Wealth Matters

Home Buyers Face Decisions that Affect Their Long-Term Financial Picture

2009-12-14T23:46:00.001-08:00

Taking the step into home ownership is one of the most important financial decisions a person will make in their lifetime. There are many factors to consider when embarking on this venture. Literally hundreds of loan programs are available, and it is important to find the one that best fits your personal long-term goals.

First and foremost, you must have a mortgage consultant in your corner that is willing to take the time to know what your long-term goals are. Communication is the key factor here.

Curious prospective home buyers sometimes turn to Internet-based services just to see what current interest rates are. But a faceless web site will not take the prospect's future financial planning into consideration or guide the potential borrower through the many nuances of the loan process. When shopping for a home loan, be wary of web-based services that offer programs to reel prospects in with attractive rates that are based upon unrealistic time frames.

If a lender is offering a terrific rate based on a 10-day lock-in period, it is unlikely that the potential home owner would actually be able to find their dream home, get through the negotiation process and win approval from a lender within such a short period of time. This is called short-pricing, and when it comes time to close the transaction, the rate that was originally offered is simply no longer available. As a result, the unfortunate prospect is bulldozed into a loan program with a higher interest rate.

It is highly unlikely that a qualified loan originator whose business is based upon referrals will use unscrupulous tactics such as this to get new customers in the door!

Once you have found a mortgage consultant that you feel comfortable working with, lay your goals out on the table because it will have a tremendous impact on choosing a loan program that meets your specific needs. One of the most important factors to consider is how long you wish to borrow the money for. For example, if you know you will only be in the home for five years, it wouldn't make sense to opt for a 30-year loan program or pay points up front to secure a lower interest rate. You would not be in the home long enough to benefit from such action.

Your mortgage consultant should be able to narrow down a selection of programs based on the information that you have provided, and present you with an easy-to-read spreadsheet that clearly defines viable options for your interest rate and amortization schedule, monthly payment and any potential savings you may realize by paying points up front.

Moreover, a reputable loan originator will not hesitate to share this information with your tax consultant or financial planner so they may offer additional feedback on your behalf.

Home ownership imparts a rewarding vehicle for building wealth and a strong financial future. The mortgage consultant that you choose should be there not only when your loan closes, but should also provide you with ongoing service to assist you in managing that debt over time.

Dubai and Interest Rates

2009-11-28T11:15:00.000-08:00

On Friday morning Dubai World, a government owned investment company asked for deferment of payments on approximately $80 billion in debt to various banks and investment companies around the world. Although a relatively small problem in this world of trillions stock markets around the world were rocked by the news. Indeed, it seems that the global financial markets may be more fragile than we had suspected.

As money left the stock markets it flew into dollars and US Treasuries and mortgages. This is actually good news for a couple of reasons. First and most obvious is that when bond prices go up the yields drop. This is good for interest rates on borrowed money like mortgages that no longer have to compete against higher yields driving rates down.

The second, and perhaps more important implication, is that for all the talk of the decline in the dollar as currency of choice and decline in US dominance when push comes to shove the world would still rather be in US dollars and US treasuries than in other secure investment alternatives. This sort of market activity is normal and it is exactly what should happen in times of economic uncertainty. It's nice to see the markets acting like they should when problems occur.

One last word of caution. With all of the investment companies, banks and governments involved in the Carry Trade Dubai's troubles could be the least of our worries. At some point in the very near future inflation will begin to real it's ugly head and rates WILL rise and probably quickly. When this happens all of those highly leveraged trades will have to be unwound and we may have a whole new round of write downs, this time on safe secure holding like treasuries that have been levered up by 10 times or more and rely heavily on a weak dollar. When this happens rates will already be on their way up and this unwinding will exacerbate the problem further and could drive rates higher faster than we would expect.

I don't want to sound doom and gloom here or imply that Dubai's problems are the beginning of the end. Ultimately, they are a small blip that probably got a lot more attention by the market here in the US than they should have because it was the day after Thanksgiving and their wasn't anything else to talk about till Monday or Tuesday when we start getting Black Friday numbers back. Just be cautious and don't get greedy. If your looking for a mortgage or other loan rates are at or near the lowest point they have been in a generation and holding out for an extra 1/4 point is not only foolish but dangerous to your bottom line. Get you loan, put a big smile on your face and enjoy the holidays.

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2009-11-24T18:18:00.000-08:00

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Why Are Rates So Low?

2009-11-22T22:52:00.000-08:00

People call in every day looking for loans. Business is brisk and rates are still really low. Frankly, I was a little puzzled about this most recent rate drop because the data suggests rates should be higher. After all, the Fed has stopped buying treauries while our government continues to borrow money like a shopoholic with a new credit card. At the same time they are also slowing down the purchase of mortgage backed securities and will stop next March. Don’t forget that all this spending WILL cause a spike in inflation and rates MUST go up as a result.

This is all public knowledge so why then are rates down near their lowest level of 2009? The answer lies in supply and demand but not how you may think. In June and July, when rates were up, fewer loans were closed. As a result, as these loans come to market about 3 months later there are fewer loans to available to buy. So even though the Fed has slowed their buying substantially they still made a significant purchase of the AVAILABLE supply of mortgages. Once the current, much higher, volume of loans hits the market supply and demand wins and rates must go higher. The only way this would not occur is if a buyer came in and soaked up the increased supply. This is not likely given inflation concerns and the availability of other well perfoming investments.

So there you have it. Rates will be higher and we can predict with relative certainty when this will occur. Like all markets things don’t move in a straight line so there will be opportunities to lock in on dips in rates as we move higher but expect to see rates in the high fives or low sixes by the middle of next year.

Mortgage Rates Stay Below 5%

2009-10-20T10:14:00.001-07:00

Mortgage Rates Stay Below 5%

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Great Video on the Homebuying Process

2009-08-02T11:30:00.000-07:00

This is a great recording I had prepared to review the homebuying process. It does a fantastic job of explaing the entire process without getting bogged down in all of the fine details.

Take a few minutes to watch and listen and make sure to pass it on to anyone you know who needs the info.

Jeff

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The Million $ Challenge --IMPORTANT

2009-07-26T10:27:00.001-07:00

I'm on a mission. Between June 1st and the end of November my goal is to help 125 first time homebuyers get into their own home to take advantage of the $8000 first time buyer tax credit. Why 125 people? Well, if I reach my goal I will have helped to pump one million dollars back into the local economy at the consumer level. (8000X125=1,000,000). Given the current state of our economy I think that if I have the chance to make a difference not just in the lives of the people buying homes but also in the economy at large I need to take up this challenge.

Not only is this a great idea for the economy it's just a great time to buy a home. Rates are down, prices are down and bottoming, sellers are motivated to offer incentives and you get $8000 for buying from the federal government.

This is not an easy task and not one that I can do all on my own. If you know someone who should be buying a home contact me at the office at 541-342-2535 or email me at jeff@evergreenpacificmtg.com. If you're a real estate broker I am looking for 5 brokers to take up the challenge of selling 25 homes between now and the end of November. If you believe you can do it give me a call.

Finally, remember that this credit only lasts till November 30th and it takes time to find a home, negotiate, get a loan and get the home closed. Also, with so many of the listings in short sale this time can be extended by 2 to 4 months. Now is the time to get going.

100% Rural Housing Video

2009-07-26T10:21:00.000-07:00

I recently did a webcast on the Guaranteed Rural Housing loan. This loan is about the only loan left that can give almost any person purchasing a home 100% financing. This 30 yr fixed loan has easy qualifying, no prepayment penalties and no monthly mortgage insurance payments. best of all, you don't have to be a first time buyer to take advantage of this great loan.

Watch and enjoy.

Realtor Financing Presentation Ron Quintero

2009-07-16T23:32:00.001-07:00

Realtor Financing Presentation Ron Quintero

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What's important About Loan Amount?

2009-07-16T17:39:00.001-07:00

What's important About Loan Amount?

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An Open Letter

2009-07-05T22:25:00.001-07:00

I recently received a letter in response to an email I sent out promoting a video I prepared on the benefits of buying versus renting. Here is the letter and my response:

Jeff, Thank you for this great video. It is a tough market and I guess if

anyone apart from big investors had a little cash or in fact no cash but

everything else was good could really make some money.

I have often said, " if only we knew that home values would increase in

7 or so years we could really have made some money." but no one is

doing anything.....I am waiting for everyone to "wake up" and the economic

unemployment situation to improve a bit, so there is more of a guarantee.

"JS:

I believe that it is our duty to spread the word and to influence those who most need to take advantage of this great market. I feel that now is absolutely the time to move with courage and conviction and stop buying into the fear mentality. We, the long time professionals, have a responsibility to make things happen! Use this video! Send the link to all of those people you have in your database who are worried about their future. The current economic situation is the exact reason that those people should be buying.

Once this market turns around (and it will) the pent up demand created by this market is likely to cause a huge spike in demand and force bidding wars and price hikes like we saw just a few years ago. Don't ever doubt the cyclical trends in the real estate market. History tells us that this WILL happen. Doubt my words? Just look at Southern California in the mid 1990s. Employment sank, prices dropped like a rock and no one could sell a piece of real estate to save their life. By the late 1990s and all the way until 2005 real estate skyrocketed! Even here in Oregon we had terrible unemployment in the 80s but by 1992 Springfield was posting returns at over 18% per year. This current situation may appear more extreme but you must continue to believe.

Do your clients a favor and make sure they really understand how the real estate market works; how any market works. Make sure they are not like all the others and buy high and sell low. Make sure they understand what we already know in our hearts to be true, that real estate is the best investment and that the most important investment you can make is in your own home.

NOW GO SELL SOMETHING!

Jeffrey "

If you've ever wanted to buy real estate either as your own home or for investment there really hasn't been a better time. According to the National Association of Realtors the last two months have been the best time since at least 1970 to buy a home. Now is the time. Call me if you want to get more information at 541-342-2535 or email me at jeff@evergreenpacificmtg.com.

Mortgage Market Update from Our Friends at Mortgage Market Guide

2009-06-28T12:22:00.001-07:00

Last Week in Review

They say no news is good news. But perhaps the more important question this week is will the Fed's news from their latest Federal Open Market Committee Meeting be good news for rates and the economy? Here's what you need to know.

Last week, the Fed released their Interest Rate and Policy Statement after their latest regularly-scheduled meeting of the Federal Open Market Committee. While there was speculation ahead of time that the Fed may decide to buy more longer-term Treasuries, which could jumpstart the cycle needed to eventually bring home loan rates down, the Fed did not make any changes to the Fed Funds Rate or their Bond purchase program. The one change from the prior meeting's statement was that the Fed now does not see deflation as a risk. While this is good news, it also means that there could be a real threat of inflation down the road. And remember, inflation is bad for Bonds and home loan rates, so this could have a big impact on rates in the longer term!

There was good news in the Personal Income Report as personal income rose in June by its biggest gain in over a year. The increase in income led to higher consumer spending and savings in June. Spending rose for the first time in three months, while the savings rate climbed to its highest level since December 1993 as the chart below shows.

-----------------------
Chart: Personal Savings Rate 1990 to 2009

Keep in mind that a high savings rate is a double-edged sword ... it's good to see people saving, but spending is the lifeblood of a strong economy.

The Durable Goods Report also brought good news, as did Consumer Sentiment, which was better than expected. Durable Orders came in better than expected for May, led by orders for airplanes and machinery. Although one report doesn't make a trend, the reading is encouraging and may signal that the economic slump is starting to ease.

But there was still disappointing news on the housing and job market fronts. Both New and Existing Home Sales came in below expectations and Initial Jobless Claims came in a bit worse than expected, indicating that the job market continues to be weak and slow in stabilizing.

After all the news of the week, Bonds and rates managed to break above important technical levels to end the week .25 percent better than where they began with a little help from some solid Treasury auction results.

FORGETTING SOMEONE'S NAME IS NEVER GOOD NEWS! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT MEMORY IMPROVING TIPS.

Forecast for the Week

A holiday-shortened week is ahead, but that doesn't mean there won't be any news. Tuesday's Consumer Confidence Report will show us how consumers are behaving based on recent economic news and may indicate if increased consumer spending is likely to continue.

There will also be important news to note in Thursday's Jobs Report for June, especially given the mix of good and bad news in May's Report. On the good side, the number of Jobs lost in May was much lower than expected. However, the unemployment rate (which is determined from a different survey) came in higher than expected.

As mentioned above, last week's Initial Jobless Claims were worse than expected, so this week's report will be interesting to see.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and rates were able to break above an important level with help from the Treasury auctions. I'll be watching to see if Bonds and rates are able to remain above this level and improve further.

Both the Stock and Bond markets will be closed on Friday, July 3 for Independence Day. Have a safe holiday.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jun 26, 2009)

Debt Consolidation Analysis

2009-06-24T11:43:00.001-07:00

Debt Consolidation Analysis

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Alternative Economics

2009-05-09T07:56:00.000-07:00

My friend and mentor, Steve Hettema,wrote an article a little while back that I feel really encapsulates what I am trying to do here with "Wealth Matters". In fact, I so wholeheartedly beleive in Steve's message that I joined his National organization of investment clubs, the NSIC, and started my own chapter called The Willamette Investor Group.http://www.willametteinvestorgroup.com. Steve will alos be in Eugene on June 13th for a full day event we have opened to the public (http://OregonBootCampBlitz.com).

To read Steve's article you can go to http://ezinearticles.com/?id=1248224

First Time Homebuyer Tax Credit

2009-04-10T15:20:00.000-07:00

Never More Affordable

2009-03-31T00:10:00.001-07:00

For the last 39 years the National Association of Realtors (NAR) has been gauging the affordability of homes across the US. Amazingly, the number just released is the best number since the report began. What this means is that this is the absolute best time to buy a home since 1970. Actually, since the report is only 39 years old it is possible, and likely, that this is the best time in nearly 50 years to buy a home. With rates having gone even lower since the report came out affordability is now through the roof and it's time to buy. Take a look at the history of the index and see for yourself what a great time it is: http://www.mortgagemarketguide.com/download/conarchy/Affordability_1970_88.pdf

http://www.mortgagemarketguide.com/download/conarchy/Affordability_1989_2009.pdf

8000 tax credits, low rates and now the most affordable housing market in a generation. GET MOVING!

New Lending Changes to Get You Buying

2009-02-14T13:33:00.000-08:00

Two new important changes have happened in the world of home loans. The first and best publicized is the new $8000 tax credit being offered to first tiime homebuyers. Unlike the current credit this one does not have to be paid back if you stay in the home for at least three years. This credit is for home purchases from January 1st till the end of November, 2009 and will give the full $8000 credit to any first time buyer earning up to $75,000 as an individual or up to $150,000 as a couple. However, you do not need to have paid income taxes to receive a credit. This is an improvement over last years attempt at a $7,500 "credit" that was actually a long term interest free loan from the government. The prior credit was a turnoff to many would be buyers because it felt like you were being forced into a situation where you owed the government money for the next 15 years.

The second change comes for investors who own more than four financed properties. As I wrote in my last entry currently both Fannie Mae and Freddie Mac have reduced the number of financed properties a person can have all the way down to four. Although to some people this may sound like a lot of real estate there are tens of thousands of investors who have been taken out of the market at a time when we need well qualified buyers to buy as much of the inventory of available homes as possible. Now, recent changes in these guidelines once again will put the number back up to ten allowing these buyers the chance to buy up the over abundant inventory of homes and help stabilize the market. I would argue that theses people are exactly the kind of people who should be able to take advantage of this market. These are the buy and hold landlords who keep property forever and whose job it is to provide quality housing to tenants. Bravo to Fannie and Frddie for seeing it MY way.

If you've been reading my prior posts you know there are still a couple of imortant changes that need to happen (ie, Seller funded DPAs via HR 600 and the reintroduction of Stated Income loans done the old fashoined way) but these are definitely two important steps in the right direction.

The Problem With Rate Fixing

2009-01-31T08:24:00.000-08:00

So I'm sitting here watching Forbes on Fox on a Satuday morning (yes, I have no life) and the talking heads are discusing the newest Republican plan to fix rates at 4%. Fortunately, most of them think this is a bad idea, they just don't know why so let me tell you.

Currently, we have the lowest national average for mortgage rates ever and it will likely be dropping a bit more as the Fed continues buying mortgage backed securities. That said, the lending guidelines that are set by Fannie and Freddie make these rates available onlty to the most deserving of borrowers. The people I help every day have 700 or higher credit scores,a 75% or lower loan to value, a good stable job they've had for years and plenty of assets. These people have a good rate but are looking for a great rate. Good for them but this will not help the housing market or stimulate the economy in any real substantive way. What we need is guideline changes that make acquiring a home easier. So far nothing has been done to fix the real problems and the fixes are readily available and free to implement.

There are three main changes that would create an immediate improvement in the marketplace and serve to stabilize the housing market. The first change that needs to be made is the reauthorization of Seller Funded Downpayment Assistance Plans. Non-proftis like HART, AmeriDream and others have been around a long time and only recently have come under scrutiny. The programs were legislated out on October 1st of last year due to data that indicated a higher default rate among those who use these programs. Much of the data used ny HUD and the Fed has been deemed erroneous however and now there is a movement to bring these programs back. HR600, a new bill in congress, has bi-partisan support and will likely pass. The difference between this law and others is that access to these programs is now limited to a higher quality of borrower. Passage of this bill is critical to getting first time buyers back to buying homes.

The second change that must be made is that stated income loans must come back. Whoa!, you say, weren't these loans the biggest problem? I answer, yes and no. Stated income loans have been around and successfully used for years. Long before anyone could get one of these loans and simply lie about their income these loans were used to help the successful, self-employed borrower with good credit and assets get a 70 to 80% loan. There is a way to do stated loan correctly and the Fed acted irresponsibly by simply outlawing them altogether. Now, successful, well off self-employed people are out of the market. There are 100s of thousands of these borrowers who would buy in this market in a heartbeat if they could. Guidelines can be implemented that keep the market safe and allow these peopke to still get in the game.

Fianlly, we need to allow buy and hold real estate investors, the professional landlords, to buy more property with Fannie and Freddie loans. Currently, guidelines allow these people the have only three financed investment properties and only four total financed properties. Until recently that number was nine. The rationale to the reduction is to lower the risk of the downturn to Fannie and Freddie. However, I beleive there is a way to determine if someone is a speculator or a landlord who buys and keeps real estate and we should allow landlord borrowers who are good at owning and managing real estate to buy up more of the inventory. This step would eliminate many of the vacant homes and would allow the low end of the inventory to get soaked up right away by people whose job is to provide housing for others. Keeping these quality borrowers out of the market is shameful.

Some people will read this and think "isn't that what got us into trouble in the first place?" While on the surface this may be true remember that these guidelines and programs were available long before the current housing/credit bubble and worked just fine when they were implemented with a little sanity and lenders used solid underwriting principals and some common sense. Ultimately, the lending pendulum is going to have to swing back toward a neutral center to get things back on track and no low rate price fixing will help someone who isn't allowed to buy or can't afford a downpayment.

"Worried About Losing Dollars? You Better Watch Your Data Too..."

2008-12-09T17:02:00.001-08:00

Hi All,

Here's a great little tidbit from my friend Tony at www.yourmortgageoryourlife.com. Read on…

"Worried About Losing Dollars? You Better Watch Your Data Too..."

"What of the dozens of boxes of personal financial information, credit reports, social security numbers and other sensitive information that was found in a dumpster behind an apartment complex in Georgia? It had been in the custody of Ameriquest... And do you remember when WaMu, the troubled national lender, was discovered to have shipped sensitive loan documents to Mexico in semi trucks with some 10,000 records lost in transit? Don't underestimate the threat that shrinking budgets and layoffs pose to your data security. In these heady and uncertain economic times, don't we want to know where our data is day and night?"

http://information-security-resources.com/2008/12/09/worried-about-losing-dollars-you-better-watch-your-data-too/

--
Best Regards,

Anthony M. Freed
eFax 1-210-579-1109
YourMortgageOrYourLife.com

Don’t Believe Home Mortgage Rate Hype

2008-12-05T13:52:00.001-08:00

A couple of days ago it was reported in the Wall Street Journal online that the Treasury is considering an option that would lower interest rates on new home loans down to 4.5% fixed. This has put the home buying and refinancing public into a minor frenzy as we continue to receive calls about our new "low rates". The problem is that rates simply aren't quite that low yet. Like everything the Treasury and the Fed are doing these days this may….., or may not happen. The reality is that an unnamed source at the Treasury reported that they are "considering" dropping interest rates down. Nothing has happened and may not happen. Everything about this "bailout" has been hit and miss with no real structure or plan attached to it so we'll see.

The problem with reports like these is that they cloud the facts about the already positive side of the mortgage market and have the unintended impact of slowing the very market they are trying to speed up. When people hear reports like this they naturally hesitate in completing a loan transaction to either buy or refinance hoping that what they hear may actually come to fruition. This hesitation could easily cause many people to lose out on a great deal.

Rates are FANTASTIC! Make no mistake about this. For the last two weeks we have had rates that have challenged any rates we've seen in my 40 yrs. There are several factors that contributed to this environment that I won't go into here but needless to say, if you are looking into a loan or a purchase, do it now when you know, with certainty, you are going to get a great deal. Pigs get fat and hogs get slaughtered so getting greedy and pausing to see what happens might be a recipe for not getting a good deal. If you're buying a home keep in mind that you won't be the only one who knows rates dropped to 4.5% if they do. Your seller will know it and expect a higher demand for his home and other potential buyers will know it and be willing to compete for the right home. Believe this, it is far more expensive to get in a price war on a home than it is to get a slightly higher rate. If you are refinancing, how low do you need??? Rates are at a level where after taxes the money is nearly free. I know people who have 25% credit card rates who will wait to see if they can get an extra quarter lower in interest. Again, don't get greedy.

I guess what I am saying, and will continue to say is that you NEED to act today. Rates are very low, prices are VERY low and sellers are hurting. Take advantage of this while you can. I know I am.

Call me if you have questions at 541-342-2535 or email me at jeff@evergreenpacificmtg.com. You can also go online to www.jeffnunley.com .

Millionaire Homeowner Magazine Goes Online

2008-11-24T12:24:00.001-08:00

For over a year now I have been publishing a magazine called Millionaire Homeowner. Until now, I've only been able to do a very small printing for my best clients. With all of the great technology out there I felt that there must be a better way to get this fantastic publication distributed. As of this month I am now able to produce a fully indexed digital copy of the magazine. The link is included here, I hope you enjoy it as much as those people who have been receiving it. I am extremely proud of what has been accomplished. Click HERE for your copy and then please, forward the link to everyone you think would be interested and we will include them in the distribution.

Don't Believe the Hype

2008-11-22T16:08:00.000-08:00

As I speak to Realtors all over the country I hear the same thing over and over "people think they can't get a loan to buy a house". Thanks in large part to the media's constant negative reporting on the credit crisis it is no surprise that many would be buyers feel hopeless and won't even try to get financed. After all, getting a home loan already ranks right up there with a root canal so why go through the embarrasment and invasion of privacy just to be told no. I believe that many people who want a home mey even forgo getting one just out of the fear of rejection.

For all the hype though there is money available. Sure, we don't do much 100 percent financing any more and you can't buy a home without a decent income or credit but there are some great programs out there that are fully funded and ready to help would be buyers. FHA, VA and Rural Development are all great programs with low or no downpayments and easy qualifying.

Frankly, now IS the time to buy a home. Rates are low, money is available and homes are cheap, in some areas, really cheap. It's this kind of economic environment where the smart get rich by getting the good deals others leave, or in many cases, put on the table. I know, thiings won't be getting easier for quite a while and economic fear rules the day but now is the time to ignore the media, be brave and do what's right for you.

Don't let some talking head determine your future. If you want more information visit the video network at www.jeffnunley.com.

Foreclosed Properties Build Future Wealth

2008-11-20T14:57:00.001-08:00

ABC News recently released a report on bank owned or REO properties. In summary, people who buy these properties today will make big money in the future.

Watch the video here:

http://abcnews.go.com/video/playerIndex?id=6286291

To your success.

Jeffrey

An open letter to our readers

2008-11-11T14:50:00.001-08:00

Amidst all the uncertainty surrounding the economy, I've had a number of calls from my clients concerning the tumultuous real estate and mortgage markets. As such, I wanted to take a few moments to address some of these concerns and shed some light on the reality of the situation.

The Real Estate and Lending industries are in fact going through a necessary correction. The industries became saturated with fly-by-night companies looking to make a quick but short on offering any real value.

Contrary to numerous reports in the media, mortgage funds are still readily available. The credit markets are tight, but it has yet to have any real significant impact on the availability of mortgage financing. Although 100% loans are all but gone, 3% down loans are still readily available, even for buyers with less than perfect credit. Most of the reports you are hearing about the rapidly disappearing mortgage products have to do with loan programs that were very common in coastal areas.

There has never been a better time to purchase real estate. With inventories at a higher than average level and extremely low interest rates (slightly under 6% for a 30 year fixed rate mortgage as of the writing of this letter) this truly is a wonderful time to move-up or purchase a vacation home. For first –time home buyers there is a window of opportunity that has never before existed to take advantage of a $7500 tax credit! I like to call this the "perfect storm" of opportunity. If you know anyone who is even considering purchasing a home, especially first-time buyers, please let me know!

If you have an adjustable-rate mortgage now may be the WORST time to refinance to a fixed rate. Adjustable rate mortgages are tied to a specific index that changes with the ebb & flow of economic conditions. If your ARM is tied to the 1-year treasury you may be in line for a rate reduction! On the other hand, if your ARM is tied to the LIBOR you may be in for a significant increase. Regardless, my suggestion is to consult you're your mortgage professional for an audit. As I mentioned earlier, many mortgage professionals have left the industry. Those who are "left standing" are likely the professionals. If you need a referral to a highly qualified professional mortgage planner please give me a call.

Interest rates may be on the decline in the next few months. Economic conditions are ripe for improvement. Interest rates can and do move swiftly so it is imperative that your mortgage professional have an active management system in place to notify you of market conditions. Again, if you need a quality referral please give me a call.

How Does a Wall Street Bail-Out Bill Affect Main Street?

2008-10-29T13:23:00.001-07:00

Large and small companies across the globe rely on access to

money markets to finance their daily operations, including

inventories, and payrolls. Lenders routinely make loans to these

companies, and to each other, to make it all happen. When lenders

have confidence in these markets, and investors have confidence in

this system, we have a functional marketplace that, for the most

part, is sustained by competition. When confidence in this system is

shattered, however, like it has been recently, credit becomes

expensive and scarce to all parties, and small and large companies

alike can choke to death waiting for the short-term capital it needs

to fund its long-term success. This directly affects you and your

family. It means a slower economy. It means more lay-offs and less

new job creation, which often means lower home values. It also

fuels volatility in the financial markets that, as we've seen, can

wreak havoc on your savings, retirement, and other investment

accounts.

It is estimated that some $70 trillion in total global investment

capital is available, which would be great news if our financial

systems were functioning with confidence – and that's what the

Rescue Bill is basically about. Like it or not, the US Government

has been given unprecedented power to invest $700 billion in our

financial systems in two main ways. First, as much as $250 billion

to purchase stock in US banks, providing the banks with badly

needed money. Second, through the purchase of certain assets to

help stimulate more liquidity in the credit market. Another initiative

will provide government guarantees for the short-term loans banks

make to each other to run their daily operations. More importantly,

these actions are in concert with similar practices by other

governments and central banks.

None of these actions will solve our problems completely or save us

from recession, but here's the good news. It is a positive step in the

direction of stabilizing the markets. The other good news is that

several other measures were tacked on to the bill to help build your

confidence in the markets. Unfortunately, there just isn't enough

space in this short newsletter to cover them all. We will briefly

highlight a couple of them, but our best, most practical financial

advice is to create your own plan for the future with your financial

professionals. Don't make any rash decisions without speaking to

the experts you trust to handle your investments. If you need help

finding a financial professional you can trust, we'll gladly provide a

referral. Just give us a call. We'll review your mortgage and create a

plan that fits your individual financial goals and needs

Changes in FDIC Limits

As part of the Rescue Bill, Congress also increased FDIC deposit

insurance from $100,000 to $250,000 for all of an individual's

accounts at a single institution. For one year, joint accounts,

retirement accounts, and trust accounts are insured separately.

This means a married couple can insure up to $1 million at a single

bank, by making a few simple adjustments. Changes also affect

revocable trusts, allowing the same amount of insurance for

beneficiaries, such as your children. That means, a married couple

with three kids could create enough qualifying individual and joint

accounts to protect up to $1.5 million. It's important to note that the

FDIC has never failed to pay a single dime of insured money when

banks have failed, so you won't have to make a run on the bank or

hide your money in your mattress anymore. Small businesses will

also benefit from new increases, as well as the confidence that

comes with this kind of insurance.

New and Extended Tax Incentives

Within the 451 page Rescue Bill are nearly 100 tax code changes

that directly affect individuals and business owners, including

education deductions, sales tax, energy credits, and even new

disaster aid. Other tax breaks, which were due to expire, were

extended, including property tax deductions, the Mortgage Debt

Forgiveness Act, and the shield for the Alternative Minimum Tax

(AMT). The property tax provision, set to expire in 2008, has been

extended to 2009, and allows up to $500 ($1000 for joint filers) in

deductions in addition to the standard property tax deduction –

even if you don't itemize! The Mortgage Debt Forgiveness Act,

extended to 2012, was designed to protect those who already lost

their homes due to foreclosures from facing an additional tax

penalty for qualifying cancelled or "forgiven" debt of up to $2 million.

And, finally, the Rescue Bill also saves about 23 million Americans

from the dreaded AMT, a kind of extra tax that some people have to

pay on top of their regular income tax created by the Tax Reform

Act of 1969.

These are just a few of the potential tax benefits created or

extended by the Rescue Bill. As always, there are specific

qualifying standards, and so it is essential to speak with a qualified

tax professional about these and other tax benefits that could help

you lower your tax bill and increase your confidence in today's

tumultuous financial markets.

Increased Federal Loan Limits Lower Price Tag on Hundreds of Thousands of Loans

2008-03-25T17:50:00.001-07:00

One immediate benefit of The Economic Stimulus Act of 2008 is the increase in loan limits for high-cost areas of the country. By raising the Federal Housing Administration's loan limits on what qualifies for lower-cost FHA, Fannie Mae and Freddie Mac loans, the bill could help a quarter of a million families purchase or refinance their homes at a lower cost. Combined with record low interest rates, the change could improve the financial picture for many now facing foreclosure. The options and loan ceilings vary, however, from county to county and only a Certified Mortgage Planner can weigh all the options to determine if a new loan makes sense for an individual homeowner.

The increase is only temporary, however, so homeowners looking to shed the premium they pay for subprime or jumbo loans required to live in their state need to act quickly to take advantage of these federally-guaranteed loans.

FHA loan limits that will range from $271,050 to $729,750 with the largest loans available in high-cost metropolitan areas such as New York, Los Angeles, San Francisco and Washington, D.C. But even smaller markets could see increased activity in the housing market when the new loans become available. In Eugene and surrounding areas we did not have any increase in the Fannie Mae limit but did have an increase in FHA limits to $343,750.

Money Magazine Endorses Equity Management Principles

2008-02-14T23:35:00.001-08:00

The January issue of money magazine had a great article that reinforces what Wealth Equity Planning is all about. The article is about why pre-paying your mortgage is not mathematically supported. It looked at how over the long term investing that cash you would have put into your mortgage is dramatically superior. It also points out that investments are more liquid and can be accessed easily in an emergency making it a much safer strategy as well. It's great to see the mainstream media finally embracing these sound financial principles. To read the whole article, go to www.wealthequityplanning.com/index.php?op=articles .

Bankrate Study Shows Holes in Mortgage Planning

2008-02-10T22:06:00.001-08:00

A recent study by Bankrate.com shows that nearly 36% of homeowners don't know what kind of mortgage they have. Sadly, this doesn't surprise me too much. Every day we get at least one call to the office from a person who says they thought they had a fixed rate loan but it is now adjusting and payments are going too high.

The real problem is not just that these people don't know that their mortgage wasn't fixed but that in almost every instance these people really NEEDED a fixed rate loan. Most of these people are credit challenged and things really haven't changed for them in the last two or three years. It's sad to think that many people in this situation may now lose their homes because the market has changed the guidelines making these loans available have tightened.

The moral to this study is if you're not sure what type of loan you have find out ASAP! Feel free to give my office a call and I can review all of your paperwork with you.

Historic Fed Move Cuts Both Ways for Borrowers

2008-01-30T11:50:00.001-08:00

Hot on the heels of its surprise inter-session rate cut of 75 basis points last week, the Federal Reserve cut key interest rates again, the fifth straight cut since September 2007. In its statement last week, the Fed said it had decided to cut the federal funds rate "in view of a weakening of the economic outlook and increasing downside risks to growth." In other words, economic data suggests the US is on the brink of recession, and the Fed is acting accordingly.

Who benefits from this cut?
If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit (HELOCs) and variable rate charge cards are the types of loans that will have an interest rate reduction on their next statement.

What does this mean for long-term rates?
Long-term mortgage rates, the lowest we've experienced in years, could actually increase after today's cut, based on historical performance and recent trends.

So if you're waiting for long-term rates to fall further, don't count on it. Your best chance to lock in the lowest rates since 2005 is now. Getting your application in process now will allow you to capture a great rate before it's too late.

What REALLY moves mortgage rates?
Fixed-rate mortgage rates aren't directly tied to Fed interest rate moves. Instead, they tend to follow in the direction of other long-term government bond yields, such as the 10-year Treasury, which historically moves in accordance with the economic outlook and in advance of Fed actions. The performance of Mortgage Backed Securities, issued by Fannie Mae and Freddie Mac, is what really determines long-term mortgage rates.

How does the economic stimulus package fit into the picture?
The economic stimulus package from Congress and the White House could be a double-edged sword for borrowers. Combined with recent Fed actions, the package could create inflation and bring about higher long-term interest rates.

On the positive side, conforming loan limits are likely to be raised from the current $417,000 to upwards of $625,000. This means great potential savings for purchase and refinance candidates who live in 20 high-cost areas across the country.

What should you do next?
If you're unsure how the rate-cut or the proposed legislation affects your mortgage, don't worry, you're not alone. There's no one-size-fits-all answer. Give us a call right away. We'll review your mortgage and see what, if anything, can or should be done to make the most of your individual financial goals and needs.

The Mortgage Planning Process

2008-01-20T11:28:00.001-08:00

The mortgage planning process is different than the typical "shopping for a mortgage" experience.

The typical shopping for a mortgage experience includes:

Wasting your valuable time trying to save $25/month by comparing rates, fees and closing costs among different lenders.
Wasting your valuable time trying to baby-sit the mortgage company you've reluctantly chosen to work with.
Being promised one thing and then getting something different.
Being "sold" on one mortgage product over another.

The mortgage planning relationship is about you:

Receiving valuable financial advice and guidance that can literally save you hundreds of thousands of dollars.
Trusting a professional who is committed, qualified and equipped to deliver what they promise.
Experiencing a "concierge" level of service when you are in the market to buy a home, refinance your mortgage or make cash flow changes to enhance your lifestyle.
Implementing a defined financial plan of action in helping you achieve your life goals and dreams.
Maintaining an ongoing high trust relationship with a team of financial advisors who can help you make necessary changes in your debt, cash flow and home equity planning strategies.

This is a relationship, not just a transaction. As such, it requires a defined system of accountability in order to work effectively. The Mortgage Planning Process consists of the following five steps:

1. Establish and define the client-planner relationship.

Mortgage Planner Should:
- Ask you for information about your financial situation and your time frame for results and success.
- Gather all the necessary documents before giving you the advice you need.
- Clearly explain or document the services they will provide to you.
- Explain how they will be paid and by whom. Unless you are willing to pay a flat fee for mortgage and real estate equity advice, mortgage planners are typically compensated through a commission structure set up with the lenders they work with.
- You Should:
- Clearly explain how financial decisions are made in your household and include all the key decision makers in consultations with your mortgage planner.
- Be prepared to share personal and financial information with your mortgage planner in order for them to be able to advise you on how best to achieve your goals.

2. Analyze and evaluate your financial status.

The mortgage planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your credit situation, real estate equity, debt situation and cash flow.

3. Develop and present mortgage planning recommendations and/or alternatives.

The mortgage planner should offer mortgage planning recommendations that address your goals based on the information you provide. The mortgage planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The mortgage planner should also listen to your concerns and revise the recommendations as appropriate.

4. Implementing the mortgage planning recommendations.

You and the planner should agree on how the recommendations will be carried out. The mortgage planner may serve as your "coach," coordinating the whole process with you and other professionals such as CPAs, CFP^® professionals, attorneys, Realtors, builders, insurance professionals and other qualified advisors.

5. Monitoring the mortgage planning recommendations through a quarterly or annual mortgage and equity management review.

You and the mortgage planner should agree on how you will both monitor your progress toward achieving your goals. During this review, your mortgage planner can adjust their recommendations, if needed, as your life changes. Most often, this process involves periodic assessment of:
- Your fluctuating cash flow needs.
- Changing market interest rates and mortgage strategies.
- Income and career alterations.
Family changes including:
- Children's financial needs.
- Caring for elderly parents.
- How your real estate equity and investments are performing from both a cash-flow and "internal rate of return" perspective.

MythUnderstandings”--Think Like a Millionaire

2008-01-03T17:57:00.001-08:00

Demystifying Real Estate Investing

Overcoming the misconceptions that keep you from investing in real estate

Most people who aren't investing in real estate are being stopped by doubt and fear. They may want to invest in real estate, but each time they consider taking action, they come up with an obstacle or a core belief that keeps them from moving toward their dreams.

According to The Millionaire Real Estate Investor by self-made millionaire and real estate investor Gary Keller, most successful real estate investors have had to overcome certain beliefs that later proved to be unfounded. Some of these beliefs center around the way they view themselves as investors, and the others are focused on beliefs about investing. By addressing these doubts and fears, and recognizing that they're unfounded, you'll eliminate the major barriers to becoming a real estate investor.

Personal Myth #1: "I don't need to be an investor. My job will take care of my personal wealth." Truth: History indicates that few jobs pay enough to create true financial independence. Financial wealth building depends on another vehicle.
Personal Myth #2: "I don't need or want to be financially wealthy. I'm happy with what I have."
Truth: Financial wealth offers greater opportunity to care for yourself and others, and that is something most everyone wants and needs.
Personal Myth #3:
"I can't do it."
Truth: You don't know what you can or cannot do until you actually try.
Investing Myth #1: "Investing is complicated."
Truth: Investing is as complicated as you make it.
Investing Myth #2:
"All the best investments require knowledge most people don't have."
Truth: Your best investments will always be in areas that you can or already do understand.
Investing Myth #3:
"Investing is risky. I'll lose my money."
Truth: Investing and gambling are not the same thing. Investing, by definition, is not risky.
Investing Myth #4: "Successful investors can time the market."
Truth: Timing isn't about being in the right place in the right time. It's about being in the right place all of the time.
Investing Myth #5:
"All the good investments are taken."
Truth: Plain and simple, every market, in every time, has its share of good investments.

There's nothing more powerful for keeping you out of action than fear and doubt. By seeking the truth, rather than relying on unfounded beliefs that lead to fear and doubt, you can overcome your greatest obstacle and get closer to achieving your dreams.

If you're interested in investing, but you have doubts about whether or not investing fits in with your current financial program, it's best to consult with a qualified and reputable Mortgage Planner who can assess your financial situation and put you on a plan that targets your goals. As with any financial program, gaining clarity on the facts is always the best place to start.

Think Outside the Box

2007-12-30T00:35:00.001-08:00

After enduring a year of fluctuating interest rates and mortgage industry trends, current and potential homeowners are opting to think outside the box, the 'big box' that is. They are relying on their local lending agent, instead of online big box lenders, to provide the best mortgage products and interest rates to fit their needs.

Over the next year, industry experts predict that each home purchase and mortgage arrangement will be as unique as the people purchasing the home. Home buyers are seeking out their local mortgage brokers in order to ensure they obtain a variety of lending options that will fit their lifestyle and budget. These unique buying and lending options not only allow home buyers to take advantage of the rates and products that match their current and future financial situations, but it also provides a level of flexibility that might not be available through an online-only lender.

Below are a few advantages to consider when purchasing loans from your local lending agent:

Competitive Rates
A couple of years ago interest rates were at an all time low, meaning home buyers could receive the best loan rates from just about anyone in the mortgage business. Now that local and big box lending agents share the same pool of wholesale lenders, both are able to offer the same mortgage products and rates. But, unlike big box brokers, local brokers have the ability to offer an additional set of geographic specific lending options which may better fit a borrower's niche market.

Easy Access
In order to ensure a speedy lending process, it is important to work with a broker who is accessible. By using a local mortgage broker instead of an online big box lending agent you can ensure you have personal first-hand access to the people underwriting your loan. Having the ability to phone or meet your broker and underwriter will help keep your loan on track towards quick approval.

Customer Service
Home buyers often find it comforting to know that their broker can meet with them in person as they guide them through one of the largest and most important purchases of their lives. This level of personalization allows the local broker to accurately evaluate the borrower's financial situation and provide superior loan options and customer service. A local mortgage broker's knowledge of the surrounding real estate and their dedication to offering flexible, innovative loan and payment options ensure you receive a loan that fits your specific needs.

Understand the Market –Shop With Confidence

2007-12-19T22:01:00.001-08:00

Rates go up rates go down. In case you haven't been paying attention, the market has been very volatile lately. Every day it seems as if it's an absolute crapshoot as to where rates will be for that day. The good news is that rates are still low by historical standards.

Over time, small changes can add up to thousands of dollars so it's important to have at least a basic understanding of what drives interest rates and how the market works. My goal for my clients is that they know the answers to some basic questions so that they can understand how the market works and they can be armed with the right questions when they go shop for a loan. Unlike a lot of my competition I actually encourage shopping.

Here are some of the questions we give our clients:

1) What are mortgage interest rates based on?
The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.

2) What is the next Economic Report or event that could cause interest rate movement?
A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.suewoodard.com and hit the green MMG Weekly banner - this is a copy of our weekly newsletter, let us know if you want to be added to my weekly distribution list.

3) When Bernanke and the Fed "change rates", what does this mean. and what impact does this have on mortgage interest rates?
The answer may surprise you. When the Fed makes a move, they can change a rate called the "Fed Funds Rate" or "Discount Rate". These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call.

4) Do you have access to live, real time, mortgage bond quotes?
If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday's newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday's paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!

Be smart... Ask questions. Get answers!
More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life. but we do this every single day. It's your home and your future. It's our profession and our passion. We're ready to work for your best interest. www.jeffnunley.com

America's Balance Sheet Moving Again as House Equity Falls – Todd Ballenger

2007-12-15T09:20:00.001-08:00

The net worth of U.S. households hit a record high $58.6 trillion in the third quarter of 2007 according to the Fed's Flow of Funds report. This is surprising, when you consider that net equity in homes declined in the third quarter for the first time in 16 years. Growth is at further risk in the current quarter. We often speak about managing assets and liabilities and how they tend to move in different uncorrelated cycles. As house prices drop, growth in stock and mutual fund holdings drove the gain in wealth this past quarter for most Americans.

Net Wealth

Borrowing grew 7.9% from last year - the slowest growth in borrowing since the start of 2001.

Asset grew 7.4% last year. While borrowing is growing faster than assets, the level of assets is larger than borrowing, so there was still a balance sheet increase in wealth.

Household assets continued to grow at a rate of about $5 trillion per year. Growth in the total value of stock and mutual fund holdings by consumers increased by more than the net equity in real estate for the fourth consecutive quarter and by the largest amount since the first quarter of 2004.

Shifting Demand For Money

Consumers are shifting the nature of their borrowing. As standards have tightend for mortgages, overall borrowing by consumers using credit grew by over a percentage point over the last year to 5.3%. If consumer continue this trend of moving to harder money, they'll increase their debt and lose tax benefits associated with most mortgage borrowing, further creating their own version of the current credit crunch.

Real Wealth May Drop

Housing wealth is likely to decline further. Many believe that the OFHEO 1.8% growth for the year through the third quarter is off, as they use lower priced homes and exclude jumbo properties, which according to NAR and Case-Shiller studies were much lower in the same quarter.

Time To Think Different

Equities are expected to slow in the shorter term, and a decrease in real house values will continue to put pressure on cash flow and spending habits as loan reset to higher interest rates. A shift is possible as people see housing stall, investment slow, and find the only way to really impact their savings may be to actually save more (meaning spend less). While this isn't appealing to most, it may be a simple fact of the forces that are lining up... and as we say the timing for good financial education of spending and savings habits around the consumer assets and liabilities will be more valuable than ever.

Annual Mortgage Reviews Bring Borrowers Closer to Achieving Financial Goals

2007-11-28T22:50:00.001-08:00

Yearly reviews are a great way to keep on track with your financial goals. You're probably already meeting with your financial advisor and other asset manager for quarterly or annual reviews, and you should do the same with your Mortgage Planner as well. An annual mortgage check-up is an ideal way to make sure your mortgage is still having the maximum positive impact on your overall financial plan.

A lot can happen in one year. The market can take turns that can open up new opportunities, such as reduced interest rates, new loan products or changes in home values. Furthermore, your personal and financial situation could be mildly to radically different than it was just 12 months prior. Perhaps one or more of the income earners got a raise or lost a job. Maybe you received an inheritance. Even a minor, one-year change in one of your kids' college plans could impact your financial situation in a way that would benefit from an adjustment in your mortgage strategy.

Periodic reviews serve several purposes. First, they establish a consistent path toward achieving your financial goals. Secondly, they ensure that you stay on track with your goals. Sometimes plans need minor adjustments, but without the knowledge that comes from a thorough evaluation, those minor adjustments may go unnoticed. Often, by the time an adjustment becomes apparent, you may have already lost valuable time and/or resources that could have been spared with a few minor modifications along the way. Finally, periodic reviews help to keep you accountable toward your commitment to achieve your objectives. Without accountability, it's very easy to let your savings and investment actions fall by the wayside, especially when unexpected expenses arise. Knowing that you'll be discussing your action steps will help to keep you committed to your goals.

Consider scheduling a periodic review with your Mortgage Planner in conjunction with your asset manager's review. In addition to saving time, you'll also gain the advantage of your own personal management team for your financial asset-building program.

Remember that getting clarity on your financial situation is never a waste of time. If you find that your current financing is more desirable than the financing that is available in today's market, you'll know that your Mortgage Planner did a great job advising you last time. If you find that your changing circumstances have dictated that a new loan will better suit your new situation, your Mortgage Planner can bring you one step closer to achieving your financial goals. Call us for a free mortgage planning review.

Know Thy Credit Score

2007-11-25T00:17:00.001-08:00

Benjamin Franklin once said "credit is

money". Although he was referring to actually

having credit with a store to purchase things, his

quote still rings true today. Whether renting a new

apartment, applying for a credit card, a mortgage

or even homeowners insurance (yes, homeowner's

insurance), your credit score will determine the

particular interest rate or premium you are

quoted. In essence it has become the filter many

industries use to decide if they want to do

business with you and at what price. This article

explains what a credit score is, what it is based

on, and how it should be maintained.

The most common credit score is the FICO

score, created by the Fair Isaac Corporation. It is

the standard for the mortgage industry as well as

many others, and it can range from a low of 350

to a high of 850. The higher the score, the lower

the interest rate you will be offered, potentially

saving you hundreds if not thousands of dollars a

year. You want to remain above 720. About half of

the country maintains a score above this magic

number. As you begin to move below this number,

interest rates may begin to rise. Fall below 500

and you may not be able to take out a mortgage

even if you currently have one. How the score is

determined is one of the most common questions

we get from clients trying to improve their credit

score? While we do not know the exact formulas

used by the three biggest credit agencies using

FICO's standard of scoring, here is what we do

know.

There are five key elements that make

up your score

Your payment history, or how you pay your

bills, makes up 35% of your score. How much you

owe is 30% and how long you have had credit is

another 15%. The type of credit you have and any

new credit issued make up 10% each. Factors that

are NOT considered in this formula are your

income, savings, age, race, geographic location or

marital status. Basically the score indicates your

track record of making payments to companies

you owe money to including your utility bills.

Although it seems it should be an exact formula it

is more of an art form in knowing what affects

each component.

The largest factor is "do you pay your bills on

time". While it is best to always pay your bills on

or before the date that they are due, paying a bill

a few days late and incurring a late charge will not

necessarily go on your credit report. Having a

"late" on your credit report means that the bill is

30 days or more past its due date. The more

"lates" you have, the lower your score will go. If

you have a bill that is 60, 90 or even 120 days

late your score will rapidly decrease. But even if

you already have a "late" on your report, the

more time you gain between that date and the

current date the more your score will improve.

The mortgage industry has two major thresholds

when looking at any late payments on your

report: Are they older than 12 months and older

than 24 months. Each milestone will provide you

with better financing solutions as your late

payments fade with time. In addition, a mortgage

"late" is much more serious than a credit card

"late". So if it comes down to a choice "which bill

should I pay?" always choose your mortgage

payment and never miss paying this one. The

consequences are far too great.

How much you owe combined with what types

of credit you have available, make up the "art"

side of the calculation. You might think that if you

owe less you will have a better score.

Unfortunately that is not always true. This portion

of your score is determined by a delicate 3-way

dance between the types (mortgage, car loans

and credit cards), how much you owe, and how

much you have available to you. Having too many

credit cards can be a negative and so can having

only one. Having a credit card with a large limit

can be a good thing, as long as you are not near

that limit. Same with a second mortgage or a

home equity line of credit. When you have lots of

credit available you want to make sure you "use"

that credit but do not maintain a high balance.

The closer your balance is to the maximum credit

available to you, the lower your score will go.

The last two components of your score are the

length of your history and new accounts. Of

course the longer you have a credit history the

longer your track record will be, but another

important factor is how long you have had a

particular account. The longer an account is open

and active the better your score will be. Opening

up a bunch of new accounts and playing the credit

card-switching balances game does not look good.

So now you know what a FICO score is and how it

is calculated. The big question is now: how do you

maintain it?

As the saying goes, most people don't plan to

fail, they simply fail to plan. It happens all too

often in our business, but if clients regularly

monitored their credit scores we would be able to

save them thousands of dollars on their

mortgages. What this means is, if you are

planning to buy a home, don't just go look at

houses, make an offer and then get a mortgage.

You may not like what you are offered as a result

of your FICO score. Our suggestion is to plan for

this event. The same holds true if you are thinking

about refinancing.

Improving your credit score is kind of

like getting ready to run a marathon

You can't just sign up today and expect to run

tomorrow. If you have a poor credit history or if

there is inaccurate information on your report it

can take months to repair and correct. We have a

saying that we have been using years, Make Life

Happen! Don't sit back and let it happen to you.

Being proactive with your credit scores (like many

other areas of your life) will improve the results

and your experiences. Some of you reading this

will be thinking you don't have to worry about this

because you have never missed a payment and

have excellent credit. Well, so thought a client

when we were in the process of obtaining a loan

for him.

This client, we will call Mark, was referred to us

by an attorney and was only 30 days away from

his purchase closing date. Mark advised us that

his credit was perfect. However, when we ran it as

part of his application, it turned out that it was

not. One of the student loans that Mark co-signed

on behalf of his daughter indicated several missed

payments despite the fact she was still in school

and the first payment was not due for another 2

years. We still got the mortgage approved at a

rate and payment Mark could live with but had

Mark proactively monitored his credit scores he

would have had a better interest rate. Mark did

contact the student loan provider and they agreed

that it was a mistake but the damage was done. It

took three months to reflect the corrected

information on his report, too late to affect that

mortgage.

In that example "life happened to Mark" and

had he been proactive about his credit score he

would have been better off. This is not a hard

thing to do – it is just like going to the gym, you

have to do it regularly. While we are not

suggesting that you monitor your scores daily or

even weekly, we are suggesting that you institute

a bi-annual credit review to ensure your credit is

the best it can be so you are not caught off guard

like Mark.

If you would like to read more in-depth

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happy you did. Make Life Happen!

“Buy When There’s Blood in the Streets”—Baron Rothchild

2007-11-20T09:53:00.001-08:00

Over the next 2 years there will be great opportunities to invest in real estate for those people positioned to take advantage of this down turn. The time to buy is when everyone is wants to or is "forced" to sell. Here are two great opportunities to learn more about if you're serious about investing in real estate.

Number 1: Short Sales—A Win/Win/Win situation
A short sale involves a complex transaction on a property where the owner is in default on the loan payments and has received a Notice of Default, and where the market value of the property is less than the amount owed. The 'short' refers to obtaining a discount on one or more of the notes on the property. Investors will usually turn the property quickly for a nice profit.

There are many factors to consider in a short sale even to determine whether it's a deal worth pursuing. The investor must understand all title issues, have complete knowledge of all outstanding notes and liens against the property, and have a good sense of what the Brokers Price Opinion is likely to be. Even after finding a good candidate, the investor needs to be knowledgeable in negotiations, in how to put together a complete and professional offer packet for the banks and in how to obtain the best possible BPO. As well, it is always best to have buyers lined up before hand.

We've selected this strategy as one of our top two because there are so many opportunities in today's market. Many homeowners are in serious trouble out there, with some researchers estimating that foreclosure sales may account for up to 10% of the properties in many markets in California. The recent flat and down market combined with too many 100% financing deals with adjustable rate mortgages has created an opportunity for savvy investors. A typical short sale in California can net the investor $25,000-$40,000.If you don't know EXACTLY what you are doing, you should not be entering this arena. However, if you DO have the knowledge to systematize this strategy, it can be lucrative in today's market, not to mention it's a win/win/win situation: homeowners may be able to prevent foreclosure and can move on with their lives, the bank gets the bad debt off their books, and YOU pocket a nice piece of change!

Number 2: Multi-tenant—The Opportunity Behind the Opportunity
If you know what you're doing, opportunities to cash in on the current market are everywhere. Case in point is the multi-tenant market, or what we see as the opportunity behind the short sales opportunity.
Think about all those people facing foreclosure leaving their homes to become renters…and rents are lagging far behind property values…

So, will there be upward pressure on the rental market over the next few years? We think so. Where would you go with your investments to take advantage of this situation? Perhaps it's time to consider multi-tenant situations. Remember, though, that you are now entering the world of commercial real estate. These are the higher stakes tables. Before you sit down at one of them, you really need to have 'game.' If you'd like more information on how to take advantage of these opportunities contact us.

The 212 Degree Experience

2007-11-12T12:58:00.001-08:00

"At 211 degrees water is hot. At 212 degrees, it boils. And with boiling water, comes steam. And steam can power a locomotive."

-212 The Extra Degree by Sam Parker and Mac Anderson

This past week I had the opportunity to go down to Palms Springs to an event named "Sales Mastery". The focus of this event was all in going that extra degree in life, business and relationships. I believe that once we embrace this truth we can accomplish amazing things. It was great to spend three days with the top mortgage professionals from all over the country all of us looking to improve our business and our life.

Out of nearly 250,000 people who call themselves loan officers only 1400 people attended. Sadly, I think this says a lot about our professions. Just a short two years ago there were over 450,000 people who called themselves "loan officers". That number has dropped significantly but even with that drop in numbers 60% of all loan officers have less than 5 yrs experience and have never experienced a down real estate market. What this tells me is that today, more than ever it's crucial to work with an experienced loan professional. I feel fortunate to say that here at Evergreen Pacific I am the newest Mortgage Advisor and still have nearly 13 years with the company.

Over the next several months we will be implementing the 212 philosophy into our business. Good things will be coming down as a result of the new outrageously high goal we are setting for our customer experience. During the event I had the opportunity to meet Horce Schultze. Mr. Schultze is one of the founders of the Ritz-Carlton luxury hotel chain. In case you don't know much about his company the Ritz is considered to be the best luxury hotel chain bar none. They've earned that distinction by offering customer service that makes any other business you have ever dealt with look mediocre at best. They work outrageously hard every single day to exceed the expectations of their visitors and have put systems in place to make that happen. It is my new passion to see that Evergreen is known by it's clients and the community to offer that same "Ritz-Carlton experience to its clients. Watch over the next several months and you'll see what I mean.

How to Determine Whether Your Loan Officer is Reputable

2007-10-30T13:34:00.001-07:00

In slower markets, some loan officers may feel pressured to close deals that aren't in the homeowner's best interest. In order to avoid getting into difficult and financially compromised positions with their mortgages, borrowers are well advised to be acutely aware of the signs of a responsible loan officer when selecting a mortgage professional.

First, look for a Mortgage Planner whose values are focused on helping individuals to achieve their financial goals in both the fastest and the safest way possible. A reputable Mortgage Planner will show you the numbers associated with the proposed loan and provide you with concrete information that backs up his or her claims. Review all of the numbers. If they don't add up, ask for clarification. If your loan officer can't or won't answer your questions, move on--without the loan.

Secondly, a responsible Mortgage Planner will present you with financial information that goes beyond the point of the transaction, and will illustrate the total cost of the loan over time. If your loan officer is focusing only on rates and fees, you may be working with someone who's looking out for his or her own best interests, not yours.

Responsible Mortgage Planners will also tailor their strategies to fit your unique situation. In other words, they always take your personal financial goals into account. No one should try to place you into a loan without knowing the intricacies of your personal financial situation.

Finally, if your loan officer is advising you on issues other than mortgages, you could be working with someone who is compromising your best interests. Issues like investment rates of return and real estate appreciation aren't the areas of expertise for the vast majority of mortgage professionals and should be left to the professionals who have training and direct experience in those areas.

When seeking a loan officer, look for someone who specializes in mortgage planning, which is the process of evaluating a borrower's unique financial situation and advising the borrower on a loan that best suits his or her individual needs and goals. If your loan officer is trying to put you into a loan without evaluating how that loan will effect your entire financial situation--including debt management, tax benefits, investment goals and net worth--it's quite possible that you're only getting half of the picture.

The bottom line is that your mortgage representative should always be looking out for your best interests, regardless of market conditions. If you have any questions about any offer you've been presented by a lender feel free to call my office, we'll be glad to give you a fair and honest assessment.

What is Your Money Blueprint?

2007-10-28T21:11:00.001-07:00

by T. Harv Eker

All of us have a personal money blueprint ingrained in our subconscious minds that will determine our financial lives. Have you ever wondered why some people seem to get rich easily, while others are destined for a life of financial struggle? Is the difference found in their education, intelligence, skills, timing, work habits, contacts, luck, or their choice of jobs, businesses or investments?

The Shocking Answer is None of the Above!
No doubt you've read other books, listened to tapes or CDs, gone to courses and learned about numerous money systems, be they in real estate, stocks or business. But what happened? For most people, not much! They get a short blast of energy and then it's back to the status quo.

Finally, there's an answer. It's simple, it's law, and you're not going to circumvent it. It all comes down to this: If your subconscious "financial blueprint" is not set for success, nothing you learn, nothing you know and nothing you do will make much of a difference. I'll explain more about this later.

My Obsession with Becoming a Success
Like many of you, I supposedly had a lot of potential but had little to show for it. I read all the books, listened to all the tapes and went to all the seminars. I really, really, really wanted to be successful. I don't know whether it was the money, the freedom, the sense of achievement or just to prove I was good enough in my parents' eyes, but I was almost obsessed with becoming a success.

I left college after my first year and spent the next 12 years trying to make ends meet. Any money I made, I lost. I really couldn't rub two nickels together. I thought that I was fairly intelligent and a good person so I couldn't understand why the one thing that I wanted, financial success, completely eluded me.

Then, as luck would have it, I got some advice from a rich friend of my father, a wealthy man in many ways. He was a strongly principled person who had a really big heart. He said to me, "Harv, if you want to be successful at business, you need to do what successful business people do. Rich people think the same thoughts and take similar actions, albeit in different vehicles. So by reading, studying and modeling them you can pick up what they do."

It was time to put what I learned to the test. I opened my next business, which was one of the first retail fitness stores in all of North America. And using the principles I learned, I became a millionaire in only two and a half years. The business was so successful that I opened 10 stores.

After selling the company, I took a few years off to refine my strategies and began doing one-on-one business consulting. And today, my sole mission is to teach these same principles to people throughout North America.

I would like to share with you a little about how each of us is conditioned to think and act about money. I'll help demystify for you why some people are destined to be rich and others are destined for a life of struggle. You'll understand the root causes of success, mediocrity or financial failure and begin changing your financial future for the better.

What is Your Money Blueprint?
Give me five minutes with anyone and I can predict their financial future for the rest of their life. How? By identifying their money blueprint.
Each of us has a personal money blueprint already ingrained in our subconscious mind that will determine our financial life. What that means is you can know everything about business, marketing, communications, negotiation or real estate, for example, but if your subconscious money blueprint isn't preset to a high level of success, you will never amass a large amount of money.
We've all heard of Donald Trump and what he has accomplished. Here is this multibillionaire who at one point lost everything, and within two years he's got it all back and more. Why? His money blueprint is set for "high." On the other side of the coin we have lottery winners. They win millions of dollars and within five years virtually half of them are back where they started. Why? Their money blueprint is set for "low."

How Your Money Blueprint is Formed
What people have to realize is that we are all taught and conditioned in how to deal with money. Unfortunately, many of us were taught by people who didn't have a lot of money, so their way of thinking about money became our natural and automatic way to think.

Your mind is nothing more than a big and spacious storage cabinet. In this mental file cabinet you file and store information. Where does this information come from? It comes from your past programming. That determines every thought that forms in your mind.

So the questions becomes, "How are we conditioned?" We are conditioned in three primary ways in every arena of life, including money:

The first influence - Verbal programming: What did you hear when you were young?
The second influence - Modeling: What did you see when you were young?
The third influence - Specific incidents: What did you experience about money, success and rich people when you were young?

The First Influence: Verbal Programming
Did you ever hear phrases like, "Money is the root of all evil;" "Save your money for a rainy day;" "Rich people are greedy;" "Rich people are criminals;" "filthy riches;" "You have to work hard to make money?" In my household, every time I asked my father for any money I'd hear him scream, "What am I made of...money?"

Every statement you heard about money when you were young remains lodged in your subconscious mind as part of the blueprint that is running your financial life. Naturally, you don't even have to think about it. You don't even see it. You go to your money file, pick it out and do what you're supposed to do with it. That's because your subconscious conditioning determines your thinking. Your thinking determines your decisions and your decisions determine your actions, which eventually determine your outcomes.

The Second Influence: Modeling
The second way we are conditioned is called modeling. There is a saying, "Monkey see, monkey do." And, of course, human beings are not far behind. Generally, we tend to be exactly like one or a combination of both of our parents in the arena of money.

So the question is, what were your parents like around money when you were growing up? Did they manage money well or did they mismanage it? Were they spenders or were they savers? Were they shrewd investors or were they non-investors? Was money always a struggle in your home or was it a source of joy and ease? Whatever your answers, you will be very similar to that. Although most of us would hate to admit it, there's more than a grain of truth in the old saying, "The apple doesn't fall far from the tree."

On the other side of the coin, some of us are exactly the opposite of one or both parents when it comes to money. Many people who come from poor families become angry and rebellious about it. Often they either go out and get rich or at least have the motivation to do so. But there's one little hiccup. Whether such people get rich or work very hard trying to become successful, they usually aren't happy. Why? Money and anger become linked in their minds, and the more money such individuals have or strive for, the angrier they get.

The reason or motivation you have for making money or creating success is vital. If your motivation for acquiring money or success comes from a non-supportive root such as fear, anger or the need to prove yourself, your money will never bring you happiness.

The Third Influence: Specific Incidents
The primary way we are conditioned is by specific incidents. What did you experience when you were young about money, wealth and rich people? These experiences are extremely important because they shape the beliefs - or rather, the illusions - you now live by.

Let me give you an example. A woman who was an operating room nurse attended the Millionaire Mind Intensive seminar. "Josey" had an excellent income, but somehow she always spent all of her money. When we dug a little deeper, she revealed she remembers when she was 11 being at a Chinese restaurant with her parents and sister. Her mom and dad were having yet another bitter argument about money. Her dad was standing up, screaming and slamming his fist on the table. She remembers him turning red, then blue, and then falling to the floor from a heart attack. She was on the swim team at school and had CPR training, which she administered, but to no avail. Her father died in her arms.

Since that day, Josey's mind linked money with pain. It's no wonder, then, that as an adult, she subconsciously got rid of all of her money in an effort to get rid of her pain. It's also interesting to note that she became a nurse. Why? Is it possible she was still trying to save her dad?

What is Your Money Blueprint Set For?
Now it's time to answer the million-dollar question: "what is your current money and success blueprint, and what results is it subconsciously moving you toward? Are you set for success, mediocrity or financial failure? Are you programmed for struggle or for ease around money? Are you set for working hard for your money or working in balance? Are you set for having a high income, a moderate income or low income? Are you programmed for saving money or for spending money? Are you programmed for managing your money well or mismanaging it?

As I stated earlier, your money blueprint will determine your financial life - and even your personal life. If you're a woman whose money blueprint is set for low, chances are you'll attract a man who is also set for low so you can stay in your financial comfort zone and validate your blueprint. If you're a man who is set for low, chances are you'll attract a woman who is a spender and gets rid of all your money, so you can stay in your financial comfort zone and validate your blueprint.

So again, how can you tell what your money blueprint is set for? One of the most obvious ways is to look at your results. Look at your bank account. Look at your income. Look at your net worth. Look at your success with investments. Look at your business success. Your blueprint is like a thermostat. If the temperature of the room is 72 degrees, chances are good that the thermostat is set for 72 degrees.

The Roots Create the Fruits
The only way to significantly change the temperature in the room is to reset the thermostat. In the same way, the only way to change your level of financial success permanently is to reset your financial thermostat, otherwise known as your money blueprint.

In life, our fruits are called our results. So what do we tend to do? Most of us focus even more attention on the fruits, our results. But what is it that actually creates those fruits? The seeds and the roots, that's what.

What's under the ground creates what's above the ground. What's invisible creates what's visible. So what does that mean? It means if you want to change the fruits, you will first have to change the roots. If you want to change the visible, you must first change the invisible.

In every forest, on every farm, in every orchard on Earth, what's under the ground creates what's above the ground. That's why focusing your attention on the fruits you've already grown is futile. You cannot change the fruits already hanging on the tree. You can, however, change tomorrow's fruits. But to do so, you'll have to dig below the ground and strengthen the roots.?

Mark Victor Hanson’s Relationship Building Tips

2007-10-27T09:39:00.001-07:00

Positive relationships are at the heart of every successful business. Yet few people take the time to really understand how successful relationships are cultivated and maintained.

In a recent issue of Mortgage Planner Magazine, Mark Victor Hansen, co-author of "The One-Minute Millionaire"
and "Chicken Soup for the Soul", provided his tips for building and maintaining successful relationships.

When relationships thrive for a while, but then fall apart, Hansen suggests evaluating what went right when things were thriving as well as what went wrong as things began to fall apart. Understanding the factors leading to the success--or difficulties--of the relationship will help you to repeat the positive while avoiding the negative.

Secondly, Hansen suggests learning to nourish your most valuable relationships in a win-win atmosphere. Many people are so focused on what they want, that they forget all about the other person in the relationship. "In business, win-win means having a genuine concern for the other person," writes Hansen. "That they win as much as you do." When people focus solely on squeezing every last penny out of a business situation, it creates distrust, cynicism, anxiety and questionable ethics. This doesn't mean to cave in and give away the farm, either. Win-lose, whether you're the winner or loser, will never work in the long run. Focus on creating a positive outcome for everyone involved. This will serve you well in the duration of the relationship.

You should also remember to invest your time wisely. There will be clients that want to dominate your time, yet give you little in return. It's a good idea to limit your time there. Balance things out by putting more time in with your core clients. Take the time to learn as much as you can about them, including their likes and dislikes, favorite restaurants, hobbies, sports and pastimes and your business reap the rewards. If you find that you have toxic people around you, Hansen advises getting away from them immediately. They'll drain your time, your energy and your resources, which are far too valuable to sacrifice.

Finally, be willing to go the extra mile. Remember, it takes time to cultivate successful relationships, but as you focus more and more on win-win relationships, behaviors like going the extra mile will become more like second nature to you. And as your relationships flourish, Hansen advises, you'll find yourself becoming richer, and not just financially.

In Praise Of A "Toxic" Loan

2007-10-26T13:41:00.001-07:00

The loan with the worst reputation these days may be the pay-option ARM. Monthly payments for this adjustable-rate mortgage go up when interest rates rise. And borrowers can sink deeper into debt because they're permitted to pay less than the minimum interest due each month, with the balance added to the principal. If homeowners hit the maximum they're allowed to borrow, their monthly minimum shoots up, which can force them into default (BW—Sept. 11, 2006).

A new academic study concludes that this most toxic of all mortgages is, in a perfect world, the best. How can that be? Because if borrowers have erratic incomes but perfect self-control, they can make small payments in lean months and catch-up payments in good times. That flexibility lessens the risk of default caused by a hiccup in income, a benefit to both borrowers and lenders.

The authors of the National Bureau of Economic Research working paper, Tomasz Piskorski of Columbia Business School and Alexei Tchistyi of New York University's Stern School of Business, say that rather than banning the loans, as some have advocated, the U.S. should educate consumers about their hazards and how to use them properly. Piskorski calculates that the ARMs' total potential benefit to borrowers and lenders combined is at least $50 billion, so even hefty spending on education would be worthwhile.

The public reaction to the study findings has been mixed. One comment on BusinessWeek.com's Hot Property blog: "Experts shouldn't be promoting this type of product for the general population, even just in theory."

By Peter Coy

How to Manage Home Equity to Build Wealth

2007-10-25T00:24:00.001-07:00

How the Affluent Manage Home Equity to
How to Safely and Conservatively Build Wealth

If you had enough money to pay off your mortgage right now, would you? Many people would. In fact, the 'American Dream' is to own your own home, and to own it outright, with no mortgage. If the American Dream is so wonderful, how can we explain the fact that thousands of financially successful people, who have more than enough money to pay off their mortgage, refuse to do so.

The answer? Most of what we believe about mortgages and home equity, which we learned from our parents and grandparents, is wrong. They taught us to make a big down payment, get a fixed rate mortgage, and make extra principle payments in order to pay off your loan as early as you can. Mortgages, they said, are a necessary evil at best.

The problem with this rationale is it has become outdated. The rules of money have changed. Unlike our grandparents, we will no longer have the same job for 30 years. In many cases people will switch careers five or six times. Also, unlike our grandparents, we will no longer live in the same home for 30 years. Statistics show that the average homeowner lives in their home for only seven years. And unlike our grandparents, we will no longer keep the same mortgage for 30 years. According to the Federal National Mortgage Association, or Fannie Mae, the average American mortgage lasts 4.2 years.

Given these statistics, more middle class homeowners are choosing to use their mortgage as a tool just like the wealthy -- those with the ability to pay off their mortgage but refuse to do so. Will you be one of those who create a new, liquid, financially secure dream?

2007-10-25T00:15:00.000-07:00