The Beach Blog - Beach Community Mortgage

Buying or selling a home? Patience is a virtue!

The mortgage process has been daunting from some homeowners and a new rule from the Consumer Financial Protection Bureau (CFPB) is meant to allow consumers more time to review documents before closing on their transactions. In theory, slowing down the pace a bit could be beneficial to some homebuyers. The overall result, however, could increase the timelines for closing the transaction for all home loans even when there is the need for speed.

The new rule will go into effect on August 1st and will combine two traditional disclosures into one, at the initial application and at the closing itself. TRID is the acronym for the Truth In Lending RESPA Integrated Disclosure and will be the hot topic for several months as lender and settlement agents prepare and implement the changes required. The traditional Good Faith Estimate and the TIL (APR disclosure) will now be one document titled the Loan Estimate. The HUD-1 Settlement Statement and the Final TIL, will now be called the Closing Disclosure. The language and emphasis on critical information appears to be more consumer friendly, but will take some getting used to for the industry. Possibly delays in the closing are due to a three business day wait period for consumers to review and compare their final figures to the ones initially disclosed to them by the lender. An error in the APR of more than 1/8% on a fixed rate loan would cause an additional 3 day wait period to occur. While lenders and settlement agents strive to not have errors at closing, a borrower might change their mind about the loan product or term during this three day period and thus, we begin anew.

As with any new change, lenders and settlement agents will be slowing down to make sure they do this right. The goal will be do it right, do it once. The penalties for not complying are severe and no lender wants to incur the wrath of the CFPB. So as they say in the traffic reports, expect delays. But don’t think there is a short cut – breathe in breath out, move on!

When should I lock my rate?

The cloud cover on my crystal ball always keeps me from answering this question! There is no accurate way to give a definitive answer to this question, but there is every reason to believe that we will see some fluctuations in rates this year. That is the politically correct response – and really doesn’t help the potential homebuyer trying to make a decision today on whether to lock in an interest rate. So what can we share with our clients that are looking to secure “the best deal” on a mortgage?

First, there are three major economic indicators that give us that future glimpse that might help drive these decisions. These are in the news monthly and can be accessed via google or any other online financial website (CNN Money or the Wall Street Journal).

Economic Growth (GDP Report) – this is the state of the economy and is the aggregated monetary value of all goods and services. When the GDP is on the rise, demand for money is also rising and interest rates will go up (supply and demand).
Inflation – this is the nemesis of the bond market and inflation will cause rates to rise. Two reports provide consumers with knowledge about inflation. One is the Core Personal Consumption Expenditures (PCE) and is the favorite of the Fed. This measures the prices we pay for goods and services (kicking out food and energy). The second report is the Core Consumer Price Index (CPI) which measures the change in prices over time. As rates are low, consumers have more buying power. As rate increase, consumers have less money to spend and the economy slows. A balancing act like the Great Wallenda never encountered!
Unemployment – the largest indicator of the health of the labor market. This is found in the Non-Farm Payrolls report. (Farming is too seasonal so it skews the numbers). This one is hard to understand, but as more jobs are created investments move toward stocks and interest rates rise. While we need improvement in unemployment, it can create higher mortgage rates.

My advice – when you shop for a mortgage, look at your own personal financial picture. The market is currently poised to see an increase in rates in 2021, but how quickly that occurs will be anyone’s guess. No one can determine your own comfort level about your mortgage payment but you. When you seek information, determine if the payment meets your needs and commit. Hesitating too long, you may see an increase that keeps you from meeting your goal.

Why do Realtors Prefer Local Lenders?

It may seem like a flash of the blindingly obvious, but for loan originators who focus on building purchase business in their local markets, INSIDE MORTGAGE FINANCE recently commissioned a national survey of real estate agents, and found that Realtors express a clear preference for local lenders over call centers.

What Are Some of the Reasons Realtors Prefer Local Lenders?

Fewer Delayed Closings.

According to the survey, delayed closings are much more common when the buyer is not using a lender with a local office. Realtors get very nervous when it begins to look like the closing may be delayed because the lender has not obtained a final approval from underwriting. While that might also occur occasionally with the local lender, turn time to get you to closing is much faster – same day even!

More Accountability.

When a home sale occurs, there is a lot on the line for the seller, buyer and agent. I’ve never heard anyone in the transaction say they like surprises, and they especially don’t like having to deal with a contact person in a faraway city that doesn’t rely on the Realtor for their business and is in no way beholden to the Realtor for the current transaction. It is almost impossible for a Realtor in this situation to get a straight answer from anyone in authority at the out-of-town mortgage center. And if there is a problem at the closing table after office hours, there is no one the Realtor can call to get the problem resolved. A local lender will get up from the dinner table to take their call!

Experience with Local Lending Laws and preferences.

You know your state’s laws as they apply to mortgage lending. According to the Realtors who were surveyed, call center companies that loan in all 50 states make more mistakes that can lead to delays or worse. How can they be proficient at what the local title company requires or who to call if there is a quick decision to be made? The Inside Mortgage Finance survey (conducted by Campbell Research) was apparently focused only on call center lenders, but many of the complaints voiced by Realtors about the call centers also apply to the nationwide megabanks. In this day of heavy regula-tion, a Realtor may be hesitant to say anything negative about a big box lender to a buyer. They don’t want to appear to be trying to influence the client as to their choice of lender, and ultimately they’re afraid of losing the client altogether. In many cases, the Buyer has already gotten “preapproved” online by the call center or the big bank before they even approach a Realtor. From the Realtor’s point of view, it’s hard to un-ring that bell. But, having a great lender relationship with a local company, might also impress the borrow-er when the deal is saved! We do this all the time and when it comes down to it, its service over rate every time. That internet lender just can’t compete with a face to face meeting and a handshake at closing!

Keeping it local – Beach Community Mortgage!

Energy Efficient Mortgages (EEMs) are loans that include funds to cover the cost of making energy efficiency improvements to a dwelling.

If you build it, he will come….I love this line from the movie Field of Dreams! Of course, it could just be I love to see Kevin Costner! It’s a feel good movie that teaches us to have a little faith in believing in the impossible. Sometimes finding the right home to buy can seem impossible.

Home buyers typically have an idea of what they want in home to meet their particular wants/needs. After diligently searching and taking that Realtor from House A to House Z, what if their “perfect “ house just doesn’t exist in the current market? Enter the variety of options called Construction to Permanent lending, or CP for short. These programs offer “one time close” that includes the construction of the home and the permanent loan upon completion.

Buyers can find the house that meets their family dynamic by choosing a lot and a builder to construct their dream home. With a CP mortgage, a buyer actually obtains the construction loan and is able to pay the builder thru draws at each stage of construction. This program has gained in popularity as the housing sector recovers from the difficulty many good builders faced during the economic disaster of the past few years. Builders with significant credit damage during this time found it difficult to obtain financing for speculative construction and may need a buyer to obtain the construction loan. In addition, banks have been more conservative in the amount they are willing to lend even the financially strong builder so that a repeat of large tracks of proposed construction sites that look like ghost towns doesn’t reoccur. Banks that do have these properties now in their REO portfolios are willing to work with buyers more readily to revitalize these neighborhoods. The CP loan becomes a win-win for all involved.

Lenders that offer these products normally do so with Conventional loans under fixed or adjustable rate with a loan to value of 80 – 90%. (Some may offer interest only type loans, but those are rarer given the conservative nature of lending today). More experienced lenders may also offer CP loans under the Veteran Administration home loan programs which may allow for 100% loan to value. Lenders offer CP financing when a lot is being purchased at the same time or when a borrower might already own the land on which they want to construct their new home. Either way, the “one time close” can be a significant cost savings for closing costs that normally would occur twice. Choosing an experienced construction lender is important to the success of this process and a buyer should shop not only based on rate and terms, but on the history of construction lending in the community. A good lender will have familiarity with reputable local builders and can help the borrower become more comfortable with the process of choosing a builder. More than anything, shop for experience in the lender and the builder!

Whether you own your lot or find one in a neighborhood you want to live in, the CP loan program can help you obtain the home you want, where you want it and with those particular upgrades that make your family happy. So if you believe in the impossible, the incredible can come true! Even if Kevin Costner is too busy to help build your home!

Call us to find out about your mortgage options! Call us today!

VA Energy Efficient Mortgages – a good way to upgrade when buying an existing home!

Energy Efficient Mortgages (EEMs) are loans that include funds to cover the cost of making energy efficiency improvements to a dwelling.

EEMs can be made in conjunction with:

a VA loan for the purchase of an existing dwelling, or
a VA refinancing loan secured by the dwelling.

Acceptable energy efficiency improvements include, but are not limited to:

solar heating systems, including solar systems for heating water for domestic use
solar heating and cooling systems
caulking and weather-stripping
furnace efficiency modifications limited to replacement burners, boilers, or furnaces designed to reduce the firing rate or to achieve a reduction in the amount of fuel consumed as a result of increased combustion efficiency, devices for modifying flue openings which will increase the efficiency of the heating system, and electrical or mechanical furnace ignition systems which replace standing gas pilot lights
clock thermostats
new or additional ceiling, attic, wall and floor insulation
water heater insulation
storm windows and/or doors, including thermal windows and/or doors
heat pumps
vapor barriers

The mortgage may be increased by:

up to $3,000 based solely on the documented costs
up to $6,000 provided the increase in monthly mortgage payment does not exceed the likely reduction in monthly utility costs
more than $6,000 subject to a value determination by VA

Requirements

If veteran does the work, only cost of materials can be included in the loan.
Lender must determine that improvements are reasonable for the property.

We offer VA EEM loans to any qualified borrower – call us today for more details. With the heat of the Summer, a brand new energy efficient A/C would be a great addition to that home you are considering! At rates as low as they are today, adding $6,000 to a loan would be a minimal increase to the monthly payment.

Call us to find out about your mortgage options! Call us today!

Why Bad News Can Be Good For Home Loan Rates

It’s counterintuitive that negative economic news can actually be good for home loan rates, but there’s a pretty simple explanation, and once you “get it” it makes perfect sense.

First, remember that big money managers in search of higher returns avoid holding onto cash by investing in both Stocks and Bonds.

Second, despite what the financial media often reports, home loan rates are based on the performance of Mortgage Backed Securities—a type of Bond.

Putting these two facts together, it begins to make sense that when the economy is “on fire” and economic reports are on the uptrend, investors tend to put more money into Stocks. That’s because Stocks offer higher returns, even though they are generally more risky.

However, in order to put money into Stocks, investors must remove some of their money from less-risky Bonds. The result is a decreased demand in Bonds causing Bond prices to worsen, and therefore home loan rates to go higher.

On the other hand, when the economy is sluggish and economic reports are negative, money managers tend to take money out of higher-risk Stocks and move it into less-volatile Bonds. As demand for Bonds increase, Bond pricing improves and home loan rates go down.

While it may seem odd that home loan rates improve when economic news is sluggish, it actually makes sense when you look at the bigger picture!

A good lender keeps up with the daily market fluctuations and can help guide you on your loan decisions. We watch the market constantly and have been able to lock in loans that saved our clients’ money – we would be happy to help you too!

What Are Your Rates?

As mortgage rates are rising, we receive calls daily about what rates are doing and what rate can a customer expect if they choose to do business with us. If only it was that easy! Rates are an exact science now, and, in fact, an experienced lender would tell you that without a lot of information exchange, a viable rate cannot be determined. You will still see quotes on the internet, verbal quotes from lenders that may be trying to entice you their way and estimated rates based on PERFECT scenarios. Today’s mortgage customer is rarely the perfect scenario, so that rate you were quoted is worthless the minute the words left the lenders mouth.

Rates are fluid with the market conditions and can change multiple times in a day. As a general rule of thumb, positive economic news will tend to push the price of mortgage bonds lower and favor the Stock markets. This means positive news may sometimes cause rates to increase as the demand for bonds is diminished and vice versa with negative economic news. Given that the standard is a moving target, knowing more about the client and the terms of the loan are a must in order for a rate quote to be provided. In fact, an industry publication put out a list some few months ago and it was a reality check for a consumer shopping rates. Below is a similar list to help you understand all the factors that could affect the rate you are quoted for your specific transaction.

Loan amount
Loan to Value ( as a percentage of the value, how much do you want to borrow?)
Combined LTV – is there a second mortgage?
Credit score
Credit history
Escrow preference – include in payment or not
Closing date
Loan type
Property type – single family home, condo
Occupancy
Residency – do you reside in a community property state
Available assets
Asset seasoning – how long have you had the asset at its current average balance
Coborrower
Debt ratio – all debts to income
Housing ratio – payment to income
Improvements needed to the subject property
Employment type – salary, commission, self employed
Employment history
Documentation available
Seller contributions
Gift funds needed
Refinance or purchase
Cash out refinance or rate and term
Fixed or Adjustable rate preference
New or existing construction

So when you are ready to choose a lender, make sure at least some of the information above is requested so that you might be able to rely on the information you receive. Anyone can quote a number, but an experienced lender will want to provide the most accurate information to help you make a wise decision.

Four Tips To Improve Your Mortgage Options

Document, Document, Document

The new mortgage regulations went into effect in January, with that being said lenders will be extra meticulous when underwriting loans in 2021. Lenders will be following these guidelines precisely and verifying borrowers have the ability to repay their loans.

Make sure you keep good records of your finances- this is key for obtaining a mortgage loan. You will need 2 months of bank statements, 2 years of tax returns (W2’s, investment accounts, and any other assets you own). Be prepared to explain any unusual deposits on your account. That $500 that you deposited in your account from the wedding gift could delay the closing process if you are not able to explain where the money came from.

Know the Score

It is almost impossible to get a loan without decent credit. Know what your credit score is. During the process make sure you monitor your credit history and credit score until the loan closes.

Some of the ways to improve your credit score are as follows:

To establish credit contact local bank services and inquire about a secure credit card
Keeping revolving credit card balances at 25% or less of the credit limit
Don’t close credit cards during the mortgage process
Don’t apply for new credit of any kind
Continue to use your card as you normally would

You can get one free copy of your credit report from each credit bureau (Equifax, Experian, and TransUnion) every 12 months at www.annualcreditreport.com.

The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a lower score, but lower scores will mean higher rates or higher costs.

Document, Document, Document

Make sure you keep good records of your finances- this is key for obtaining a mortgage loan. You will need 2 months of bank statements, 2 years of tax returns (W2’s, investment accounts, and any other assets you own.) Be prepared to explain any unusual deposits on your account. That $500 that you deposited in your account from the wedding gift could delay the closing process if you are not able to explain where the money came from.

Know the Score

It is almost impossible to get a loan without decent credit. Know what your credit score is. During the process make sure you monitor your credit history and credit score until the loan closes.

Some of the ways to improve your credit score are as follows:

To establish credit contact local bank services and inquire about a secure credit card
Keeping revolving credit card balances at 25% or less of the credit limit
Don’t close credit cards during the mortgage process
Don’t apply for new credit of any kind
Continue to use your card as you normally would

You can get one free copy of your credit report from each credit bureau (Equifax, Experian, and TransUnion) every 12 months at www.annualcreditreport.com.

The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a lower score, but lower scores will mean higher rates or higher costs.

Keep Expenses Reasonable

Try to keep your monthly debt obligations below 43 percent of your income. Lenders will want to see that you have reserves after you pay your bills to live on. Approximately 2 months of mortgage payments is usually sufficient.

Get Prequalified

Ability To Repay Rules

Recently, the mortgage industry was hit with the next big wave of financial reform created by the Dodd-Frank rule. In this latest tsunami, lenders are required to provide irrefutable proof that a consumer has the capacity (income) to service not only the mortgage they are applying for, but every other debt that they pay.Now this doesn’t sound like bad idea, as why would a lender want to risk $100,000 loan to someone who doesn’t have the income to pay it back?Common sense would tell you that credit underwriting has and always will include limitations based on debt to income (DTI) evaluations.The problem is the definition of common sense seems to have shifted.

While the process of obtaining documentation to support a mortgage application has been challenging at times, the amount needed now to meet the new regulations will be a little more like climbing Mt Everest in your flip flops.Consumers are protective of their personal information as they should be.Identity theft and acts of massive corporate computer hacking have us all leery of providing every shred of paper that includes our name, ssn, address, income, assets, photo identification, etc., etc. But, the government says lenders must.We must know all, document all, verify all and then share it with underwriters and secondary market investors with a full evaluation on pages and pages of calculations that throw common sense into a tailspin.

Underwriting to these new rules and closing the transaction will have many additional steps thus slowing the process once again. In the process, those that truly have the ability and capacity to repay may not be able to provide proof of this fact. The loan will have to be tested against the rules and at times this might kill a deal. And we thought financial reform was meant to assist the consumer and help the housing industry propel out economy out of the abyss.

As a borrower, what you should know is that a good lender will communicate what is truly needed to meet all the regulatory requirements. Your cooperation in providing this data will be paramount to the success of the lender being able to provide you with a loan. Lenders start the process with the same goal you have – to create a loan to assist you with your financial needs. We want to lend money to qualified, well documented borrowers and we will do all we can to make this happen. Become your lenders partner in this process and the result will be a smoother road to buying or refinancing your home. The rule of two still applies (2 years of complete tax returns, 2 months of asset statements, 2 years of employment history, 2 years of residency) so continue to gather and prepare for a loan application ahead of time. Talk to a lender very early in your process so you will know what is needed and get prequalified before you sign a contract.

The Current State Of The Housing Market

According to a recent online survey by the real estate research firm Trulia, almost half of the participants who plan to buy a home are worried most about rising interest rates. The cost of housing is rising, and the inventory of homes to buy is shrinking. Adding the recent rise in rates to this equation has the potential to hurt the housing recovery by scaring homebuyers out of the market.

Rates are the wild card in home buying today. While you don’t need the “crystal ball” to know that rates are on the upswing, the violent turn of the market over the past few weeks did take some potential homebuyers by surprise. For our younger, first time, homebuyer generation, going from a rate below 3.5% to something above 4.00% was a significant event. For those of you more seasoned in the process of mortgages, you know that almost anything below 6% feels like a gift. There was a time that rates below double digits would cause a refinance frenzy! Let’s break this down to the actual dollars and cents. If a borrower was purchasing a home with a loan amount of $200,000 on a 30 year fixed rate loan with the rate of 3.5%, the monthly principle and interest (P&I) would be $898.09. If that rate increased to 4.0% the P&I would be $954.83. That is a difference of $56.74 per month – not a small amount of money, but still less than the cost of a family dinner at the kids’ favorite restaurant. No one likes to see the costs of anything go up, but paying a little more each month to have the benefits of homeownership seems like a good trade off. At least you get something extra for your money: tax incentives, a place to call your own and the knowledge that you are buying in a growing economy. Rates may not be at the historic lows anymore, but they are certainly extremely attractive and home prices are rising which means equity in your home is happening.

If you are currently in the market, you are aware of our local inventory for the type and price range you are seeking. The market is very busy, and the length of time a home remains on the market (if it is priced right) has been sharply reduced. It’s back to good times but at a much more realistic price point. Don’t risk missing the opportunity to buy because you have heard rates are up – get the facts and see how we can help you!

Construction To Permanent Loans

Our market has certainly seen strong improvement in the past few months. As such, we are seeing a large increase in the amount of new homes being built in the area. Subdivisions that had been sitting almost dormant for 24-48 months have seen a resurgence of new construction in part due to the reasonable cost of lots and an increase of lending by financial institutions. The days of multiple speculative homes is not back by any means, but a builder who has a product in demand and can provide to a bank a viable sales contract is finding money more readily available. One lending option is called Construction to Permanent or CP, for short.

A CP loan can be done as a one-time closing, where all funds are disbursed on draws, and when the home is complete, the note documents are modified to set the terms of the permanent loan. In this scenario, a borrower may realize some savings in the costs of construction and in closing costs compared to a two closing scenario. This program is available when the borrower already owns the lot or when a lot is being purchased in conjunction with the transaction.

The most popular CP loans are done as conventional financing and have loan to value limitations of 80%. When an eligible veteran is looking to build a home, we do offer VA CP loans which may allow for up to 100% financing. This program is gaining popularity in our market with buyers and builders alike are realizing some great benefits. If you are planning to build your next home, consider asking about the advantages of a Construction to Permanent loan. We would love to help you become knowledgeable in this process and determine if this is right for you!

Inflation Can Impact Home Loan Rates

In the wake of the Fed’s QE3 (or Quantitative Easing) announcement, you may be wondering how this new effort to stimulate the economy may impact the mortgage and housing markets. And you’re right to wonder. One of the consequences of QE3 could be inflation—which is the archenemy of bonds and home loan rates.

Here’s a quick narrative that will help you understand why this is important.
Imagine for a moment that you are going to lend your very own money to someone to buy a house. So you go through all the paces to determine this person is a good credit risk, you do the loan, and you start receiving $1,500 per month as your regular payment. You then of course take that $1,500 and start loading up your shopping cart with the goods and services you need on a monthly basis…food, clothing, medicine, gas, and so on.

But over time, you notice something happening. Every month, you are getting slightly less in your cart than you did the month before, for that same $1,500 you are spending. Why? Because costs are on the rise–that’s inflation.

Now imagine that you are once again going to lend your very own money to another person to buy a house. You go through all the paces once again, and determine that the person is a good credit risk.

You want the same shopping cart full of “stuff” that you got last time in return for doing the loan, but this time you realize that you can no longer get that same cart full with $1,500. Due to inflation, you now need $1,700 to buy those same goods and services. As a result, you will need to charge a higher interest rate to compensate you for the ongoing impact of inflation. This is why home loan rates change when there is a fear of inflation in the air.

We are constantly watching the market on behalf of our clients and helping them make good decisions about locking in rates. We would love to help you buy or refinance your current home!

What is QE3?

The Federal Reserve recently announced another round of Quantitative Easing (QE3). Read on to learn what QE is, why the Fed announced QE3, and what this means for home loan rates.

What is Quantitative Easing? Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds to try and stimulate the economy. Oftentimes, the Fed does Quantitative Easing when they are hoping to (1) create inflation and avoid a deflationary economy, (2) lower the unemployment rate, and (3) boost Stock prices.

Why did the Fed announce QE3? With our economy still struggling (especially our housing and labor markets) and inflation appearing tame, QE3 was widely expected. But what caught the markets by surprise was the aggressiveness of the Fed’s action. Over the next several months, at the very least the Fed will be buying Mortgage Bonds at an annual rate of nearly $800 Billion.

The Fed also noted that QE3 will continue until there is a self-sustainable recovery in our economy, as long as inflation doesn’t rise too high or quickly. Rest assured, the Fed will be watching inflation levels carefully over the coming months.

What does QE3 mean for home loan rates? The Fed is buying such large amounts of Mortgage Bonds each month to keep home loan rates (which are tied to Mortgage Bonds) near record lows, which they hope will help strengthen our housing market and economy overall. However, as the economy starts to improve and if inflation heats up, Bonds could face some selling pressure…which could impact home loan rates negatively as a result.

The bottom line is that home loan rates remain near historic lows and now is a great time to consider a home purchase or refinance. Contact us to determine your buying or refinancing power today!

Get the Bugs Out!

When there is a requirement for a “pest inspection” for a home loan—what they really mean is that they are looking for evidence of wood destroying insects. In Florida, we experience wood rot due to moisture and this creates the opportunity for insects to set up house and enjoy a meal on us!

Did you know that there are 6 types of wood destroying insects inspectors must report?

Termites are the most well-known insects that cause wood damage. These small delicate insects construct colonies within wood structures. Termites eat wood fiber, and damage usually occurs from the inside out. Termites generally damage softwoods, but can damage hardwood areas as well.
Lyctid Powder Post Beetles are small and reddish brown to black in color. The beetle larvae directly infest wood, destroying it. The beetles feed on starch and cause damage mostly to hardwood surfaces such as cabinets and flooring. Lyctid powder post beetles leave small exit holes, which are covered in a dusty powder.
Round-Headed Wood Borers are large, cream-colored wood-infesting larvae with a prominent head capsule. Adults turn into large, colorful beetles with a long antenna. These beetles generally live in living or dead trees and cause damage to hardwoods and softwoods. The beetles generally cause limited damage because they do not re-infest the wood after the first generation.
Horntail Wasps are large insects with a long stinger. Horntail wasps generally emerge in newly constructed homes up to around 3 years old. Structural damage is minor and usually results in aesthetic damage to wall or floor coverings. Horntail wasps generally leave large half-inch exit holes that are easy to identify.
Carpenter Bees are large, heavy bees that look similar to the common bumblebee. Carpenter bees leave multiple large exit holes usually at right angles. This allows water and fungi to enter their intricate network of tunnels. Most of the damage is located around exterior trim, doors and sliding.
Carpenter Ants earned their name due to the fact that they destroy wood quite efficiently. Carpenter ants are black or reddish-black insects that nest in cavities above ground level. Damage occurs when carpenter ants attempt to expand their nests, causing structural wood damage. Other damage may occur to soft building materials.

If you are planning to sell your home, it’s a great idea to order this wood destroying organism (WDO) report from a reputable source ahead of any potential buyer writing an offer. Then you will have time to remedy any issue without the need for possibly much more expensive repairs required by a lender. If structural damage exists, you don’t want to find that out days before the home is scheduled to close. Share this idea with your Realtor too – the upfront expense (usually less than $100 for the report) is well worth the peace of mind!

How to Get Prepared for an Appraisal

Even in times when real estate was booming, when homes were selling like hotcakes, the property appraisal was one of the major hurdles for sellers, buyers and lenders. While the actual appraisal inspection may only take an hour or so, the appraiser must still go back to the office, do the research and write the report.

Here are a few tips for property sellers to help move the process along more smoothly.

Compile a list of recent improvements. If possible, include before and after pictures and copies of paid receipts for the work completed. If major updates, have a detailed copy of the contractor’s bid.
Make sure all areas are accessible, including the attic, basement and crawl spaces. This includes the garage. Tell that man to clean out the cave!
If the home is part of a homeowner’s association, include a copy of the fees paid and name and phone number of the association president or association administrator.
Straighten up each room. Appraisers are required to photograph each room, and while it may not make a difference to them if the room is messy, there is an underwriter who may be less objective.
If there are any unfinished projects, make sure you complete them before the appraiser’s inspection.
If there are any easements, encroachments or any unusual covenants associated with the title, provide a copy to the appraiser.
If you know of any recent “For Sale By Owner” sales that will help support the value, try to get additional information from the home buyers living there now.
If there has not been a pest inspection, get one now. Repairs that may be required can cause delays in the purchase process for a prospective buyer.

One more thing – Since the appraisal is paid for and completed for the buyer and the lender, the seller does NOT have the right to know the final value — that is, unless the buyer gives permission to share the information. Unless it comes in low, a seller may only be told the appraisal is satisfactory or required some repairs.

Call us for more information on how we might help you buy or prepare to sell your home!

Selecting a Realtor®

If you’re like most people, you view buying or selling a home with a mixture of fear and anticipation. It’s an exciting, emotional time as you move forward to a new chapter in your life. With so much going on, it’s not unusual that most people feel a bit overwhelmed when choosing a Realtor®.

While friends, family and coworkers are a good source of referrals, their needs may have been different – they may have bought or sold a luxury property while you might be a First Time Home Buyer looking for a single family starter home. Be sure to ask the agent the type of property, price range and areas in which they specialize.

The Internet is a good resource, but it is not a substitute for working with a Realtor®. If you’re selling, be wary of websites that list your home in the MLS for a flat fee and discourage you from working with a Realtor®. Yes, they will take your money and post the information you provide to them, but after that you are on your own. Is it worth it to cut corners on something as important as selling your home? While at first glance real estate commissions may seem pricey, they are really quite reasonable when you consider the value received versus the dollars spent.

Work with a Realtor®. Licensing requirements are the same for all agents, but only those who are members of the National Association of Realtors® (NAR) and agree to be bound by NAR’s Code of Ethics can call themselves REALTORS®. And only Realtors® have access to the Multiple Listing Service (MLS), a very powerful tool for both buyers and sellers.

Find an agent who takes time to answer your questions and can act as your local resource. The best agents can help make your real estate transaction seamless by directing you to various resources (insurance, inspectors, mortgage loan professionals, tax or real estate attorneys, etc.).

Don’t list with an agent simply because they will accept the lowest commission. You get what you pay for and, while price is always a factor, it alone should not be the deciding factor.
Conversely, don’t list with an agent only because they will set the highest price or agree with your predetermined selling price, especially if values and recent transactions in your neighborhood do not support that number. Listen to your Realtor – they should know the market. Get a pest inspection done when you list your home – avoid costly delays should there be any need for repairs before closing.

While the amount of experience an agent has is important, it should be just one of many considerations. Keep in mind that a newer agent is building their business, so they are highly motivated, and their enthusiasm and effort can more than compensate for any lack of experience.

While this is not all inclusive, it is intended to provide basic guidance as you choose an agent. There are many intangibles that will enter into your decision – the agent’s personality, your sense of whether they are honest and trustworthy, etc. Do your research, ask questions until you find an agent you feel comfortable with, make sure the agent has a clear understanding of your needs and wants and you should be just fine!

10 Commandments When Buying a Home

After 30 years in the business, we sometimes take for granted that borrowers understand the need to keep all their debts and income the same during the loan process. Until closing, everything is subject to review and reevaluation. When borrowers make changes during the loan process, surprises happen: the loan process may go south or the sale may be in jeopardy. And the lender becomes the bearer of the bad news. No one likes this to happen, so I have borrowed the list below from Karen Deis, an entrepreneurial mortgage consultant who hosts the Mortgage Currentcy website. Deis’ public list is a good reminder that once you have applied for a loan, do not buy a car or change jobs!

10 Commandments When Applying for a Mortgage Loan

Thou shall not change jobs or become self-employed.
Thou shall not buy a car, truck or van unless you plan to live in it.
Thou shall not use your credit cards or let your payments fall behind.
Thou shall not spend the money you have saved for your down payment.
Thou shall not buy furniture before you buy your house.
Thou shall not originate any new inquiries on your credit report.
Thou shall not make any large deposits into your bank account.
Thou shall not change bank accounts.
Thou shall not co-sign for anyone.
Thou shall not purchase ANYTHING until after the closing.

Call us today for more details on how you can take advantage of the lowest interest rates in history!

Underwater on your mortgage?

Some good news came out recently for those homeowners that are still having difficulty refinancing due to their property values. The Federal Housing Finance Agency announced changes to the Home Affordable Refinance Program (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their mortgage loan. Fannie Mae and Freddie Mac have adopted these changes, and you may be eligible to take advantage of them. The program has been broadened to allow for more flexibility when the property is worth less than what is currently owed. If you have attempted to get your servicing lender to refinance your loan and were denied due to the value, you should give it another try.

Some of the parameters are as follows:

If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance under the expanded provisions of HARP.
You must be current on the payments with no delinquency in the past 6 months and no more than one late payment in the last year.
There must be a benefit to you as the homeowner for the refinance to take place. This means a reduction in your current payment or a more stable loan product, such as a fixed rate versus a balloon or adjustable rate.
You can determine whether your mortgage is owned by Fannie Mae or Freddie Mac by checking the following websites: www.freddiemac.com/mymortgage or https://www.fanniemae.com/loanlookup/.

Your current lender is the only option for these loans at this time, so be patient but persistent! In March, it is expected that any lender may be able to assist with these, so we hope to help even more local homeowners get a loan that fits their current financial needs If you have any questions, don’t hesitate to call us!

Credit Scores and Key Lime Pie

Credit scores are used as a risk factor to determine the chances of a borrower making a payment 90 days late in the next 24 months. Over 40 factors determine a credit score.

Picture your credit score as a whole key lime pie. If you were to purchase a slice of the pie in a restaurant, your slice would most likely be equal in size to the person’s piece at the next table. But if you divide the pie yourself, grandma may take a skinny piece, and your dad gets the gigantic slice. Your credit score is like a pie with unequal pieces; it’s made up of many factors but the factors are not of equal importance in determining your score. However, there are five main percentages, or pieces of pie, that credit score determination is broken down into.

Payment History – 35%
The focus here is on late payments and how frequently they occur. A late payment in the last six months most negatively impacts your score. Late payments that occurred 7 – 24 months ago are less severe, and late payments that occurred over 24 months ago affect your score the least.

Outstanding Credit Balances – 30%
Having high balances on revolving credit, such as credit cards, negatively impacts your scores because credit reporting agencies look at cumulative totals. It is best to keep credit card balances at 25% or less of the credit limit. Additionally, it is not always better to close accounts that have no balance. Try to spread out balances among multiple credit cards; it is better than having one maxed out credit card.

High balances on installment loans such as a car loan or mortgage do not impact your credit score as much as credit cards do. Home equity lines of credit (HELOC) are not as volatile as credit cards, but they are treated as revolving credit unless the balance is above $30,000. When a HELOC is over $30,000, credit reporting agencies treat it as installment debt.

As a side note, American Express’ credit reporting is important to check because they will report the previous month’s balance if there is no current balance. It can lead to your card being shown as maxed out.

Credit History – 15%
The longer you have had established credit, the better it is for your overall score. Credit reporting agencies look for trendlines, favorable credit items, whether an installment loan or revolving credit, in which you have not missed a late payment for over 24 months. It is ideal for these trendlines to be between three and five years old. The theory behind this is that more history about your credit is a good predictor of your future payment history because with time you are likely to establish financial patterns.

Type of Credit – 10%
This portion of your credit score looks at the types of credit you currently have. Having different kinds of credit, such as a mortgage and credit cards, is seen as more favorable because each account is seen as an endorsement of trust. However, department store credit cards are not rated as highly as regular credit cards. Additionally, mortgages are seen as higher quality credit because they are considered more difficult to obtain.

Inquiries to Your Credit Report – 10%
Hard inquiries of your credit score, which are conducted by lenders based on your permission, can have an adverse affect on your credit score. Each inquiry can deduct from 5 – 15 points, so it is a good idea to limit credit inquiries to 5-7 per 12 month period. However, if a string of inquiries are completed within a 14 day period, such as when shopping for a car loan, it will not negatively impact your score. Additionally, promotion inquiries, where companies look at your credit to pre-approve you for credit, do not affect your credit score unless you accept the offer of credit.

Credit scores may not be as easy to swallow as a slice of key lime pie, but we are here to help. For additional information on credit and whether your credit will qualify you for a home loan, please call us today!

3-Day for a Cure

At Beach Community Mortgage, we love it when our employees take up a cause and devote themselves to it. We are proud to announce that two of our employees are taking part in the Susan G. Komen 3-Day for the Cure: Dawn Hoffman, Mortgage Loan Originator, and Tammy Eitel, Underwriter.

The Susan G. Komen 3-Day for the Cure is a 60-mile walk for women and men who want to make a personal difference in the fight to end breast cancer. Participants commit to raise at least $2,300 and spend several months training to prepare for the event. This year the ladies will participate in the Atlanta 3-Day for the Cure, which is October 21 – 23.

Breast cancer is the most frequently diagnosed cancer and is the leading cause of cancer death among women worldwide. Somewhere in the world, a woman dies from breast cancer every 69 seconds.
Net proceeds from the 3-Day for the Cure are invested in breast cancer research and community programs.

Tammy and Dawn both have been inspired by others to participate in 3-Day for the Cure. Tammy’s lifelong best friend’s mother is her inspiration for walking this year. Tammy’s inspiration is currently in remission, and she’s walking to show support for all that her friend and mother went through during the diagnosis and treatment of the breast cancer.

This is Dawn’s second year participating in 3-Day for the Cure. Dawn and her husband recently lost a friend, Dana, to breast cancer. Dawn said, “This is my attempt to do something meaningful to truly honor Dana, her battle with cancer, and her family during their time of loss.”

If you would like to support our employees’ efforts, click on the photo to the right to be directed to a donation page. We appreciate Dawn and Tammy’s hard work and wish them success in meeting their goals over the next few months!

The “New Normal”

Over the past three years, the qualifying criteria for getting a mortgage loan have tightened significantly, and July brings new regulations via the Dodd-Frank Act. The mortgage industry has adjusted to a new kind of business as usual mode – we call it the “New Normal.”

The “new normal” resembles things we used to do, but the enhanced paperwork and the need to clarify and document can inadvertently overwhelm borrowers. Our job is not only to guide you through the mortgage process but to also educate you on the reasoning behind all of the questions and documents we ask a borrower to provide. This “new normal” is about completing the whole puzzle of a borrower’s ability to repay a loan rather than verifying just enough to get by. At Beach, our goal is to make our clients comfortable with the mortgage process – not just have you fill out paperwork.

In addition to the credit standards being raised, the value and acceptability of the collateral – the home – can present issues since we are still in the recovery phase of the market bottoming out. If an appraisal report does not meet the criteria required by the secondary market, we may have to examine alternatives such as a non-fixed rate loan with the borrower. At Beach, we are fortunate to have a bank behind us that can offer additional loan options. Not all lenders can offer such an alternative.

Having financing options can make the difference in owning and renting, and our goal is to help you own your home!While our goal will always be to find the loan that the customer desires, when the circumstances change, we are ready to meet the challenge and provide options to consider.Call us today!

Spring Cleaning

Spring has sprung! In my opinion, it’s the best time of year to enjoy the amenities of our area. Fishing, boating, and just being in the sunshine with temperatures in the 70s remind us why Northwest Florida is the best place to live!

If you are one of those people who enjoy spring cleaning, did you ever consider that maybe you need to take a look at the clutter within your finances as well? Start with your wallet, and see just how many credit cards you are carrying around that you don’t even use. Next, check out your bank accounts, and make sure you have your money geared towards earning the most interest possible. Move the cash around when your account that doesn’t pay has excess. This is easy to do each day when you have a mobile banking option (we do so I’m just saying maybe you should bank with us!). Get your credit report, and clean it up if you find inaccurate data is being reported or you need to improve your repayment history (www.annualcreditreport.com). And don’t forget to look at your mortgage and determine if it needs a little sprucing up. With rates still very low, you don’t want to miss an opportunity to investigate a refinance. These rates won’t be here much longer, so spring into action soon! We are only a phone call away!

Don’t Fight the Fed

There has been much in the news about what the Fed is trying to do to boost our economy. If you are considering a mortgage, the following might be of interest to you.

The Fed’s goals for their current round of Quantitative Easing are to (1) boost Stock prices, (2) create inflation, and (3) lower the unemployment rate by injecting $600 Billion into the economy. In recent weeks, we’ve seen evidence of all three goals.

Stocks have been improving. The unemployment rate has declined. In fact, just last week, the Labor Department reported that the Unemployment Rate fell to 9%, and the U6 or “real” rate of unemployment, which includes discouraged workers and those who have accepted part-time employment for economic reasons, fell to its lowest level since April 2009! We’ve seen an increase in global unrest of late – not just in Egypt, but in other parts of the world as well – that at least partially centers around runaway inflation in commodities and food.

This means that the old saying, “Don’t Fight the Fed” still rings true. If the Fed wants to accomplish its three QE2 goals, they probably will. BUT… they will accomplish them at the expense of Bonds and home loan rates. That’s because – while those goals are designed to stimulate our economy and keep our recovery moving forward – they are unfriendly to Bonds, which means they are unfriendly to home loan rates too.

Therefore, if the Fed is successful in its goals boosting Stocks, lowering unemployment, and creating inflation, the negative trend in Bonds will likely continue and push home loan rates upward in the process. It’s certainly more realistic to believe that rates have seen their lowest mark and we can and should expect a rise in rates as 2011 progresses.

That makes now an ideal time for homebuyers to take advantage of the today’s low home loan rates. Make the call today – reserve (lock) your home mortgage rate now!

Home for the Holidays

The holidays are filled with shopping, eating, and joyous times with family and friends. It’s also is a reminder of what being “home for the holidays” truly means to millions of Americans. Owning your own home is still one of the greatest pleasures we can pursue. It means much more than just a place to hang our hat. It is the heart of the family, the place we raise our children, the home we strive to pay off to enjoy for our retirement years. Owning our own home gives a foundation to our financial future that is worth much more than money. It is comfort, security and a safe haven. It is priceless.

Our employees wish everyone that we have helped become a homeowner, everyone we have refinanced to improve their financial position and all those we are helping to achieve homeownership in the future a very joyous holiday season. Whatever you celebrate, may you do so in the comfort of your own home.

Quantitative Easing and What it Has to Do with Home Loan Rates

After its November meeting, the Federal Reserve announced another round of Quantitative Easing (or QE2) through the purchase of an additional $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. This means, including Treasury purchases from reinvesting proceeds of mortgage payments, the Fed will purchase between $850 to $900 billion in securities through June 2011, which equals about $110 Billion per month.

Quantitative Easing is the concept of the Fed becoming a heavy buyer of Treasuries and Bonds. This is done to artificially cause those security prices to move higher under the increased demand. That demand should, in turn, cause interest rates to move lower in the hopes of stimulating the economy.

While that sounds easy enough, it’s not an exact science. In fact, not too long ago, Fed Chairman Bernanke noted that the Fed has much less experience in judging the economic effects of additional quantitative easing. He went on to say that this “makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public.” More recently, Bernanke compared the Fed’s handling of the next round of QE2 to a golfer with a new putter, stating that the golfer has to tap lightly at first and try to figure out how to use it properly. Those words don’t exactly inspire confidence in the Fed’s ability to get QE2 right.

Even if the Fed does get it right, we have to keep in mind that Quantitative Easing has drawbacks and unintended consequences. For example, another round of Quantitative Easing will continue to load the US with debt. Additionally, QE2 would likely lead to a weaker US Dollar. While a weaker US Dollar may make our exports more attractive to foreign buyers, it could ultimately drive interest rates higher.

That brings us to another potential result of the Fed’s purchases: inflation. Recently, a news story explained how another round of Quantitative Easing brings the risk of “unleashing the 1970s inflation genie.” Consumers who are looking to purchase or refinance a house should take note of that possibility – since even talk of inflation can negatively impact home loan rates. After all, a rise in inflation would be bad for Mortgage Bonds and, as a result, for home loan rates.

The point is – this story is far from over. The Fed may have announced its plan for QE2, but now we have to wait and see how it may benefit the economy as a whole, or negatively impact home loan rates. If you are considering any type of mortgage financing, please call us – we want to help you get the best rate and terms available!

Answers to Your Mortgage Questions

With rates at the lowest they have been in 55 years, the question is not should you buy or refinance, but how can you take advantage of this phenomenal opportunity! As a leading lender in the area, we answer a lot of questions about obtaining a mortgage, so here a few common ones we address every day.

QUESTION: How much home can I afford?
ANSWER: Affordability is a combination of home price, interest rate, and down payment. And with rates at historic lows, homebuyers have the opportunity to get more for their money…but if rates go up even a little bit they could miss out. Here’s a simple formula that drives that point home. In simple terms, every 1% increase in home loan rates decreases the buying power of an individual by 10% in home price. This means that if you qualify for a home priced at $200,000 today and home loan rates increase 1%, the amount you could qualify for would be reduced to approximately $180,000 to maintain the same payment.

QUESTION: I am constantly hearing how property values have dropped. What happens if the appraisal comes in below what we need?
ANSWER: The value as determined by an appraiser is an opinion and may be reevaluated. When an appraisal comes in lower than expectations, the lender will review the data, do additional research and could approach the appraiser with additional information that could result in an increase in value. The appraisal is a report to help a lender determine a loan decision based on adequate collateral. Regulatory guidelines have limited the scope of an appraisal to some pretty finite requirements. A good Realtor can usually target a listing price that is consistent with current market sales and help avoid an unexpected surprise. If you are refinancing, a lender can help you determine value thru a variety of sources.

QUESTION: How hard is it to get a loan?
ANSWER: Easier than most people think! The media blitz has created the mindset that it’s too difficult to obtain a loan. That’s not the case – we are making loans every day to people just like you. Every transaction is different and circumstances may dictate some additional work, but determination can get you there. I assure you we are determined to find the right loan for you.

QUESTION: Do I have to make a big downpayment?
ANSWER: No. With the variety of loans available today, there are options that could allow for no downpayment at all. You need to call us to help find the loan that might just open the door to homeownership to you!

Call one of our Mortgage Loan Originators today to buy or refinance your home – you might be surprised at what we can do for you!

Changes in FHA Lending Coming Soon…

Effective Oct 4th, the Federal Housing Administration has mandated changes to the HUD sponsored mortgage loan program. FHA loans serve over 30% of the nation’s borrowers due to the flexible qualification criteria and the low down payment requirements.

FHA Loans require a Mortgage Insurance Premium (MIP) which effectively funds the program. The MIP is collected in two parts, one considered to be financed within the loan (UFMIP) and one that is collected monthly as part of the mortgage payment.

HUD’s changes to the FHA home loan program are part of the plan to mitigate potential failure of the Mutual Mortgage Insurance Fund. This plan includes changes to the calculations for the Up Front MIP (UFMIP) and the annual MIP charged to borrowers obtaining FHA financing. More changes are pending, but this one is effective October 4, 2010.

The changes are that the financed or Upfront MIP will be less, but the monthly premium will be increased. The result is a higher monthly payment to a borrower. Qualification for an FHA approved loan is going to be a bit tougher going forward. Getting preapproved before you need a mortgage is more important than ever.

Call one of our Mortgage Loan Originators today or email us via the links on our website. We can help you determine your ability buy or refinance in today’s changing environment!

Welcome News!

While the mortgage market news may appear depressing around the country, our communities are continuing to see signs of improvement. The oil spill certainly affected our market, but the reality is that people in our area are on the move and will continue to buy, sell and refinance real estate.

At Beach Community Mortgage, our volume of loan activity has increased in this quarter, and we continue to see the potential to end 2010 much better than the national averages suggest. As part of this effort to excel, we have added some new talent to our staff, and we are excited to share our news with you.

Julie Kuhn and Lee Ann Arrigo have joined our Mortgage Loan Originator team and have already brought new opportunities to us. They have both been in the local market for many years helping first time homebuyers, repeat clients and seasoned investors obtain the best financing options available.

Edie Sheppard and Kim McLaurin-Eaddy have joined us in our Operations center. Edie will work with our originators and their clients through the processing steps of a loan request, while Kim will work in our post closing department. Both Edie and Kim come to us with many years of local experience, and we are happy they have chosen to become part of our Beach family.

Our entire staff is ready to assist you in the purchase or refinance of your home. Find out today what you need to qualify by calling one of our Mortgage Loan Originators. With rates the lowest they have been in over 30 years, why wait?

1/2 Price Sale!

According to Freddie Mac, the average interest rates nationwide are half of what they were 15 years ago! Can you imagine paying over 9% on your mortgage? If you closed on a mortgage back in January 1995, that’s about what you paid.

It’s amazing how rates have changed in our lifetime, and today they are the best they have been in over 30 years. I can remember closing on my first house and feeling lucky to receive a rate somewhere around 11% and happy to get it. While we are a society of negotiators, there just isn’t a better deal than real estate right now. We are all cognizant of the issues in our economy and have fears about what the oil spill means to our area. Unless you believe you have to leave here because of this, our history of being resilient in the face of tragedy speaks for itself. I heard a speaker the other night talk about the word FEAR and its meaning. For some, it means forget everything and run! Most of us are probably experiencing the forgetting everything’s all right definition. Not great, but ok. And when you start with ok, you can build on that.

If by any chance you are considering a refinance of your current home loan – call us today at 850.315.4100. We could save you some real money. If you are buying, let us help you get the best rate possible. Money is on sale!

National Homeownership Month

June is National Homeownership Month, and the Independent Community Bankers of America (ICBA) and the nation’s nearly 8,000 community banks continue to help Americans in communities throughout the country become, and remain, homeowners each year through the personal attention that only a local community bank can provide. Community banks are, and always have been, common sense lenders focused on doing what is best for their customers and their communities.

Beach Community Mortgage is no exception! We want to work with you on the local level to make sure you are given every advantage that only a local lender can offer. While rates and costs are similar, the ability to work with a lender who has relationships with local real estate agents, appraisers and title companies can make a big difference in your home buying experience. No out-of-town lender has the ability to offer the hometown advantage we can! It’s not what you know but who you know that can make a difference, and this old adage applies to every local real estate transaction.

Get the personal attention you deserve. It’s up to you to find the home that’s right for you. It’s up to us to find you the right loan. Let us help you become our neighbor!

Take the Stress out of Homebuying

You can find articles and websites that provide lists of tips to make the home shopping experience a good one. The reality is that you must do some homework and soul searching before you begin looking for that dream home.

Understanding that the “right time to buy” is really defined by you and not the market is essential to your success. You will be living in the home and paying the mortgage (that’s where we come in!), so it really doesn’t matter what the media is saying about home prices or rates. If you need to buy a home, who better to judge the timing than you?

When you are ready, get prequalified with us! You need to know your buying power and what it takes to obtain a mortgage before you shop. Do not skip this step! Without it, you will only be window shopping for a home, not shopping with a purpose.

Find a Realtor who you connect with especially if this is your first time. Trusting your agent to understand your needs and allowing them to do the search is by far one of the best time savers you can give yourself. Communicating your needs is critical, so make sure you and the other family members who will live in the home are in agreement about the most important things you want. While it isn’t likely that an existing home will meet everyone’s wish list, you should always choose your home because you love it first, then worry about appreciation and resale.

You have to find the home that’s right for you – let us find you the right mortgage.
Call us today!

What’s Up With Rates?

The end of March was significant in mortgage lending as the Fed pulled out of the purchases of Mortgage Backed Securities (MBS). This program has been a safety net for rates for the past 14+ months and kept rates at historic lows. Now that the program has ended, we can expect rates to begin to rise. The thing about rates is that they tend to rise much quicker than they ever come down again. If you are considering a home loan, the sooner the better is the reality of our current mortgage lending environment. Coupled with the Homebuyer Tax Credit we have mentioned many times in this blog, April is the best month to make your home buying decision.

Coming just in time, the Florida Open House Weekend will be held April 10th – 11th. Check websites for the local Board of Realtors in your area for information about homes that will be available, or call your favorite Realtor for more information. It’s up to you to choose the right home. Let us help you find the right mortgage – call us today!

Military Perk in the Homebuyer Tax Credit*

Did you know that the current Homebuyer Tax credit has a caveat for military and some federal employees that allows an extra year of eligibility?

Under the Worker, Homeownership and Business Assistance Act, which was signed into law in November 2009, individuals or their spouses who serve on qualified official extended-duty service outside the country for at least 90 days between Jan 1, 2009 and April 30th, 2010 have an additional year of eligibility. Given the amount of LOCAL miliatary heros, this could extend the credit for many in our community.

Let’s all work together to educate those that serve our country outside the safety of our borders and help more families become homeowners this year! For more information visit IRS.gov.

*Clients should consult a tax advisor for more information on how the tax credit will impact them. Tax laws are complex, and we want clients to be well informed before making the decision to purchase a home.

The End of the Decade of “Uh-Ohs”

I recently read an article that referred to the years of 2000 – 2009 as not just the “Ohs” but the “Uh-Ohs.” I found this humorous in a tongue and cheek sort of way. While we learned a lot about how things can go wrong, we now have the opportunity to start a new decade by learning from our mistakes. It’s always refreshing to start anew, to go forth with optimism that things will improve, isn’t it?

One thing you don’t want to miss is the opportunity to buy a home, and this year the reasons to make that decision NOW are crystal clear. Home prices have hit the proverbial bottom and will begin rising. Rates are already beginning to show signs of increasing, so waiting for a lower rate is no longer an option. The IRS tax credit* mentioned in the last blog will only be available until April 30th for home purchase contracts. If you want your personal piece of the stimulus, you should already be shopping for your new home!

You sure don’t want to look back this summer and say, “uh oh, I should have bought a home before______.” You can fill in the blank, but you get my drift.

Today is the best day to begin the homebuying process. Call one of our Mortgage Consultants to find out what you can do to optimize your homeownership benefits before it’s too late to avoid an “uh oh” moment.

Homebuyer Tax Credit Extended and Expanded!

Last week, a new Homebuyers Tax Credit bill was signed into law. The bill extends the tax credit for first-time homebuyers (FTHBs), as well as opens it up to current homeowners who are looking to buy. Here is a brief overview of the Homebuyers Tax Credit – and its benefits – based on the new bill.

Tax Credit for First-Time Homebuyers

FTHBs (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Tax Credit for Current Homeowners

The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Those in the military do have some special extensions on the timelines available.

What’s So Great About a “Tax Credit*”?

The benefit of a tax credit is that it’s a dollar-for-dollar benefit, rather than a “tax deduction,” or reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps

The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price

Qualifying buyers may purchase a property with a maximum sales price of $800,000.

* Clients should consult a tax advisor for more information on how the tax credit will impact them. Tax laws are complex, and we want clients to be well informed before making the decision to purchase a home.

I Feel a Healing Coming On!

All indications are that we are past the worst of the economic crisis in housing. While that says a lot, it doesn’t say we are cured! Nationally, prognosticators say it will take all of next year and then some for the housing market to heal. Our country is still facing staggering numbers of unemployment and foreclosures. In areas where employment numbers are better, recovery will be quicker.

Living in NW Florida has always been great, but given the housing crisis predictions for the coming months, we are truly living in paradise! Due to our military installations scattered across the Panhandle, we are insulated from some of the worst employment numbers ever experienced, and we will recover more quickly than other parts of Florida. Our area is a prime target for VA home loans. Most of these borrowers have job security, and consequently that helps offset the local foreclosure rate. The drop in our housing costs has also generated a larger buying population as more families can afford to buy here. Good credit history is the absolute key in seeking a loan, so finding out where you stand is the first step in the process.

According to numbers released by the Okaloosa County Property Appraiser, we are enjoying an increase in homes sales of as much as 28% over last year! The average number of transactions has gone from 151 a month to over 200 in 2009. The $8,000 tax credit has been a boon to our area as well as to over 45% of transactions nationwide since its inception. (While the tax credit may be extended, the current offering ends Nov 30th.) Add the potential growth in the next 2 years due to the influx of new military missions to our area, and we have the potential to rise from the ashes of the housing crisis much sooner than other areas of the country.

Rates are great, and prices are great. So what are you waiting for? Call one of our mortgage loan consultants today!

Timing is Everything!

Were you wondering if the timing is right to buy your first home? Stop guessing, and start looking! With tax incentives of up to $8,000** and rates still holding at historic lows, the time is now, the place is here, and the clock is ticking.

Unless extended or reenacted by Congress, the current first-time* homebuyer tax incentive of up to $8,000 in tax credit** will end November 30, 2009. While there is currently movement to do one or both, you never know what could happen, and it’s always better to plan on a sure thing. Although you still have plenty of time to take advantage of the current opportunity, the reality is the timeline for closing on a mortgage loan may be lengthening.

New guidelines are forcing mortgage lenders to provide additional wait periods for consumers prior to consummating a home loan purchase. The rules are there to avoid placing undue pressure on borrowers to close before they understand their loan program. Specifically, a lender must give a borrower at least 7 days to review the original Annual Percentage Rate (APR) disclosures from the initial application and must redisclose at minimum 3 days prior to closing if there is a significant change in the APR once the file is in process. This does not sound like a bad idea as there has been proof that thousands of homebuyers got into loans they weren’t qualified for based on the truth about their income and assets. Suffice to say, those situations are no longer available and qualifying is now more of a science than an art. You can’t paint a colorful picture when the subject matter is black and white.

The result of the changes in APR disclosure requirements could be extended closing times for home purchases. Unless you get into process early and commit to a lender that you trust, you could be facing a delay in your home loan closing date and miss that November 30th deadline. Why wait to make your move? You have about 8,000 reasons to go shopping for your first home today!

Please call one of our Mortgage Loan Consultants today – we want to help you take advantage of every opportunity to own a home!

* First-time home buyer means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which the first-time home buyer credit applies.
** Clients should consult a tax advisor for more information on how the tax credit will impact them. Tax laws are complex, and we want your clients to be well informed before they make decisions to purchase their first home.

Chart Your Course

The typical home sale has three integral parts.

The Seller – who sets the price they WANT to get
The Buyer – who offers what they WANT to pay
The Realtors – who try to negotiate the sale between the buyer and seller

Once you get past this, you now have the fourth component which is the LENDER.

The lender is called upon when the buyer is not paying cash to provide long-term financing options that are pleasing not only to the buyer, but to a seller that might be participating in the closing costs and to the Realtor who wants assurance that the buyer is qualified and the deal is going to close. In this mix, you have to throw in the credit standing of the buyer, the assets available for down payment and closing costs and that small little item, THE APPRAISAL! (Imagine the theme from Jaws here!)

Today, appraisals have become the biggest obstacle to overcome in a transaction. Why? The seller sees the property value as more than what they paid for the home. In previous years, this was normal. However, if the property was purchased in the last 3-4 years, the likelihood is that the property has actually decreased in value. The new buzz word for this phenomenon, “underwater” (Jaws theme starting to make sense?). This is why so many sellers have had to resort to short sales or even foreclosures if they can no longer maintain the home and need to sell to survive financially. This has created a property value rip tide – values that were already low, become lower as those short sales and foreclosures that are now on the market create comparables for other homes in their neighborhoods. The good news in all this is that we may have hit the bottom and are now inching our way back to the surface. The markets in Okaloosa and Santa Rosa counties are already beginning to see some stabilization in prices as the inventory of distressed sales is being absorbed. Escambia and Walton counties are still bouncing around with a large inventory of underwater sales (think of the condos), so we will still read and hear about distressed market sales for a while longer in those areas.

If you are considering a home purchase or a refinance, contact one of our Mortgage Loan Consultants. We can offer you a “life boat” of information, guidance and facts that will help you navigate to safe waters in the road to successful homeownership! We partner with local Realtors to make sure you find the right home, at the right price.

Call us today – find out why it’s always better at the Beach!

Prepare for Home Ownership: Steps You Can Take to Get There!

Today, there are a growing number of obstacles for homebuyers, including a higher credit score standard and more restrictions on credit. You should have a thorough understanding of the changing market when shopping for a mortgage.

Be aware of first-time homebuyer programs. Ask about them when you contact a lender. The IRS is currently offering up to $8,000 in tax credits!
Get pre-approved. Know the difference between “pre-qualified” and “pre-approved.” Getting pre-qualified is a casual process where the lender tells you how much you should be able to borrow based on how much money you make, how much debt you have and how much you have to put down on a house. Pre-approval occurs only after you actually apply for the loan and the lender gives you in writing the amount you can borrow. A buyer who is pre-approved is more attractive to sellers and their agents than one who is only pre-qualified. Once you find a mortgage that is best for you, get pre-approved before you start making offers on a home.
Be honest with the lender and yourself. You don’t want to borrow more than you can afford and lending guidelines are there to protect you as well as the lender.
Look at the basics of the loan. Don’t get distracted by all the bells and whistles. Choose the type of loan that makes the most sense for you.
Know your credit situation. Obtain a copy of your credit report and FICO score at least six months before you apply for a mortgage. This should give you enough time to challenge and remove any errors on your credit report and take care of anything that’s hurting your credit score.
Consider all the costs. A lender will review costs like fees, closing costs, points, homeowner insurance, and taxes. But consumers should also consider repairs and maintenance costs. As a homeowner, you are responsible for those additional costs – there won’t be a landlord to call.
Organize your finances before you go to the lender. While each lender may require different documentation, at a minimum you will need:
- Pay stubs.
- Tax returns.
- Financial statements (one that is less than 60 days old).
- Copies of additional monthly payments such as car loans, credit cards, student loans, etc.
- Any additional information (such as proof of additional income) that you think will help your banker to positively evaluate your credit request.

CALL BEACH COMMUNITY MORTGAGE!! We can help with all the steps it takes to be a successful homeowner. Our goal is your goal – a mortgage that meets your family budget. Contact one of our Mortgage Loan Consultants today!

The Good, the Bad and the Good

The current trend in our economic news is telling us that we are beginning to see up – I guess there’s nowhere else to look from here (the bottom), so I would agree! Our market is now experiencing sales where there were none, rates that are the lowest in our lifetimes and a new reality that the NW Florida housing market has changed. We should celebrate that due to our demographics, the military influence across our region, and the tenacity of our citizens, we are moving toward recovery.

The bad news in all this is that the mortgage guidelines continue to tighten. This means that all those foreclosures continue to take a toll on the integrity of the pools of loans that are Fannie Mae, Freddie Mac and Ginnie Mae backed. The ability to qualify will continue to be a challenge as these entities strive to improve their image, i.e. the government’s image in the eyes of the Nation. To the average potential homebuyer, this means you will have to be ever cognizant of your credit rating and your savings accounts.

The good news – the lesson has been learned and mortgages created today will be a viable part of our economic stability. We can create well qualified borrowers by taking the time to educate you on how you will meet these new guidelines. Our only goal is to put you into a home with a mortgage you can afford. We are all back to basics, and sometimes that is the best place to be.

Call one of our professional Mortgage Loan Consultants today to find out why it’s always better at the beach!

Spring Forward into Homeownership!

Spring. A time for renewal, rebirth and revitalization. A time for all of us to take a hard look at what’s in our “financial closet,” and clean out the old to make room for the new. With all the financial challenges we currently face, taking time to see what we can do to improve our personal finances is a good step toward healing our economy. What’s in it for me, you ask? How about taking a look at your home?

Do you own or rent? Do you want to revamp an old high rate mortgage? Are you considering homeownership now that rates and prices are at the lowest in over a decade? If you were hoping to refinance but discovered your value has dropped so significantly that you are “underwater,” pay close attention to the new Home Affordability and Stimulus Plan penned by President Obama. You should contact your current servicing lender and see what can be done to restructure your current loan into something more in line with your financial needs. If you don’t find help there, call us, and we will work with you to find options.

If you are a potential new homeowner looking for a mortgage, make sure you have all the facts. Don’t let all the negative press discourage you from applying for a home mortgage! Helping you walk thru the loan process is what a good lender does best. The rewards are shared when we help you become a homeowner in our local economy. We want to plant the seeds of homeownership into our community more than any other lender in this market. Our name depends on it!

Call one of the knowledgeable Mortgage Loan Consultants in the Meet Our Lenders section for more information on how YOU can spring into a financially sound mortgage loan! It’s always better at BEACH!

What are you waiting for?

It seems like there is always something in the news these days telling potential homebuyers and homeowners that the Treasury is promising rates in the 4.5% range for long-term mortgages. While the hope is there, the actuality is that the market just isn’t there.

So what does this promising information do in a market that is already sluggish with too much inventory? It makes potential homebuyers second guess their decision to stay in their rental for another couple of months just to see what happens. Guess what? You just threw away about $2,000 in rent and tax advantages that will take years to recoup with a rate drop of about half a percent.

The same is true with a refinance scenario. A homeowner deciding to wait for rates to hit bottom continues to pay a higher mortgage rate on his current loan instead of taking advantage of the reduction now.

The difference between a rate of 4.5% and 5% with an average loan of $200,000 for 30 years is about $60 per month. If you are considering a refinance and your current interest rate is 6% or more, you are probably paying about $180 more per month while you wait. If you are renting, whatever amount you are paying, you don’t own your home, and the security of owning is priceless. With the current tax credit of $7,500, why are you waiting at all? (The new stimulus bill may offer amounts more than this!)

If you are interested in finding out more about the current state of mortgage rates, your options and what to do to best optimize your financial future, call us. You will see why it’s always better at BEACH!

Believe in 2009

Each year at this time, we look for ways to seek a better tomorrow. We resolve to improve our health, save more money, take that trip we put off, spend more time with our kids and maybe even buy a new home. For one night, as we ring in the New Year, we become optimistic that we can change our world!

That delightful enthusiasm might start to fade when we pick up the daily paper or watch the news. If we can’t control what is happening around us, how do we make all those resolutions really happen? In one simple word – believe. The power of commitment is only as strong as our belief that something can be done. If you believe you can loose that 10 pounds or maybe save enough for a down payment on a new house this year, you can make that happen.

While we want to help you achieve all your resolutions for 2009, the one we can certainly focus on is a desire for affordable homeownership. No matter what is happening in the financial markets, owning a home is still and will always be the best investment you will ever make. Regardless of what has happened to real estate values, the place we call home provides us refuge, safety and security. You can’t put a price on that. Time, the great healer, will return the real estate markets back to some level of normalcy soon. In the meantime, choose to live in your home and treat it well. It will reward you in the end with providing a source of financial security as well as the roof over your head. If you don’t own your home and want to, choose 2009 to believe it can happen to you!

If you haven’t checked rates lately, call us today. Mortgage loans are at all time lows and the timing is perfect for buying a home or refinancing the one you own. Don’t wait too long – rates can change by the minute, and you want to catch one that meets your financial needs today!

Good Neighbors?

If you are like many residents in our area, your neighborhood probably has seen some level of foreclosures in the past few months. It may be due to your former neighbor relocating to another state due to a job transfer. Despite months of effort they were not able to sell or rent their home to meet the mortgage obligation. It could be that an investor on that rental property down the street just “let it go back to the bank.” It could also be that your neighborhood was a victim of fraud.

Mortgage fraud is one of the highest types of white collar crime in the U.S. today and takes down its victims with brute force. There are two motivations for mortgage fraud, and both can have a severe impact to those involved and to the homes surrounding a fraudulently purchased property. The first form is “Fraud for Property” where a buyer’s primary motivation is to own their own home. While they may lie to obtain the property, they usually intend to pay back the loan. The problem is that they have misrepresented their ability to repay the debt by possibly “creating” the financial documents used to qualify for the loan. The reality is they don’t always have the financial strength to meet the obligations of home ownership, and foreclosure could be the consequence.

The second form is Fraud for Profit and this form can take down the property values in your neighborhood like a bad day on the stock market – swift and mercilessly. In this situation, your “good neighbor” never really even moved in and resold the home after a short period of time in a scam that could include identity theft, criminal appraisal practices and unscrupulous real estate “professionals” that had only profit in mind. This fraud can take your neighborhood from Wisteria Lane to Nightmare on Elm Street when the criminal next door begins working from home and you see sights you only thought happened on TV!

Our job as a lender is more than offering you a variety of home loan programs. It includes policing our own backyard when we know mortgage fraud is happening. We are trained to notice the Red Flags in a real estate transaction, so we don’t allow your neighborhood to fall victim to fraud. We may look casual, but our approach to business is not. If we can help you or your neighbor with a real estate transaction, call us. We can prequalify your buyers and make sure your transaction is reviewed for signs of fraud. You can trust we want to make things right because we live here too.

Call 850.315.4100, and speak to one of our professional Loan Consultants. Relax – you’re at the Beach!

What Used to be Neapolitan is Now Plain Vanilla.

While the credit markets have certainly tightened, the word “frozen” has been used a bit more loosely than is applicable. The average consumer is still able to use a credit card, access their home equity line of credit and seek a mortgage for a home loan purchase or refinance. The lending pool has not become an ice skating rink!

The idea that you can no longer obtain a mortgage is just plain wrong. You might not be able to get all the flavors that used to be prevalent, but a customer that has established a good credit history, has a verifiable income and meets some realistic debt-to-income guidelines will be treated to a variety of loan products. We are still in the business of helping people buy or refinance homes and you will still have choices that make a loan meet your particular financial needs.

The mortgage lending industry is facing challenges today. We are a part of the whole dichotomy that is the financial backbone of our country. The story of “It’s a Wonderful Life” explains in very simplistic terms how the money we lend comes from the deposits of others. Mr. Smith’s $1000 deposit helped build Mrs. Jones’ new front porch. Money has to move in order for our economy to remain stable. The money we lend in the mortgage industry keeps the flow in proper balance and must be delivered to qualified borrowers who can and will continue to repay the loan. Foreclosures put a dead stop to that flow and will have to be worked out of the system in order for things to settle down. This also means that the guidelines to lend must be reviewed and revised. History tells us what we did right and what we did wrong. When there is failure, it’s more obvious what mistakes are to be avoided in the future. With change, there is opportunity to improve.

So enjoy the vanilla flavor of loans for a while. It is still the classic that is almost always the base for every other variety. Call one of our experienced Mortgage Loan Consultants to see what we can do for you today. It’s always better at the BEACH!

Understanding the Market

Everyone has heard about the current financial crisis on Wall Street, but it can be difficult to understand exactly what it all means to the average Florida family. There are reports from every governmental agency you can imagine. Until the election is over, these economic issues will continue to be splattered across the political atmosphere and become just one more topic to argue over. The reality is that we are in a new financial frontier of historical proportions. No one can predict how this will look in the immediate future. Time will tell as they say, and we can only protect ourselves and our financial concerns.

Alex Sink, CFO of the State of Florida, offers this information on her website www.MyFloridaCFO.com:

“Simply put, this is NOT the time to panic and take your money out of your bank or out of the market. Many of your accounts are probably protected.”

Well the word probably doesn’t give you a warm fuzzy feeling, but she does go on to explain how FDIC insurance protects your bank accounts, SIPC protects your brokerage investments, and if you are insured by AIG, you are fine as the state insurance regulators will step in and ensure claims if necessary. Check out the website for full details.

One silver lining is that mortgage rates are doing well. We are seeing an improvement in interest rates that have caused a new rush of first time home buyers and refinance clients for the first time in several months. If you are curious about your personal qualification, call us and we will evaluate your opportunity to obtain a new mortgage.

Our government is in a critical time, and how they handle this will be a very interesting read in the years to come. For the interim, if you have funds with our bank (or any other bank for that matter) and need to ask some questions, call the bank at 850.244.9900. Our bank employees will be happy to help. If you are considering a home purchase or a refinance, call one of our experienced loan consultants at Beach Community Mortgage today at 850.315.4100. We will show you, it is better at the BEACH!

Do Something About Your Taxes!

It’s that time of year homeowners! Our preliminary tax bills (TRIM notices) have been mailed to us with the good news our taxes are almost due! Seriously, some of you will be receiving a reduction in your tax bill over last year due to some of the new legislation that was passed to help us with the rising costs of homeownership in Florida. On the flip side, things didn’t go exactly as planned. There was a caveat in our tax language that allowed the values of our properties to be adjusted upward even in these times of depreciating equity and this reduced the amount we could have saved. But, have no fear! There is a new effort underfoot to remove this language from our tax code and give us the help we need. Be sure and ask your Congressman or State Representative what is going on in your neighborhood.

It is also time to make sure you have your homestead exemptions filed for your primary home. If you filed last year and still reside in your home, there is no need to take any action. However, if you bought property this year or will be closing before January 1st, 2009 on your new home, you are eligible for a reduction in your tax assessed value. Go to www.okaloosapa.com or www.okaloosatax.com to find answers about your property taxes and how to file for the exemptions. Again, we voted in some new legislation to make our taxes more palatable and we will all benefit from an increase in our exemptions this year.

If you have questions about property taxes or Homestead Exemption, be sure and call one of our Loan Consultants. We live here too, and it’s always better at the Beach!

Things to Do When Applying for a Mortgage

Relax!
Mortgage guidelines and program availability has changed over the past couple of years, but there are some basic parameters that still make the process an easy one. It does not need to be intimidating applying for a mortgage – our goal is to provide you with a loan, not find a reason to turn you away.

Seek advice from professionals, not from your friends at the barber shop!
Everyone has an opinion, and when you apply for a mortgage you need to get your answers from a professional mortgage lender, not your barber (unless he is one!). There is too much at stake not to know the right way to get your loan. Make a call – it will ease your mind.

Limit your Paperwork initially!
The proper documents are usually readily available to you and trying to figure out what you need can be easily handled by a phone call to one of our Loan Originators. We will only ask for what is absolutely necessary to approve your loan.

We are your full service lender!
If you want a smooth transaction, call us! We will prove to you that doing business with Beach Community Mortgage is easy. Relax! You’re at the beach!

Tax Relief for First Time Homebuyers

ATTENTION FIRST TIME HOME BUYERS!!!!

If you bought a home on April 9th or after, or are considering a new home purchase, the Federal Government has authorized a tax credit of up to $7,500 for you! This credit is meant to help you during your first year of homeownership by allowing you to take a dollar-for-dollar reduction in what you might owe in income taxes. For some, this will mean an actual refund increase. For those of you who end up paying taxes at the end of the year, the credit can reduce that amount significantly. There are, of course, some restrictions on this program and you eventually do repay the money, but you have up to 15 years to do it and its interest free! This program is only in effect until June 30th, 2009 so if you haven’t bought your first home yet, now is the time to take the plunge. You will not only take advantage of this tax credit, you are also shopping for a home at the best time in years. Prices are remarkably low and sellers are motivated to work with you.

For more information on this new home ownership incentive, contact one of our professional loan originators today. It’s always better at the BEACH!

Put More Money in Your Pocket

Florida homeowners have experienced a tremendous rise in property taxes over the past six years. Think of a debt of more than $30 billion and you might need to take a deep breath! What does the future hold for homeowners that just can’t afford the rise in not only taxes but homeowner’s insurance costs as well?

There is an Amendment coming on our ballots in November that will help us control the rising cost of property taxes. This is known as Amendment 5 and specifically addresses the funding of public schools through taxing only property OWNERS. The fact is that only if you are a homeowner in Florida do you pay taxes that fund the school systems. Renters and tourist dollars do not fund our public schools. In Okaloosa County, the cost of this is about 38% of your tax bill! If this Amendment passes, the savings to the homeowners in Florida is estimated at $10 billion dollars and would put some spending money back in our pockets. So where will the funds come from to support our schools? There are several proposals in the works, but spreading the cost of our schools to all those that enjoy living here and even those vacationing in Florida, makes a lot more sense. For more information on this Amendment, go to www.giveme5florida.com.

If you haven’t obtained the MY SAFE FLORIDA HOME inspection, consider doing that right now. The reports were free until just recently, but even paying for this has proven to be a small price to pay for the savings you might receive in your homeowner’s insurance bill. Check out www.mysafefloridahome.com and see what you can do to reduce the cost of your premiums before your next renewal. In addition, we are seeing small reductions in quotes across the board with those agencies writing coverage in Florida. It might be a good time for an insurance check- up to see if there are savings in your own coverage.

Please call one of our experienced Loan Originators for information on these and other homeownership ideas. It’s always better at the BEACH!

Down Payment “Gifts” Available

Want to buy a home, but just can’t come up with down payment money? Don’t be discouraged – help is available!

The guidelines for mortgages have become very strict and all those 100% sub prime loan programs no longer exist. This is good news for our industry as so many of those programs helped create the current foreclosure crisis. But what about the buyer with the ability to make the payments, who has kept their credit in good standing and just doesn’t have the savings it might take to get into a home? Down Payment Assistance (DPA) programs are currently available through approved lenders (Beach Community Mortgage) that provide a way for the minimum down payment to be “gifted” to the home buyer. This means you never have to pay this back! The funds are actually provided on behalf of the borrower at the time the loan is closed. Qualification is simple and is part of the normal process of a loan approval.

If you are selling your home and not getting the traffic you want, consider these programs. They are an excellent tool to make your home stand out above the other listings in your price range. You might even realize more money in your pocket by offering to participate in a DPA program for your buyers instead of lowering your sales price!

Call one of our experience Loan Originators today to see how these programs can help you!

Freddie Mac and Fannie Mae Over Exposure

You know that the media has a great impact on what we do for a living and how we plan for our future. We’ve all been exposed to the doom and gloom our local publications have put on our real estate market (as well as the national media outlets as well). It has been more and more evident in the news as of late. The failure of IndyMac Bank and its mortgage services has been high on the list of media gossip. Bad news sure travels fast.

Now, the media has jumped on this Fannie Mae and Freddie Mac situation. If you’ve been watching lately, stocks for these companies went on a race down faster than the morale of the Green Bay Packers fans when Brett Favre retired (sorry non sports fans – if you don’t follow sports this was bad). All of this came about when some doubt was cast about the companies’ “financial condition and whether their balance sheets are strong enough to continue their business of buying and guaranteeing home mortgages.” The media again, sensationalizes the story and it results in a potential issue to two entities that play a very crucial role in the US economy.

While many larger private investors out there (IndyMac, Wachovia, Countrywide, etc) have gotten themselves in substantial trouble with their loan portfolios and some of the questionable loans that they had, the GSE’s (government sponsored entities, i.e. Fannie and Freddie) keep very vanilla paper. The loans as a whole are very conservative. Their Mortgage Backed Securities are a safe vehicle in which investors park their funds. Somehow that does not make it into the media ramblings.

So, the Treasury Department and the Federal Reserve outlined a plan to prop up the two mortgage entities by giving them access to (temporarily) the same funds as commercial banks and Wall Street firms. What that means is that Fannie and Freddie have access to more capital if they need it. If they were to come close to running out of funds they have a big savings account to tap into. Liquidity is what it is all about in the secondary mortgage market.

What does it all mean? To quote Shakespeare’s Macbeth (Act 5, scene 5), “[life] is a tale told by an idiot, full of sound and fury, signifying nothing.” That is probably what this will all boil down to – a whole lot of noise that will equate to nothing. Fannie Mae and Freddie Mac provide a crucial source of funding for banks and other mortgage lenders and they are the only major players left for pooling loans into securities. Their demise would create a catastrophic wave that would be felt globally, not just here in the good ole USA. Our government has taken steps this week to make sure these entities remain sound and have the backing they need to help repair our national housing crisis. A little good news never hurts.

The Beach Just Got Better

In October 2007, we combined the financial strength and geographic presence of Beach Community Bank with the lending expertise of ABWIN Mortgage to form Beach Community Mortgage. This set the stage to build one of the strongest mortgage companies on the Emerald Coast for today and the future!

With that quest in mind, it is with great pride that we announce the appointment of Pam Woodall as President of Beach Community Mortgage. Pam will also serve as a Senior Vice President of Beach Community Bank. For those of you who already know Pam, you know the depth of her talent and experience in the mortgage industry. She was an integral part of Access Mortgage Corporation, working under the leadership of Bob Brown, Jr. That team of talented mortgage professionals quickly became the #1 Mortgage Lender in Northwest Florida and celebrated that success for almost ten years until its sale in 2003.

If you have not had the pleasure of meeting or working with Pam, you are in for a treat! She is a welcome addition to our existing team of knowledgeable lenders which include Michael Tano who will continue to handle daily operations, Balenda Hetzel who oversees sales, and Bob Brown, Jr. who serves in a consultatory role and conducts speaking engagements on behalf of Beach Community Mortgage. Getting Pam in place with the other great members of our mortgage company gives us an unbeatable team, dedicated to delivering the best mortgage products out there with the best customer service possible!

If you are already our customer, then you have experienced our unique approach to banking, and we are most appreciative of your business. If you are not yet our customer, we invite you to check out our relaxed, friendly way of doing business. Come see what “Banking (and Lending) at the Beach” is all about!

Fed Cuts Rates Again

Have you ever wondered how the interest rate set by the Federal Reserve affects mortgage rates? When the Fed makes a move, they are changing a rate called the “Fed Funds Rate”. This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets.

It is kind of like asking where babies come from. So, let’s examine where interest rates come from so we may be able to get a better understanding of how rates are impacted on a day-to-day basis.

Mortgage interest rates are based on Mortgage Backed Securities (MBS) or Mortgage Bonds. One of the biggest misconceptions I hear is that mortgage rates are based on the 10 year Treasury note. If you are speaking with a lender who tells you that rates are tied to the 10 year Treasury note, run away fast because they have their eyes on the wrong indicators and it could cost you money when there is a shift in the market. While the 10-year Treasury note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions.

So how does the process work? How is it that Mortgage Backed Securities impact mortgage rates?

In order to not get into a full blown economics lesson, I am going to oversimplify the process. When the stock market is producing higher yields than Mortgage Backed Securities (MBS’), money flows into the stock market and MBS lose value and mortgage interest rates increase. Conversely, when stocks lose their luster – funds flow back into Mortgage Backed Securities, their value increases and mortgage rates get better.

There are a variety of economic indicators that you can watch (or hopefully your lender is watching) that cause the ebb and tide of rates every day. If you are so inclined, you can check them at this calendar – Economic Calendar.

Rates DO change every day in some fashion (sometimes multiple times throughout the day). Some days the increase or decrease is larger than other days, but they are not static by any means. Rates are fluid. In periods of high volatility (like recently), it is more important than ever that your lender understand the dynamics of the mortgage market and how it impacts your home loan.

When you are shopping for a lender (whether it is Beach Community Mortgage or not), please keep that in mind.

Florida’s Market, Better Than Reported

Ah, a new year. It seems that many people fall into the same routine from previous years. Set a New Year’s Resolution and then give up on it a couple of months later. Just as individuals fall into these routines, it seems the media falls into the same rut with their reporting of gloom and doom in our real estate market. We all know that foreclosures are on the rise according to everything we see in the news. It is the epitome of sensationalism and it has a negative effect on all property owners in the area. However, what every media outlet seems to do is to ignore half of the facts and only give you the bad. Is it intentional? Who knows? Maybe it is, maybe they just do not know enough about the topic they are reporting on…

So, here we are sitting here in a real estate market where people should be purchasing like crazy, yet everybody is so paranoid. I’d like to point out a couple of things for this wonderful State we call Florida:

Serious foreclosure starts (90 days late or more) are as follows:

Florida had an overall increase of 76 basis points (A basis point is a unit that is equal to 1/100th of 1)
Florida ARM loans had an increase of 40 basis points +
Florida sub-prime loans had an increase of 1 – 40 basis points

So overall, foreclosure rates are rising in Florida at a fairly high rate. However, I looked at the top 5 states in foreclosure starts in 4 categories (Prime Fixed Loans, Prime ARM Loans, Sub-prime ARM loans, and FHA loans) and this is what I found:

Prime Fixed Loans (Top 5):
Ohio
Indiana
Mississippi
Louisiana
Michigan

Prime ARM Loans (Top 5):
Ohio
Mississippi
Indiana
Michigan
Louisiana

Subprime ARM Loans (Top 5):
Ohio
Michigan
Indiana
Iowa
Mississippi

FHA Loans (Top 5):
Michigan
Ohio Indiana
Louisiana
South Carolina

Even though we are going through some rough times in Florida, we do not even crack the top 5 in these categories. These categories are statistics for OWNER OCCUPIED homes. In our case, we are not seeing little old ladies being thrown out of their homes at an alarming rate like the TV or the newspaper may lead us to believe. Now, we would be naive to think that it is not happening to some degree, but in the owner occupied (primary residence) category, we are definitely not getting hit as hard as some would like us to believe. However, when we look at the Non Owner Occupied Homes (investment properties) in serious foreclosure we get a different story:

Percent of Default Investment (Prime Loans):
Nevada
Arizona
Florida
California

Percent of Default Investment (Subprime Loans):
Nevada
Arizona
Florida
California

What does that tell us? We, as a State, are looking bad because a whole lot of investors got caught with their hands in the cookie jar and are not making payments.

The moral of my “captain obvious” story is that it is a great time to buy real estate and I am tired of hearing people think that it is doomsday in our lovely state. For individuals who are purchasing a primary residence or a LONG TERM investment, we are in great shape (remember, real estate was never meant to be a short-term investment vehicle).

My source of reference is Doug Duncan, the Chief Economist from the Mortgage Banker’s Association – I really did not just make it up.

Please let us know if there is anything we can do for you on your next deal or if you just need some advice from a very knowledgeable group of Mortgage Bankers.