Archives for April 2010

I’m supporting NAMI

In less than a month, I’ll be joining thousands of others who will be walking for NAMI, the National Alliance on Mental Illness, to help raise money and awareness.  Mental illness impacts many Americans and includes everything from autism, ADD, bipolar disorders, eating disorders, depression, schizophrenia…and so much more.

The walk is on May 15, 2010 and is a short 5k at Magnuson Park in Seattle…I’m asking friends and family to chip in what ever they can, even if it’s five bucks, every donation counts.

You can click on the link on the left for more information or to sponsor me.

Thank you for your support!

Senior Property Tax Exemption or Deferral? One places a lien on property!

I read this post this morning from The Talon Group and even though my background includes 14 years in the title and escrow industry, I had no idea about the different options for Seniors with property taxes…this is a must read!

Washington State provides two very different programs for our “well-aged” homeowners to help pay property taxes. The most popular program, Senior Property Tax Exemption allows seniors making less than $35,001 to “freeze” the tax value of their home (in the eyes of the assessor) at the current rate. As the assessed value rises or falls, the taxable value will be billed upon the lesser of the frozen or market value. Other than the Emergency Medical Services Levy, this program exempts all excess or special levies that are in addition to the regular levies. Seniors can even exempt themselves from paying for regular levies if their income is $30,000 or below. To qualify, you must be at least 61 years of age by December 31st of the application date. Renewals are sent out out at least every four years.

Click here to read the entire article.

Kudo’s to The Talon Group for dishing up great information for consumers!

15 Days Remaining for the Home Buyer Tax Credit

NOTE: this is a post from 2010 and this tax credit is no longer available.

If you are planning on taking advantage of the home buyer tax credit, either as a first time home buyer or a "repeat" home buyer (aka "long time resident"), you have fifteen days to be in a binding sales contract with mutual acceptance.    This means that both you and the seller have ironed out the negotiations which can sometimes take a few days to agree on…so in reality, you probably have less than 15 days unless you submit the "perfect" offer to the seller and they decide to accept it with no counter offers.

If you are hoping to claim the home buyer tax credit, you should check in with your mortgage professional to make sure that your preapproval is still valid.  In the Seattle-Bellevue area, listing agents and sellers expect a preapproval letter to accompany the purchase and sale agreement before they will consider the offer. 

Preapproval letters may expire if your paystubs, bank statements or credit report are outdated.   The terms stated on the preapproval letter should match with the terms of the offer being presented to the seller.  Mortgage rates have been volatile and if your debt to income ratios were "pushed" to the limit, you may or may not be qualifed for what you once were.

If your offer is countered past April 30, 2010 because you didn't have all your ducks in a row with your lender, you may not qualify for the home buyer tax credit.

And before you try to get into a mutual contract before the deadline–it's a good idea to make sure that you actually qualify for the tax credit.  

You may be disqualified from the home buyer tax credit if:

  • the government has deemed you make too much money–modified adjusted gross incomes up to $125,000 for a single taxpayer, or $225,000 joint, qualify for the full credit.  Those with MAGI up to $145,000 for a single taxpayer   and $245,000 joint qualify for reduced credit.
  • if the purchase price is over $800,000 (better write that offer for $799,950 if your income qualifies).
  • if the home being purchased is not going to be your primary residence.
  • family members are not eligible (you cannot buy the home ancestors or dependents)
  • if the contract is accepted after April 30, 2010
  • if the transaction is closing after June 30, 2010

Remember, I'm your mortgage expert for homes located in Washington.  I am not a tax expert–please consult your CPA or tax advisor for more information.

Did You Know that FHA Mortgages are Assumable?

One benefit of FHA insured mortgages is that they are assumable to qualified buyers.  This means that if you have an FHA insured mortgage at today’s low rates and you’re selling your home during a higher mortgage rate environment, being able to offer a lower rate to potential buyers could provide a distinct advantage over other competing listings. [Read more…]

President Obama Declares April National Financial Literacy Month

Recently President Obama declared April as National Financial Literacy Month.  

In recent years, our Nation's financial system has grown increasingly complex.  This has left too many Americans behind, unable to build a secure financial future for themselves and their families.  During National Financial Literacy Month, we recommit to teaching ourselves and our children about the basics of financial education.

I've always felt that financial education should be taught in high school.  I'm not talking home-ec, at least not the the home-ec I attended at Hazen High School where I grew up in Renton, where we made up incomes and came up with a rough budget.  I'm talking about a detailed course where students would focus on the benefits and consequences of credit and debt.

I think it's great that the President is bringing attention to Financial Literacy.  During the subprime era of mortgage, I met with people who wanted to buy a home because their friend or co-worker just did.  They had no idea what financial responsibilities coincide with owning a home.  They often wanted to buy as much as they could be qualified for based on guidelines at that time even if the mortgage payment or program was not suitable

More from President Obama's proclamation:

The new Consumer Financial Protection Agency I have proposed will ensure ordinary Americans get clear and concise financial information…. While our Government has a critical role to play in protecting consumers and promoting financial literacy, we are each responsible for understanding basic concepts….

I wonder what is an "ordinary American" and what if you're not an "ordinary American"?  In his proclamation, he also talks about how our "recent economic crisis was the result of irresponsible actions on Wall Street and everyday choices on Main Street" and includes "large banks [that] speculated recklessly".  His list of who's at fault no where includes our Congress who mandated that Fannie Mae, Freddie Mac and FHA create programs or different guidelines to help more Americans buy homes

From the Wall Street Journal:

Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure.

But I digress…

President Obama is promoting a website they've created for financial literacy which appears to be an assortment of various government links organized on one site.   It' looks like it's well meaning advice but I'm not sure it's the best or most practical advice–very similar to HUD's book on buying and financing your home.  The site also has information that is very biased, in my opinion, about financial tools such as reverse mortgages, which are not right for everyone but when used in the right situation, can make a huge difference for the better in a seniors life.  I also found some information about credit repair that would potentially provide the result a consumer would be looking for.

I highly recommend that you subscribe to Get Rich Slowly.  This is a fantastic blog that is packed full of common sense financial information on getting out of debt and building your savings.  J.D. Roth's blog was recently named the most inspiring money blog by Money Magazine.

Washington State's Department of Financial Institutions also has a blog that you may find interesting:  Money Talks.  I'm a new subscriber to this blog and so far, the information seems very good.   In fact, it was from DFI's blog that I learned about the Twitter hashtag for April's Financial Literacy Month: #FinLit10

Of course I hope you're a subscriber to my blog, The Mortgage Porter.  I don't only write about mortgages or post interest rates on my blog, you'll also find quite a bit of information about credit scoringwhich impacts your life every day.  I cover other topics too.  You can subscribe in the upper right corner by entering your email address and you can un-subscribe anytime.

During April, I'll share information in recognition of National Financial Literacy Month…actually I hope that's what I've been doing at Mortgage Porter for the last couple of years!

Why It Pays to Get Preapproved Early: You May Think You Know Your Credit Score

I recently met with a couple who had relocated to the Seattle area and were ready to make an offer on a home.  They’re very qualified with their income stability and enough savings to put a twenty percent down payment on their next home.  What surprised them was the credit report.  [Read more…]

Poll: How would you prefer to have your mortgage originator compensated?

How a mortgage originator is compensated is being reviewed by the Federal Reserve and Washington State's Department of Financial Institutions (DFI).   The traditional method of being paid based on a percentage of the loan amount is getting some heat.  It's unfortunate because I do believe a majority of the bad actors are no longer in the mortgage industry thanks to the SAFE Act and licensing requirements.   Those who do not want to be held to the licensing standards and who want to stay in the mortgage industry will have work for a bank, where they are only registered.  Many banks are limiting what and how a mortgage originator "appears" to be paid to the consumer.  (Only mortgage brokers have had to disclose their compensation on the back end).   

Currently, a consumer can have their mortgage priced with an origination fee (points) or without points, which means rebate pricing is being used to compensate the originator.  The loan does not have to be priced with a full 1% of the loan amount, if you look back at even recent rate post at Mortgage Porter, you'll see that sometimes I quoting 0.75% for a certain rate–it all depends on where the markets are at that moment.

I would love to hear back from my readers how you feel mortgage originators should be compensated.   I will be leaving the poll on left side of my blog during the month of April.   Please vote and feel free to leave your comments on this post.

I'll be sure to share the results with you.

The choices in this poll are:

Flat Fee:  My opinion is that if mortgage originators are forced to go to a flat fee.  Mortgage companies will still have to compensate them for their "market worth".  It's possible that although the fee might look better, the base rate (without discount points) might be higher as it will be set by the bank or mortgage company, and not the originator.

Points:  This is currently the most common method with how a mortgage originator is paid.  Points can be paid by the consumer or by rebate from the bank/lender.

Hourly:  Consumers could select a mortgage originator based on their hourly rate and an estimation of how many hours the mortgage originator estimates their transaction would take.

Just How Much of Your Info Do You Want on the Internet?

My husband jokes that he tries to stay out of "Google" where I am the opposite.  I hope folks who are need a mortgage for their home in Washington State can find me by searching various topics or my name on the internet.  However, I don't like website where they compile and provide a significant amount of personal information just by entering in your name.

My sister recently made me aware of   Yes, I'm all over Facebook, I tweet and I yelp… sometimes I even flicker or blip; but it's my choice.   Believe it or not, I do like to have some level of privacy (or at least the illusion of it) while we still can.

"Spokeo aggregates publicly available information from phone books, social networks, marketing surveys, real estate listings, business websites, and other public sources. Spokeo does not originate data or publish user-generated content like Facebook or MySpace. Rather, Spokeo indexes third-party data in ways similar to Google or Bing."

I encourage you to visit Spokeo and find your listing.  All you have to do is enter your name.  Review the information that they have posted on you and if you're okay with that data–that's totally cool.   However, if you would like to have your profile (or listing) removed, you can do so by clicking the privacy link in the bottom right corner of the website.  It's pretty easy to do. 

Ironically Spokeo says they "care about data privacy" and have partnered with a company that claims to protects your privacy and they offer you a chance to buy that service after you see what they have about you on their website.  I opted NOT to purchase this service.