Can We Turn the Market Around??   Today we are all wondering whether this bailout will pass or not and what the implications are to our industry, I am confident that we can turn the market around.  While the bailout is an important step and likely to eventually pass in some form, there is so much that we in the Real Estate market can do to help get the ball rolling.  

Anyone that knows me, knows I am extremely optimistic.  I think this has to do with overcoming many obstacles in my life and realizing that no matter how bad it looks, I will survive.  The one secret that I have discovered is that an optimistic attitude and a positive approach to everything I do can overcome every obstacle that may come my way.   This is why I feel as though I am constantly preaching that we cannot allow all that is going on in our economy to shake us up and cause us to look at ourselves and our industry pessimistically.   There is always a light at the end of the tunnel and my belief is that if you can realize that and make that a part of your daily life, you will survive and succeed.  

What I am asking you now is to take my challenge.  Take some time to reinvent yourself.  Strike that negativity from your life.  Realize that while our industry is a more difficult place to make our income, we are the ones that have survived thus far and our rewards are coming.  

Home prices are excellent.  Interest rates are excellent.  While the ability to get a home loan has tightened up, there are still good solid buyers out there.  They need you to encourage them and show them that we can focus on all the turmoil if we want, but this is still an excellent time to buy a home.   For the move-up buyer, the benefits far outweigh the losses.  Just to use an example, let's say home prices are down 10% (I know this is not a correct figure, but it's easier for my example)  Your customer has a home for sale that was originally worth $100,000.  With the 10% drop in price, they will end up selling for $90,000.  In their mind, they have lost $10,000.  But, if they are purchasing a home that was worth $200,000, it's now selling for $180,000.  So, in actuality, they have gained $10,000 by buying now.  Hard to believe, but it's a better time to buy now than it was 3 years ago.  (you may need to re-read this, because I know you don't believe it)  

A while back I made this suggestion and I am going to make it again.  If you truly want to help get the ball rolling you will take my advice.  Here's what you do: Go to every one of your listings that is selling to buy another home.  Take them out and start showing them homes and encourage them to make an offer contingent on the sale of their home.  While just one Realtor doing this won't really won't do much, if every Realtor was to write at least one or two contingent offers, we may just be able to get that domino effect going and while the rest of the country is waiting on a bailout and the market to turn around, we could actually start our own turnaround.   Maybe this sounds too easy or maybe you don't see the point in it.  But, if you stop and analyze what I am saying, you will see that there is merit to this idea.  WE CAN TURN THIS MARKET AROUND!  

Have a positive week!  Please don't hesitate to call me with any questions or concerns.  Remember I offer conventional, FHA, VA, and Rural Housing loans.  Oh, and FHA is the ticket right now....our local area maximum loan amount is over $270,000!   jim  

Unless you never turn on a television, never pick up a newspaper, and never listen to the radio....you would have to have gone through another week of wondering "what the heck is going on??".  Again, we have more turmoil in the market and now we have an extremely possible federal bailout that will definitely affect our business.  But, how?  Well, while I am far from an expert, I do believe it is the little (yes..that's a pun) kick in the butt we need to help our industry begin a recovery.  First, we need to recover our consumer confidence.  Potential buyers, even seeing low interest rates and extremely reduced home sale prices, are still somewhat reluctant to make a purchase at this time.   For me, personally, the phone has begun ringing more.  I have done a few more preapprovals than I had been doing, and several of my potential borrowers have offers  on the table.   You and I need to seriously take an optimistic approach right now.  We need to expend that extra energy to inspire people to take advantage of a great opportunity to buy while prices and rates are low.  Avoid that gloom and doom perspective and when you are confronted with it, try to turn it around.  While I know it may sound somewhat foolish to pretend things aren't as bad as they have been, the only way to turn things around is a new and positive approach.    I am truly excited right now as I feel that being a survivor of this market has made me stronger.  (oh..and taught me the value of clipping coupons, too)  And, while I am sympathetic to those we have lost in our industries, I do know that I will have less competition in the future.  I am also hopeful that my knowledge of my industry, along with my attention to detail, and genuine concern for my clients, will provide me with increased business in the future.  I know in the past that I have lost loans to other lenders willing to falsify documents or push borrowers into programs that were more beneficial to the loan officer than they were to the borrower.  I hope my morals and ethics will shine through as well.

I can't be more happy to be able to offer FHA mortgages in our current economy.  Right now it's the solution for quite a few buyers.   I have a few FHA loans in process right now that would have been conforming conventional mortgages a year ago.  Why?  Because of the low down payments and the low interest rates on an FHA mortgage and the fact that lenders have tightened up and eliminated the 100% financing programs. 

The other big factor causing more buyers to go FHA is that conventional rates are based on credit score and loan to value of the mortgage.  Right now, the FHA loan just makes sense. 

My advice to anyone considering purchasing a home right now, is to work with a lender that also offers FHA financing.  I have 11 years experience with FHA and taught FHA financing in Real Estate Continuing Education Classes.

Note: If you are a loan officer with a lender that does not offer FHA mortgages...give us a call at Grande Financial.  We would love to talk to you about joining our team!

The sun is shining and it's a beautiful day.  Sure it's a tad chilly this morning, but we know that spring is on it's way.   I don't have a crystal ball, but I have spoken to quite a few Realtors and potential buyers recently and I can't help but think that we are possibly in a turning point in our industry.  What we all have to do is seize the moment and run with it.  I have been encouraging all my preapproved buyers to get with their Realtors and make that offer.  The selection and price of available properties is tremendous.  Rates are attractive.    If you have sellers that will be buying another home when their home sells...now is the time to encourage them to start looking and maybe write a contingent offer.  If we get enough contingent offers going....we might be able to get that domino effect in play.   This is a time that we need to take an extremely optimistic outlook and wear that outlook wherever we go.  It's time to put the doom and gloom back in the closet and focus on a positive future.   Certainly the mortgage industry has suffered as well.  I have seen programs eliminated on a day to day basis as well as drastic program changes. I have also found that FHA mortgages are keeping me alive.  With increased purchase limits for owner occupied properties, less strict credit guidelines, and a somewhat relaxed review of the property (from what it was several years ago), FHA is an excellent way to buy with little or no money down.  And...we can close just as quickly as conventional financing.   Even though conventional 100% financing programs have gone by the wayside, we do have 97% programs.  I work with almost 30 lenders and feel that I have the experience (12 years in the mortgage industry as well as 5 years as a licensed Realtor) to know how to get the job done for your buyers (and sellers).  Just as the Real Estate industry has lost many Realtors to this economy...so has the mortgage industry.  The strong and knowledgeable will survive.  Please keep me in mind for any assistance you may need!   In closing, I have discovered two great websites recently.  The first is called ZIPskinny.  Check it out at http://www.zipskinny.com/ .  You will be able to input a zip code and find all sorts of helpful information on that particular zip code.   The second site is http://www.felonspy.com/search.html .  Here, you can type in an address and find the locations of convicted felons in your neighborhood.  It's certainly an eye opener.    Have great week..and have a positive attitude!!   jim

Okay, normally I call this my "Realtor Update" but I thought we all needed a dose of optimism.  (at least those of us that are still out there and still trying to make a dollar in this industry!)   Here's my theory: "We can turn this market around with our own optimism and positivity!"   

Remember when Johnny Carson made an announcement that there was a toilet paper shortage?  There really wasn't a shortage at all, but within hours the stores were almost depleted of their supply.    As we are continually hearing about the troubles in the housing and mortgage industries, it seems to further those issues.   Maybe if we take a new tactic and focus on all the positives, we can start bringing a turnaround into place.  

One of the things that I keep hearing over and over is that even though there is an amazing supply of homes on the market, many buyers are waiting for rates in the mid 5% range.  We need to show them that the rates are extremely attractive in the low 6% range right now and couple that with the lower home prices due to the glut in the market, and it's just about a wash.   

Here's an example.  I did a loan for a buyer a few years ago.  She purchased a property for $140,000 with 10% down.  Her rate was 5.5% at the time.  Recently, my client wanted to refinance to possibly get a little cash out for home improvements.  The appraisal came in at $130,000.  She was very disappointed that her home was worth $10,000 less and it precluded us from doing her refinance.  But...back to my example....the house at $140,000 with 10% down at 5.5% had a principal and interest payment of $715.  That same house at $130,000 with an interest rate of 6.25% would have a principal and interest payment of $720.  That's just $5 a month difference.  

Basically what I am saying is that with the drop in home prices, the payment with the slightly higher rate is about the same as getting the lower rate a few years ago with the higher prices.  (I know..that's a confusing statement)  

This is an amazing time to buy a home and we need to do all that we can to encourage everyone we can to purchase a home NOW!  

I have talked to a couple of Realtors lately having success with working with renters.  They pick an apartment complex and get the individual addresses for each unit and send out postcards.  Repetition is the key when you are doing any type of farming project.  So..be consistent and repetitive and hopefully you will see results, too.  

Many Realtors are sitting on a pile of listings.  I asked if the sellers are out looking at homes and in the majority of the cases, the sellers are waiting for a buyer to buy their home before they begin looking.  Well...here's an interesting approach. Why not see if you can get them to make a contingent offer?  Since it's all set up like a dominoes game, if we can't get the first domino to fall, we can't get the rest to move either.  We have all these sellers out there that won't make a move till they sell...and we have to spur them on a bit. 
(Oh..and make sure your sellers are preapproved, too!  Recently a panicked Realtor called me and asked for help for her client who had an accepted offer and was unable to get a new mortgage to purchase a new home.  Sadly...there wasn't anything that could be done, but this should have been discovered before the property ever hit the market)  

In closing, I would like to wish you a very happy and prosperous New Year.  I hope that 2008 will be the year where the true survivors in this industry...you an me...are able to truly shine. 

Happy New Year!

Well, here I go again.  For the second time in 2 years, I am starting a new job.  Sadly, my last employer, Colony Mortgage Corporation began closing it's doors in August of this year.  With the economy in it's current state, finding a new company was not easy.

Grande Financial is a smaller, locally owned company in Northwest Ohio.  What was most important was whether the company would be strong and stable.  It is!  Grande Financial also has great rates and low costs....two other very important factors for me in choosing a new lender.

 

So, I hope that you might consider giving me a call! 

Having been in the mortgage business for almost 11 years, I have to say that I would hate to have to shop for a mortgage.  There are so many programs and so many lenders that it's impossible to know if you are getting the best loan at the best price.

My advice to anyone in the market for a mortgage is to check with your friends and family to see who they used or would recommend.  It's also good to check with your Realtor, but get more than one recommendation. It doesn't hurt to be somewhat aware of where interest rates are at this time, too.  But also be aware that rates differ from program to program and can be higher due to past credit issues or little or no downpayment.

Occasionally, I will do a rate shop myself.  I like to see how I compare to other lenders in my area.  (my rates are usually the best...that's a little brag)  Sadly, many loan officers don't give good factual information.  I have had a rate quoted that was at least a quarter percent lower than my best available rate, and yet the closing costs quoted were nearly identical to mine.  When I questioned the loan officer as to whether there was a broker fee or lender fee, he disclosed that it did require a 2% broker fee.  Well folks, a 2% broker fee is considered a closing cost and should have been included.  How many rate shoppers have fallen for that line?

Another important thing to keep in mind when getting mortgage rates is what type of loan do you need.  Many times I have had clients call for a rate for a 30 year fixed mortgage.  Thank goodness I ask questions or I would have angered some people in the past.  If you are doing a traditional 30 year fixed conventional mortgage with a downpayment of at least 5% and you have good credit, then you would most likely be the easiest person to answer with a rate.  However, if your credit is less than perfect, you don't have anything for downpayment, you are buying the property as an investment property (rental), or you are looking for a NO PMI loan (no mortgage insurance - PMI is required on most loans with less than 20% down), you are a veteran wishing to use your VA eligibility, or you require an FHA loan, you will have a rate other than the the traditional 30 year fixed conventional rate.  This is why I say that you need to seek out someone you can trust.  Someone that knows the programs and will give you an honest and fair rate for your mortgage.  Someone that was referred to you usually wants to maintain that relationship with the person that sent you.  They will most often do their best for you.

Okay, now lets say you are the borrower with good credit and a downpayment and you are looking for a 30 year fixed rate conventional mortgage.  How do you shop?  Well...again, start with the referrals, but it's okay to call lenders and ask their rate.  But preface that by telling them something about yourself and your goal.  Tell them the price or value of the property.  Tell them whether it's a purchase or refinance.  Tell them what cash you have available for downpayment and what your mortgage amount would be.  Then, ask them for the rate.  Also ask for the amount of closing costs NOT INCLUDING TITLE INSURANCE.  The reason to leave out the title insurance from the closing costs is that many lenders do not calculate it correctly.  You may find that through your shopping there are two lenders with the same rate, however one quoted you far less in closing costs.  Then, when you get to your closing, you find that the title insurance that he quoted was far less than the actual price.  You may have actually done better with the other lender.  After you are quoted a rate and closing costs (without title insurance) ask if there is an "origination fee", "broker fee", "lender fee", or any points (a point is 1% of your mortgage).  Technically, these should all have been disclosed as closing costs, but some lenders like to mislead people. 

Keep in mind that after you have gotten a quote for a rate and closing costs (without title insurance) that are attractive to you, there will be other costs.  Title insurance (of course), your first year of homeowner's insurance, prepaid interest, and funds for the escrow account.  However, all of these items will be the same regardless of lender, but it's still good to be aware of them.  You can get a quote on title insurance from the title company that will be providing your title insurance.  You obtain homeowner's insurance through an agent of your choice and this is not dictated by the lender.  Escrows are federally regulated.  The escrows, prepaid interest, your first year homeowner's insurance are all considered "pre-paids". 

My final suggestion is that once you are decided on a lender, ask for a Good Faith Estimate.  This is where they spell out all the closing costs, the prepaids and what your actual mortgage payment will be. 

Feel free to email me with any questions that you may have at jimburrington@aol.com .  Remember also that I (and my company) are licensed to do business in Ohio, Michigan, Indiana, & Kentucky.  I would be happy to assist you, too!

I was a Realtor for 5 years before I got into the mortgage business.  I also have taught Real Estate Continuing Education in the State of Ohio.  What I have learned is that Realtors don't want to have lenders sending them all sorts of propanda and flyers or emails of why they are the best or why should someone use them.  Instead, they prefer to work with lenders who provide them with usable information and the tools and suggestions they need to make their jobs more profitable. 

I used to find myself spending two to three days on the road calling on Real Estate offices, hoping to meet some new Realtors or maybe luck out and find a Realtor writing an offer with a buyer ready to go.  But, while I was out on calls, it was not as easy to work on the loans that I had in process or to be available to Realtors or clients.  For this reason, I have found it much more profitable to work from the office with my office phone, my cell phone, my computer and my aol online. (AOL Buddy list: Jimburrington...add me) I find that I can accomplish a lot more and provide much better service this way.  I may not get as many opportunities to meet new Realtors, but I feel that I am doing a much better job for the people I am assisting, when I am easy to reach.

Finally, I think the one thing that means the most to me...but takes some Realtors a bit of time to get used to, is that I am honest.  I won't beat a dead horse.  If you refer a client to me and there is no way they can get a loan, I will tell you so.  Or, if something comes up during the loan process, as much as it's hard to give bad news, it's a lot harder to give it late! 

 

I hope to slowly get in the habit of making better use of this site and this blog.  I hope that if I have said anything of interest and you would like to be on my email list to receive my regular emails on subjects helpful to you and your career, that you will email me at jimburrington@aol.com .