Urgent Notification - Subject Confirmation

Rubbish. I'm getting mail almost daily saying that I can dramatically reduce my mortgage payment and that I must call a loan center today. Talk about UnEthical marketing; Would you want to do business with snake oil vendors who prey on the in-informed using scare tactics to drive their business? I don't think so. Avoid the scams. Use your head. Call me with questions. I'll set you straight. Pat Townsley. www.PTRE.net, toll free: 800-646-5527

Who do I pay first?

If you're ever in a Pinch for funds on any given month, PAY YOUR MORTGAGE first. Do whatever you have to so that you pay on time and pay the minimum amount. Beg, steal or borrow. In reveiwing hundreds of credit reports, the biggest Ding on anyone's report is a late mortgage payment. It will haunt you for years. Don't go there. High credit debt or a late credit payment is WAY better than a mortgage late. Credit Questions? Call me. Pat Townsley, Broker. 800-646-5527. www.PTRE.net

Negative Amortization versus Reverse Mortgages

Negative Amortization (aka Neg-Am) loans, also sometimes called A.R.M.s or Option ARMs (Adjustable Rate Mortgage) are good for Cash Flow but really need to be understood by the client. They give 3 to 5 different payment options, with the lowest Option (usually) being one that doesn't really pay the Interest Only portion of the monthly payment, so you're actually deferring monies back ON TO your loan instead of paying it down. So your loan balance actually gets higher over time, sometimes significantly higher. The upside of these NegAm loans is that you have improved monthly Cash Flow in your pocket. You get to choose how to hang yourself.
Reverse Mortgages are typically for the elderly, where the loan absolutely goes "backwards." They're designed so that a person can enjoy the rest of the years in their home without making a payment. There are several ways to slice it up, but basically, the homeowner doesn't make a physical payment; the typical principal and interest payment come directly out of the equity in the property via an ever increasing first deed of trust (mortgage) that the bank holds. Terms and limits apply. For more info, contact me. Pat Townsley, Mortgage Consultant. www.PTRE.net toll free: 800-646-5527

Sweat Equity

Just got off the phone with a client who bought a house about a year ago. They bought a fixer and had grand ideas of upgrading...which is the theory behind a fixer: buy low, put in personal sacrifice of labor and time, then the value will be higher upon completion of those tasks. Add a little room for neighborhood appreciation, and you've got more value (equity) than when you bought it a year before. That's the "work" part of the equation... the Sweat comes from your investment into the project. Without improving a property, you're banking purely on the market to add value...which isn't always the wildfire Appreciation we saw in the 2000 to 2005 market, and yes, sometimes the market dips (corrects). So, the best hedge for increasing value are the Twin forces of Appeciation and Property Improvement when looking at a Fixer type property. Add a bit of Principal Mortgage Reduction (paying down the loan)...and you've got even more value in that property. Remeber my mantra for Fixers: "Worst House, Best Neighborhood." For contractors, the Uglier the better! Don't take on a project beyond your scope of ability as it will end up costing you. For more information on Fixers, Appreciation, Flipping home or getting into a new home, contact me. Pat Townsley, Realtor and Mortgage Broker. www.PTRE.net toll free at 800-646-5527. I've done it. I offer you my first-hand experience and deliver real-world results. Thanks.

Home Values

Quick thought as I reply to another client... "How Much is Your Home Worth" type search engines or services are interesting business models. Thier goal is to not really to give you the value of your house and say "thanks, see ya later," the real end goal is to capture information for Realtors and industry professionals and sell that information as Qualified Leads. The Zilla system is pretty interesting, fast and an actual database (rather than some systems where live agents actually do the research), however, Zilla isn't that accurate in places like Marin where the home tend to be very different from one another....however, it can give you a pulse on the area. I subscribe to HouseValues.com as a Realtor to get some leads. I do give a full evaluation (above and beyond the required info) of your home. Information is power. I've got the power, and will share it with you. Call or email with questions, or for a home and neighborhood value valuation, just click on the link for Free Home Evaluation on my site www.PTRE.net. Thanks. Pat Townsley, Realtor

Verification of Employment and Stated Income

There are two primary types of loan documentation when it comes to the application process: Full Doc and Stated Doc (or No Doc). "Full Doc" means you, the borrower, will provide Two full years of W-2's (if employed) and/or Two full years of Tax Returns (plus current profit and loss statement) for self employed. That's usually the Rub or challenge here in California: Not too many people actually make the income to afford a mortgage out here. SOLUTION: Stated Income loans. This is where we basically make up your income (within reason for your employment). Additionally, we'll need a Verification of Employment (VOE) to prove what you do. If employed, we send a form to your employer. If Self-Employed, then we'll probably look to get one or more of the following: Business license, letter verifying self employment from a CPA, industry license, letters of reference from clients/vendors. To side step some of these issues in the years to come, get some side income going from another source so that you either use your own Name as a business entity or get a DBA (Doing Business As) and/or get income via 10-99 contract and a CPA will then be able to verify that you did receive income as self employed. Verification of Employment completed.
Finding creative solutions for a crazy market: Pat Townsley, Mortgage Broker serving all of California. www.PTRE.net or call Toll free: 800-646-5527

Prop 13

A client recently asked me how his property taxes will change if he sells his home and buys another. The quick answer is that as long as the property is a primary residence and in the same county, he keeps his property tax base as set forth in the landmark 1978 ruling. Some counties offer "reciprocity" where they'll allow the original tax base to transer between counties. Home buyers in the past years don't have a clue about Prop 13 as it isn't offered anymore. Who knew home prices would be where they are today back in 1978. Consult your CPA and/or Tax Attorney for specifics. Historically, Proposition 13, officially titled the "People's Initiative to Limit Property Taxation," was a ballot initiative to amend the constitution of the state of California. It was enacted by the voters of California on June 6, 1978. It would eventually be upheld as constitutional by the United States Supreme Court in the case of Nordlinger v. Hahn[1], 505 U.S. 1 (1992). Its passage resulted in a cap on property tax rates in the state, reducing them by an average of 57%. Proposition 13 received an enormous amount of publicity, not only in California, but throughout the United States. Its passage presaged a "taxpayer revolt" throughout the country that is thought to have contributed to the election of Ronald Reagan to the presidency in 1980. Questions? Ask me at www.PTRE.net. Pat Townsley, Mortgage & Real Estate Broker. Toll Free: 800-646-5527

100% "No Money Down" financing

I've done it. I have clients who have done it.... and so far, nobody has been financially ruined: 100% financing of a home in California. This simply means that you don't put any money down and you get to buy a home, get the pride of ownership, put a roof over your head and get a bit of a tax break with the interest write off. Buy something with some "upside potential" (in need of some basic work to gain sweat-equity), then refinance once you're in the home for a year or two. NO MONEY DOWN loans are NOT the last loans you'll ever have on the home. They're really "band-aid" or short term thinking loans until you can refi into a better rate. No Money Down loans come with a price: Higher Interest rates. Why? Because the banks are taking a RISK by lending to you since you haven't got access to the funds for a proper down payment. In the end Real Estate is still your best Investment Vehicle. I will not put you into a loan that you cannot logically and comfortably handle...and that's why my clients succeed in 100% No Money Down situations. Any Questions? I'm here to help. Pat Townsley, Mortgage Broker. Funding loans throughout California. www.PTRE.net 1-800-646-5527 toll free.

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Your one-stop shop for all your real estate needs...

Welcome to personalized hands-on service for all of your Real Estate Buying, Selling and Financing needs. One call handles it all. I am both a Realtor and Mortgage Broker providing the best of both worlds with one point of contact, saving you time and money. Your best real estate experience is a phone call away: (800) 646-5527. Pat Townsley. Visit my Home Page at www.PTRE.net.
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