JIM CUNNINGHAM

Nova Home Loans
Senior Loan Officer
480-614-6413
jim@novahomeloans.com
Showing posts with label Mortgage Newsletter. Show all posts
Showing posts with label Mortgage Newsletter. Show all posts

Thursday, June 18, 2009

Jim's Soap Box (June 09)

JIM'S SOAP BOX

Real Estate Newsletter June 2009


SUMMER IS HERE!!

I really thought we would all be cooked by early June, but the Phoenix weather has been outstanding. It must be the reason for the record number of sales in May. I will admit that I have been a housing optimist over the past couple years, and some accuse me of howling at the moon. However, in this edition of the soapbox, I actually have some statistics to maybe get excited about.

Also, I would like to welcome all of my Facebook contacts that I have recently included to the Soap Box mailing list. My thought is that if I can see what you've had for breakfast - you can read about my industry once a month. (facebook joke). Enjoy!!

The goal of my newsletter is to provide educational material mixed with Jim's unsolicited yet fascinating opinion on the Arizona housing market and real estate ownership in general. If you would like me to address a specific topic in the future, please email it to me and I will respond in the following newsletter.


How Did Wall Street Go Bust?

As a mortgage professional and educator, I have read countless pages on how the credit crisis evolved. Frankly, most of the things I read were position pieces that pointed the finger of blame at a specific industry or political party. Had I seen the following 10 minute video sooner, it would have saved weeks of reading.

So - if you don't have a full grasp on what happened to mortgage financing, and why Wall Street banks went bust - this is about the simplest explanation ever! ENJOY!!


What's Your Rate, Dude?

Here is a pet peeve of mine that I need to share with you in regards to interest rates. On occasion, I will have a potential client call me, and in their first breath of air, ask me what my rates are today. When I begin to explain that I need to know more about their situation before I can even begin to quote rates, they sometimes get a little frisky, and accuse me of not disclosing my rates upfront. Then the conversation spins into a dissartation by me on the dozens of factors that effect interest rates, and the potential client who now has tunnel vision on the rate I eventually quote him. This is not a desired scenario for a first contact with a new client.

These people are called rate shoppers and they usually make uninformed decisions on who their lender should be. Truth be told, there are dozens of factors that can effect your interest rate and they need to be explored before anyone can start quoting rates.

Look at the list below of 26 different criteria that affect your mortgage rate. How can anyone quote you an interest rate you can trust without a thorough knowledge of your unique financial situation?

1. Loan Amount 2. LTV 3. CLTV 4. Credit Score 5. Credit History 6. Escrow Preference 7. Closing Date 8. Loan Type 9. Property Type 10. Occupancy Type 11. Residency 12. Available Assets 13. Asset Seasoning 14. Co-borrowers 15. Debt Ratio 16. Housing Ratio 17. Improvements Needed 18. Employment Type 19. Employment History 20. Documentation Type 21. Paying Points 22. Length of Loan 23. Relocation 24. Seller Contributions 25. Gifts 26. Cash-out

My friends, please beware of anyone who quotes you an interest rate over the phone or the Internet without asking anything about you, your family, your finances or your lifestyle.


May Residential Sales - Highest Number Since August 2005!

May residential sales for Greater Phoenix were 9,290. The last time there were more residential sales was 45 months ago in August 2005 when sales were 10,031. I am pretty sure it was Mark Twain who said " there are lies..., there are damn lies..., & then there are statistics." As much as I agree with this philosophy, these numbers are pretty impressive. Even though 76% of the homes purchased in May 09 were either bank owned or short-sales, we are reducing our inventory at a record pace.

Feel free to contact me by phone or email for any purchase, refinance, or general mortgage advice.

Jim Cunningham
Sr. Loan Officer
NOVA Home Loans
8800 E Raintree Dr. #180
Scottsdale, AZ 85260
480 614-6413 office
602 434-8261 cell
jim@novahomeloans.com

Tuesday, May 13, 2008

Jim's Mortgage Newsletter May 08

Jim’s Soapbox

(Arizona Real Estate Newsletter - May 08)

My wife Madalyn often says to me “…when one doors closes, another door is opened”. I have found that is a great way to describe today’s Real Estate market here in Metro Phoenix.

A common media-driven perception today is that the Phoenix housing market is far more risky than it has ever been before. I find that to be a funny concept for the media to promote, because in really isn’t accurate. Actually, the risky time to buy real estate in Phoenix was that period of time between the unnatural value boom, and the inevitable drop off. Metro Phoenix had a very stable (appreciating) market for 10+ years leading into the boom, and we have almost returned to the point where property value would have appreciated to without the peak and valley of ’05 to ‘07.

I am not going to argue that everything is roses & rainbows within the housing market right now. However, I would like you to take notice that there are so many other ways to take advantage of Arizona Real Estate, that regardless of the condition of our current market, it always the perfect time to do something.

I would like to share some Real Estate projects and concepts that are booming today. The housing market is not lousy, it is simply different.

· Rehabs
· First Time Purchase
· Investment Purchase
· Home Equity Lines of Credit


Notice that I am not suggesting in any of these concepts that you sell any of your property. You should never sell real estate in a down market unless you really have to. I believe we are almost to the end of the depreciating portion of the cycle – hold on to your property.

REHABS

“Rehab” is a buzz term in our industry for any renovation you plan on doing to an existing home. If you want to add a new bedroom, expand your bathroom, build a guest house, or enclose your patio – you are basically talking about a rehab project.

Today is a great time to renovate your home. Compared to 18 months ago, rehabs are much cheaper per square foot and they get finished in a fraction of the time. In 2006, it could take up to 60 days to get the concrete delivered – not to mention the delays in framing due to the lumber shortage. I am not in the construction industry (I am a lender), but I can attest that projects that took 9 months to complete in 2006, now take about 2 months. The summertime is also a great time to rehab your house in metro Phoenix, because the delays from rain & humid weather are pretty hard to come by.

There are several ways to finance your Rehab project depending how big your project is. Sometimes drawing on a new (or existing) Home Equity Line of Credit is the best way to go for short term money. Also, “one-time” construction loans are a popular option for large scale projects. Either way, you can call me with questions because there are special programs for Rehabs to keep your closing costs to a minimum.

Here is the name of a Rehab Specialist I trust, and have worked with for several years. His name is Marten Niner. His cell phone is (602) 739-7073 & his email address is justintimecontracors@yahoo.com. Martin can both help you with the design of your project and give estimates. He is a good first step in this process.

There are many other great Rehab companies here in Phoenix, just be sure to ask for references before you commit.

PURCHASE YOUR FIRST HOME

In case you haven’t followed the housing trend this year I have great news,… it is a buyer’s market!! The next 6 months, preceding the election, could mark the low tide of property values in Maricopa County. I could not think of a better time to buy than when property is at its lowest. Buy low and Sell high are still pretty good words to live by! Take advantage of distressed property prices and have the seller pay for 100% of your closing costs. The last 8 purchases I financed had the seller paying every penny of the closing costs.

Also, 100% financing is still around. I have FHA programs with Down Payment Assistance (i.e.Nehemiah and Ameridream) that let you purchase with only $500 out of pocket. I have the 102% Rural Housing program if you would like to purchase a home in Anthem, Queen Creek or Buckeye (for $0 out of pocket). If you are not sure if you qualify, call me & I can let you know the next day.

INVESTMENT PURCHASES

Again, in case you haven’t followed the housing trend this year I have great news,…IT IS A BUYER’S MARKET!! This is probably the best time to get an investment property since the summer of 2001! A common complaint that I hear today is the inability to do 100% financing on investment homes. Well, that statement is very true; you are going to need 10% - 20% down to buy an investment property. However, you can actually purchase a home that has a positive “cash flow” now. You can find a pre-foreclosure property with $50K in equity the day you buy it. (You won’t be able to get to that 50K equity out right away, but you could leverage it to your favor in about 366 days J).

I also have a great Hard Money Lender that will allow you to purchase an investment property (that requires a rehab) and they will lend you 90% of the whole project (including the cost of the rehab). So, for 10% down you can buy a Fixer Upper, and finance the repairs all at the same time. I quoted them out last week, and they were charging only 8.875% and 1.5 points. That is a smoking deal!

HELOCs

Even though a lot of banks have run away from selling this type of product, there are still a few banks that do them very well. The advantage of the Home Equity Line of Credit has been two fold. There is the advantage of the low rate and the flexibility to use it. Today the Prime rate is 5% & I have HELOCs with rate as low as Prime -1%. That means you can borrow at a net rate of 4%. I am confident that 4% interest rate beats most credit cards, furniture loans, pool loans, fixed 2nd mortgages, and car loans. It is the most powerful debt consolidation tool available. next to inheritance

The ability to leverage a HELOC to 100% to the value of your home has basically disappeared, but 85% is still available. If you have $10,000 in revolving debt and Equity in your home you should think about consolidating.

I am looking towards a great summer both socially and professionally. If you have any questions on this material, or just want to say “Howdy”, feel free to give me a call or an email. The line about inheritance was a joke – I am trying to keep you on your toes.

All Best!!
Jim

JIM CUNNINGHAM
Community First Financial, LLC
7575 E Redfield Rd Suite 235
Scottsdale, AZ 85260
480-305-8900 ext 305 - office
480-907-2435 - fax
602-434-8261 - cell
jcunningham@communityfirstfinancial.com
www.communityfirstfinancial.com
www.jimcunninghamcff.blogspot.com
http://activerain.com/jcunningham