The Sunstreet Mortgage Team will be at the SEVRAR Expo 2010 this year.  If you are a member and will be attending this year, please stop by and say hello.  We will be in Booth #32.

Gary Miljour- Mortgage Lending for Tempe Arizona

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I had a real estate agent call me the other day that I did not know.  She was calling around looking for a lender to place a loan for her borrower.  She specifically asked me if my company can offer her client a Fannie Mae HomePath loan. I told her yes, got out my yellow steno pad and started to ask her certain questions to uncover the best loan option for her  borrower.  In some states the new lending laws are pretty clear that a loan originator must provide a borrower the best lending option based on their situation.  It just happens that Fannie Mae HomePath options do not usually offer the best terms in comparison to FHA options except in the case of 2nd homes and investment loans.  So I asked her straight up, “Why does your client want to use Fannie Mae HomePath?“, she says because her client’s wife is short selling her home (on her credit only) and this is the only way that we can do a loan is by placing it in the husbands name only.  Now on the surface this seems correct.  Go conventional, because you do not have to use the other spouses credit.  So I asked her further if the husband was living with his wife in the home that is being short sold.  She said “Yes“.  I also asked her if the wife going to be living with him in the new home once the short sale is finalized.  She answered “Yes“.  So I explained to her that even though conventional loan guidelines do allow a buyer to purchase a home in his own credit, he did live with her a had a communal responsibility for the debt that is being sold short.  Most Mortgage Investors treat this like a buy and bail and just are not comfortable with granting the new loan.  I explained further that the loan could be done, but my company (Sunstreet Mortgage, LLC) did not have an investor who would buy the loan from us.  The guidelines basically say “Yes” but the investor says “No“.  I told her politely that she would need to seek out another lender to help her with the loan.  This is when the conversation when wrong:
She says “Don’t tell the bank about the wife’s situation.“.  Beyond the fact that the investor would of figured it out, I said to her that I cannot leave out materials facts about the borrower’s situation for a loan decision. This is called “Mortgage Fraud”

Wikipedia defines Mortgage Fraud-as “a term used to describe a broad variety of criminal actions where the intent is to materially misrepresent or omit information on a mortgage loan  application to obtain a loan or to obtain a larger loan than would have been obtained had the lender or borrower known the truth. In federal courts, mortgage fraud is prosecuted as wire fraud, bank fraud, mail fraud and money laundering, with penalties of up to thirty years imprisonment. “

By leaving out the facts that the husband is married to a wife that is short selling a home in her name only is leaving out material information that could change the outcome of a loan decision (LOAN FRAUD!!).

I am still not sure if the real estate agent understood this.  A lender cannot leave out the facts to grant a good decision for a client.  Now if all information is presented to a lender and the bank that is making that loan grants a positive decision to take on the risk, then this is NOT loan fraud.  Understanding the difference is key.

Gary Miljour- Mortgage Lending for Tempe Arizona

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The Arizona Housing Financing Authority is back at it again implementing new first-time home buyer programs to assist
with the finance arm of a first home purchase.

Based on the right situation, the Arizona Mortgage Revenue Bond, can be a great niche product to help with that certain
homeowners who is needing some financial help with purchasing a home.  Even though their bond rate (4.99%) is not as
competitive as market rate, some of the benefits do outweigh the drawbacks.  Here are some of the criteria.

AZ Mortgage Revenue Bond Highlights
Down Payment assistance available up to 5% of the purchase price.  This can be used for down payment, and or closing costs
or a combination of both.

This is probably the biggest advantage to this program.  A secondary advantage is if you buy a home in a specific target area
the income is less restrictive.

Here are some of the drawbacks.  This program cannot be used in Pima or Maricopa County.  So it is primarily a great tool
to lend in rural housing communities.  The down payment assistance is not completely forgiven in the first 5 years.  It
drops 20% each year.  Rate is not as attractive.

Here are the basic requirements:  Product is used in conjunction with an FHA, VA and RD insured 30 year fixed rate products.

*Must be a first time homebuyer, plan to occupy as primary residence and not had prior ownership in the last three years
(certain census tracts located in various counties do not require applicants to be first time homebuyers while offering
higher income and sale price limits.)
* Borrower must contribute a minimum of $1,000.00 of personal funds
* Borrower cannot get any cash back or debt consolidation paid
* Borrower required to complete a home buyer education class
* Must meet program’s purchase price and income limits
* House payment/total payment to income ratios cannot exceed 31/43%
* Credit score for all borrowers must be at a 620 or above
* Independent professional inspection to be done on the property and obtain a home warranty
*Again this product will be a niche for that certain client.  Also understand that only 22 lenders in the entire state of
Arizona is set up to offer this product.  I like to share this because so many think there are not options anymore.  I
say find a mortgage lender who understands real options and will work with them.

Gary Miljour- Mortgage Lending for Tempe Arizona

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Back in August 2008 I wrote a post (And You Really Thought You Can’t Get a Home with $100.00) about FHA HUD homes
having a special deal on certain properties that allowed only $100.00 down.  Well Folks FHA and HUD have decided to cancel this
program for the time being. The marketing company for Hud homes is Arizona is www.mcbreo.com.  They announced on
July 19, 2010 the incentive Expiration for Arizona and Nevada.

from mcbreo website: ” HUD’s $100 Down payment initiative will expire on July 31, 2010.  The $100 down payment was
for owner occupants (Any individual who purchases a HUD home as their primary residence for at least 12 months after
closing and who has not purchased a home from HUD as an owner occupant in the past twenty four months) purchasing a
HUD Home with FHA financing. This incentive will continue to be eligible for all contracts signed by seller by
July 31, 2010.  Contracts signed after the July 31,2010 deadline will not be eligible for the $100 Down payment incentive.”

This program was a good help to many buyers, and I am sad to see it disappear.  It seems like there are fewer and fewer
options for homeowners.

Gary Miljour- Mortgage Lending for Tempe Arizona

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I know so many people that still do not realize that their ARM (adjustable rate mortgage) might not be broken.  I wrote about this way back in March 2008. Is your ARM (Adjustable Rate Mortgage) Really Broken? Most homeowners always assume that if they have an adjustable rate mortgage that their payment and interest rate is going to go upward.  Well due to rates being so low, this is actually the opposite.  If you are truly not sure if you have a broken “ARM”, please feel free to contact me and I will be happy to review your paperwork and help you find out.  The last client who thought they had a broken “ARM” saved $550.00 a month when the interest rate when down. 

Gary Miljour- Mortgage Lending for Tempe Arizona

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With interest rates dipping as low as 4.25% to 4.75% on a 30 year fixed, the tax credit gone should not make much of a difference in the minds of home-buyers. However, that has not been the case.  So far the mortgage application volumes since the tax credit ending has been very low.  Most borrowers have not yet realized that due to the low interest rates that the long term benefits of owning a home is more beneficial today than the customer who bought their home 3 to 6 months ago.  The reason for this phenomena is due to interest rates creeping down to all time low levels between 4% to 5%.  Most homeowners who took advantage of the first time home-buyer tax credit paid for mortgage rates in the ranges of 5.25% to 5.75% range.

So let me give you 2 great examples using a $90,000.00 loan and a $180,000.00 loan of the benefits today buying a home versus the tax credit of yesteryear.

Example #1:

First Time Home-buyer bought a $100,000.00 home and put 10% down during the first time home-buyer tax credit.
The loan was for $90,000.00 at a rate of 5.5%.  That Principal and Interest payment is $511.01.  This borrower earned the $8,000.00 tax credit.

vs.

The same First Time Home-buyer bought a home today at $100,000.00 and put 10% down.  The loan was for $90,000.00 but now the estimated rate is 4.75%.  That Principal and Interest payment is $469.08.  The borrower did not earn $8,000.00 but
is now saving $41.93 a month.  over 360 payment or 30 years, this total:  360 payments X 41.93 =  $15094.80 in payment
savings.

This is basically 2 times more beneficial than the first time home-buyer tax credit.

Example #2:

First Time Home-buyer bought a $200,000.00 home and put 10% down during the first time home-buyer tax credit.  The loan was for $180,000.00 at a rate of 5.5%.  That Principal and Interest payment is $$1022.02. This borrower earned the $8,000.00 tax credit.

vs.

The same First Time Home-buyer bought a home today at $200,000.00 and put 10% down.  The loan was for $180,000.00 but now the estimated rate is 4.75%.  That Principal and Interest payment is $938.97.  The borrower did not earn the $8,000.00 but is now saving $83.05 a month.  Over 360 payments or 30 years, this total:  360 payments X $83.05 = $29,898.00 in payment savings.

This is basically 4 times more beneficial than the first time home-buyer tax credit.

The hard part is predicting the interest rates, and these rates will not stay this low forever. If you felt you missed out on the tax credit, quit kicking yourself.  You can still get that home and get the same benefit.  Yes it is not instant money, but it also does not come with tax consequences if you sell your home early (please seek CPA about that).

The reason I shared this is because I feel we all got sucked into believing all the gimmicks and tax credits as a sole reason to buy a home. The real reasons are right in front of you.  With prices and interest rates at all time lows now is the time to act.

Gary Miljour- Mortgage Lending for Tempe Arizona

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I am sure you have heard about this by now, but if you have not let me share again.

Effective July 1, 2010 all Mortgage Bankers and Mortgage Brokers in the State of Arizona will require their loan originators to be licensed.

Now based on an exemption in the laws the big Interstate Chartered Banks do not require their loan originator working for a big bank such as Chase, Wells Fargo and Bank of America to be licensed.

Now I am not trying to make this into a David versus Goliath story, but I am trying to emphasize the huge differences and implications this change will have on the consumer.

Here is a chart to show the differences:

So I think the choice is clear.  The funny part is the cost for the service based on rates and fees are about the same.  The best analogy I can use is having a choice of working with a CPA vs. Turbo Tax but paying the same price.

Gary Miljour- Mortgage Lending for Tempe Arizona

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Please join us for an OPEN HOUSE! We are celebrating the opening of the Mesa branch of Sunstreet Mortgage, LLC. Here are the details:

When: June 9th, 4:00 pm – 7:00 pm

Where: Sunstreet Mortgage, LLC Mesa

1910 S Stapley Dr, Suite 202, Mesa, AZ 85204

Why: So you can check out our new office!

Food and drinks will be provided, mark you calendars!

Gary Miljour- Mortgage Lending for Tempe Arizona

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Gary Miljour- Mortgage Lending for Tempe Arizona

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Gary Miljour Licensed Loan Originator NMLS#207208

This old adage sometimes makes you think of the chicken or the egg and which came first. Those type of philosophical debates are fun for the ages but when it comes time to figure out if renting a home is more advantegeous to owning a home, there are many personal factors involved in the decision.

I will be the first to state that NOT everyone out there should be a homeowner. Homeownshership takes a lot of responsibility, and sometimes we are just not ready to make that committment. But when the time feels right and the decision has been made that you want to explore homeownership, then at that point, you will need to know if owning a home has a bigger benefit versus renting.

Now I could show some slick charts to show you everytime that home ownership is a better place to park your housing dollar versus renting, but truly until we know your unique circumstance for me to say this is just not true.

I can give you quite a few reasons where renting makes more sense than owning.

• Not ready to take on the responsibility of a mortgage obligation.
• No permanent work location.
• Rental costs per month could be cheaper at the moment.
• No down payment for the mortgage.
• No job or income source.
• Your credit is too low.

Now if these reasons above are not your situation, then I would be the first to tell you that it would make sense to run the numbers and see how much of a mortgage payment would cost you versus renting a place.   Remember, rents have a tendancy to go up over time while a fixed rate mortgage payment will stay the same.

To figure out your break even time, I have an attached link to a real slick:   buy vs. rent calculator

Bottom line, if you plan on being in a home for five years or more, most of the equations equate in your favor to purchase.  Some equate out in as little as three years.

If you have specific questons about renting vs. homeownership, please give me a call.

Gary Miljour- Mortgage Lending for Tempe Arizona

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