Everyone has a payment budget. You MUST think strategically! How long you plan to stay in your home can play an important role in your home buying strategy. For example, if you plan to be in you home 5-7-10 years, an adjustable rate mortgage could provide $59,000 more loan with same payment when compared to a 30 year fixed loan. Buying soon while rates are lower could be advantageous too! If rates were to increase 0.50%, you could lose about $37,000 in loan amount assuming the same payment. Want a professional to assist with a strategy for your home loan? Give me a call. Clay Selland, President Signet Mortgage Corporation 925-807-1500 x303 Clay@SignetMortgage.com NMLS#183492

As I was starting on my hike well before sunrise Saturday morning, the crunch of my hiking boots on the gravel trail caused me to think about those serving in our military all over the world and the sound their boots make every day on our behalf. I have been able to do this hike virtually every day for the last 248 days … the park is paid for by taxes we pay to East Bay Regional Parks … the road I walk on to get there is paid for by taxes we pay to the County … most of all, the freedoms we all enjoy are because of the taxes we pay to the United States Government. No one likes paying taxes .. and it is too easy to complain or protest paying your taxes based on wasteful government or excess spending on priorities you may or may not agree with.  

Stop and think about the blessings that we enjoy and appreciate those freedoms and blessings are not free. If you follow one of your tax dollars – a very large portion of it will be going to put food on the table for a serviceman or woman, who hasn’t seen their spouse, baby or two-year-old daughter for the last 18 months, while serving in Afghanistan or somewhere around the world. Think of those serving us in public service (military, fire and police services, etc) and how they risk their life willingly.  The least you can do is write that check or file that tax return with gratitude.

We can argue whether our government should be involved in different causes throughout the world, and certainly challenge the waste in government.  Probably one of the most frustrating inefficiencies is the rift between political parties that prevents meaningful progress in Congress – the folks elected to help us!  As I write a check this week I am going to do so with gratitude and challenge you to do the same.

While at it, write another check to a charity or faith-based organization that will further help someone in need.  I walked out my front door early this morning with my Border Collies and was up on a trail above San Ramon Valley in about a half hour.  I’m enjoying a beautiful sunrise and appreciate that is not possible without the freedoms of living in this country. This is a land of opportunity, but certainly not equal opportunity for everyone and there is a responsibility to take care of each other, and yes, pay your fair share of the overhead (government) to make it happen and for our safety and freedom.  When you write your tax check and address it to the Internal Revenue Service… put that red, white and blue “forever” stamp on the front with gratitude and pride.

Mortgage lenders/investors will typically permit the cancellation of private mortgage insurance (MI), when you build up enough equity in the home.  With market values up double digits this past year there is a chance that you may be able to cancel your mortgage insurance earlier than you thought.

If you’ve made your mortgage payments on time and have the equity in your home, cancelling your MI shouldn’t be difficult at all. In fact, most homeowners cancel their MI long before the automatic termination date.

There is an important distinction between mortgage insurance on a conventional loan and an FHA or VA loan which do not have the same rules. Mortgage insurance for recent FHA loans often remain through the term of the loan and only way to get rid of the mortgage insurance refinance.

The general rule is if you make regular payments only and the loan balance is 78% of the original value – the mortgage insurance is automatically canceled.

You can request to have your mortgage insurance canceled if the value of your home has increased and your loan-to-value is less than 80%.  This will involve working with your current servicer/lender and may involve an appraisal to confirm value.

This link provides an excerpt from the Homeowners Protection Act as well as a link to one of the major mortgage insurance companies brochure containing more detail. http://homebuyers.mgic.com/resources/cancel-mi.html  

If you have questions please give me a call.

It’s a very competitive real estate market and legitimately sellers are choosing which offer to accept based on the strength of the buyer.  Often electing to take a substantial discount in price for a cash offer and a quick closing sellers may unnecessarily leave money on the table. Well-qualified borrowers can miss out on their dream home by not being prepared. The key is getting a solid pre approval. For many years at Signet Mortgage, we have only issued pre approval letters when we have verified a clients income, asset and credit affirmation, as well as obtain automated underwriting from either Fannie Mae or Freddie Mac. In this market, that may not be good enough.

Not all lenders will allow the processing of a loan without identifying a specific property, this is understandable because not all transactions go through and it is an investment on their part to fully underwrite the loan that may not go through. Signet, operating as a mortgage broker, has access to 10 lenders that will allow a full underwrite of a “to-be-determined” property. We have a full range of investor options as well as competitive lender choices.

This approach is an upfront investment by the buyer that can read significant rewards. With a full underwrite, the pre approval letter now would only have contingency on the identification of a property and no loan contingency with respect to the client putting their offer on par with a cash offer.

The idea that a pre approval from a direct lender is any stronger is hogwash. The quality of the pre approval letter is based on the work done on the loan file to support the pre approval and the experience and integrity of the loan officer – period.

Again, as a mortgage broker, Signet has access to just under 20 lenders which assures clients that I can find a successful solution to a buyers unique circumstances. Make sure to leave the time to get a full pre approval before making an offer on your new home! That small investment will help your offer to be successful. 

As a CPA and Real Estate Broker, I approach real estate financing with the care and professionalism that you deserve for one of the largest transactions you will do in a lifetime. If this sounds like someone you would like to work with to get solidly pre approved for your next home, please give me a call. My team and I will do the work to make sure that your offer is the one the seller loves!

“Clay was a recent guest on Rental Housing Network Show on KLIV 1590AM with host, Sandy Adams. Clay spoke about buying investment property and opportunities in this market. Watch the first half and learn about valuable information that investors and owners should be paying attention to. The second half Russ Castle of Castle Insurance shares information on comparing insurance policies and questions you should ask your insurance agent.”  

With all the concern about a run-up in rates – once the Fed began to taper off their support of the treasury and mortgage-backed securities market – things have remained relatively flat.  Not everyone believes that we are on the road to recovery, benefiting mortgage rates.             It is impossible to quote specific rates but a sampling of rates available Thursday include ..

• $625,500 30 year fixed, 4.50% rate and APR (75% loan to value)
• $417,000 30 year fixed, 4.50% rate and APR  (80% loan to value)
• $900,000 5 year ARM,  3.250% rate and 3.455% APR (75% loan to value)

The first 72 hours after an emergency event you will be on your own.  You cannot survive without Water – it is the most important part of your emergency preparedness.  There is a good chance you will not be at home in the event of an emergency so make sure you have water in your car and at work.

• Buy a few cases of water – put one in each car – another at the office – and several more at home. Imagine an earthquake and you are stuck somewhere with no water…

• Each person will require a minimum 15 gallons of water for 72 hours. Do not forget your furry friends as your pets will need water too!

• Commercially available 55 gallon drums can store water indefinitely. Fill one up and cover it with a tarp in the back of your yard.

• Do not overlook the water in your water heater and toilet tanks in the event of an emergency. Turn off the Smart Measurement tools or electricity to the water heater – then turn off the intake valve and open the drain. That avoids adding contaminated water to your 50 or 60 gallons of H2O. You can hire an electrician to do it.

• Locate your water main both at the house and the box that the water company uses to read your meter. Have an emergency shutoff wrench for the water (and gas).

• Have some water purification tablets in your emergency kit. Unscented bleach works too – 16 drops per gallon and let stand 30 min.  it will still have a slight  chlorine smell but that means it’s okay to drink.

Improved HARP – Home Affordability Refinance Program… something that the Government got mostly right during the effort to assist homeowners that could not take advantage of historically no credit check loans in the uk because their home values have dropped.  Recent changes mean property owners should take a second look, specifically:

• Bankruptcy or Foreclosure seasoning requirements have been eliminated
• Up to 60% debt-to-income ratios are now accepted on all HARP refinances, thanks to the Rhinosure programs that are being offered
• Promissory Note date now used to determine HARP eligibility, prior to 5/31/09.  Until recently it was based on when Fannie or Freddie purchased the loan.
• 0x30 Mortgage rating in last 6 months is required – previously it was no late payments for 12 months!
• Loans that currently have mortgage insurance are allowed!
• Unlimited LTV/CLTV on HARP owner occupied homes, 2nd homes and Investment properties

Available for INVESTMENT properties TOO!

The HARP 2.0 Home Affordable Refinance Program is designed to allow a refinance of properties that no longer have 20% equity and benefit from historically low rates.  In short, no late payments last 6 months, and your loan has to be owned by Fannie Mae or Freddie Mac (not the same as who services your loan or where you make your payments).  Generally conforming loans (below $625,500).   Promissory note must be dated on or prior to 6/1/2009. If you are in debt then first take a look at trust deeds for debt in Scotland. Existing 2^nd loans are allowed – unlimited combined loan to value. Rates are fabulous so it’s worth checking if you would benefit from a refinance to record low rates. Multi-family properties up to four units can be refinanced at similar rates as there are caps on the adjustments for loan to value, credit score, occupancy and number of units! The main requirements are that the loan be owned by Fannie Mae or Freddie Mac.  Remember, a loan can be serviced by any of the major services and still could be owned by Fannie or Freddie.  The best way to tell is to provide a current mortgage statement and the last four digits of borrowers social.  We can do the rest. No requirement (or benefit) to refinance with your existing lender as they may have overlays that restrict benefit. Fannie Mae and Freddie Mac will likely assign an automated valuation of the property thus eliminating the need for an appraisal. Primary residence or second home.  With a primary residence there is a cap to the “adds” so rates are very competitive.

Send us your mortgage statement and note the last four digits of your social security number – and your email address – we can do the rest!    No obligation at all – you might as well find out if you could lower your payment or take years off your mortgage.

Purchasing an investment property that needs a little work?  Wish you could include the costs of renovation in the loan?  You can with a HomeStyle renovation loan from Signet Mortgage!

Improvements can be anything that adds value to the home.  No longer will a purchase be held up because of the condition of the home – a renovation loan will allow repair services to cater you after closing with funds borrowed at the time of purchase. The lender simply creates a hold-back for the funds that are dispersed as the work is completed. It doesn’t matter whether you are a residential customer or large corporate customer with a high-rise building, you’ll receive the same high-standard of care, service and support. Property must be a single-family home and the loan-to-value based on the “as completed” value is limited to 75%.  The underwriting is based on slightly more conservative Fannie Mae guidelines requiring a 720 FICO score, etc. Cost of improvements can be up to 50% of the “as completed value” which provides a great deal of flexibility to buy a distressed property and turn it into a solid investment. Improve your return on investment by putting less cash into the property. This example illustrates purchasing a $400,000 property with and without a renovation loan. The ability to add the desired renovations into the value that the 75% loan is calculated on, lowers your cash investment.

If you made it this far you are obviously interested in the details on how a renovation loan can work to purchase your next investment property.  As I am a CPA and licensed as a real estate broker I am uniquely suited to assist with even the most complex situations and would be happy to help.  Please give me a call today.

Clay Selland, President, Signet Mortgage Corporation

925-807-1500 x303

Clay@signetmortgage.com

There are things you might want to consider before you take on the task of managing your own rental property. The article below, by Sandy Adams of the Rental Housing Network, goes through some key questions to ask yourself first.

https://www.rentalhousingnetwork.com/newsletter/download_newsletter/18