How to save an additional $150,000 on your home:

30 12 2011

Small step #2.

So you own a home– congratulations!  You’re decades ahead of the average renter and are on the path to win.

Over time, your income will likely increase, and your current debts will decrease.  This can help you make the second small step towards financial freedom: The short-term mortgage.

By refinancing to a 15 year mortgage, your interest rate will usually be 1-3% less than your current 30 year rate.  Also, every dollar you spend gives you the same result as $3 towards a 30 year mortgage.  And in the first 12 months of a 15 year loan, you will build more equity than 4 years of payments on your 30 year loan.

Imagine you’re driving to your beach vacation and you could take a route that would get you to the same destination, but in half the time with only 1/3 of the costs, giving you an extra week of time on the beach.  The catch is you’d have to give up two McDonald’s meals on the trip to enjoy an extra week in paradise.  Which route would you choose?

When you’re ready to make a choice to save more money on your home, I’m ready to help.  Please contact me for a personal savings report, to see how much extra time on the beach you’ll get.

And if you can only afford your current monthly payment, we can usually still save you 1% and a decade of payments with a 20 year loan.  So please reach out to me to see how much you’ll save.

As always, I’m here to help.

Sincerely,

Wilhelm Koenig

405.249.5993 cell

Advertisements




What you need to know when buying a flipped property.

10 10 2011

Here’s the HUD memo that details the extension on the waiver of anti-flipping regulations.  It gets pretty tricky and double-negative-y pretty quickly, so here’s the simplest way I explain it:

During the housing bubble days, when homes were increasing in value quickly, home flippers would buy homes, do minimal repairs (ie paint) and sell it quickly for a profit.  Some of these homes had major issues like mold that had been quickly painted over, or foundation issues that had been temporarily patched together.  Also, some of these transactions had fraudulent, selling a home for more than it was worth to a buyer who never intended to live there, and who received a cut of the money from the sale.

 So HUD looks very closely at any transactions where the seller bought the property less than 6 months before the new sale.  They are looking to make sure that the property is in good shape, that it is worth the sales price, and that the transaction isn’t fraudulent.  Here’s what that means to you:

 Normally HUD would not even allow any sales under 90 days after when the seller purchased the home.  The only exceptions were when the seller inherited the property, since this would not be a sale, or a typical investor buying and flipping properties.  HUD recently started allowing transactions under 90 days if the house and the transaction meet additional guidelines.  Even though HUD will allow this, not many investors will close transactions under 90 days.  Check with your lender if they will allow FHA closes under 90 days.  But here are HUD’s guidelines for closing an FHA loan during the 90 day period:

1. The transaction is arms-length: no business relationships between the seller, buyer, or other parties in the transaction.  The seller is on title to the property.  If an LLC or other company is involved in the transaction, it was already established before the transaction began and was operating according to applicable laws. 

2. The property’s value is accurate: It has not been bought and resold multiple times in the past 12 months.  It was marketed on the MLS.  If the value increased more than 20%, then you must document the value with the following:

    a.  Appraiser documents the improvements to the property and the reasons for the increase in value. (usually this will be copies of the repair receipts and invoices from the seller)

     b.  A home inspection.  Any health issues (mold, unsafe gas heaters, etc) or structural issues (foundations, roofs, etc) must be repaired and the repair must be documented by the home inspector or the appraiser.

Most lenders require a second appraisal to double-check the value and condition of the home.  The lower value of the two appraisals will be used and any repairs mentioned by the appraisers must be fixed and documented like on 2b.

The bottom line is that it CAN be done, to close a flipped property in under 90 days.  But you need an excellent, proactive lender who addresses these additional issues for buying a flipped property.  And I’d love to be that excellent, proactive lender for you.  As always, I’m here to serve you.

Wilhelm Koenig





Why do I get to skip a payment when I buy or refi?

3 10 2011

In some situations, you could skip two payments.  But let’s take a closer look at what is happening with the first payment on your loan.

Interest is always paid in arrears on a loan.  This means that the interest has to accumulate before there is anything to pay.  It’s like a water bill- you use the water first, the utility company checks to see how much you owe, and then bills you the next month for the previous month’s usage.  So the interest accrues during your skipped month and your first payment applies to the interest from the previous month and the loan principal.  That’s why you get to skip a month.

How do I get to skip two months?  If your loan funds during the first 5 days of the month, you could pay less closing costs and skip one payment, or pay slightly more and skip two.  Since you are only paying the interest for the skipped month, it’s usually only about 2/3rds of what the normal payment would be.

Many times a home purchase or refinance happens when you’re going through a life change– a new marriage, baby, job relocation, divorce or death in the family—and many times skipping one or two payments helps with all the small “other” costs that go along with these life changes, whether they are diapers for babies or diapers for taking in elderly parents.

I am honored to help you save money on your home financing, especially when you are going through these life transitions.  So far I have saved fellow Oklahomans $18.3 million on their homes this year, and I want to help you be a part of that savings.  Please reach out to me, and I’m happy to help.

As always, here to serve,

Wilhelm Koenig

405.249.5993





Q: What documents do I need to get pre-approved?

26 09 2011

A: More than you’ve got. 🙂

Seriously, if you are prepared, getting pre-approved for a home loan is simple.   You and I set up a time to talk about what you want to achieve with this transaction.  This can be on the phone or in person, and usually takes between 15 and 30 minutes.  We’ll cover the bases of getting approved, the homebuying process, and we’ll look at different strategies to save the most money on your home over time.

By the end of this conversation, I will tell you whether or not I can help you, and if I can, exactly what I will do for you.  I will also give you a detailed list of documents to gather, so I can give you a pre-approval letter that shows I have verified your income, assets, and credit and that you are fully approved.

These are usually:

All pages of the last 2 years of your Federal tax returns

The most recent 1 month of paystubs

All pages of the last 2 months of bank statements

All pages of your most recent retirement or investment account statements

Driver’s license and social security cards

And if you are refinancing, your most recent mortgage statement, your home owner’s insurance declarations page, and your tax sheet

That’s typically all you need.  Then we have a follow-up meeting after you’ve gathered the documents so we can finalize your approval.  We’ll address any challenges on your approval and make sure that we have solutions.  This way there are no last-minute curveballs before closing. 

I’ll educate you on the different ways we can structure your loan to maximize your savings monthly or over time, and you can choose what is best for you.  This is how I am saving your fellow Oklahomans over $20 Million dollars on their home financing this year, and I want to help you be a part of this family.

Please contact me for a complimentary consultation today.

Wilhelm Koenig

405.249.5993

 





Do I have to pay for closing costs too?

5 07 2011

It depends on how you write your contract. 

Look at this house, the parts of the home represent the parts of a mortgage.  The door is the down payment, the house is the loan, and the chimney are the closing costs, because they stick up above the rest of the house.

If the sales price is $100,000 and the down payment is 5%, then the door costs $5,000 and the home costs $95,000.  The closing costs probably would be around $3,500. 

So if you ask for the seller to pay for your chimney, you can get into your home with only paying for the door ($5,000.) 

Sometimes the seller will pay for the chimney only if you raise the sales price to cover the cost of the chimney.  The new sales price would be $103,500, the down payment would be $5,175, and you would pay no closing costs. 

In either case, it is extremely important to hire a competent loan officer and realtor who both work for you.  I would love to explain your loan details as clearly as the example above and put you in touch with a solid realtor who will work to make the transaction fit your needs.  Please reach out to me when you need help financing your home.





Are you a member of a Native American tribe?

13 06 2011


If so, you may be eligible for one of the best loan products available, the section 184 loan.  It is a loan for registered members of Indian nations or their spouses, which allows you to put very little (or no money, depending on your tribe) down, receive a low interest rate and pay no monthly mortgage insurance.  It also is a loan type with common-sense underwriting guidelines, so if you have some unique situations that keep you from qualifying for a conventional loan, you may still qualify for a section 184 loan.

While close to 50% of the section 184 loans in the US are in Oklahoma, very few lenders offer it, and even fewer do it well, making the process simple for you.  We love our clients, and we especially love helping clients with Native Americans citizenship finance their homes on great terms.

Please reach out to us to start your approval process.  Thank you!





Reduce approval stress with cash-to-close tips

13 06 2011

Why would an underwriter even care where I got my closing money? 

I have enough money, what is their problem?

So tell me again, why do I need to get copies of my deposits for the last two months?  Arrrggggghhhhhhh!

 

Underwriters care.  They care a lot.  They care about putting immaculate loans on their books, loans that they can sell without issues, loans that are so clean they read like a Dick and Jane book.  They don’t necessarily care about your home or your situation.  Which means that they can make your life difficult if you’re unprepared. 

One of the big challenges on a loan is verifying the cash to close.  Oftentimes this can make you feel like you’ve just been inspected by the TSA on your finances.

But really, it’s simple.  Underwriters want to make sure that no one takes out a loan to use as the down payment for another loan, and they want to make sure that money isn’t changing hands illegally in the transaction—ie the seller giving you money for the down payment, etc.  That’s all—no domino chains of loans and no under-the-table deals.

Here’s what they typically want: one or two recent months of bank statements to show how much you usually average, and the source(s) of your recent deposits.  If there are no irregular, non-payroll deposits and your ending balance and average balances are within one paycheck of each other, you’re usually fine.

If there are a lot of irregular deposits, we switch to plan B: use a Verification Of Deposit or show where each deposit came from.  A VOD is a mini-statement from your bank that tells us your average and ending balance.  If these are similar, we can usually just use this and avoid getting cancelled checks for the random deposits.  Sometimes, though, an underwriter may request the full bank statements and verification of the source of all deposits.   Remember, they want to show the money used for the down payment wasn’t borrowed and didn’t come from the seller.  In this case, we’ll get a copy of the deposit slips and the cancelled checks that made up the irregular deposits, write a short explanation on the deposits, and move on.

The idea is simple, but things can get complicated right before the closing if you submit an updated bank statement that has weird deposits.  The best plan is to be proactive– keep copies and explanations of all your non-payroll deposits.  This way, you can have a simple, smooth loan process.

Here to help,