan Corradini WEST USA realty (602) 380-7913 cell & alancor@hotmail.com . I have been using him to manage my rental property for the last 6 years, and he is the real deal.

When you subtract the monthly cost (nut) from your potential rent you will get that property's monthly cash flow number. Most people will gravitate towards properties with a positive cashflow - but some people will also consider properties that simply "break even" with the intent of selling them in a few years at an appreciated value.

Why is this a Good Time to Buy??

One of the biggest factors in finding property with good cash flow will be in the price of the home. Being that the mortgage payment on the property will constitute the largest portion of your cost, you want to find rentable property at a low purchase price. This sounds like common sense (Duh!), but a cheap list price doesn't always mean it's a good deal.

Today's housing market has a record number of short sales, foreclosures, pre-foreclosures, distressed, and bank owned property! Some home prices are down over 30% from where they were 18 months ago. This could easily mark the low price point for home sales for the next few years. When you see the following scenario you might think that those properties are not really available. To that I can honestly say,... have you really looked? Because, you only need to find one property that works!

Example

Here is a single family home (3bd/2ba) in Tempe near the light rail. It is bank owned and they are asking $150K (appraises at $205K) and they will pay all of your closing costs with a full price offer. The property is basically move in ready and needs a little paint. You pay 20% down ($30,000) & finance 80% ($120,000) on a 30 year fixed (6.75%).

The principal & interest payment is $778/mo + $50/mo home owners ins. + $92/mo property taxes = total PITI = $920/month. You also decide to have a property manager (a good idea) for $65/month, and you find no other monthly costs. Your net cost is $985/mo.

Your realtor does their research, and informs you that rent on a 3 bedroom within 2.5 miles of ASU should rent for $1,130/mo. And if you get it listed before August 20^th, you should be able to rent in within 2 weeks.

$1,130 rent - ($985) cost = $145/ month in positive cash flow. This seems to be a pretty good scenario worth exploring. Here are the positives,...

•· You have the potential to make $145/month cashflow.

•· You have a 30 year fixed loan, so every month your principal balance goes down.

•· You have an great source of Tax deductions at the end of the year

•· You have just acquired a property with $55,000 of equity in it.

The above example is simply one basic scenario out of thousands that exist. There are going to be plenty of properties that have a negative cashflow after thorough analysis. But, the key to finding the right cashflow property begins in the act of building a team and looking for them.

Conclusion

Investment property is not everybody's cup of tea. However, if you have thought about it in the past, today's housing market provides great opportunities to buy properties that "cashflow". If you are waiting for the housing market to reduce inventory and "tighten up" to buy an investment property - you are missing the boat.

There are many other concepts and techniques that I did not touch on today that I will be happy to share with you if you have interest

•· Buy investment property as a primary residence (2% - 5% down)

•· Buy investment property as a second home (5%-10% down)

•· Buy a multiplex (2 - 4 units)

•· 8 creative ways to find your 20% down payment

•· Purchase an investment property that needs rehab for 10% down

•· Buy a new home and use your current home as a rental

I am looking towards a great summer both socially and professionally. If you have any questions on this material, or just want to say "Howdy", feel free to give me a call or an email.

All Best!!

Jim

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

What can I expect during a purchase?

Jim Cunningham (Nova Home Loans - BK#0902429) — Thu, 12 Jun 2008 11:13:22 -0700

What can I expect during a purchase?

Something that is often overlooked within the home loan industry is the education of the client in the steps of doing business together. As the borrower, you should want know what the process is, and what to expect from your loan officer. This is a basic account of the events that take place during a purchase transaction when you are dealing with me.

First Contact - Every loan starts somewhere, and in the technology age it is usually a phone call or an email. Occasionally, it still happens when I meet someone in public and we exchange business cards. But it seems that phone calls, emails, and internet (blog links), are most common.

In the first contact we will introduce ourselves and talk briefly about what your basic goals are, and how soon you want to take action to get pre-approved. The first contact then ends with me saying "...the next step is the application, and that will take about 20-30 minutes. Do you want to do it now, or set a time to do it later this week?"

The Application - A full application is necessary to give you (the borrower) accurate information and loan options. There are hundreds of factors that lenders (banks) take into consideration when approving loans and these should all be identified in the application. The method I prefer, to get the most accurate information, is to interview you over the phone.

The questions that I ask are things you will usually know off the top of your head. I want your Social Security #, work history for last 2 years, information on your home, and basic financial information. As you answer the questions, I enter them directly into my computer. The next part of this phone application is when I ask permission to pull your credit report. We will then briefly review your credit report to identify strengths, weaknesses, and find any inaccuracies in it. I will also tell you your credit scores and even give you a copy of your credit report if you wish.

The last phase of the application is when we discuss your goals in more detail. Typical questions are...

•· What price range have you targeted?

•· What do you consider a comfortable monthly payment?

•· How long do you see yourself in the house?

•· Are you considering a Condo or a Townhome?

At the end of the application, I will tell you how much time I will need to produce your loan options. Usually, I need 24 hours to get back with you - but I will urge you to call me if other ideas or questions come up during this planning window. In some instances I can tell you immediately if you are approved and what your purchase ceiling is (maximum purchase price)

Loan Options - At the conclusion of my analysis, I usually come up with one (or more) purchase options that will make sense for you (the borrower) to pursue. To make things easier for you to understand, I will email one (or more) Good Faith Estimates (GFE) to you before our upcoming phone call. You will be instructed to print the Good Faith Estimates so that we can review them together over the phone. I always recommend that you print the Good Faith Estimates so you can take notes on them.

We will then review the Good Faith Estimates over the phone, and I will explain the loan program, fees, interest rates, escrows, and estimated payments until you (the borrower) are comfortable with all of the information on the Good Faith Estimate. This process could take a few minutes for some people, whereas others can take well over an hour to understand all of the concepts of this transaction. We will not move forward to the next step of the loan process until I feel you are comfortable with this material.

At this point you (the borrower) will tell me one of three things. All of which are OK.

•· You like an option you see, and want to move forward by previewing houses

•· You don't like the amount you are approved for and want to hold off for now

•· You would like to see more loan options on your target price

Once you have made the decision to move forward, I produce a one page letter called a Loan Status Report (LSR). This document states that you have consulted with a lender (me) and you are pre-approved to purchase a house. The letter will also have a maximum dollar value on it indicated how much money you have been approved for. This letter is then submitted with a housing offer to notify the seller that you have your money ready and you are a serious buyer.

Also, I recommend that we produce a custom LSR for each offer you submit. I am a firm believer in showing that you are only approved for the amount you are willing to offer. By submitting a LSR showing that you are approved for more money then you are offering will sometimes influence the seller to not reduce their price during negotiation because "you have the money to pay more"

Send You the Application - After we agree on a potential Loan Option, I will send you the application and it will be specific to that Loan Option. When you receive the application you will notice that it has already been filled it out with your information. As you review the application you will proofread the answers you gave me, sign it, and send it back.

There will also be a cover letter attached with the application that gives you a list of additional documentation that I will need. This list typically requests items like Pay Stubs, Tax Returns, Bank Statements, Photocopy of Your Driver License, etc... There will also be a return envelope for you to return the application and copies of the items I request. If there are any areas that are not perfectly clear we can review them at this time.

This application is basically a rough draft of your purchase transaction. All numbers will be subject to change as the purchase price will most likely be different than the estimate illustrated in the application. Also, by signing the application, you are still not committed to do business with me (the lender) it just allows me to continue to work for you in your best interest.

Looking for a House - I am not as involved in this stage as you preview houses with your realtor. However, a common question is "How long is my pre-approval good for?" Usually a LSR is good for 90 to 120 days assuming that your employment does not change during that period. Technically, your credit report is only good for 90 to 120 (depending on the lender/bank) so it needs to be re-pulled every 90 days to ensure your scores are accurate. I usually check in with you & your realtor every 3 weeks or so to get an update on your search.

You find a House - and it is time to put in an offer. Like I described earlier, I will usually write a custom LSR to go along with your offer. It is common to have multiple counter offers bounce back and forth between parties until you actually have a contract that is agreed upon, and signed by both parties. Once you have the signed contract we are in business and it is time to LOCK your loan.

Locking - This term refers to how we secure the interest rate on your new loan. The bank that your loan is going to, will allow us to "lock in" today's interest rate that they are offering. They will guarantee that specific rate for a fixed period of time, typically 30 days. I recommend locking the rate as soon as we have a contract, and begin processing the loan.

You also have the option to Float. Floating means that you are not locking in today's rate - rather, we will see what the market does over the next few days (or weeks) and try to get a better rate. We can do this for you in hopes of bettering your situation, but it is a gamble and there are losers.

The truth is that interest rates change every day, and even the savviest financial expert cannot tell you what is going to happen to rates. We can make educated guesses on the future of interest rates, but there are so many variables that affect the market that we can often be wrong. My advice to everyone is, "...If the loan makes sense with the rate you see today, you should lock that rate and move on."

Usually, the close of escrow will be set roughly 30 days into the future, so your option to float will only last about 10-14 days until it is time to send you loan to underwriting. You need to commit to a rate at that time.

Inspection- You will most likely have a 10 day window (from the date the contract was signed by both parties) to have an inspection done on the subject property. The inspection is mostly for your information to let you know what problems the property might currently have (bad roof, mold, bad wiring, etc...). After you get the results from the inspection you can decide...

•· You still like the property and will buy it as is

•· You don't want to pursue buying the property

•· You want to negotiate with the seller to repair the property

•· You want to negotiate with the seller to compensate you for the cost of repair

To complete your loan, I do not need a copy of your inspection. The only reason I am pointing it out here is because I usually recommend that we wait to have the property appraised after the inspection has taken place. Appraisals usually cost $300 - $400, and I do not want you to pay for an appraisal if it turns out that you reject the home after a poor inspection.

Processing - This is a general term in lending that can mean so many things. In this case I am referring to the internal paperwork that I request on your behalf in addition to your application. We can have dozens of items to collect for your loan, but the big ones are your Appraisal, Title Report, Home Owners Ins., Loan Payoff Amount, HOA, Flood Certification, and Property Tax info. In most cases, all of these items get collected by me without any effort on your part.

I will be asking you at this time to send me updated paystubs and bank account statements if the ones you previously submitted are over 30 days old. Once my processing is complete, and I receive updated documentation, we enter a new stage called Underwriting.

When I receive a copy of the appraisal I will contact you with the value of the property and send you a copy of the full appraisal either electronically or by mail.

Underwriting - The bank that will be servicing this loan always requests that the loan gets underwritten before they fund it. Underwriting is the process of a special person reviewing all of the information & documentation to verify that all of the loan requirements are met. This process of underwriting usually takes a few hours, however it can take several days before the underwriter can see the file due to their current volume, or where they are physically located.

During the underwriting process, the underwriter can request additional documentation from us if they have any issues with the loan. This additional list of documentation is referred to as "conditions". In most cases, I will handle all of the conditions myself. On occasion, I may call you to get me more info on something, or to write a letter of explanation to the underwriter.

Once all of our conditions are "satisfied", we can now move on to you signing the documents on the loan for your new home.

Signing the Documents - Here is when I call you with the good news that your loan has been approved, and to schedule a time for you to sign the final loan Documents. This usually takes place at the Title Company and will take from 30 - 90 minutes depending on how many questions you may have. Be prepared to sign your name about 100 times. If your schedule does not permit you going to the Title Company, I can have a mobile signer come to your home or office at your convenience.

This will actually be the very first time that you see the final numbers on the loan. The more important numbers would be your monthly payment and how much money you will be paying at the closing table. Up to this moment, everything you have seen in the application and the good faith estimate are truly estimates. It is common for you to sign the document several days before the close of escrow.

Funding & Recording - Just because you have now signed the documents, does not mean everything is finished. There are two more elements that take place before you get your keys. You need the loan to Fund and for title to Record before you take possession. These are things that the Lender and the Title Officer do for you. Generally, the loan will fund and the title will record on the close of escrow date. The close of escrow date should be on a weekday, and you should only assume that you will get the keys sometime before 5pm on that day.

•· Funding is the act of receiving a wire of money from the bank to the Title Company. All wires are routed through the Federal Reserve so they can take about 4 hours to complete. In most cases the Loan will fund around 12:00pm on the close of escrow.

•· The actual recording of title is a County function (by County employees) and it is just best to assume that your loan will not record until 4:59pm on the close of escrow.

Timeline - A typical purchase will have a 30 day escrow period in which all loan functions (and the inspection) are to be completed. Sometimes a longer escrow period is called for because it helps the buyer or seller coordinate a move day (i.e. 45 days or 60 days).

Sometimes there is a desire to have a shorter close of escrow due to special circumstances. Please note that it will still usually take about 15 business days to complete your loan if everyone rushes.

Don't give lender's your Credit Card - a true story

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 28 May 2008 20:21:41 -0700

In any industry you are going to experience good and bad representatives within that industry. Be it an accountant, a mechanic, or a bartender - there are great ones and there are very poor ones. The lending industry is no different. I need to share a true story I heard from a perspective client an hour ago.

I got a just call from a woman named Tanya who lives in Georgia. She found my name & number on Google from an old Active Rain blog I posted in Nov 07. (Active Rain Really Works) Anyway, she wanted my opinion on her recent phone call with Quicken Loans.

Apparently, she had called Countrywide to get approved for a FHA streamline refinance (and did) and then they quoted her a rate. Then called Quicken Loans for a 2nd opinion on a rate and the representative told her this. "Countrywide is currently being purchased by B of A and your loan could be held up for 6 to 9 weeks due to the buyout. Whatever they quoted you will never close within 30 days, so the rate they are giving will surely change before you close..." "...Also, I need your credit card number to lock your rate with our company. We can prepay the appraiser, and cover your application fee with your credit card..." "...you cannot lock your loan without a credit card number..."

Holy Cow! I cannot believe that anyone would actually say that - but I guess I am wrong. Countrywide is an exceptional lender, and I am pretty sure that Quicken even sells their loans to Countrywide. I have never heard of a underwriting or funding delay at Countywide due to their impending merger. They are very solid!

***Listen closely everyone - if any lender asks you for a credit card number to lock your loan DO NOT DO IT! I don't think that they actually use your card in any way to secure a lock for your loan - but I do think it is an act to get you to commit to them and stop shopping around. I also do not believe that Quicken Loans would condone this activity if they knew about it. It is probably a desperate act by a very Jr. Loan officer (I hope).

All you need to provide to lock a potential loan is your name, contact info, your social security number, and the subject property address. All of these items should already be covered during the application process. The bottom line is to beware if someone asks you for your credit card number to lock your loan.

Arm yourself with knowledge!! (& have a great day)

Jim

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

Rural Housing in Arizona Group

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 14 May 2008 19:10:24 -0700

I have seen some impressive activity on Blogs I have posted over the last few weeks regarding the RHS 102% Rural Housing Program. If Rural Housing (in the state of Arizona) is of interest to you, I would like to invite you to join a group the specializes in the topic.

You can go to the groups screen and find us under Rural Housing in Arizona. Not a very original name - but you at leats know what we are about. I would like to simply send you a link to join but I have not mastered that part of the Active Rain interface. You can find both the guidelines for the program, and find some Arizona properties that are listed for sale that are already eligible for this kind of financing.

FYI - The "Rural" areas in which this program is offered may surprise you. Anthem, Buckeye, Queen Creek, Casa Grande, Whitman, Wickenburg, Tramonto, and basically 95% of the State of Arizona outside of Maricopa County all have Rural zoned houses ready for 102% financing.

•· Loan will cover up to 102% of appraised value (not just the sales price)

•· No minimum credit score, No minimum down payment, & no MI

•· Finance all closing costs

•· Full doc only

•· 30 year fixed (with roughly 6.25%)

Again, I hope to have you join our group if you have interest. My goal is not to have a 100+ person group - Rather, I would prefer just to have people that are interested in using this dynamic program to get more buyers into homes.

Jim Cunningham

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

Rural Housing Update on Pools

Jim Cunningham (Nova Home Loans - BK#0902429) — Wed, 14 May 2008 17:47:39 -0700

The RHS Rural Housing Program has provided a fantastic product for people purchasing a new primary residence for years. One of the few regulations of the program I have found disappointing, has been the inability for the property to have an in-ground pool and be still be considered Rural. Knowing that this is a National loan program, I am confident that they did not consider the number of rural properties on the outskirts of Metro Phoenix and Metro Tucson that have pools, when they wrote that rule.

Recently, I heard that you can ask for an exception from the RHS to accept a property with an in-ground pool. Apparently, they are primarily concerned with the potential appraised value of the subject property if it did not have a pool. I believe that after they grant you an exception for the property they actually cut your appraised value by 10K-15K and keep moving forward.

Being that this program is based off the appraised value (not the sales price) this might not be a big deal in today's market, where many properties appraise higher than their sales price.

I have not requested an exception yet (mostly because I have avoided in-ground pools). But, I will blog about the results of my exception request when I do.

Jim

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com

http://activerain.com/jcunningham

Jim's Soapbox (May 08 Newsletter)

Jim Cunningham (Nova Home Loans - BK#0902429) — Mon, 12 May 2008 20:09:15 -0700

Jim's Soapbox

(Arizona Real Estate Newsletter - May 08)

My wife Madalyn often says "...when one doors closes, another door is opened". That is a great way to describe today's Real Estate market here in Phoenix.

The common media-driven perception today is that the Phoenix housing market is far more risky today than it has ever been before. Now I find that to be a funny thing for the media to promote, because in reality the risky time to buy real estate in Phoenix was shortly after the unnatural value boom started, and before the eventual drop off. Phoenix had a very stable (appreciating) market for 10+ years leading into the boom, and we have almost returned to the point where property value would have appreciated to, without the peak and valley of '05 to ‘07.

Now I am not going to argue that everything is roses within the housing market right now, but I would like you to take notice that there are many things that you can take advantage of in this market. There are so many ways to take advantage of Arizona Real Estate today, that regardless of the condition of our current market, it always the perfect time to do something.

I would like to share some Real Estate projects and concepts that are booming today. The housing market is not lousy, it is simply different.

•· Rehabs

•· First Time Purchase

•· Investment Purchase

•· Home Equity Lines of Credit

Notice that I am not suggesting in any of these concepts that you sell any of your property. You should never sell real estate in a down market unless you really have to. I believe we are almost to the end of the depreciating portion of the cycle - hold on to your property.

REHABS

"Rehab" is a buzz term in our industry for any renovation you plan on doing to an existing home. If you want to add a new bedroom, expand your bathroom, build a guest house, or enclose your patio - you are basically talking about a rehab project.

Today is a great time to renovate your home. Compared to 18 months ago, rehabs are much cheaper per square foot and they get finished in a fraction of the time. In 2006, it could take up to 60 days to get the concrete delivered - not to mention the delays in framing due to the lumber shortage. I am not in the construction industry (I am a lender), but I can attest that projects that took 9 months to complete in 2006, now take about 2 months. The summertime is also a great time to rehab your house in metro Phoenix, because the delays from rain & humid weather are pretty hard to come by.

There are several ways to finance your Rehab project depending how big your project is. Sometimes drawing on a new (or existing) Home Equity Line of Credit is the best way to go for short term money. Also, "one-time" construction loans can be in order due to the size of the project. Either way, you can call me with questions because there are special programs for Rehabs to keep your closing costs to a minimum.

Here is the name of a Rehab Specialist I trust, and have worked with for several years. His name is Marten Niner at "Just in Time Contractors". His cell phone is (602) 739-7073 & his email address is justintimecontracors@yahoo.com . There are many other great Rehab companies here in Phoenix, just be sure to ask for references before you commit.

PURCHASE YOUR FIRST HOME

In case you haven't followed the housing trend this year I have great news,... it is a buyer's market!! The next 6 months, preceding the election, could mark the low tide of property values in Maricopa County. I could not think of a better time to buy than when property is at its lowest. Buy low and Sell high are still pretty good words to live by! Take advantage of distressed property prices and have the seller pay for 100% of your closing costs. The last 8 purchases I financed had the seller paying every penny of the closing costs.

Also, 100% financing is still around. I have FHA programs with Down Payment Assistance (i.e.Nehemiah and Ameridream) that let you purchase with only $500 out of pocket. I have the 102% Rural Housing program if you would like to purchase a home in Anthem, Queen Creek or Buckeye (for $0 out of pocket). If you are not sure if you qualify, call me & I can let you know the next day.

INVESTMENT PURCHASES

Again, in case you haven't followed the housing trend this year I have great news,...IT IS A BUYER'S MARKET!! This is probably the best time to get an investment property since the summer of 2001! A common complaint that I hear today is the inability to do 100% financing on investment homes. Well, that statement is very true; you are going to need 10% - 20% down to buy an investment property. However, you can actually purchase a home that has a positive "cashflow" now. You can find a pre-foreclosure property with $50K in equity the day you buy it. (You won't be able to get to that 50K equity out right away, but you could leverage it to your favor in about 366 days J).

I also have a great Hard Money Lender that will allow you to purchase an investment property (that requires a rehab) and they will lend you 90% of the whole project (including the cost of the rehab). So, for 10% down you can buy a Fixer Upper, and finance the repairs all at the same time. I quoted them out last week, and they were charging only 8.875% and 1.5 points. That is a smoking deal!

HELOCs

Even though a lot of banks have run away from selling this type of product, there are still a few banks that do them very well. The advantage of the Home Equity Line of Credit has been two fold. There is the advantage of the low rate and the flexibility to use it. Today the Prime rate is 5% & I have HELOCs with rate as low as Prime -1%. That means you can borrow at a net rate of 4%. I am confident that 4% interest rate beats most credit cards, furniture loans, pool loans, fixed 2^nd mortgages, and car loans. It is the most powerful debt consolidation tool available. (next to inheritance)

The ability to leverage a HELOC to 100% to the value of your home has basically disappeared, but 85% is still available. If you have $10,000 in revolving debt and Equity in your home you should think about consolidating.

I am looking towards a great summer both socially and professionally. If you have any questions on this material, or just want to say "Howdy", feel free to give me a call or an email. The line about inheritance was a joke - I am trying to keep you on your toes.

All Best!!

Jim

Community First Financial, LLC

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8900 ext 305 - office

480-907-2435 - fax

602-434-8261 - cell

jcunningham@communityfirstfinancial.com