Portland Mortgage Broker who is Accountable
Posted On: July 22nd, 2010 by James Posted In: Financial Health • Local Interest • Mortgage Programs • Mortgages
I was listening to the Adam Corolla show the other day and he was off on some rant about how horrible the airline industry has become. Horrible customer service, zero pride or respect from airline employees. I also heard an anecdote about the airline industry that each flight only makes an average profit of $100 dollars or so after all the expenses are backed out. It got me thinking about my mortgage industry and how many new regulations will likely point us towards this type of experience in the future with getting mortgages.
Conversely, I also began to fantasize about what might happen if some of the current mortgage business model were applied to the airline industry- particularly that of the “commission only” sales model. What if flight crews, and ground crews could pick their own members, and work together to create a fantastic customer experience. They would make their own websites, and try to make it easy for Continue Reading – Portland Mortgage Broker who is Accountable
If your rate is above 4.5%
Posted On: July 20th, 2010 by James Posted In: Mortgage Programs • Mortgage Rates • Mortgages • Refinancing
I’ve been hearing the radio ads just like everyone else, and our favorite breathless loan cheerleader has lately been urging you to call him “if your rate is higher than 4.5%”. I’m sure he would love to refinance you over and over again without any regard to if it makes sense for you.
Lets say you currently have a mortgage for $180k at 5.5% interest. Your principal and interest payment is $1,078. And now you really think that you are being foolishly ripped off for paying more than 4.5% on this loan. Lets also say that your credit score is 685. So now, in order to achieve this magical interest rate, you will need to pay a load of mortgage processing fees, an appraisal fee, title fees, plus 2% in points to cover the premium associated with a 685 credit score. Lender and title fees totaling $7,000. This is what you will pay in order to achieve a monthly savings of $115. The easy math is to divide the monthly savings into the upfront costs and calculate how many months it will take to pay for itself: $7.000 / 115 = Continue Reading – If your rate is above 4.5%
Converting your IRA to a Roth = a great opportunity
Posted On: July 13th, 2010 by James Posted In: Financial Health • Government Actions
File this one under: “Check with your financial planner and tax adviser before taking action”.
So now that the Lebron’s choice episode is behind us we can focus on another reason why 2010 is a unique moment in our financial lives. This year there is a moratorium on the Roth IRA rules. If you are in a higher tax bracket, you’ve been shut out of the Roth IRA party, until now. This year, ANYONE can convert an existing IRA into a ROTH IRA. There are 2 major consequences to doing this:
- whatever portion of the balance you convert will be considered taxable income for this year.
- The balance you convert will be able to grow and compound into the future, and when you go to withdraw this money, you will do so TAX FREE!
HERE’S WHAT I THINK ABOUT TAX FREE RETIREMENT ASSETS
Continue Reading – Converting your IRA to a Roth = a great opportunity
Mortgage Rate Apocalypse
Posted On: June 23rd, 2010 by James Posted In: Mortgage Rates • Refinancing
From the industry that has been “crying wolf” for the last I don’t know how many years about “low low rates”, I know that this is just more noise. I have been trying to figure out exactly how to describe what is happening lately in the fixed rate mortgage marketplace. Because rates usually move in step with the general state of the economy (economy good= rates go up, economy bad= rates go down) we’ve been in a VERY low mortgage rate market for most of 2010, and late 2009. I know that certain radio advertisers have been pimping the so called “rate of a lifetime” every 15 minutes for going on 3 years now, to the extent that the urgency has been drained completely. Well I’m here to tell you that today the FNMA 4% bond coupon that we use to track pricing has just hit the highest level in history.
Continue Reading – Mortgage Rate Apocalypse
Gift Funds for a Down Payment: What to Expect
Posted On: June 18th, 2010 by James Posted In: FHA Mortgage • Mortgage Programs
Most home buyers bring some kind of down payment to the table in a real estate purchase.
The money down can come from any variety of sources, and a very common source of funds is that of the “family gift”.
Different loan programs have different requirements when using gift funds as the down payment. Most lenders will require there to be a legitimate and verifiable family relationship between the donor and recipient. The FHA mortgage allows for the ENTIRE balance of cash due to be from a family gift, whereas conforming agency loan programs will require the borrower to have 5% of his own funds in the deal if the down payment is less than 20% (if the down payment is 20% or greater, conforming loans will allow the full balance of the down payment to be from a gift).
So here comes the tricky part – HOW TO DOCUMENT THE TRANSFER OF GIFT FUNDS
Continue Reading – Gift Funds for a Down Payment: What to Expect
