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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I pose this question not to give a literal answer to this simple question but to really examine what a 30 year mortgage is. I am here to state the obvious, and be quite blunt in the process.  Once a 30 year mortgage is created, you are a payment slave to that bill until the day the loan is paid off.  You have just signed your life away and have to find a way through thick or thin to pay on that mortgage or the bank will take back their asset.  Even further, it is not really even yours until it is paid for.

30 years is a long time. Most of us do not like to have the same car for 5-10 years, so a mortgage is a huge commitment.  For some homeowners, by the time the mortgage is paid off, their kids have already moved out.  This is not a short term, pay when I want kind of commitment, but a grown-up kind; pay every month type of commitment.  We have a better chance of going through a divorce or changing jobs before the home is paid off.  So we better start treating it as a big deal.

I, like most, have had to change my thinking in the last few years and re-prioritize what is important in my life.  Debt free sounds pretty good right? This takes a big commitment, it also means not calling me (the loan guy) every 5 years or so to refinance, but looking at all smart options.  Remember, every single time you refinance, unless you go with fewer years, you are starting back at a new 30 year obligation. Personally, I have owned a home for 11 years, but really have only owned for 3 years.  I sold one home and bought another and refinanced a few times along the way.  Yes, $150.00 a month less sounded good at the moment, but now the one thing I cannot get back is time.  I have lost that forever and now need to make up ground.  My point is; take it from the mortgage advisor, the best mortgage rate in town means nothing if it goes against the basis of eventually not having a mortgage payment.  Remember your commitment and be ready to own it… for a long time.

Gary Miljour- Mortgage Lending for Tempe Arizona

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Attention all real estate investors and buyers trying to buy homes from real estate flippers:

Most mortgage lenders now have strict guidelines when it comes to title seasoning. Title seasoning is determined based on how long the seller has been in title to the current property.  If a seller has been on the title of the property for a very short period of time and now is trying to re-sell the property, banks will require the home to be title seasoned.

A lot of people ask why a bank would care.  Well let me try and answer that question.  The mortgage lender cares because not enough time has passed to truly verify that the home value is holding, declining or appreciating.  Mortgage lenders today do not want to take the risk of the unknown so they feel that title seasoning helps protect them from this risk.  Now if you agree or disagree with the mortgage lender, that is not going to change the fact that they are now requiring this as a condition.

Here are some good indicators with mortgage seasoning:

1.  FHA loans do require a 90 day title seasoning.  A purchase contract cannot be written until the title is seasoned beyond the 91st day.  Day 92 is the best time to execute the new contract.

Click here to read the rest of my post.

Gary Miljour- Mortgage Lending for Tempe Arizona

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The new cliché in the mortgage industry is that “We are getting back to basics.”

I have heard this phrase thrown around lately, but sometimes I wonder if anyone except other lenders knows what we are talking about?

I have a theory that if you get 2 or more mortgage lenders in a room at a party and they start talking shop, others watching probably think we are speaking Klingon, or what I been calling for a long time “mortgagese.”  You see, we like to throw a lot of words and acronyms around like FICO, DTI, LTV, flipping, deals, etc.  But I think we sometimes forget that Joe homeowner or maybe even most Real Estate Professionals have no idea what we are talking about.  So in plain old English, let me share what I know about getting back to the basics with mortgage lending.

“Mortgage Lending Guidelines 101″

Cash is King: The more funds liquid in bank deposits and retirement accounts the better.

Down payment is crucial: The more funds you have for a down payment, the stronger the loan file becomes.

Credit trumps all cards: Without a decent credit score, a mortgage lender cannot even give you lending options.

Weird deals are to be avoided at all costs: 95% of the time if the deal is a little off the wall, it won’t work.

You must have a job or income: The income source must be verifiable, believable and well documented for usually 2 years.  No job, no loan…Sorry!

Equity in your existing home will have a huge impact on the new mortgage loan being approved: Today you must either choose to sell your existing home or have some pretty good equity if you expect the bank to offset the debt with rents.  Also, it must actually be rented out!  You cannot just say “we plan to rent it out.”

Appraised value matters: The home must appraise for your offer price or the lender will cut the maximum amount they are lending.

Chain of title is important: I have run into this issue lately with short sale flipping companies.

Title seasoning is a big deal: Most lenders have sources that can do this loan 1 day after transfer of title, but are limited to where the loan can be placed.  FHA has a 90 day anti-flipping policy.

Mortgage insurance companies prevail over the lenders guidelines: If the loan is going conventional for whatever reason, the mortgage insurance companies have their own lending overlays.  It gets real fun when you are in a declining market value state.

AND LASTLY,

Mortgage Rules Change Daily: This one is the most crucial.  What your mortgage lender knew in the past means nothing today.  The good lenders study up on current mortgage guidelines sometimes daily or weekly.  Even then it is almost impossible to keep up with the ever changing mortgage guidelines.

Again, when we say “we are getting back to basics” it means that common sense underwriting will usually trump with a mortgage lender.  If you have cash in the bank for a down payment on a home with some left over cash called reserves, you have a great job for over 2 years and you have decent or better credit score; you should be able to get approved.  If you do not have those 3 items, then you might run into some challenges.  There are always exceptions to these basics, but in general, that is what a mortgage lender is looking for today in a borrower.

Gary Miljour- Mortgage Lending for Tempe Arizona

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Gary Miljour Licensed Loan Originator NMLS#207208

Gary Miljour- Mortgage Lending for Tempe Arizona

Proceed with Confidence

Follow me: 

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Sunstreet Mortgage, LLC NMLS#145171

Gary Miljour Licensed Loan Originator NMLS#207208

I get calls time to time from clients about how to get their utilities turned on.  Even though this is basic for me, this is a challenge for a lot of us if we do not know the steps to make this happen.

Let me share some tips when having your utilities turn on:

1.  Make sure you know a precise date of move in so you have service ready on the day of move in.  I cannot tell you how many clients forget to coordinate this and do not have utilites on move in day.

2.  Call the utility company at least 2 weeks prior to move in and find out how you will be approved for service.  Some companies require deposits for the services, or pull your credit for approval (this is a soft pull).

3.  Some utility companys require the escrow number of your file before they will switch service.  You will need to talk with the escrow/settlement company and get this information upfront.

4.  Make sure the boxes are unlocked if they have to go out to the property and turn it on.  This is a rare case, but I have seen utilities not turned on due to this reason.

These are just a few tips that will help with your frustrations of having your power turned on.

Gary Miljour- Mortgage Lending for Tempe Arizona

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Gary Miljour Licensed Loan Originator NMLS#207208