The IDEAL Investment

The IDEAL Investment - 2/20/2012

Rental homes can be the IDEAL investment in today's market because they offer a much higher rate of return than alternatives without the volatility of ups and downs in the stock market.
IDEAL serves as an acronym to identify the advantages of rental properties:

• Income from the monthly rent contributes to paying the expenses and a return on the investment
• Depreciation is a non-cash deduction that contributes a tax shelter
• Equity grows monthly as the mortgage amortizes due to some of each payment being applied to the principal
• Appreciation is achieved as the value of the property goes up
• Leverage can increase the return on investment by using borrowed funds to control a larger asset

The combination of these characteristics working together makes rental real estate a very good investment for today's economy and years to come. Increased rents, high rental demand, good values and low non-owner-occupied mortgage rates contribute to positive cash flows and very favorable rates of return.

Contact me for more information about actual opportunities in our local market.

Are You KIDDING Me? No...Not Again!

If you have been thinking about refinancing an FHA loan or buying a new home with FHA financing, now is the time to act!

Buying a home?

For the potential homebuyers out there, don’t delay if you plan to use FHA financing. You will save money by placing a contract on a home and starting the financing process now, because the FHA’s Up-Front Mortgage Insurance Premium (MIP) and Annual MIP will increase for applications submitted on or after April 9.

Already have an FHA loan?

For those with an existing FHA loan endorsed on or after June 1, 2009, you may be able to save thousands with a lower rate and monthly payment if you apply now for an FHA streamline refinance. Don’t wait; the process is often quick and easy.

After April 9, 2012:

• The Up-Front MIP will increase from 1% to 1.75% of the base loan amount.
• The Annual MIP for 15-year or longer loan terms will increase to 1.25% for loans with LTVs higher than 95% and to 1.20% for loans at less than or equal to 95% LTV.

New fee structure for refinancing older FHA loans.

For those with older FHA loans, i.e., endorsed before June 1, 2009, you may also save money with an FHA streamline refinance. However, the fees for refinancing these loans will be reduced on June 11, 2012 to 0.55% for the Annual MIP and 0.01% of the base loan amount for the Up-Front MIP.

If you are in this group, call for an assessment of your loan to determine if the changes to the FHA fee structure may make it more advantageous to wait to refinance until June 11, 2012.

FHA fees will increase in April.

To take advantage of the current FHA fee structure, you must act now. Call today me today 214-448-3835 and I will help you assess your options to determine if you’ll save with an FHA loan or refinance.

This information is provided by SWBC Mortgage Company

Fix It Anyway

"If it isn't broke, don't fix it" is certainly popular advice, but if you've ever had a serious plumbing leak, you certainly wished you had taken care of the problem earlier.
Washing machines, like all appliances, are supposed to work and when they don't, it's time to have them fixed or replaced. However, there is a critical connection from your water supply that may even be older than your washing machine itself.
Ask someone whose hose broke while they were asleep or out of town and you'll hear stories of how quickly the water can damage walls, flooring and furniture. Almost anyone can replace the hoses with a pair of pliers for under $30.00 to avoid this potential catastrophe.
As you're shopping for the replacement hoses, consider the braided stainless steel connectors. The advantage is that the stainless steel offers additional protection should a soft spot develop in the hose beneath. They'll cost a little more but offer considerably more protection for a nominal price.

Uh Oh...Not Again!

FHA Fees Going Up April 1st


FHA has raised the annual Mortgage Insurance Premium to 1.25% beginning April 1st.  MIP is required on all FHA loans and used to fund losses by lenders for borrowers who default on their mortgages.  As of June 1st, FHA loans in excess of the standard maximum of $625,500, in high-cost areas, will have a premium of 1.5% of the loan amount.

In addition to the increase in the annual MIP, FHA also announced it plans to raise the fee on the up-front MIP from 1.00% to 1.75%.  No date was reported for its implementation.

The bottom line will result in a borrower’s payments going up.  However, it might not be restricted to the MIP.  Freddie Mac’sPrimary Mortgage Market Survey showed that both 30 year and 15 year mortgages have gone up too.

One way to avoid the increase is to have a completed sales contract and have your lender order the FHA commitment prior to April 1, 2012.  If you plan on buying a home this spring, there is a reason to do it earlier rather than later.

In Search of An Honest Man

Similar to Diogenes’ search for an honest man, homeowners want someone to do quality repairs at a fair price.  The task appears reasonably easy but if you’ve ever tried to locate someone to fix something, you know just how difficult it can be.

Finding a list of companies from a phone book doesn’t mean they’ll be reasonable and reliable, it just means they have a phone and are willing to pay for an ad.  And let's face it...that's  oh SO 2000.  Searching on the Internet may direct you to a website that appears to be a local company but really is a marketing company who will sell the lead to a repair person or company who will pay a referral fee.  You are never truly certain with whom you are connecting or where?  There are consumer organizations like Angie’s list who rate repair professionals and contractors but they usually require an annual membership fee to be able to access the information.  Services like Renovation Experts or Service Magic are registries for contractors, however, they may not be the most competitively priced.
THE best recommendations are going to come from your friends, family, and neighbors... those you trust and who have actually used the repair professional.  The problem here is that you might have to make multiple calls before you can find a friend who can recommend the type contractor you need.

Repairs are a normal part of selling homes.  I certainly come in contact with lots of contractors.  This experience leads me to understand who is reputable and reasonable as well as who to avoid.

As part of my commitment to helping you from the time you buy your home until you sell it, I am more than happy to make a recommendation of a good repair professional. Give me a call or a click on over to my website…I want to help.

Check out my Vendor List for your next home improvement project.