Buying a Home in Salt Lake City, UT

Have property values declined, not so much as to put you ridiculously upside-down, but enough that your current loan balance may no longer be less than 80% of the current value of your home? If you're in a position where you don't pay PMI now because you didn't need to pay it when you first took out your current loan, or because you didn't need it the last time you refinanced... perhaps you've felt that refinancing wouldn't benefit you, having heard that the cost of PMI has increased significantly over the past few years.

Many homeowners are unaware that both Fannie Mae and Freddie Mac have refinance programs available whereby if you have a conventional loan on which you were not required to pay PMI at its inception, you can refinance your loan at the current low rates and NOT pay PMI even if your current Loan-to-Value ratio is no longer less than 80%.

You do have to meet a few reasonable requirements to qualify.

Here is a preliminary test.

Y   N     Do you have a conventional loan?

Y   N     Did you have to pay PMI on your current loan when you got it?

Y   N     Do you currently owe more (on your first mortgage alone) than your home's current value?

Y   N     If you have a second mortgage, will your junior lienholder subordinate?

Y   N     Have you had any late payments on your existing mortgage in the past 12 months?

If you selected the answers I marked in bold, you likely qualify for a refi with no PMI (even if your current Loan to Value is > 80%!).

More details:

• If the existing loan (the loan being refinanced) does not have PMI, the new loan will not need PMI regardless of the LTV.
• The new loan can be used to pay off the existing 1st mortgage and cover closing costs, but the maximum cash back to the borrower is $250.
• Also, the maximum allowable LTV is 105%. (Meaning, if your property has declined so much that you are more than 5% upside down (considering the current value and the payoff of your first mortgage plus the closing costs if you wish to roll those in), you will not qualify.)
• New subordinate financing is not permitted. (You can leave the existing junior mortgage(s) in place if they agree to re-subordinate)
• There is no maximum CLTV (Combined Loan To Value (i.e. Total of all loans combined) or HTLTV (Total of loans and home equity lines combined). (In other words, so long as the first mortgage you are refinancing is less than 105% of the current market value, you will still qualify to refinance that first mortgage even if junior liens would take you over 105%!)
• Automated underwriting determines if an appraisal is needed. (The purpose of the appraisal is to determine if the new loan will be over 105% of the current value, NOT to determine whether or not you will have to pay PMI.)
• For credit scores, property types, occupancy types, high LTVs and subordinate financing, pricing adjustments apply, just as they do in regular purchase and refinance transactions.
• New loan can be a 30, 20 or 15 Year Fixed Rate or a 5/1, 7/1, or 10/1 ARM for true conforming loan amounts (loan amounts of $417,000 or less).  New loan can be a 30 or 15 Year Fixed Rate or a 5/1, 7/1, or 10/1 ARM for super conforming loan amounts.
• Available for all occupancy types (owner occupied, 2nd homes and investment properties)
• Available for all property types (1 - 4 unit properties).

FHA Annual Mortgage Insurance Premium just went up another .25%

On a $300,000 loan, this means the monthly payment just went up $62.50 per month!

This goes into effect on loans insured by FHA on or after April 18, 2011.

I hope our new construction buyers with FHA loans have homes to close on before then!

There is surprisingly little coverage on this. Here is one of the few links I could find other than bloggers: Fox News

If you will be buying a home with FHA Financing this spring ANYWAY, you may want to consider beginning your home search a little earlier than you had planned.

Other changes are sure to come as the government has plans to substantially pull out of the mortgage industry over the next few years.

Before you do anything else, please research "Exclusive Buyer Agency".

Salt Lake City, Utah is a great place to live, work, raise a family, run a business and have fun!

• Are you or your company relocating to Utah?
• Do you want to buy a $300,000-$800,000 home within 90 days?
• Do you have excellent credit?
• Are you making a substantial down payment or paying cash for your home?

If so, You Deserve the Best!

Don't buy a home without an agent on YOUR side of the transaction!

Make sure you hire an Exclusive Buyer's Agent!

Call us at (801) 969-8989 or contact us via the link on this page.

©2011 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT - Exclusive Buyers Agents (EBA) - All Rights Reserved

According to a number of Wells Fargo Home Mortgage originators, Wells Fargo will now allow an FHA borrower to get a mortgage with a credit score of less than 600.

In exchange for a larger down payment and a lower overall debt load (lower Debt-To-Income ratios), Wells Fargo Home Mortgage currently allows borrowers to take out an FHA loan on a purchase transaction with a minimum credit score as low as 500.

Here are the details as I understand them:

The credit policy change was posted to Wells Fargo Home Mortgage originators on January 14, 2011 and takes effect for purchase transactions using an FHA loan on or after January 15. The new policy will allow minimum loan scores and loan to value ratios as follows:

• A score of < 500 = not allowed
• 500 to 579 = 10% minimum down payment (90% Max LTV) PLUS "additional requirements"
• 580 to 599 = 5% minimum down payment (95% Max LTV) PLUS "additional requirements"
• 600+ = 3.5% minimum down payment

The "additional requirements" for all borrowers with FICO scores < 600 are:

1. Lower Debt to Income Ratios. These could be as low as 31% for housing debt and 36% for TOTAL debt.
2. 2 full months of "reserves" are required (cash in their bank account AFTER paying down payment and closing costs). The reserves are calculated on the total housing payment, in other words Principal, Interest, Taxes and Insurance (PITI)
3. Seller contributions may not exceed 3% of the purchase price
4. Gift funds are not allowed to count toward the down payment requirement (for any borrower with a score less than 600)
5. Downpayment Assistance Programs are not allowed to count toward the down payment requirement (for any borrower with a score less than 600)

The borrower must also be able to document that they accumulated the required downpayment funds and that they did not come from a gift or from a DAP. They must prove they had the ability to accumulate the funds and documentation proving how they came to accumulate the funds needs to be included in the loan file.

A few final details:

• This is for purchase transactions only.
• This is only CURRENTLY available ONLY from a Wells Fargo Home Mortgage RETAIL lender.
• Pricing adjustments will still be made to the rate. In other words, the lower the credit score, the higher the interest rate will be. You will not be offered the best rate with a low credit score.

What does this mean?

I take this to be a sign of a potential loosening of the credit market in the future. No, credit will still not be as freely available as it was a few years ago, nor should it be. (It shouldn't have been then!) But most analysts agree that almost all lenders went too far to the extreme with requirements putting a near complete freeze on mortgage lending.

A good number of people over the past few years have seen their credit scores slip for a variety of reasons. Some were at one point homeowners and would like to be again. There are borrowers still yet to default, there will still be short sales and foreclosures. With the tightened credit restrictions, buyers just haven't been plentiful enough to make decent headway against the excess inventory in many markets.

If other lenders follow suit, and we see additional lenders adopting similar policies related to easing requirements in one area (such as credit score), at the same time they will likely raise other requirements to compensate (such as down payment, Debt to Income Ratio, Reserves, etc) for the increased risk of default. Although it will take a while for the effects of these easing restrictions to really kick in and have a substantial effect on housing supply and demand (there are other demands that will require time and discipline to get in order), this is definitely a step in the right direction and it shows some responsibility and thinking by those underwriting such loans.

Our typical client has credit in the 700s and 800s and also usually has a substantial down payment, so the credit freeze has not directly affected the majority of our clients. But today's buyers will one day be sellers and their property values and equity positions will fare better as more people qualify to obtain credit and purchase real estate.

If you think you might have credit scores below 600 and are interested in buying a home, call or email and we can refer you to an agent and a lender who can help you out.

If your credit score is higher than 700 and you are interested in a buying a home within the next 90 days, call us today for a free consultation!

• Are you or your company relocating to Utah?
• Are you buying a $300,000-$800,000 home within 90 days?
• Do you have excellent credit?
• Are you making a substantial down payment or paying cash for your home?

If so, You Deserve the Best!

Don't buy a home without an agent on YOUR side of the transaction!

Make sure you hire an Exclusive Buyer's Agent!

Call us at (801) 969-8989 or contact us via the link on this page.

©2011 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT - Exclusive Buyers Agents (EBA) - All Rights Reserved 

Many Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate that is higher than they qualify for. Others unnecessarily pay too much in fees in order to get the lowest interest rate.

Shopping for a loan does not have to be difficult or complicated. The key is to take control of the process, get organized, and make sure you do it right.

Here are some basics on ONE way to shop for a loan. Click each link for more information on each topic:

• Shop the lenders on the same day and at the same time
• Make sure all the lenders have the same facts
• Figure out the TOTAL Cost of the Loan^SM
  
• Don't skip the "shopping" even if you have a "friend" in the business or a "company special"
• Ask for References!
• A few extras
  

As advocates for the Home BUYER, one of the ways we protect our clients above and beyond what most traditional agents do is by offering to help them evaluate lenders and loan options using our TOTAL Cost of the Loan^SM system.

If you have excellent credit and will be buying a $300,000-$800,000 home within 90 days and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A!

Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers. They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Many Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate that is higher than they qualify for. Others unnecessarily pay too much in fees in order to get the lowest interest rate.

Shopping for a loan does not have to be difficult or complicated. The key is to take control of the process, get organized, and make sure you do it right.

Here are some basics on ONE way to shop for a loan. Click each link for more information on each topic:

• Shop the lenders on the same day and at the same time
  
  This first rule is not only the fairest way to shop for a loan (for the lenders), but it also keeps you from cheating yourself by using incorrect data to make a decision.
  
  Many Buyers make the mistake of getting a quote from one lender on Friday, another on Monday and another on Tuesday. The reason this gives you inaccurate data is because the market affects the rates. You can't shop for quotes on different days and fairly compare the lenders. You can't even always shop your lenders at different times on the same day.
  
  Pre-Schedule the day and time you want to get their quotes on and then you can make a fair comparison.
  
  
• Make sure all the lenders have the same facts
• Figure out the TOTAL Cost of the Loan^SM
• Don't skip the "shopping" even if you have a "friend" in the business or a "company special"
• Ask for References!
• A few extras

As advocates for the Home BUYER, one of the ways we protect our clients above and beyond what most traditional agents do is by offering to help them evaluate lenders and loan options using our TOTAL Cost of the Loan^SM system.

If you have excellent credit and will be buying a $300,000-$800,000 home within 90 days and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A!

Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers. They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Many Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate that is higher than they qualify for. Others unnecessarily pay too much in fees in order to get the lowest interest rate.

Shopping for a loan does not have to be difficult or complicated. The key is to take control of the process, get organized, and make sure you do it right.

Here are some basics on ONE way to shop for a loan. Click each link for more information on each topic:

• Shop the lenders on the same day and at the same time
• Make sure all the lenders have the same facts in order to make an apples-to-apples comparison
  
  
  • These facts include:
    
  • Same Purchase Price
  • Same Down Payment (And therefore the same Loan Amount)
  • Same Loan Type (FHA, VA, Conventional, Other)
  • Same Loan Term (30 Year, 15 Year, other)
  • Same "Points" (We usually recommend having them all quote you with "No Points")
  • Length of the "Lock" (30-45 days is standard. Sometimes you can get a better rate with an even shorter closing date and lock)
  • Same Credit Score and Debt Ratio Assumptions
  • etc. etc.
    
    
  What do you really want out of "shopping" your loan? The lowest rate? The lowest fees? Most Buyers fixate on one of these and when a lender figures out which one, they get that part of the loan as low as possible by moving things elsewhere in the equation.
  
  Lenders should know that you are shopping for both the lowest rate AND the lowest fees. Neither is most important to you. The total cost of the loan (fees AND rate) will be considered.
  
  What the Buyer really wants to do is save the most money while they hold the loan. Up front AND over the long haul.
  
  
• Figure out the TOTAL Cost of the Loan^SM
• Don't skip the "shopping" even if you have a "friend" in the business or a "company special"
• Ask for References!
• A few extras
  
  

As advocates for the Home BUYER, one of the ways we protect our clients above and beyond what most traditional agents do is by offering to help them evaluate lenders and loan options using our TOTAL Cost of the Loan^SM system.

If you have excellent credit and will be buying a $300,000-$800,000 home within 90 days and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A!

Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers. They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Many Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate that is higher than they qualify for. Others unnecessarily pay too much in fees in order to get the lowest interest rate.

Shopping for a loan does not have to be difficult or complicated. The key is to take control of the process, get organized, and make sure you do it right.

Here are some basics on ONE way to shop for a loan. Click each link for more information on each topic:

• Shop the lenders on the same day and at the same time
• Make sure all the lenders have the same facts
• Figure out the TOTAL Cost of the Loan^SM
  
  After many years of evaluating how lenders compete for business, we have found a good way to calculate the TOTAL cost of a loan. We do this by considering how many dollars leave your pocket at the closing table (mostly made up of fees) and how many dollars leave your pocket each month you hold the loan (mostly a factor of the rate). This is the fairest way I have found to shop lenders, and even to compare different loan types from the same lender.
  
  Homebuyer Representation, Inc. has created a program that extrapolates these figures out for the term of the loan (15 or 30 years). It can show you the total dollars that have left your pocket at any point along the way. You can see on a graph that the best lender in the short term (lowest fees) is not always the best lender in the long run (often the one with the lowest rate.) They often cross paths along the way.
  
  What our system does is it allows you to see where this transition takes place (if it does). Graphing out the TOTAL cost of each loan option gives you the ability to make the best educated decision regarding which loan to choose.
  
  If you know you will only hold the loan for 2-3 years, it may actually cost you less if you choose a lender whose rate is a bit higher, but whose fees are substantially lower than another lender's offering. If you believe you will hold the loan for potentially a longer length of time, a lender who costs a bit more up front, but offers a lower interest rate, may cost you the least amount of money by the time you will be likely to either sell the home or refinance the loan.
  
  The problem with just judging a loan by the APR is that it doesn't allow you to understand which loan is really going to cost you the least amount of money based on your specific scenario. (How long you plan to hold the loan) Still, if you have no other way to compare, comparing the APR is better than just comparing the rate alone or the fees alone, as the APR does factor in the up front costs of the loan.
  
  
  
• Don't skip the "shopping" even if you have a "friend" in the business or a "company special"
• Ask for References!
• A few extras
  
  

As advocates for the Home BUYER, one of the ways we protect our clients above and beyond what most traditional agents do is by offering to help them evaluate lenders and loan options using our TOTAL Cost of the Loan^SM system.

If you have excellent credit and will be buying a $300,000-$800,000 home within 90 days and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A!

Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers. They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Many Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate that is higher than they qualify for. Others unnecessarily pay too much in fees in order to get the lowest interest rate.

Shopping for a loan does not have to be difficult or complicated. The key is to take control of the process, get organized, and make sure you do it right.

Here are some basics on ONE way to shop for a loan. Click each link for more information on each topic:

• Shop the lenders on the same day and at the same time
• Make sure all the lenders have the same facts
• Figure out the TOTAL Cost of the Loan^SM
• Don't skip the "shopping" even if you have a "friend" in the business or a "company special"
  
  
  Some clients think they have "shopped" lenders before we meet. They believe they have found the best option and they feel comfortable with the lender for some reason. Other times they don't want to shop for a loan because they have a family friend in the business or they work for a lender and they believe they will get a good deal by working through the person or company they have a relationship with. Often, when we help them shop correctly, we will find an even better option with lower fees AND a lower rate, or the "special deal" they were being offered, miraculously gets better. We have, many times, saved clients thousands of additional dollars when we teach them how to correctly "shop" their loan again.
  
  I encourage clients to compare their options... especially if they have been offered a special deal from a friend or their employer. Many borrowers take these loans at face value, never realizing that they could have saved thousands of dollars, just by doing some shopping around. After all, if the borrower really is getting a good deal, comparison shopping will only confirm that.
  
  A good policy has always been: Trust. But verify.
  
  
  
• Ask for References!
• A few extras
  

As advocates for the Home BUYER, one of the ways we protect our clients above and beyond what most traditional agents do is by offering to help them evaluate lenders and loan options using our TOTAL Cost of the Loan^SM system.

If you have excellent credit and will be buying a $300,000-$800,000 home within 90 days and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A!

Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers. They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Many Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate that is higher than they qualify for. Others unnecessarily pay too much in fees in order to get the lowest interest rate.

Shopping for a loan does not have to be difficult or complicated. The key is to take control of the process, get organized, and make sure you do it right.

Here are some basics on ONE way to shop for a loan. Click each link for more information on each topic:

• Shop the lenders on the same day and at the same time
• Make sure all the lenders have the same facts
• Figure out the TOTAL Cost of the Loan^SM
• Don't skip the "shopping" even if you have a "friend" in the business or a "company special"
• Ask for References!
  
  I can't believe how few people (almost NONE) ask lenders for references. Communicating with recent customers allows you to ask questions about the process and get candid answers from someone who just worked with that lender. This allows you to choose a lender who will:
  
  
  1. Close the loan on time
  2. At the terms they promised.
  
  Probably one of the biggest legitimate fears a borrower has is the bait-and-switch. The lender tells the borrower just days before closing that something was uncovered in their credit that means they can't give them the rate they promised, or it will cost them additional fees to get it (or both). The Buyer feels extreme pressure to take that higher rate and/or pay the higher fees, or potentially lose the home.
  
  Make sure you choose a lender who will work diligently to process your file as completely as possible, as early as possible. I enjoy working with lenders who have full document packages to the title company 2-5 days before Settlement. Closing could be the smoothest part of your transaction, or the most terrible part of it, in large part based on which lender you choose and their attitude, work ethic and thoroughness in putting together your complete loan package as early in the process as possible.
  
  A lender who does as much work as possible as early as possible is less likely to have any "surprise" details come up that could affect the terms of your loan. They will "grill" you and require you to send them all sorts of documentation. It is better to work with a lender who gathers everything they may need up front, than one who waits until the week before closing to ask for documentation that will be necessary to complete your loan package.
  
  Ask for references and ask the references questions about these topics specifically. Don't hesitate to ask any other questions you may have about their experience working with the lender. 
  
  

• A few extras
  
  

As advocates for the Home BUYER, one of the ways we protect our clients above and beyond what most traditional agents do is by offering to help them evaluate lenders and loan options using our TOTAL Cost of the Loan^SM system.

If you have excellent credit and will be buying a $300,000-$800,000 home within 90 days and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A!

Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers. They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Many Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate that is higher than they qualify for. Others unnecessarily pay too much in fees in order to get the lowest interest rate.

Shopping for a loan does not have to be difficult or complicated. The key is to take control of the process, get organized, and make sure you do it right.

Here are some basics on ONE way to shop for a loan. Click each link for more information on each topic:

• Shop the lenders on the same day and at the same time
• Make sure all the lenders have the same facts
• Figure out the TOTAL Cost of the Loan^SM
• Don't skip the "shopping" even if you have a "friend" in the business or a "company special"
• Ask for References!
• A few extras (and feel free to ask questions here as well)
  
  If you know your credit status, lenders shouldn't need to pull it in order to quote you, so long as all lenders are quoting you based on the same credit worthiness (FICO Score, for example, if you have had it pulled for some other reason recently).
  
  You do need to realize that if you shop this way, and your credit score IS worse than what you told the lenders, quotes will need to be updated based on the new information. There are lenders who specialize in helping only "A" credit borrowers who may not even help you (or may not be able to help you at all) if your credit scores are too low. Likewise, there are lenders who may cost a bit more up front, but who are willing to spend the time and effort to help borrowers with lower credit scores either to still qualify for a loan today, or to guide you through the process of cleaning up your credit enough that you will qualify for a better loan at some point in the future. There is more work involved for lenders who are willing to offer those services, and they should be reasonably compensated for the additional work, if necessary.
  
  Cheapest is not always necessarily the best. Performance, professionalism and full service are important. Empty promises or promises that cannot be kept can actually be damaging to a Buyer under contract on a home.
  
  Yield Spread Premium - Yield Spread Premium is something many borrowers are not aware of until sitting at the Settlement table, if at all. The Yield Spread Premium is money given back to a mortgage broker in exchange for selling you a higher rate than you actually qualified for. The lender may feel they have actually earned this money because of extra work they needed to do on your loan. In my opinion, that is fine, so long as it is disclosed to the borrower up front that the lender will be charging a slightly higher rate than the borrower qualifies for in order to earn this "premium". 
  
  As a borrower, you should realize that the Yield Spread Premium can be used toward some of your other closing costs, allowing you to bring less money to the table at closing.
  
  Once again, I simply believe that the borrower should be aware of this so they can make an informed decision about whether or not they would rather pay the lender that extra cost up front, rather than be paying for it at a higher cost (via additional interest) over the next 15 or 30 years.

As advocates for the Home BUYER, one of the ways we protect our clients above and beyond what most traditional agents do is by offering to help them evaluate lenders and loan options using our TOTAL Cost of the Loan^SM system.

If you have excellent credit and will be buying a $300,000-$800,000 home within 90 days and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A!

Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers. They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Beware the Buzzwords.

I had a recent experience with my current mortgage holder that makes me wonder if consumers are accepting "deals" from banks that are not "deals" at all.

First, to be clear: I have equity in my home and I don't need a loan modification. I'm just in the market to refinance because rates are pretty good right now.

• I called to get a payoff on my existing loan.
• I got transferred to a loan retention department where they had a "special deal" for me if I stayed with them. I think it was something like 1/8 less than my current rate. AND I had to pay origination fee and other junk closing costs...
  
• I told them that their retention rate was terrible. It was 7/8 higher than another option with no points or fees.
• They told me I might qualify for a loan modification under Obama's plan.
• I told them I likely wouldn't go for that even if I did qualify, but I would listen to their sales pitch just to see how low my special government "bailout" rate could be.
• Turns out the Obama "special deal" was only 1/8 better than the lender's deal. Still about 3/4 higher than the rate I had locked in elsewhere with no points or fees. I even pointed that out and asked what was up with that? The rep just said that some people thought it was a good deal and that the program wasn't meant for everybody.

Beware. Not all of the "deals" out there are deals at all.

I just KNOW someone somewhere would be laughing all the way to the bank (pun intended) if I bought into either of those deals.

I'm not saying there aren't a select few out there who cannot benefit from some of the programs out there. But most have to live in an area where no depreciation has taken place in the past 2 years...

Some in the real estate and lending industries feel the most touted "programs" are merely publicity stunts. They wouldn't be surprised to find out some conglomeration of lenders lobbied for such programs. The main benefactors of many programs are not really homeowners, but lenders... "Just follow the money," they say. 

I certainly don't even know if the "Obama" program being pitched by my loan servicer was really tied to the "stimulus package". It could just be that lenders are trying to find the "some people" out there who will think the offer is a good deal because they used certain buzzwords in the sales pitch.

If you hear "Bailout" "Obama" or "Stimulus Package" watch out. Slow down. Do your homework.

The lender could just be trying to stimulate their own bottom line...

If you have excellent credit and will be buying a $300,000-$800,000 home in the next 1-3 months and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A! Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers.  They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

 ©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Many homeowners are tempted to refinance at interest rates that haven't been this low since the 1970s.

Well, should you? Or shouldn't you?

The general rule of thumb has been to refinance if you can save more than 1% on the rate (with no points or fees other than an appraisal, Title Insurance, and re-establishing an escrow account). You also generally want to be planning on staying in the home for at least another few years, as it will usually take a year or two to recoup those costs. (MORE, if you pay origination fee and junk fees.)

I read an interesting article today by a Dr. Steve Sjuggerud who gives contrarian wealth-building advice.

His recommendation is that "The last person you want to get your interest-rate forecast from is your real estate agent!"

I would agree. Most real estate agents (including myself) simply cannot forecast the interest rate. I highly doubt that Dr. Sjuggerud can forecast the interest rate either (with any specificity), but let's hear what advice he would give you:

• He suggests that mortgage rates could go "much lower".
• He plants seeds that suggest that he thinks you should hold out for 3% or below.
• He recommends refinancing into an Adjustable Rate Mortgage (ARM) and then switching to a 30 year fixed rate once the Fed raises the short term rate.

The only problem with his strategy, (OK, maybe not the only problem, but a real one and a big one for consumers to consider) is that if your property value declines (Sorry, but you have heard that most of the country is in a declining market, right?), you may not be able to refinance into that 30 year fixed rate mortgage...

That's exactly the problem with Arizona's real estate market right now. Property values are downfrom their peak at up to 50% in some markets. No lender will loan you 200% of what your home is worth... so very few owners can take advantage of today's rates.

As "bad" as 5% might seem to Dr. Sjuggerud, many people have 6, 7, 8 & 9% mortgages right now. Many of those people are on ARMs, just like this guys suggests! Those whose property values have declined significantly cannot refinance into today's "terrible" 5% rate.

I'm not saying that rates won't go lower... I hope they do!

But be aware that waiting to refinance as property values decline may not be the smart decision. Getting into an ARM while property values are on the decline might not be the smartest thing to do... even if rates do dip lower.

In some markets, waiting for that 3% rate might just keep you from being able to refinance your home at all. And if the rate does get down that low, why not refinance again? If you can't, you wouldn't have been able to if you had waited... so you don't really lose.

Get a good idea of what the property values are doing in your area, evaluate your current rate and the current options you have to refinance. If the rate isn't low enough for it to make sense... don't do it. If it is, why wait for something that may or may not happen?

If you are buying a home in Salt Lake City or the Surrounding Area, make sure you get an Agent on YOUR side of the transaction!

If you have excellent credit and will be buying a $300,000-$800,000 home in the next 90 days and would like an agent who will work exclusively for you, call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers.  They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

 ©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" ^TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

Suze Orman's 2009 Action Plan.

I just downloaded a copy but haven't read it yet.

You have until the 15th to download and save your own copy (courtesy of Oprah).

CLICK HERE

Happy New Year everybody!

If you have excellent credit, and will be purchasing a $400,000-$1,500,000 home in the Salt Lake City, Utah area in the next 90 days and would like to be represented by a Certified Negotiation Expert and an Exclusive Buyer's Agent (an agent who will work exclusively for you on your side of the transaction), call us at (801) 969-8989 or contact us via the link on this page.

©2008 Homebuyer Representation, Inc. - Salt Lake City, UT

"The Real Estate Agents on the Buyer's Side" ^TM

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...