Property/Casualty Insurance vs. Mortgage Insurance

HOMEOWNERS insurance is required by mortgage lenders. It protects the homeowner from lawsuits like a "slip and fall" or damages from someone getting hurt on your property. It also insures your home for damages (like a tree falling into your home) or a fire. You can add on to your policy to have earthquake insurance and increased coverages limits including theft. You can also receive a discount from some companies if you insure home and auto and other lines. MORTGAGE INSURANCE is only to insure the BANK if you default on the loan. Mortgage Insurance is typically found when your first mortgage loan is larger than 80% of the value of your home. Call me (415-485-1776) to get out or avoid mortgage insurance. Call CLAUDIA CARDOZA at AAA (415-472-6700 x357) for your home and auto insurance needs. For commercial property and business insurance, call ANDY POPOFF at Farmers Insurance (415-472-1080). Keep your finances in the pink and review your policies, coverage as well as your mortgage annually. Pat Townsley, Consultant. www.PTRE.net. (415-485-1776).

Seller's credit to Buyer for NRCCs

NRCC: Non Reocurring Closing Costs. These are the mechanical fees in any loan process. They're the real "hard costs" of doing a loan outside of the lender's compensation (fees/points/rebates). NRCCs include title and escrow fees, transfer taxes, reconveyances, wire fees, doc prep fees, notaray and a laundry list of little onesy-twosey "junk fees." For home buyers (if structured in the negotiation in the contract via an addendum), the SELLER can credit the BUYER for the closing costs. It can be a sticky thing. The goal is for the BUYER to keep as much CASH at close and basically "finance" the closing costs into the purchase price via the MORTGAGE. Figure most closing costs on an average Northern California/Bay Area purchase run around $8,000, wouldn't it be nice to not have to come out of pocket for these additional fees? The answer is Perhaps. Let's talk about strategizing your next purchase and keeping cash in your pocket at close. Pat Townsley, Real Estate Financial Strategist. 415-485-1776. www.PTRE.net

Real Estate Referral Fees

Mortgage broker and Realtors cannot legally take a commission or referral fee between each other. Same with escrow companies, etc. However, Realtors can refer business to each other and collect a referral fee or commission on the referral upon closing. We have standard Referral Agreements that are pretty common. I offer a 30% referral fee to Realtors who send me clients looking to buy homes in my territories (Marin, Sonoma, Napa, Solano Counties). Of course, I really focus on Central Marin properties and am well traveled in Sonoma and Solano. The reason Realtors would to this referral is to keep a small portion of a potential commission while ensuring that their client gets the best local representation by a Realtor who really knows the area. Looking to buy or sell in Marin? Call me. Looking to buy or sell somewhere else, Call me... I'll refer you to an excellent Realtor where you're looking to buy. Need to finance that purchase anywhere in California.... I'm the guy. Pat Townsley, Realtor and Mortgage Broker. www.PTRE.net. 415-485-1776

Teamwork in a transaction

I'm both a Realtor and a Mortgage Broker. Not many people can and will do both. I'm happy to do both, or either the Real Estate side or the finance side. When I do both, you get one point of contact and quite a bit more ease of transaction. I'm a micromanager, so regardless of how I'm involved in the transaction, I go above and beyond the call of duty to insure everything goes on schedule. I have a heck of a support team behind me from lender Account Executives, Escrow Officer relations and a vast referral network of professionals from construction to legal. I'm here to help and make things easy. Let's talk, let's do some business! Pat Townsley, Broker. www.PTRE.net. Making Real Estate really happen.

1% home loan and no closing costs

Warning; Danger, Will Robinson. Watch out for this often misleading type of advertising. The real goal of it is to sound so good that you call.... then you (hopefully) get the disclosure of how these loans work. Two primary keys to 1% loans and No closing costs: 1% is only a teaser type rate which is a Negative payment...so if you make that 1% payment, you're actually increasing the size of your principal balance in today's market. They're called Negative Amortization loans. The other point is No Closing Costs. There are always closing costs... you're paying them one way or another: either up front at closing, by having a higher interest rate and/or margin or by agreeing to a prepayment penalty on your loan. Need answers? I'm the guy: Pat Townsley, Loan consultant: www.PTRE.net toll free: 800-646-5527

When the _ _ IT hits the Fan

Sometimes, when things go wrong (especially at the closing of a purchase transaction), the pressure is really "On." The one keystone in the purchase transaction is the Mortgage Broker or Lender. He gets blamed for anything that goes wrong. Everyone is counting on this guy to hold it together; Selling Realtor, Buyer's Realtor, Escrow officer, the Buyer, the Sellers, the insurance agent, home warranty people, movers, painters... families and communities are on the line. Even the best mortgage brokers have unforeseen train wrecks, where the wheels come off on funding day. That's where cool heads, fast action, relationships and experience prevail. What doesn't kill a mortgage broker makes him stronger. Call me for personalized service, non-stop service, great loans and on-time closings.
Pat Townsley, Mortgage Broker to the Stars and putting out fires before they begin. Serving all of California. www.PTRE.net or call toll free at 800-646-5527. Close on time, every time.

Accessing Information

Folks, we're headlong into the Information Age. That's what we are as a society. Just one more step in evolution from Stone Age, Bronze Age, Industrial Age... and now...Data. Information is power. Embrace it, sort through it.... be the ball Danny. A powerful tool and soon to be a monster in the industry is the home valuation site called Zillow (Zillow.com). These guys are crunching tons of pieces of information in order to give you some form of value of property. They don't want to be Realtors. That's not the objective of Zillow and thier home "Zestimates." They're giving you free information in order to Advertise. They sell Ad Space. That's the game. They're the SuperBowl of home evaluations and neighborhood data. Watch for these cats to gain the home-field advantage as the Google of Valuations. Need another opinion on your home's value. Gimme a call. Pat Townsley, Realtor/Broker. www.PTRE.net toll free: 800-646-5527

Making a Million Dollar Offer

Here we are in July 2006... lots of activity in the Real Estate market. I'm currently working on representing a client looking to buy in the Loch Lomond area (Pt. San Pedro and Peacock Gap) of San Rafael. Homes are fairly higher end out here... not much "fixer" opportunity, and homes are in the $1.1 million to $3 million range. So, there are many "comps" to set high prices. When evaluating a home for a purchase client, I go back 2 years in historical area sales within 10 miles, all sales on the subject street, and a one year "Active, Pending, Withdrawn and Sold" history to get a pulse on all activity... then we look for any challenges the subject property faces and try to come in with the most competitive and logical offer with a fast close, tight financing and try to avoid the ping-pong of counteroffers. Looking to Buy California? Pat Townsley, Realtor. 800-646-5527. www.PTRE.net

Credit Challenges

I'm sitting in my office with Calvin. His credit is a bit beat up from past delinquent payments and collections. To improve his credit rating, he can "Challenge" the ugly mark via a dispute with the credit agency which is reporting the delinquent. Not all three of the major reporting agencies report the same stuff, so you might see a Delinquent payment only from TransUnion and not the others. Try to resolve any other disputes directly with the source rather than collection agencies. Your credit blunders of years gone-by will haunt you forever... so take action to make sure your credit is clean. Seek professional advice. Many of the online credit scoring companies don't actually give you good information...and it's a waste of your money. Get the right help. Pat Townsley, Credit Medic & Broker. www.PTRE.net, toll free: 800-646-5527

Credit Scores; My take

There are several "new" credit scoring methods now on the Internet. Some scores are over 900. What does that mean? Unknown. It's like Celcius, Absolute or Kevlin to the U.S. standard of Fahrenheit. In the Mortgage industry, we use the FICO (FICO is a trademark acroynm for Fair Isaac Company) score as the industry standard for all agencies. A Mortgage report merges information from the top three credit reporting agencies, giving you Three similar and close, but usually different scores based on your use of credit and the past history. We take the Middle of the three scores (the number, not the average) and use this to qualify your rate. The more you "run" or "pull" your credit report, the more Dings or Inquiries you'll have on your report. When considering a Real Estate financing opportunity (purchase or refinance), only let your #1 choice lender pull your credit, and avoid buying a vehicle, pulling your credit report, opening charge cards, increasing limits and/or ping-ponging debt. Let your lender (me) pull your report and we'll go over it together. I'm a master at credit repair, score improvement and debt structuring. Credit: It's Really important. Call an expert. Pat Townsley, Mortgage Broker. www.PTRE.net, 800-646-5527

Terra Linda and the love of an Eichler.

I grew up in an Eichler. Simple, classic, single-level modular to courtyard 1950's brain child of the man who's name is now legendary. Nice place to live....and I've seen them burn to the ground in about 3 minutes, I've seen them rebuilt and coveted to $1 million dollar super homes. In some circles, Eichlers are almost a cult...transforming them back into the 50's and 60's vintage style. A sweet Eichler; It's a bit better than having a really bitchin' Vega. Of course, when my mom bought our home in 1965 for $34,000.... who knew it would be in the $800,000 to $900,000 range some 40 years later. It would have been inconceivable. If you're thinking of buying or selling an Eichler, I'd love to discuss and broker that deal for you. I've been in just about every Eichler style in Terra Linda. I know 'em; I've replaced the radiant heat, windows, sewers, siding, you name it. What happens in an Eichler, stays in an Eichler. I'm here for your questions. Pat Townsley, Eichler native and Realtor. www.PTRE.net, local San Rafael: 415-485-1776

Information Security & your credit report

Folks, you've got to watch youselves on sending information over the Internet...by fax, whatever. One social security number could screw up your entire life. A loan prospect just emailed me for the first time ever. He's a referral from a past client from three years ago....totally out of the woodwork. (Thanks for the referral Don!). Anyway, this new prospect emails me his bank statements, Social, paychecks and W2s on the very first email. Kinda chilling. All this information, basically Blindly send to me without any previous contact. I've got his name, address, social, DOB, where he works, the hours he works, all his personal banking and savings info. Imagine if this email landed up somewhere else by accident. So, make sure you've got a relationship/rapport before you send you life over the Net. Pat Townsley, Broker and associate Crime fighter. www.PTRE.net

Refinancing on the Cash Flow ARM

I've been happily busy with meeting clients at their homes this past week to discuss the various refinancing options available at this time. A lot of the time, I recommend NOT refinancing as their current low, ARM or Fixed rate is better than the alternative of Refinancing. In several cases, Refinancing is a great alternative to improve their overall financial picture. The ADJUSTABLE RATE MORTGAGE (aka A.R.M.) can be a nice solution for a client where their debts are out of control and their income is luffing. Call or email me with any questions for your particular situation. Remember, your financial health isn't healthy if you're pumping cash in one side and bleeding it out thru another. Balance is sometimes hard to achieve, and we often put blinders on to where we're losing blood. So, let me help; The doctor is IN. www.PTRE.net, toll free 800-646-5527. Pat Townsley, Financial trauma doctor.

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