Observations From A Loan Officer: Stop Paying Rent – Build Relationships & Execute A Strategy. #4 In A Series

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I talk to a lot of  home buyers.  They understand the market relationship of low inventory and high rent.  High rents are caused by declining inventories of available homes.  It is frustrating to spend a significant percentage of monthly income on rent. Rent does not Mike Nelson - Equity Primegenerate any equity and the renter misses out on significant tax advantages of a mortgage.

 How Do We As Agents & Lenders Help These Customers?

Long Term Relationships – A low inventory/high rent market is a competitive market.  Agents and lenders are competing for buyers.  Buyers are competing for the few listings that are available, putting the sellers at the advantage. Sellers often receive multiple offers and bidding wars have become quite common. It is important that agents and lenders have strategies, outside of just the highest offer, to make their buyer the most attractive.

However, we must realize a competitive market is not necessarily a bad market.  Home owners are certainly due their return on investment.  Obviously, the renter wants to enter the ranks of home owners so they can get their return on investment too.

Click for moreObservations From A Loan Officer: Stop Paying Rent – Build Relationships & Execute A Strategy. #4 In A Series

Interest Rates: Up, Down, or the Same – Thoughts of Several Experts

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Michael Nelson - Equity Prime

Interest Rates: I Am So Confused

Interest rates are back in the financial news after the meeting last week in Jackson Hole.  My opinion has not changed as to when rates will rise – inflation will be legitimately on the upswing and unemployment will be legitimately low.  You can click on any of my blog tags for a host of articles and opinions from experts.

Regardless – check out the links below for current expert opinions.  I have tried to choose balanced viewpoints but that is difficult in this election year.

Click for moreInterest Rates: Up, Down, or the Same – Thoughts of Several Experts

VA Loans – Lowest Rates & Lowest Down-Payment Requirements: Always A Good Thing?

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I love the VA loan program for all the obvious reasons.   Our veterans deserve to have access to low-interest rates and low down-payment requirements.  The sacrifices our military men and women make demand the best we have to offer in affordable housing and mortgages.

Equity Prime Mortgage - Mike Nelson
27 Months In A Row: VA Mortgage Rates Beat Everything – Mortgage Reports

Low Interest Rates & Low Down-Payment Requirements: Always A Good Thing?

The answer to the first part of the question is a resounding yes.  Low interest rates are always a good thing.  Remember, the goal of a mortgage is to pay the lowest amount of interest while increasing the amount of home equity with each payment.  Mortgages are expensive and reducing interest cost is a good thing.

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Successful Business Owner – Use a Bank Statement Mortgage For Your Loan!

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Equity Prime - Mike NelsonBank Statement Loans: Great Product for Successful Business Owners

I received a call last week from a wonderful realtor who does a great job for her clients.  Her client owns a very successful small business and he wants to purchase a house for his family.  This certainly seems like a reasonable idea.

 

19530687_s-300x200Successful Business Owners Don’t Fit in the Fannie/Freddie Universe

Successful business owners use CPA’s to run their books, keep track of revenue, account for cost, and properly file taxes each year.  As with all good CPA’s, they follow the rules and file tax returns according to the laws and financial regulations.  For businesses owners this will include accounting for expense to reduce their income tax.

The problem is the Fannie & Freddie world of conforming mortgages does not deal well with the successful business owner who has plenty of assets and cash flow but not a lot of taxable income.  I can tell you, I have spoken to many wealthy people who want to buy a house, have the necessary assets, but can’t get a conforming loan.

What is the solution?

BANK-STATEMENT-LOANS

Equity Prime Bank Statement Loan Program

  • 24 mo personal statements
  • DTI up to 50%
  • Credit scores to 660
  • 80% LTV considered
  • Multiple property types
    • SFR
    • Condo
    • Investment/2nd home

 

 

Click for moreSuccessful Business Owner – Use a Bank Statement Mortgage For Your Loan!

Here’s how to fix the appraiser shortage

The fact is we are on the verge of a major appraiser shortage unlike any I have seen in my 30 years in the business. Unless this trend is stopped, the quality of appraisal values will eventually decline and public trust in the housing economy could once again fall apart. …

Click for moreHere’s how to fix the appraiser shortage

Let’s Talk Appraisals – Or Religion – Or Politics……

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Michael Nelson - Equity Prime, LLC
What You Need to Know About Home Appraisals – Geoff Williams – US News

We all have heard the age-old adage – never talk religion or politics with customers, the date you want to impress, or the in-laws.  Well, we might as well add appraisals into the forbidden discussion category.  As a mortgage lender, this is a tough topic.  Regulations are very clear on the interaction allowed between a loan officer and an appraiser.  Which is to say a loan officer and an appraiser can have no interaction at all.

 

 

Appraisals are a hot topic – lots of emotion and added stress!

Michael Nelson - Equity Prime
What You Should Know About the Appraisal Process – Michele Lerner – Realtor.com

I don’t take issue with the regulations for all the obvious reasons.  History has certainly taught us that relationships between loan officer and appraiser are ill-advised.  But, I do suggest regulation has taken the pendulum too far to the other side.  Scarcity of appraisers and the time required to get an appraisal have made the 30 day close very hard to hit.  Especially in a TRID environment and refinance transactions.  While, I understand that each state is different, I can tell you the appraisal situation in Colorado is especially troublesome.

Click for moreLet’s Talk Appraisals – Or Religion – Or Politics……

What is APR And Is It Important?

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There is a lot of regulation around APR and home mortgages – anything with this much regulation must be important, right?  Lenders and loan officers spend a lot of time calculating, managing, and disclosing APR – it is a big part of everyday life in the lending industry.

Candidly, APR is confusing and hard to understand.  I have heard it called many things – average percentage rate, about percentage rate, approximate percentage rates…  For the record it is Annual Percentage Rate.  Let’s clear up some of the confusion.

Equity Prime - Michael Nelson
The Mortgage Reports – by Gina Pogol

What is APR and Why Is It Important?

APR (annual percentage rate) is  the interest rate plus the costs associated with the loan.  This mysterious number is intended to give an apples to apples comparison between two different loans.  Theoretically, if the consumer compares the APR of two loans, the loan with the lowest annual percentage rate is naturally the best loan for the consumer.  APR is designed to protect consumes from hidden costs, bait & switch, and deceptive marketing schemes which have been used in this industry.

Click for moreWhat is APR And Is It Important?

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