If you are a buyer still looking to buy your first home (or) if you are a realtor who has a handful of First Time Homebuyers who don't have down payments - Listen To This.
When it comes to affordable housing programs, (HUD) the US Department of Housing and Urban Development gets the majority of Arizona's attention. Well, let me introduce you to HUD's distant cousin RHS. If have you have never heard anyone refer to the (RHS) Rural Housing Service, you are not alone. The RHS operates under the (USDA) U.S. Department of Agriculture, and they actively promote affordable housing programs for Rural areas.
These "Rural" areas in which this program is offered may surprise you. Anthem, Buckeye, Queen Creek, Casa Grande, Whitman, Wickenburg, Tramonto, and basically 95% of the State of Arizona outside of Maricopa County all have Rural zoned houses ready for 100% financing. This program has some limitations but let me give you some highlights...
•· Loan will cover up to 102% of appraised value (not just the sales price)
•· No minimum credit score
•· No down payment needed
•· Finance all closing costs
•· Full doc only
•· 30 year fixed (roughly 6%)
There are obviously more details to this program but no huge curveballs. Please contact me and I can send you more details on this program. The realtors I am working with on this program are already getting more business because of it.
LETS ALL CLOSE MORE DEALS!!
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
http://www.communityfirstfinancial.com/
http://www.jimcunninghamcff.blogspot.com/
http://activerain.com/jcunningham
Thursday, June 12, 2008
Don't give lenders your credit card!
In any industry you are going to experience good and bad representatives within that industry. Be it an accountant, a mechanic, or a bartender - there are great ones and there are very poor ones. The lending industry is no different. I need to share a true story I heard from a perspective client an hour ago.
I got a just call from a woman named Tanya who lives in Georgia. She found my name & number on Google from an old Active Rain blog I posted in Nov 07. (Active Rain Really Works) Anyway, she wanted my opinion on her recent phone call with Quicken Loans.
Apparently, she had called Countrywide to get approved for a FHA streamline refinance (and did) and then they quoted her a rate. Then called Quicken Loans for a 2nd opinion on a rate and the representative told her this. "Countrywide is currently being purchased by B of A and your loan could be held up for 6 to 9 weeks due to the buyout. Whatever they quoted you will never close within 30 days, so the rate they are giving will surely change before you close..." "...Also, I need your credit card number to lock your rate with our company. We can prepay the appraiser, and cover your application fee with your credit card..." "...you cannot lock your loan without a credit card number..."
Holy Cow! I cannot believe that anyone would actually say that - but I guess I am wrong. Countrywide is an exceptional lender, and I am pretty sure that Quicken even sells their loans to Countrywide. I have never heard of a underwriting or funding delay at Countywide due to their impending merger. They are very solid!
***Listen closely everyone - if any lender asks you for a credit card number to lock your loan DO NOT DO IT! I don't think that they actually use your card in any way to secure a lock for your loan - but I do think it is an act to get you to commit to them and stop shopping around. I also do not believe that Quicken Loans would condone this activity if they knew about it. It is probably a desperate act by a very Jr. Loan officer (I hope).
All you need to provide to lock a potential loan is your name, contact info, your social security number, and the subject property address. All of these items should already be covered during the application process. The bottom line is to beware if someone asks you for your credit card number to lock your loan.
Arm yourself with knowledge!! (& have a great day)
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
I got a just call from a woman named Tanya who lives in Georgia. She found my name & number on Google from an old Active Rain blog I posted in Nov 07. (Active Rain Really Works) Anyway, she wanted my opinion on her recent phone call with Quicken Loans.
Apparently, she had called Countrywide to get approved for a FHA streamline refinance (and did) and then they quoted her a rate. Then called Quicken Loans for a 2nd opinion on a rate and the representative told her this. "Countrywide is currently being purchased by B of A and your loan could be held up for 6 to 9 weeks due to the buyout. Whatever they quoted you will never close within 30 days, so the rate they are giving will surely change before you close..." "...Also, I need your credit card number to lock your rate with our company. We can prepay the appraiser, and cover your application fee with your credit card..." "...you cannot lock your loan without a credit card number..."
Holy Cow! I cannot believe that anyone would actually say that - but I guess I am wrong. Countrywide is an exceptional lender, and I am pretty sure that Quicken even sells their loans to Countrywide. I have never heard of a underwriting or funding delay at Countywide due to their impending merger. They are very solid!
***Listen closely everyone - if any lender asks you for a credit card number to lock your loan DO NOT DO IT! I don't think that they actually use your card in any way to secure a lock for your loan - but I do think it is an act to get you to commit to them and stop shopping around. I also do not believe that Quicken Loans would condone this activity if they knew about it. It is probably a desperate act by a very Jr. Loan officer (I hope).
All you need to provide to lock a potential loan is your name, contact info, your social security number, and the subject property address. All of these items should already be covered during the application process. The bottom line is to beware if someone asks you for your credit card number to lock your loan.
Arm yourself with knowledge!! (& have a great day)
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
What can I expect during a purchase transaction?
What can I expect during a purchase?
Something that is often overlooked within the home loan industry is the education of the client in the steps of doing business together. As the borrower, you should want know what the process is, and what to expect from your loan officer. This is a basic account of the events that take place during a purchase transaction when you are dealing with me.
First Contact – Every loan starts somewhere, and in the technology age it is usually a phone call or an email. Occasionally, it still happens when I meet someone in public and we exchange business cards. But it seems that phone calls, emails, and internet (blog links), are most common.
In the first contact we will introduce ourselves and talk briefly about what your basic goals are, and how soon you want to take action to get pre-approved. The first contact then ends with me saying “…the next step is the application, and that will take about 20-30 minutes. Do you want to do it now, or set a time to do it later this week?”
The Application - A full application is necessary to give you (the borrower) accurate information and loan options. There are hundreds of factors that lenders (banks) take into consideration when approving loans and these should all be identified in the application. The method I prefer, to get the most accurate information, is to interview you over the phone.
The questions that I ask are things you will usually know off the top of your head. I want your Social Security #, work history for last 2 years, information on your home, and basic financial information. As you answer the questions, I enter them directly into my computer. The next part of this phone application is when I ask permission to pull your credit report. We will then briefly review your credit report to identify strengths, weaknesses, and find any inaccuracies in it. I will also tell you your credit scores and even give you a copy of your credit report if you wish.
The last phase of the application is when we discuss your goals in more detail. Typical questions are…
• What price range have you targeted?
• What do you consider a comfortable monthly payment?
• How long do you see yourself in the house?
• Are you considering a Condo or a Townhome?
At the end of the application, I will tell you how much time I will need to produce your loan options. Usually, I need 24 hours to get back with you – but I will urge you to call me if other ideas or questions come up during this planning window. In some instances I can tell you immediately if you are approved and what your purchase ceiling is (maximum purchase price)
Loan Options – At the conclusion of my analysis, I usually come up with one (or more) purchase options that will make sense for you (the borrower) to pursue. To make things easier for you to understand, I will email one (or more) Good Faith Estimates (GFE) to you before our upcoming phone call. You will be instructed to print the Good Faith Estimates so that we can review them together over the phone. I always recommend that you print the Good Faith Estimates so you can take notes on them.
We will then review the Good Faith Estimates over the phone, and I will explain the loan program, fees, interest rates, escrows, and estimated payments until you (the borrower) are comfortable with all of the information on the Good Faith Estimate. This process could take a few minutes for some people, whereas others can take well over an hour to understand all of the concepts of this transaction. We will not move forward to the next step of the loan process until I feel you are comfortable with this material.
At this point you (the borrower) will tell me one of three things. All of which are OK.
• You like an option you see, and want to move forward by previewing houses
• You don’t like the amount you are approved for and want to hold off for now
• You would like to see more loan options on your target price
Once you have made the decision to move forward, I produce a one page letter called a Loan Status Report (LSR). This document states that you have consulted with a lender (me) and you are pre-approved to purchase a house. The letter will also have a maximum dollar value on it indicated how much money you have been approved for. This letter is then submitted with a housing offer to notify the seller that you have your money ready and you are a serious buyer.
Also, I recommend that we produce a custom LSR for each offer you submit. I am a firm believer in showing that you are only approved for the amount you are willing to offer. By submitting a LSR showing that you are approved for more money then you are offering will sometimes influence the seller to not reduce their price during negotiation because “you have the money to pay more”
Send You the Application - After we agree on a potential Loan Option, I will send you the application and it will be specific to that Loan Option. When you receive the application you will notice that it has already been filled it out with your information. As you review the application you will proofread the answers you gave me, sign it, and send it back.
There will also be a cover letter attached with the application that gives you a list of additional documentation that I will need. This list typically requests items like Pay Stubs, Tax Returns, Bank Statements, Photocopy of Your Driver License, etc… There will also be a return envelope for you to return the application and copies of the items I request. If there are any areas that are not perfectly clear we can review them at this time.
This application is basically a rough draft of your purchase transaction. All numbers will be subject to change as the purchase price will most likely be different than the estimate illustrated in the application. Also, by signing the application, you are still not committed to do business with me (the lender) it just allows me to continue to work for you in your best interest.
Looking for a House – I am not as involved in this stage as you preview houses with your realtor. However, a common question is “How long is my pre-approval good for?” Usually a LSR is good for 90 to 120 days assuming that your employment does not change during that period. Technically, your credit report is only good for 90 to 120 (depending on the lender/bank) so it needs to be re-pulled every 90 days to ensure your scores are accurate. I usually check in with you & your realtor every 3 weeks or so to get an update on your search.
You find a House – and it is time to put in an offer. Like I described earlier, I will usually write a custom LSR to go along with your offer. It is common to have multiple counter offers bounce back and forth between parties until you actually have a contract that is agreed upon, and signed by both parties. Once you have the signed contract we are in business and it is time to LOCK your loan.
Locking - This term refers to how we secure the interest rate on your new loan. The bank that your loan is going to, will allow us to “lock in” today’s interest rate that they are offering. They will guarantee that specific rate for a fixed period of time, typically 30 days. I recommend locking the rate as soon as we have a contract, and begin processing the loan.
You also have the option to Float. Floating means that you are not locking in today’s rate – rather, we will see what the market does over the next few days (or weeks) and try to get a better rate. We can do this for you in hopes of bettering your situation, but it is a gamble and there are losers.
The truth is that interest rates change every day, and even the savviest financial expert cannot tell you what is going to happen to rates. We can make educated guesses on the future of interest rates, but there are so many variables that affect the market that we can often be wrong. My advice to everyone is, “…If the loan makes sense with the rate you see today, you should lock that rate and move on.”
Usually, the close of escrow will be set roughly 30 days into the future, so your option to float will only last about 10-14 days until it is time to send you loan to underwriting. You need to commit to a rate at that time.
Inspection- You will most likely have a 10 day window (from the date the contract was signed by both parties) to have an inspection done on the subject property. The inspection is mostly for your information to let you know what problems the property might currently have (bad roof, mold, bad wiring, etc…). After you get the results from the inspection you can decide…
• You still like the property and will buy it as is
• You don’t want to pursue buying the property
• You want to negotiate with the seller to repair the property
• You want to negotiate with the seller to compensate you for the cost of repair
To complete your loan, I do not need a copy of your inspection. The only reason I am pointing it out here is because I usually recommend that we wait to have the property appraised after the inspection has taken place. Appraisals usually cost $300 - $400, and I do not want you to pay for an appraisal if it turns out that you reject the home after a poor inspection.
Processing - This is a general term in lending that can mean so many things. In this case I am referring to the internal paperwork that I request on your behalf in addition to your application. We can have dozens of items to collect for your loan, but the big ones are your Appraisal, Title Report, Home Owners Ins., Loan Payoff Amount, HOA, Flood Certification, and Property Tax info. In most cases, all of these items get collected by me without any effort on your part.
I will be asking you at this time to send me updated paystubs and bank account statements if the ones you previously submitted are over 30 days old. Once my processing is complete, and I receive updated documentation, we enter a new stage called Underwriting.
When I receive a copy of the appraisal I will contact you with the value of the property and send you a copy of the full appraisal either electronically or by mail.
Underwriting – The bank that will be servicing this loan always requests that the loan gets underwritten before they fund it. Underwriting is the process of a special person reviewing all of the information & documentation to verify that all of the loan requirements are met. This process of underwriting usually takes a few hours, however it can take several days before the underwriter can see the file due to their current volume, or where they are physically located.
During the underwriting process, the underwriter can request additional documentation from us if they have any issues with the loan. This additional list of documentation is referred to as “conditions”. In most cases, I will handle all of the conditions myself. On occasion, I may call you to get me more info on something, or to write a letter of explanation to the underwriter.
Once all of our conditions are “satisfied”, we can now move on to you signing the documents on the loan for your new home.
Signing the Documents – Here is when I call you with the good news that your loan has been approved, and to schedule a time for you to sign the final loan Documents. This usually takes place at the Title Company and will take from 30 – 90 minutes depending on how many questions you may have. Be prepared to sign your name about 100 times. If your schedule does not permit you going to the Title Company, I can have a mobile signer come to your home or office at your convenience.
This will actually be the very first time that you see the final numbers on the loan. The more important numbers would be your monthly payment and how much money you will be paying at the closing table. Up to this moment, everything you have seen in the application and the good faith estimate are truly estimates. It is common for you to sign the document several days before the close of escrow.
Funding & Recording - Just because you have now signed the documents, does not mean everything is finished. There are two more elements that take place before you get your keys. You need the loan to Fund and for title to Record before you take possession. These are things that the Lender and the Title Officer do for you. Generally, the loan will fund and the title will record on the close of escrow date. The close of escrow date should be on a weekday, and you should only assume that you will get the keys sometime before 5pm on that day.
• Funding is the act of receiving a wire of money from the bank to the Title Company. All wires are routed through the Federal Reserve so they can take about 4 hours to complete. In most cases the Loan will fund around 12:00pm on the close of escrow.
• The actual recording of title is a County function (by County employees) and it is just best to assume that your loan will not record until 4:59pm on the close of escrow.
Timeline – A typical purchase will have a 30 day escrow period in which all loan functions (and the inspection) are to be completed. Sometimes a longer escrow period is called for because it helps the buyer or seller coordinate a move day (i.e. 45 days or 60 days).
Sometimes there is a desire to have a shorter close of escrow due to special circumstances. Please note that it will still usually take about 15 business days to complete your loan if everyone rushes.
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
Something that is often overlooked within the home loan industry is the education of the client in the steps of doing business together. As the borrower, you should want know what the process is, and what to expect from your loan officer. This is a basic account of the events that take place during a purchase transaction when you are dealing with me.
First Contact – Every loan starts somewhere, and in the technology age it is usually a phone call or an email. Occasionally, it still happens when I meet someone in public and we exchange business cards. But it seems that phone calls, emails, and internet (blog links), are most common.
In the first contact we will introduce ourselves and talk briefly about what your basic goals are, and how soon you want to take action to get pre-approved. The first contact then ends with me saying “…the next step is the application, and that will take about 20-30 minutes. Do you want to do it now, or set a time to do it later this week?”
The Application - A full application is necessary to give you (the borrower) accurate information and loan options. There are hundreds of factors that lenders (banks) take into consideration when approving loans and these should all be identified in the application. The method I prefer, to get the most accurate information, is to interview you over the phone.
The questions that I ask are things you will usually know off the top of your head. I want your Social Security #, work history for last 2 years, information on your home, and basic financial information. As you answer the questions, I enter them directly into my computer. The next part of this phone application is when I ask permission to pull your credit report. We will then briefly review your credit report to identify strengths, weaknesses, and find any inaccuracies in it. I will also tell you your credit scores and even give you a copy of your credit report if you wish.
The last phase of the application is when we discuss your goals in more detail. Typical questions are…
• What price range have you targeted?
• What do you consider a comfortable monthly payment?
• How long do you see yourself in the house?
• Are you considering a Condo or a Townhome?
At the end of the application, I will tell you how much time I will need to produce your loan options. Usually, I need 24 hours to get back with you – but I will urge you to call me if other ideas or questions come up during this planning window. In some instances I can tell you immediately if you are approved and what your purchase ceiling is (maximum purchase price)
Loan Options – At the conclusion of my analysis, I usually come up with one (or more) purchase options that will make sense for you (the borrower) to pursue. To make things easier for you to understand, I will email one (or more) Good Faith Estimates (GFE) to you before our upcoming phone call. You will be instructed to print the Good Faith Estimates so that we can review them together over the phone. I always recommend that you print the Good Faith Estimates so you can take notes on them.
We will then review the Good Faith Estimates over the phone, and I will explain the loan program, fees, interest rates, escrows, and estimated payments until you (the borrower) are comfortable with all of the information on the Good Faith Estimate. This process could take a few minutes for some people, whereas others can take well over an hour to understand all of the concepts of this transaction. We will not move forward to the next step of the loan process until I feel you are comfortable with this material.
At this point you (the borrower) will tell me one of three things. All of which are OK.
• You like an option you see, and want to move forward by previewing houses
• You don’t like the amount you are approved for and want to hold off for now
• You would like to see more loan options on your target price
Once you have made the decision to move forward, I produce a one page letter called a Loan Status Report (LSR). This document states that you have consulted with a lender (me) and you are pre-approved to purchase a house. The letter will also have a maximum dollar value on it indicated how much money you have been approved for. This letter is then submitted with a housing offer to notify the seller that you have your money ready and you are a serious buyer.
Also, I recommend that we produce a custom LSR for each offer you submit. I am a firm believer in showing that you are only approved for the amount you are willing to offer. By submitting a LSR showing that you are approved for more money then you are offering will sometimes influence the seller to not reduce their price during negotiation because “you have the money to pay more”
Send You the Application - After we agree on a potential Loan Option, I will send you the application and it will be specific to that Loan Option. When you receive the application you will notice that it has already been filled it out with your information. As you review the application you will proofread the answers you gave me, sign it, and send it back.
There will also be a cover letter attached with the application that gives you a list of additional documentation that I will need. This list typically requests items like Pay Stubs, Tax Returns, Bank Statements, Photocopy of Your Driver License, etc… There will also be a return envelope for you to return the application and copies of the items I request. If there are any areas that are not perfectly clear we can review them at this time.
This application is basically a rough draft of your purchase transaction. All numbers will be subject to change as the purchase price will most likely be different than the estimate illustrated in the application. Also, by signing the application, you are still not committed to do business with me (the lender) it just allows me to continue to work for you in your best interest.
Looking for a House – I am not as involved in this stage as you preview houses with your realtor. However, a common question is “How long is my pre-approval good for?” Usually a LSR is good for 90 to 120 days assuming that your employment does not change during that period. Technically, your credit report is only good for 90 to 120 (depending on the lender/bank) so it needs to be re-pulled every 90 days to ensure your scores are accurate. I usually check in with you & your realtor every 3 weeks or so to get an update on your search.
You find a House – and it is time to put in an offer. Like I described earlier, I will usually write a custom LSR to go along with your offer. It is common to have multiple counter offers bounce back and forth between parties until you actually have a contract that is agreed upon, and signed by both parties. Once you have the signed contract we are in business and it is time to LOCK your loan.
Locking - This term refers to how we secure the interest rate on your new loan. The bank that your loan is going to, will allow us to “lock in” today’s interest rate that they are offering. They will guarantee that specific rate for a fixed period of time, typically 30 days. I recommend locking the rate as soon as we have a contract, and begin processing the loan.
You also have the option to Float. Floating means that you are not locking in today’s rate – rather, we will see what the market does over the next few days (or weeks) and try to get a better rate. We can do this for you in hopes of bettering your situation, but it is a gamble and there are losers.
The truth is that interest rates change every day, and even the savviest financial expert cannot tell you what is going to happen to rates. We can make educated guesses on the future of interest rates, but there are so many variables that affect the market that we can often be wrong. My advice to everyone is, “…If the loan makes sense with the rate you see today, you should lock that rate and move on.”
Usually, the close of escrow will be set roughly 30 days into the future, so your option to float will only last about 10-14 days until it is time to send you loan to underwriting. You need to commit to a rate at that time.
Inspection- You will most likely have a 10 day window (from the date the contract was signed by both parties) to have an inspection done on the subject property. The inspection is mostly for your information to let you know what problems the property might currently have (bad roof, mold, bad wiring, etc…). After you get the results from the inspection you can decide…
• You still like the property and will buy it as is
• You don’t want to pursue buying the property
• You want to negotiate with the seller to repair the property
• You want to negotiate with the seller to compensate you for the cost of repair
To complete your loan, I do not need a copy of your inspection. The only reason I am pointing it out here is because I usually recommend that we wait to have the property appraised after the inspection has taken place. Appraisals usually cost $300 - $400, and I do not want you to pay for an appraisal if it turns out that you reject the home after a poor inspection.
Processing - This is a general term in lending that can mean so many things. In this case I am referring to the internal paperwork that I request on your behalf in addition to your application. We can have dozens of items to collect for your loan, but the big ones are your Appraisal, Title Report, Home Owners Ins., Loan Payoff Amount, HOA, Flood Certification, and Property Tax info. In most cases, all of these items get collected by me without any effort on your part.
I will be asking you at this time to send me updated paystubs and bank account statements if the ones you previously submitted are over 30 days old. Once my processing is complete, and I receive updated documentation, we enter a new stage called Underwriting.
When I receive a copy of the appraisal I will contact you with the value of the property and send you a copy of the full appraisal either electronically or by mail.
Underwriting – The bank that will be servicing this loan always requests that the loan gets underwritten before they fund it. Underwriting is the process of a special person reviewing all of the information & documentation to verify that all of the loan requirements are met. This process of underwriting usually takes a few hours, however it can take several days before the underwriter can see the file due to their current volume, or where they are physically located.
During the underwriting process, the underwriter can request additional documentation from us if they have any issues with the loan. This additional list of documentation is referred to as “conditions”. In most cases, I will handle all of the conditions myself. On occasion, I may call you to get me more info on something, or to write a letter of explanation to the underwriter.
Once all of our conditions are “satisfied”, we can now move on to you signing the documents on the loan for your new home.
Signing the Documents – Here is when I call you with the good news that your loan has been approved, and to schedule a time for you to sign the final loan Documents. This usually takes place at the Title Company and will take from 30 – 90 minutes depending on how many questions you may have. Be prepared to sign your name about 100 times. If your schedule does not permit you going to the Title Company, I can have a mobile signer come to your home or office at your convenience.
This will actually be the very first time that you see the final numbers on the loan. The more important numbers would be your monthly payment and how much money you will be paying at the closing table. Up to this moment, everything you have seen in the application and the good faith estimate are truly estimates. It is common for you to sign the document several days before the close of escrow.
Funding & Recording - Just because you have now signed the documents, does not mean everything is finished. There are two more elements that take place before you get your keys. You need the loan to Fund and for title to Record before you take possession. These are things that the Lender and the Title Officer do for you. Generally, the loan will fund and the title will record on the close of escrow date. The close of escrow date should be on a weekday, and you should only assume that you will get the keys sometime before 5pm on that day.
• Funding is the act of receiving a wire of money from the bank to the Title Company. All wires are routed through the Federal Reserve so they can take about 4 hours to complete. In most cases the Loan will fund around 12:00pm on the close of escrow.
• The actual recording of title is a County function (by County employees) and it is just best to assume that your loan will not record until 4:59pm on the close of escrow.
Timeline – A typical purchase will have a 30 day escrow period in which all loan functions (and the inspection) are to be completed. Sometimes a longer escrow period is called for because it helps the buyer or seller coordinate a move day (i.e. 45 days or 60 days).
Sometimes there is a desire to have a shorter close of escrow due to special circumstances. Please note that it will still usually take about 15 business days to complete your loan if everyone rushes.
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
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
Thursday, March 27, 2008
100% Financing still available
100% Financing Still Available
If you are a buyer still looking to buy your first home (or) if you are a realtor who has a handful of First Time Homebuyers who don’t have down payments – Listen To This.
When it comes to affordable housing programs, (HUD) the US Department of Housing and Urban Development gets the majority of Arizona’s attention. Well, let me introduce you to HUD’s distant cousin RHS. If have you have never heard anyone refer to the (RHS) Rural Housing Service, you are not alone. The RHS operates under the (USDA) U.S. Department of Agriculture, and they actively promote affordable housing programs for Rural areas.
These “Rural” areas in which this program is offered may surprise you. Anthem, Buckeye, Queen Creek, Casa Grande, Whitman, Wickenburg, Tramonto, and basically 95% of the State of Arizona outside of Maricopa County all have Rural zoned houses ready for 100% financing. This program has some limitations but let me give you some highlights…
• Loan will cover up to 102% of appraised value (not just the sales price)
• No minimum credit score
• No down payment needed
• Finance all closing costs
• Full doc only
• 30 year fixed (roughly 6%)
There are obviously more details to this program but no huge curveballs. Please contact me and I can send you more details on this program. The realtors I am working with on this program are already getting more business because of it.
LETS ALL CLOSE MORE DEALS!!
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
If you are a buyer still looking to buy your first home (or) if you are a realtor who has a handful of First Time Homebuyers who don’t have down payments – Listen To This.
When it comes to affordable housing programs, (HUD) the US Department of Housing and Urban Development gets the majority of Arizona’s attention. Well, let me introduce you to HUD’s distant cousin RHS. If have you have never heard anyone refer to the (RHS) Rural Housing Service, you are not alone. The RHS operates under the (USDA) U.S. Department of Agriculture, and they actively promote affordable housing programs for Rural areas.
These “Rural” areas in which this program is offered may surprise you. Anthem, Buckeye, Queen Creek, Casa Grande, Whitman, Wickenburg, Tramonto, and basically 95% of the State of Arizona outside of Maricopa County all have Rural zoned houses ready for 100% financing. This program has some limitations but let me give you some highlights…
• Loan will cover up to 102% of appraised value (not just the sales price)
• No minimum credit score
• No down payment needed
• Finance all closing costs
• Full doc only
• 30 year fixed (roughly 6%)
There are obviously more details to this program but no huge curveballs. Please contact me and I can send you more details on this program. The realtors I am working with on this program are already getting more business because of it.
LETS ALL CLOSE MORE DEALS!!
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
Tuesday, January 22, 2008
What did todays rate cut mean??
Today’s prime rate cut of .75% means that mortgage rates are going to continue to drop even lower,.. Right? Not Necessarily!!!
As much as I hope that rates continue to drop for homeowners, this rate cut does not mean that the 30 year rates will go down immediately. Rates have actually dropped significantly over the last 3 weeks on the assumption that the Feds were going to drop the Prime rate at least .50% (and some speculated that it might be as high as 1%). Had the Feds only dropped the rate .25% today, rates would actually have gone up today due to the over speculation from the previous weeks.
Please note that 30-year fixed rates correlate directly to long term bond yields, not the Prime rate. Thus, the outlook for the future of our economy is the most important factor in what 30 year rates do today,.. And unfortunately that is very subjective.
SO WHAT DOES THAT MEAN TO YOU??
The good news is that rates are as good as they have ever been in the last 6 years. If you need to refinance out of an ARM do it now. In fact, my advice for the last 6 years has been pretty consistent, regardless of the market. IF IT MAKES SENSE TO REFINANCE OR PURCHASE TODAY – DO IT. These markets are very difficult to predict, and loan programs are changing (for the worse) every day. I would rather you Ieave .125% on the table by refinancing now, than losing .25% by waiting too long, or worse… losing your ability to refinance.
Arm yourself with knowledge!
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
As much as I hope that rates continue to drop for homeowners, this rate cut does not mean that the 30 year rates will go down immediately. Rates have actually dropped significantly over the last 3 weeks on the assumption that the Feds were going to drop the Prime rate at least .50% (and some speculated that it might be as high as 1%). Had the Feds only dropped the rate .25% today, rates would actually have gone up today due to the over speculation from the previous weeks.
Please note that 30-year fixed rates correlate directly to long term bond yields, not the Prime rate. Thus, the outlook for the future of our economy is the most important factor in what 30 year rates do today,.. And unfortunately that is very subjective.
SO WHAT DOES THAT MEAN TO YOU??
The good news is that rates are as good as they have ever been in the last 6 years. If you need to refinance out of an ARM do it now. In fact, my advice for the last 6 years has been pretty consistent, regardless of the market. IF IT MAKES SENSE TO REFINANCE OR PURCHASE TODAY – DO IT. These markets are very difficult to predict, and loan programs are changing (for the worse) every day. I would rather you Ieave .125% on the table by refinancing now, than losing .25% by waiting too long, or worse… losing your ability to refinance.
Arm yourself with knowledge!
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
The Next Refinance Boom is Here
THE GOOD NEWS ABOUT RATES!!
Despite all of the recent well reported real estate related woes, I have great news for everybody. RATES ARE DOWN! And truth be told, rates are actually way down. Rates are currently better than anything we have seen in the last 3 years, and by the time you read this, they could be at an all time low for the last 10+ years!
The reason they are so good today is really difficult to pinpoint. There are really dozens of reasons, but my market advisors are saying that these low rates are influenced from the speculation that the Fed will continue to lower prime (which is a good guess).
Here are my rates on Jan 15th. These rates assume that you are a perfect borrower*. If you are not that perfect borrower – rates are still very good.
30 year fixed 5.625% (no points)
15 year fixed 5.000% (no points)
5 year ARM 5.375% (interest only) (no points)
5 year ARM 4.875% (interest only) – (paying one point)
Please give me a call (or email) to explore if this is a good time to refinance. Aside from the many that will refinance during this rate spike, this is a fantastic time to purchase investment property.
All Best!!
Jim
*Perfect borrower is generally someone with a 700+ credit score and can document their income (tax returns/paystubs) and reserves (bank statement/401K). Also, the perfect borrower will have a 20%+ equity position in their home.
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
http://www.communityfirstfinancial.com/
http://www.jimcunninghamcff.blogspot.com/
http://activerain.com/jcunningham
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