Buying a Home and Have Questions?

Wonderful! Congrats on the decision. We have pulled together some helpful tips to get you started. These go pretty much in order, as most in the real estate industry will tell you it is important to stick with this road map to save yourself and others much anxiety.


How Much House Can You Afford?
Buying a new house is a big investment. You want to be sure that you have all the right finances before proceeding. Spend the time to do a serious audit of your finances and determine a budget. Use an Affordability Calculator to estimate how much you can afford on a house based on your income, savings, debt and assets. Any of Efinity's licensed mortgage professionals can also help with this. Check your credit score. Every year you are allowed one free copy of your credit report.


Get Preapproved For Mortgage
Now that you’ve checked your finances, it is time to see what kind of mortgages you qualify for. Many buyers make the mistake of assuming that being prequalified and preapproved for a mortgage are the same. They are NOT. At Efinity Mortgage at time of application we press deeply into your financial situation and certainly through the application process, an extensive financial background check and a current credit score report.


Find the Right Realtor
A realtor or real estate agent is another great person to have as you maneuver the home buying process. They have the in-depth knowledge on home buying and help you negotiate the purchase. This service is free for the buyer because the realtor is compensated by the seller. You can search online for a realtor at Realtor, Zillow, Trulia. Efinity Mortgage also works with a large number of realtors throughout our network.


Find a Home
You’re finally at the step you’ve been waiting for. Be sure to create a checklist of items you need and want in your future home. This will narrow down the endless choices of homes and help you focus on only the right ones. Also, make a list of your neighborhood preferences like safety, commute, type of schools, local shopping and grocery.


Get a Home Inspection
The home inspection is a step that many home buyers tend to skip over but this is a very important step once you’ve found a home you like. A home inspection checks for any damages to the home’s structure or foundation as well as any major or minor fix-ups that need to be done. Once a thorough home inspection is completed the buyer and seller will receive a report from the home inspector.


Make An Offer
Make an offer with the help of your realtor and don’t be afraid to negotiate price. This may take longer than you think but always be ready if the seller says yes.


Close the Sale
Before you close review all the costs associated with both the purchase and the expected monthly payments. No matter how much time and effort we put forth, it is still amazing to us how often clients gloss over these things. Spend the time and know what you are buying.

When Bill Gross Speaks; We Listen

There are a small group of individuals who speak and grab our collective attention. Bill Gross is one of those individuals. Earlier today he was on CNBC and made some interesting comments. CNBC.com was kind enough to summarize that interview and we wanted to pass it along for our collective audience. Bill Gross: Get ready for an 'entirely different' market CNBC Reporter; Jacob Pramuk | @jacobpramuk Bill Gross has some bad news for investors. In his June investment outlook released Thursday, the widely followed bond fund manager contended that bond and stock returns realized in the last 40 years are "a grey if not black swan event that cannot be repeated." Investors should not expect 7 percent returns on bonds or returns in the high single digits or double digits on stocks, Gross told CNBC on Thursday. "The markets are entirely different and it would pay to travel to Mars as opposed to stay on Earth, because the returns here are very, very low," the manager of the Janus Capital Unconstrained Bond Fund, said on CNBC's "Power Lunch". Gross said easy central bank policy could hold down bond returns. Central banks in Europe and Japan have adopted negative interest rates, while the U.S. Federal Reserve's target rate is at 0.25 to 0.50 percent. German and Japanese 10-year bonds currently have negative yields, while their 30-year bonds yield less than 1 percent. The U.S. 10-year Treasury note yield sat around 1.8 percent Thursday. Gross contended those rate trends can hurt not only savers but also the broader economy. He said Fed policymakers, who have signaled they could hike rates at least once this year, realize they need to normalize policy. "Ultimately, they have to move back up and I think a certain number of Fed governors realize that the normalization process is necessary in order to save business models and to save capitalism basically because capitalism doesn't work at 0 percent and it doesn't work at negative interest rates," he said. Gross added that investors should "basically go the other way" by holding liquid cash. He said they should not buy corporate bonds and resist buying high-yield bonds or riskier stocks. Over the last 24 months, Efinity Financial has been a long proponent reducing market exposure. It's wonderful to see one of Wall Street's leading minds summarize some of the challenges in a direct and straight forward way.

Why Wait??

Mortgage rates have been historically low for several years, but a surprising number of borrowers are still not taking advantage even though rates fell again at the start of this year. How many? Close to 7 million. After the Federal Reserve raised its target interest rate in early December, the common expectation was that mortgage rates would rise. Refinances had already dropped by nearly a third throughout 2015, as rates inched up in anticipation of the Fed's move. "Global economic shocks then sent investors looking for the safety of U.S. Treasurys, driving down yields on benchmark 10-year bonds. Mortgage interest rates began to fall in defiance of prevailing wisdom, and the "refinanceable" population grew by 30 percent in the first six weeks of 2016," said Ben Graboske, Black Knight Data & Analytics senior vice president. Mortgage interest rates dropped 30 basis points in that time. By the end of February, 6.7 million borrowers could have saved an average of $3,000 per year, representing a total of $20 billion in potential annual savings, according to an analysis by Black Knight. These borrowers have enough equity in their homes and high enough credit scores to qualify for refinances. "It's lack of awareness of the opportunity, and how to act on it," added Graboske. How much does that translate into on a monthly payment? More than 3 million borrowers could save $200 a month or more; nearly 1 million could save $400 a month or more. Mortgage refinance applications have increased in the past two months, but millions of borrowers are still sitting on the sidelines, perhaps unaware of the savings, or just too lazy to go through the process. "There are costs that come into play for sure and there is often the perception of costs," said Graboske. "Still, if you look at this population, we have 1.5 million borrowers that are sitting at almost a full point above what they could be." Black Knight broke borrowers up into rate clusters and found that about 3.4 million borrowers had active 30-year mortgages and interest rates of 4.5 percent to 4.75 percent. Of these, 1.5 million met broad-based underwriting criteria, and would be impacted when rates moved from 4 percent to 3.75 percent. When you look at the 4.25 percent to 4.5 percent rate range, 4.7 million had active 30-year mortgages, 2.1 million of which met underwriting criteria. They become "in the money" if rates drop from 3.75 percent to 3.5 percent. Mortgage rates did move slightly higher in the past week, but not enough to change most of the analysis here. Millions of borrowers are still choosing to pay more than they have to on their home loans. That opportunity is likely to vanish in coming months, should rates rise as expected. Of course, last year most expected mortgage rates would already be far higher than they are now, and that did not materialize. In closing, for many of the current mortgage products out there it may have taken you just as long to read this Blog as it would to start the refinance process. What are you really waiting for?

Learn the Facts & Myths of Reverse Mortgages

I had a lengthy conversation yesterday with one of my trusted realtors regarding Reverse Mortgages. While this is not been in Efinity Group's typical space, I was shocked at the misinformation that was understood as fact regarding this program. Similar to what we have done in the past I wanted to put something together to get the facts out there for our reading audience. Taking equity from a house is large decision for most seniors. It's not a decision that should be taken lightly. That said, a Reverse Mortgage is designed to allow seniors to improve their lives by freeing up the monthly obligations of a mortgage and whatever restrictive monthly cash flows that may present. Having access to funds to pay off credit cards, home equity loans and increasing cash flow for living expenses are a few benefits to having a reverse mortgage. Here are a list of facts and myths about reverse mortgages to help you make your decision.

Myth #1: It is the bank that owns the senior's home. Fact: When a customer has a reverse mortgage, their name will stay on the title unless a change in the title is made.

Myth #2: The bank has the right to make an elderly person leave their home. Fact: Reverse mortgages are insured and regulated by the Federal government. Any mortgage servicer has no authority to ask a senior to give up their home unless they fail to comply with the loan terms. Similar to any other mortgage, items like property taxes and homeowners insurance need to be paid and current. Texas Senior Lending wants to help customers stay in their homes as long as they can.

Myth #3: The senior’s heirs will eventually have to repay the loan if the customer passes away. Truth: A reverse mortgage is a non-recourse loan that gives the estate a year to sell the home at market value. Once the house is sold, the money from the sale will pay for the loan.

Myth #4: You will be responsible to make payments on reverse mortgage loans. Truth: Payments are due when the last living homeowner of the property permanently leaves the home.

Myth #5: Reverse mortgage proceeds are taxable and affect Social Security or Medicare. Truth: Although proceeds of a mortgage are not taxable and have no effect on your social Security or Medicare, you’re Supplemental Security Income (SSI) and Medicaid can possibly be affected. We hope some of what was provided above is beneficial.

Interested in buying a home? Here the difference between success and failure (per the NAHB)

August 4, 2014 - Each $1,000 increase in the cost of a new median-priced home price forces 206,000 prospective buyers out of the marketplace, according to a new study by the National Association of Home Builders (NAHB). source: http://www.nahb.org/news_details.aspx?newsID=16947 In all the wrangling over credit, construction and confidence in this housing recovery, the real cost of owning a new home could come down to about the same amount as the cost of a new washing machine. NAHB claims just $1,000 makes all the difference. "Each $1,000 increase in the cost of a new median-priced home price forces 206,000 prospective buyers out of the marketplace," reads the first line of a new report from the National Association of Home Builders. NAHB researchers based their findings on the number of households that would not qualify for a mortgage (factoring income, debt, interest, property taxes and homeowners insurance) based on that price increase to a median-priced home. They varied state to state, with a low of 313 borrowers not qualifying in Wyoming, to a high of 18,250 in Texas. "It all adds up. A thousand dollars means an additional monthly cost, based on someone's income. That may make the difference between owning and renting," said Robert Dietz, a tax and market analyst at the NAHB. The NAHB is using the analysis to focus on the effects that building regulations have on affordability, noting that higher regulatory costs for builders are passed on in the price of a new home. That said, the $1,000 figure is striking evidence of just how many Americans teeter on the edge of homeownership. The nation's homeownership rate continues to fall, as job and wage growth does not keep pace with home price growth. Nationwide, home prices, including distressed sales, rose 7.5 percent in June 2014 compared with June 2013, according to a report released Tuesday by CoreLogic, a data company. This is a moderation in the double-digit price gains seen last year, but still represents 28 straight months of year-over-year appreciation. "Home prices are continuing to rise fueled by ongoing tight supply, low rates and aggressive investor buying on the East and West coasts," said Anand Nallathambi, CEO of CoreLogic, in a release. "The expected surge in the number of homes for sale has not materialized to date, as many homeowners are staying put and waiting for better economic times and higher prices." Supply issues are easing somewhat and should continue to moderate price gains, but other issues in the mortgage market are also keeping the price of home ownership higher. While builders complain of construction regulations, mortgage lenders argue they are being handcuffed by a still backward-looking housing finance system. They need to have $1,000 extra, according to the builders, but that is just one small part of a far more complicated housing recovery. Home buyers need good credit, sufficient down payments, proof of solid employment…or cold hard cash as covered by Diana Olick with CNBC. Souce: http://www.cnbc.com/id/101895900 While the national news agencies quickly found this story appealing, the truth behind the matter is if you have been responsible in your borrowing, have shown steady employment for over two years and have at least the required down payment; most everyone can obtain a mortgage. There, we said it. It's really not that hard. We have programs available today which allow 1st time homeowners leveraging FHA financing to have as low as a 580 credit score. They only need steady employment and the HUD required 3.5% down and even that can be a gift from a family member! In closing, don't let the headlines fool you. As in years past, steady income and responsible borrowing have been and always will be the key to homeownership.

It's that time again... Property Tax Tips for Filing in 2014

Here are 5 property tax tips for a successful filing in 2014 First off, make sure all your current property taxes are paid. The tax code is very clear in placing the burden of making sure taxes are paid squarely on the taxpayer, not the tax assessor / collector. Failure to receive a tax statement does not relieve you from responsibility that prior year taxes are paid on or before January 31 of each year. Second, take pictures of your property on January 1 each year. The effective date of all tax appraisals is January 1 each year. You are taxed on your property as it existed on the first day of the year. If it burns to the ground on January 3, you still get to pay taxes on it for the entire year. On the other hand, if something is seriously wrong with your property (flooded, torn up for remodel, etc.) and the market value is significantly diminished at the beginning of the year, you will need evidence of this later in the spring when you file your protest. Pictures are the best evidence of property condition on January 1. Next, make home improvements or additions in the winter. If you add that pool or new bathroom in November, it becomes taxable in just two months and you will pay the extra taxes that year. Make the same improvements in February and they don’t become taxable until the next year and you won’t pay the higher taxes until the year after that! Also, it is not “too late” to fix big problems with your tax appraisal. Even if you did not file a protest by May 31, all is not necessarily lost. If you can prove the tax appraisal is at least 25% too high you can still file a “Substantial Error” motion until January 31 of the following year and get the value reduced. Also, if you can prove that the Appraisal District failed to send you a required notice you can file a “Failure to Receive” motion by January 31 and be entitled to an appeal hearing. Lastly, under section 25.25(h) of the Property Tax Code, you can beg the Chief Appraiser to fix just about anything and he has the authority to do it with a signature. Finally, you would be surprised how many people don't do the following: Make sure you have filed your Homestead Exemption. Carefully check your property tax statement to verify that part of the value of your homestead is exempted from taxation. The amount varies by taxing entity, but you should see some discounts off of the total appraised value for the school district and county We hope you find these tips helpful and perhaps save you some money!

The Train has left the Station!

According to Industry reporting, home prices are going up, up, up, but it’s not a bubble just yet. The surge in home prices over the past year may have some home buyers wondering if the market has gotten ahead of itself. Rising interest rates aside, housing prices in most parts of the country appear to have plenty of room to move higher if the wider economic recovery remains intact. The latest data on price gains show home prices advanced 7.7 percent in the year through June, a rise that has fed on itself as fence-sitting home buyers move to buy before prices rise further. West coast housing markets have seen the biggest gains. The Federal Housing Finance Agency report showed prices in June were 17 percent higher than a year earlier in the Pacific area, which includes California and Washington. House prices jumped 11 percent in the Mountain region, which included Nevada and Arizona. The Middle Atlantic region -- New York, New Jersey and Pennsylvania -- had the smallest increase, at 2.5 percent. The government data echoes other reports of healthy gains in home sales and prices. The National Association of Realtors said Wednesday that the median price of a previously owned home jumped 13.7 percent for the year ended in July to $213,500. A recent rise in mortgage rates is also spurring buyers to lock in rates before they climb further. "When start you see interest rates rise, people are going to want to jump in," said Beth Ann Bovino, deputy chief economist at Standard & Poor's. "All those people on the fence come back into the market. But that's a good thing." Higher borrowing costs could eventually price some buyers out of the market and slow the pace of home sales. Sales of new single-family homes dropped sharply in July to their lowest level in nine months, the Commerce Department reported Friday. Sales dropped 13.4 percent to an annual rate of 394,000 units, and the government also revised sharply lower its estimate for home sales in June. Sales of previously owned homes, a much larger share of the overall market, picked up by 6.5 percent last month to the fastest pace since November 2009, according to the Realtors report. The inventory of homes for sale remains tight – just 5.1 months' worth at the current sales pace – which has help sellers and homebuilders boost their asking prices. After a long drought in new home construction, that tight supply is expected to continue to support prices. "We have a number of locations where the next home sold may take as much as one year to deliver, because our backlogs are so big at individual communities," said Douglas Yearly, CEO of luxury home builder Toll Brothers. "That's when we raise price." There are early signs that the rise in prices and borrowing costs may be cooling demand. Mortgage applications for both home purchases and refinancings dropped for a second straight week as rates rose, according to the Mortgage Bankers Association. Demand fell 4.6 percent in the week ended Aug. 16, as the rate on a 30-year fixed mortgage rate rose to 4.68 percent, matching this year's high mark. Rates have been rising since May, when the Federal Reserve first signaled it may begin tapering off its $85 billion in monthly bond purchases. That easy-money policy has been a critical stimulus in reviving the housing market from its historic 2007 collapse. The continued pickup in the pace of home sales and prices will depend heavily on whether the job market continues its slow recovery and incomes continue to rise. That disposable income represents the buying power required to fuel the housing market’s continued recovery. And despite the recent jump in prices, homes in most local markets remain affordable by historical standards. One of the most widely used measures – the Realtors affordability index – stood at 178 in June – down from a peak of 200 during the depths of the housing bust – but well higher than average levels. (The index, which factors in prices, incomes, borrowing costs and other variables, shows that a family with the median national income has 178 percent of the income needed to qualify for a mortgage that covers 80 percent of a median-priced house.) Other measures indicate that, despite rapid gains, homes are reasonably valued, according to a research note from Capital Economics. After the sharp declines following the housing bust, home prices have yet to reach levels in line with the long-term trend since 1975, according to the report. Prices are some 15 percent below that trend as measured by the Case-Shiller price index and 11 percent lower based on the FHFA's data. And the cost of buying a house is still cheap in relation to the cost of renting, suggesting prices haven't yet reached a point where they will cool demand, according housing Capital Economics housing economist Paul Diggle , who prepared the report. "The most reliable measure still suggests that housing is undervalued," he said. Even if rising prices and rates don't scare away potential home buyers, the continued housing recovery will depend on the availability of credit, which tightened considerably following the wave of rogue lending that fueled the mid-2000s housing bubble. Lenders are much choosier than they were six years ago, but there are signs they've begun to ease up a bit on credit standards as they compete for new borrowers. And after paring down a large pile of debt accumulated during the credit boom, those potential buyers are better able to take on a new mortgage payment. That will help the housing market better weather the ongoing rise in interest rates, according to Bovino. "We've had four years of cleaning up our balance sheets, getting our fiscal homes in order," she said. "I think we do have the capabilities to cushion that blow (from higher rates)."