Myths About Realtors That Need To Go Away

People often believe a real estate agent is simply someone who knows about homes for sale in their area, hammers signs into front yard lawns, and makes a slew of money just showing up at an open house. A no-brainer, right?

Not quite. In perpetuity there have been a host of myths about how a real estate agent’s business works, and as in any other scenario where people don’t know what they don’t know, faulty perceptions and assumptions are created. 

First of all, we don’t know of any Realtor being paid a salary. Because agents sitting in model homes on weekends can’t control when their builders’ houses might be ready to sell, they may receive a meager draw against commissions. But like resale agents, they don’t get paid a fee until escrow closes and keys are handed out. So who pays for all those lavish broker events, open houses offering refreshments and fancy brochures? The agent does. No matter what an agent puts into their efforts, however, there is never a guarantee they will recoup their outlay on marketing, gas used up showing hundreds of houses to potential buyers, lunches with clients, endless hours of negotiating, time spent with home stagers, etc. In other words, no matter how gorgeous the real estate office and how fancy their brand, they each hang their own shingle and pay for it as completely as any small business person does.

Real estate commissions are another point that gets messed up in people’s heads. They look at the entire commission (customary-but-negotiable commissions vary from area to area) being proposed by the listing agent and assume every dime goes into that agent’s pocket once settlement takes place. But here’s the scoop: commissions are legally paid to the agent’s employing brokerage company, which in turns pays both the selling and buying agents after taking out agreed-upon fees. While the same agent may represent both the seller and the buyer, it is a much rarer occurrence, which in turn carries its own complications and liabilities.

Speaking of liabilities, most states require licensed agents to carry Errors and Omissions insurance, a separate fee paid by the agent to protect both themselves and their brokers from unforeseen contractual complications, and some have their own on-staff legal team as well. The agent’s commission split with the employing broker varies from broker to broker, often depending on the company’s business model as well as the agent’s level of production. Rookies generally have higher splits than seasoned pros.

Throw in agents paying taxes, social security and a host of other fees, and you’d see how they earn their living not unlike those in other industries — except they don’t get paid every two weeks and often can go months with no commissions at all.

So next time you see an agent (1) making 30 trips to show a buyer homes only to find that buyer decides not to buy after all (2) wielding brooms and secretly tidying up a house for showings like Annette Bening does in the movie American Beauty (3) dealing with sellers who perpetually refuse to be realistic about what their house is worth, sometimes keeping their house on the market for a year or longer, or (4) meeting with vendors, home stagers, contractors, inspectors, videographers, etc., know they are running a business in which they invest themselves, their weekends, and their very own dollars. They do this betting their skills, the market, and their clients all converge in one happy scenario to make the American Dream stay dreamy.

If you are thinking of buying or selling and need a Realtor give me a call. 

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

The Most Popular Rehab Loan Only Requires 3.5% Down Payment...

Question: Is it possible to include extra funds for renovations in a loan for a new house?

Yes. The most common loan product for that today is the FHA 203(k) renovation loan. With 203(k), you can get money not only to purchase the home but also to refurbish it. You can use the funds not only to replace and repair things like carpets, roofs, kitchens, and bathrooms but also to add on. You can repair and rehab an existing swimming pool, but can’t dig a new one.

With 203(k) Standard, you’ll work with a consultant approved by HUD. That person will guide you through the process of gathering estimates for the work you plan. Expect to pay $500 to $1,500 for his or her services, depending on how extensive the work you plan to do.

Once you have your estimates, your loan officer will order the appraisal. There will be an “as is” value and an “as completed” value. The loan will be based on the second, higher value. The excess funds will go into a separate escrow account and be disbursed to the contractor as needed. If the property won’t be habitable while the work is being done, you’ll also be able to finance up to 6 months’ interest into the loan—assuming the as completed appraisal has a high enough value. Your down payment will be as low 3.5% of the financed value. The 203K Standard is limited to your county loan limits. Check with me or your lender for specifics.

There is also a “streamline” 203(k), which does not require the services of a consultant. Repairs are limited to $35,000. The paperwork is pretty much the same, and the rate is usually the same as for the full 203(k) loan.

The most important thing to realize is that, while this is an excellent loan program, it is not by any means a “turnkey” purchase; as the buyer, you’ll have to be quite involved in the process, from start to finish. In my experience, few people are willing to be that involved.

Still, if you can find the proverbial diamond in the rough—a trashed-out home in a nice neighborhood—you can build some immediate equity and get a home with a lot of new parts, to your specifications. You want to be sure that both your real estate agent and loan officer are experienced with this loan—there are a LOT of moving parts. BUT I am here to help you along the way. 

I hope this has been insightful.. please let me know if you have any questions. Comments are always welcomed and appreciated. 

Thank you for visiting my blog, please leave a comment or question and come back soon. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

How to get Private Mortgage Insurance to STOP

I get this question a lot; When can I stop paying PMI?  

Assuming that by "PMI" you mean Private Mortgage Insurance as opposed to the mortgage insurance required on FHA loans, the process is simple. You simply have to demonstrate to the lender that your loan is 80% of your home's value or less. Lenders have a variety of requirements for this proof. Some accept a computerized value assessment, called an Automated Valuation Model (AVM). Think Zillow on steroids. An AVM typically costs about $20.00. Other lenders require an appraisal with an exterior-only inspection, called a "drive-by" appraisal. This costs about $350.00. Some lenders require a full appraisal, which costs about $500.00.

If you believe your property has appreciated enough—and a quick "Zestimate" from Zillow will give you a rough idea—you should contact your lender. Your monthly statement will give you the customer service number. They will tell you their requirements. You will have to pay for the appraisal ahead of time. It's important to check the value of your home at least annually so you know when you can remove our PMI or refinance to remove it. 

One more very important fact while you are checking the value is to do a mortgage loan analysis on your current loan and check current mortgage rates, maybe it makes more sense to refinance, reduce your rate and remove your PMI. 

Some lenders won't consider removing PMI until you have had the loan for at least 12 months.  Lenders also require that your loan is in good standing, with no late payments for the last 12 months.

Private Mortgage insurance drops off automatically once the loan-to-value ratio (LTV) drops to 78% of the original value. For a 30 year mortgage, this occurs in around 10 years.

FHA mortgage insurance works differently. For loans originated between January 1, 2000, and June 3, 2013, mortgage insurance would drop off once the loan balance fell to 78% of the original purchase price, but no sooner than 5 years. This meant that a borrower with an FHA loan could make a payment after 5 years to reduce the loan balance to 78%. For a starting balance of $300,000, that would mean a principal payment of $37,000 at year 5.

After June 3, 2013, borrowers will have to refinance into a conventional loan to drop the mortgage insurance, since FHA MI now remains with the loan for its entire term. In this case refinancing into a conventional loan once you have 80% loan to value, providing a new loan without any MI required. 

I hope this has been insightful.. please let me know if you have any questions. I welcome your questions and comments.

Thank you for visiting my blog, please leave a comment or question and come back soon. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

What Does It Take To Get A VA Home Loan With 100% Financing & ZERO Down Payment

I Get this question a lot; What's the minimum credit score for a VA home loan approval?


Technically, there is no minimum credit score for a VA-guaranteed home loan. A veteran borrower could have no FICO score and get an approval based on "non-traditional" credit. This means providing evidence that he or she meets financial obligations in the form of utility bills, insurance payments and the like.

Although a lender could approve a borrower with a score of, say, 500 by manually underwriting it, I think the odds of that happening are quite remote. Someone with a 500 score would have some combination of currently delinquent obligations, collection accounts and possibly liens and judgments. This would indicate to a lender that the borrower doesn't have adequate control of their finances.

Practically speaking, getting an approval with a 580 score is realistic, although the rate will be higher than for someone with a higher score, and the borrower may have to clear up any currently delinquent obligations before the lender will fund the loan.

The good news is that low credit scores are fixable, although it may take some time and effort. If there are credit cards that are close to the credit limit or over the limit, reducing the balances will improve the scores significantly. If there are collection accounts and judgments, it is worth contacting the creditors to negotiate lower settlement amounts.

Finding a loan officer who's willing to help you through the process of getting qualified—even if you have major craters on your credit report—is worth doing early in the game. It is ALWAYS possible to improve a credit score, but it takes a plan and the determination to follow through and execute it.

VA Home Loan is 100% Zero down payment required, making this the most idea home loan for veteran and their families. Many unfortunately are not aware of the program or don't think they will qualify. I encourage you to look into your eligible if you have ever been in the military. 

You will also need to get your Certificate of Eligibility (COE) you can do this very easy by going through the Web LGY System . You can also obtain your COE by completing VA Form 26-1880 PDF and mailing it in. Click here for the fill in form ... You will need your discharge or separation papers DD214 to complete this form.

How to Apply for a VA Home Loan Certificate Of Eligility (COE)

Thank you for visiting my blog, please leave a comment or question and come back soon. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Increasing Your Credit Score 9 Tips To Help You

Improving your credit score can be a daunting task and if you are trying to do it on your own, do some research and get some advise from an expert. You may do more harm then good if you are not careful. 

You sacrifice and work hard to pay off a credit card or two and get that liberating feeling that you're making progress. Then you check your credit score to see the effect of your admirable prudence, and you find the number has gone down, instead of up!

What you need to understand is that credit scores factor not just with the amount of debt you have; they also look at your credit utilization — the percentage of your credit limit that you're currently using. "That scoring factor is one reason your credit score could drop a little after you pay off debt, having low credit utilization (30% or less) is good; having no credit utilization may be harmful to your score."

What about paying off installment loans? "Paying off an installment loan, like a car loan or student loan, can help your finances but might ding your score," they report. "That's because it typically results in fewer accounts. (That's not a reason not to do it! Don't stretch out a loan and pay more in interest to save some credit score points.)”

Once you've gotten your balances to zero, guard your credit by making it easier on yourself to pay on time by setting up electronic reminders, monitor your credit report for errors, and dispute any you see. Someone's file may be mixed up with yours, or your identity may have been stolen — both of which can seriously affect your score.

And just because you cleared out some debt, don't get tempted to apply for more credit products in a short period of time , whether it's the purchase of a car, furniture or to take a trip. "Opening new credit lowers the average age of your credit accounts and involves a "hard inquiry" which can result in a small, temporary drop in your score, if you can, wait at least six months between credit applications.

Depending on your total available credit, it might hurt your score to completely close a credit account with a high credit limit. The fact that you have been offered a lot of credit means you have demonstrated proficiency, and that credit utilization thing comes into play again. To make sure closing one card doesn't impact your score, pay off balances on all other cards.

And lastly, if you've just qualified to buy a home and are waiting to close escrow, this is NOT the time to buy furniture on credit, especially if your qualifying ratios are borderline. Before making any large purchases on credit, consult your loan officer. There will be a final credit check before you close, and if your number has gone down, you may risk getting your approval nullified.

Here's some general tips to help you increase your credit scores. 

1. Pay down your balances to 30-50% of available credit. 

2. Increase your available credit when possible.

3. Transfer debt to other accounts to get a better balance of 30-50% on each account.

4. Build new credit 

5. Build old credit, use your zero balance credit cards for monthly expenses that you pay off  each month so you are not paying interest on the account. 

6. Use a variety of different types of credit. 

7. Avoid changing addresses and jobs frequently. 

8. Clean up your credit report, you can do it yourself or hire a pro. It's estimated that over 40 Million Americans have errors on their credit report. 

9. Get a FREE copy of your credit report at www.annualcreditreport.com 

Contact me for a referral to a professional if needed, I have been working with a great credit repair company for over 10 years. They have done wonderful things for many of my  clients. 

Thank you for visiting my blog, please leave a comment or question and come back soon. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Getting Prepared To Buy Your First Home

For some it seems like a no-brainer. Renting a home feels like throwing money away, offering no sense of ownership whatsoever. Buying a home is investing in the future. Even if it takes up to 30 years to pay off the loan, you have been LIVING in your investment. 

According to a new study by Framework, however, there is more than meets the eye with first time home buyers, who see it as laced with blind spots and pre-loaded with anxiety — mostly because they went into it fairly blind, without enough education and information. The surveys were completed by two groups: recent first-time homebuyers and prospective first-time homebuyers.

The report says only 41% feel very well prepared for the home buying process, 57% worry they can't afford homeownership, 47% think the home buying process is "rigged" against the buyer, 44% fear making costly mistakes, and 55% said they could use an independent advocate to coach them through the process of home buying and homeownership. On top of that, more than half of first time home buyers in both groups said buying a home was more difficult than it should be.

So what does this tell the average real estate professional or mortgage loan officer? That they may have fallen short of making their buyers literate enough to have confidence in the process? I'd like to think I am not an average mortgage loan officer, my primary job is educating my clients through-out the process, providing information and answering their questions.  While, once they had been through the process of buying a home, 64% of responders said they emerged from it knowing a lot more about the financial aspects of it, most wished they had taken some kind of class to prepare them for it.

When you think about it, those in the industry often don't do a great job in explaining aspects of homeownership not in their purview — things like paying taxes, how and when a payment can adjust, or promoting the idea of having a home ownership "slush fund" in the case of an emergency, such as flooding, a failing roof, or plumbing leaking underground. Of course, these aren't included in the warm, fuzzy feelings industry professionals care to project as they lead buyers through the process, but that doesn't mean first-time homebuyers shouldn't be encouraged to find classes. We have a team of professionals offering a Home Buyers 101 class for anyone interested. The next one is in April.. contact me for details. 

CurrentMortgageRatesToday.org says that while the largest cost of owning a home will be your monthly mortgage payment, there are several other costs that you should be aware of when trying to find out how much homeownership will cost you — things like an HOA fee (and what it covers), property taxes, homeowner's insurance, and utilities. And then there is maintenance and repairs.

There are always risks inherent in any large purchase. But it's up to the potential homeowner to decide if it's the best financial step for them. Attending one of our Home Buyers 101 class will set you up for success in the home buying process. Learn about how to get qualified, learn about different loan programs, down payment assistance and how to budget for your purchase. What to expect as a new home owner, credit repair, and why it's important to have a home inspection before you purchase a home. Experts in Real Estate, Finance, Title&Escrow and a Home Inspector will be present. Contact me for details. 

Thank you for visiting my blog, be sure to leave a comment of ask a question. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Source: PRNewswire, currentmortgageratestoday.org, TBWS

Millennials Demand Virtual Tours ....

The millennial generation that grew up with computers as appliances and fed on video games are looking for a high-quality virtual reality experience when looking for a home.

For all the fanfare about how millennials were poised to be the biggest home buying generation yet, there are still a few things that must happen to get them out of their parents’ basements or shared rentals. Interest in buying, however, is not the issue. According to new data from Apartment List, 80% of millennials do have the desire to buy their own homes, but economic factors are delaying the process for up to two decades if they must continue to assume, they must save up for a 20% down payment. Even if this was reduced by half, however, only 33% of millennials would be able to save that amount in five years or less.

For those millennials serious about buying a home, the process will look much different than for previous generations. One reason for this is the relatively new introduction of virtual reality (VR) technology into the real estate market. This newer technology is more than a videographer doing 360-degree fish-eye lens panoramas of the interior of a home for sale. They are an interactive walk-through the buyers themselves can experience, stopping to examine every floor vent, cutting edge cooktop, or even watching the pool sweep as it Roombas through blue waters. (If you want to get a taste of VR at it most potentially scary best, check out Spielberg’s Ready Player One.)

Let’s face it. The millennial generation grew up with computers as appliances. Fed on video games as their parents shook their heads thinking it was all in good fun while wondering why their kids abandoned bicycles and stopped watching old horror movies on TV. What they turned out, however, were adult children who now demand a high-quality VR experience. This next gen of homebuyers will wonder how their parents were ever able to put up with a world that did not offer it.

It is estimated by VR manufacturer Matterport, a company founded in 2011, that potential buyers spend three to six times more time examining a real estate ad listing when they study VR ads. It’s what marketing types call “sticky” advertising. Touring real estate listings is not only livelier, but also more fun. Homes listed using this technology come with a 3-D walkthrough, making a digital copy of the inside of the house as well as its outdoor spaces. Matterport supplies a dimensionally accurate model of the space precisely as the human eye would see it, whether it’s land, office building spaces, or homes, and the future includes (just like the Spielberg movie), being able to attach a VR headset to your phone.

Using VR to showcase homes is something that many high-end real estate agencies are already doing, given that 95% of buyers use the internet to look for homes, and 51% buy homes that they have found using the internet, adding VR to the mix seems inevitable. This technology to show homes is already becoming a touchstone for many luxury home buyers, done without those buyers ever having stepped foot onto a property, especially where in-person showings simply are not feasible. Not only will millennials expect this service to be made available to them for ALL types of home sales; they will likely demand an increasingly higher quality experience overall than today’s Realtor online presentations with music playing in the background or 25 still photos attached to a listing.

Then there is social media— something millennials cut their teeth on. The driving factor behind Facebook’s decision to buy Oculus Rift was its potential for use in the platform’s marketplace. Considering that Facebook is heavily invested in the growth of person-to-person sales, this can have a serious impact on the amount of time it takes to buy a house. Savvy agents will have to get behind this as the globe and its technology spin ever faster.

Another of the consequences of millennials’ inability to purchase homes as early as previous generations is a major uptick in the single family and apartment rental industry. While single and attached home rentals are growing at an even faster pace, apartment rentals are being changed using virtual reality. Time and labor-saving new tech practices enable rental managers to simply schedule live VR sessions, showing properties and answering questions as potential renters’ sip on soy chai lattes on their sofas. Using MARK.SPACE, a blockchain-powered 3D and VR open source platform for creation and integration of spaces and objects, they can also record showings and make those available to potential renters to view online.

What all this does is elevate the importance of in-person showings, since tire-kickers will be fewer and farther between. As more potential buyers can use virtual reality to tour potential homes online, fewer potential buyers will come to open houses or even in-person viewings with real estate agents. Buyers benefit from this because they can tour homes using VR and eliminate from consideration those listings that aren’t appealing based on what they see, translating into less time, travel and expense looking at homes. Sellers and agents benefit because they can sell homes faster and not waste time trying to market homes to tire kickers, but older real estate consultants who are slower to embrace and invest in technology as a driver in home sales may have a tough time making the transition to this type of buyer as they watch their younger brethren embrace it with great gusto.

Approximately 71% of millennials express very positive feelings regarding virtual reality. This generation can't imagine having someone in a uniform fill up their cars, after all. They can’t even picture a world without online person-less checkout and virtual shopping carts. While members of older generations may need some convincing that VR adds value to the real estate process, millennials will be all over it.

As I mentioned, more millennials are interested in homeownership than many people think. Economic factors may be delaying the process, but when millennials are ready to purchase a home, or even look for a rental, it’s not unfathomable that virtual reality will be an important part of the process, making purchasing a home simpler, more convenient, and less work.  

Thank you for stopping by my blog, please leave me a comment, they are always encouraged and welcome. 

Roxy Redenbaugh

SR Loan Consultant

Branch Manager

Cell 808-457-2455 

NMLS #269926 

Using Real Estate As A Vehicle For Wealth

For many of us, our most significant investment and largest profits in life are due to having bought a house — something that acts as a de facto bank account, grows in equity and provides shelter all at once. But what if we want to use real estate as a money-making opportunity instead?

Real estate has, of course, made many millionaires. The Wall Street Journal recently reported how more than 80% of borrowers who refinanced in the third quarter chose the “cash out” option, withdrawing $14.6B in equity out of their homes, according to government-sponsored mortgage corporation Freddie Mac. Now, many are finding their homes to be a tappable source of wealth. “Home equity is the big pot of gold,” said Sam Khater, the chief economist at Freddie Mac.

It’s not hard to see why many have successfully made money buying and selling real estate because of the diverse ways to grow wealth with real estate investments. Forbes writer David Greene talks about having become a student of creating wealth through real estate and has compiled a list of some of the traits he sees as common among the most successful investors, whether they’re house flippers, residential home landlords, or large apartment complex owners.

Knowledge is, of course, key. Real estate investors always seem to know more than those around them — what drives markets, how to time market cycles, and which things to watch out for. “They are much more likely to recognize shifting markets before others do and are prepared to take advantage of these opportunities when they present themselves,” says Greene.

The very best never stop learning, and real estate is no exception.  Apart from websites where investors can learn, network, and find solutions to their problems, some also collect books written on how to invest in real estate, reading them repeatedly.  Developing the ability to analyze a property for cash flow as well as recognizing an under-valued property when you see one. Then develop a basic understanding for estimating rehab costs along with the various pieces at play when it comes to owning rental property.

The more you know about real estate investing, the less fear you’ll have. Overcoming fear is one of the best things you can learn to do if you want to carve out a successful career for yourself in real estate.

Patience is also a virtue, that it may sound simple, but that’s not always the case. “When it comes to real estate investing, there is a lot of pressure on you to move and move fast. The best deals go quick and allowing projects to run past the agreed upon timeline can be expensive. Investors are constantly facing pressures to do more, do it faster, and do it cheaper.”

The best investors know when they need to run fast and when they need to stop and wait to see how things develop. Patience can take several forms when it comes to real estate investing. Learning to recognize areas where you’ll need to practice it can save you from a lot of expensive mistakes.

Understanding market cycles are also of vital importance. Top investors zig when everyone else zags. They are fearful when others are greedy and greedy when others are fearful. Waiting for the market to slow down, or crash even, can require more intestinal fortitude but it is also a much better time to be picking up assets.

Study how to transform a property, how to be efficient, and how to be keenly focused and how to develop important relationships, I encourage you to go to BiggerPockets.com, where you can get tips like this for free. “In a hot market, you don’t just find good deals. You make good deals. Top notch investors see ways to add value to properties without spending more money than they have to. For those with the vision to bring it about, there can be big rewards for those who buy the ugly duckling and turn it into the beautiful swan.

I work with investors on several fronts, coaching, advising and how to obtain financing on any real estate deal. There are so many financing programs that are available and attractive for any type of property and investor.

It’s a completely different arena buying a Non owner Occupied (NOO) or commercial property and is very flexible.

Just to name a few different ways to access financing for your project;

1.     NINA- No income, No Asset documentation often referred to as “No Doc” mortgages. The borrower is required to provide any financial information regarding their income or assets.

2.     SISA – Stated Income/Stated Assets, Loans only require the borrower to state their income and assets situation but do not require the verifications of income and asset information.

3.     SIFA or SIVA – Stated Income/Full Assets or Stated Income/Verified Assets, only requires the borrower to state income but must provide asset documentation information.

4.     NO Doc – No additional income docs required. This is normally an asset-based loan and the subject property is looked at solely for determination of value for the loan amount lender is willing to risk.

5.     Low Doc – Minimal docs are required to determined income for borrower. Examples would be, personal or business bank statements for 12 to 24 months. 

 I have a really cool eBook for investors, go ahead it's FREE Download HERE

Thank you for visiting my blog, please leave me a comment, they are always encouraged and welcome. 

Roxy Redenbaugh

SR Loan Consultant

Branch Manager

Cell 808-457-2455 

NMLS #269926 ACMC #2225