General Archives - Page 8 of 26

Zone Out to Home In

Written by Priority Lending Admin on May 24, 2017. Posted in General. Leave a Comment

On the heels of my recent music-inspired blog entry, someone in our office emailed me the following line from the song “Stressed Out” by Twenty One Pilots: Out of student loans and tree-house homes we all would take the latter. While there’s no arguing that a home loan is preferable over a student loan, it made me think of another line from the same song: Used to dream of outer space, but now they’re laughing at our face saying, “Wake up, you need to make money.” In other words, no amount of dreaming or wishing things were different is going to change the realities of life. Wow, that just sounded really depressing – sorry! Allow me to try and turn that frown upside down (and THAT sounded REALLY cheesy – sorry).

A recent study conducted by a psychologist at University of North Carolina Greensboro found that daydreamers showed better functioning skills and ability to focus when required by the context of the situation. Further, he found that those who daydream and let their minds wander in their daily lives were more open to different experiences – this openness to experiences has been shown to be the strongest personality predictor of creative success.

Daniel Coleman, author of the book Focus: The Hidden Driver of Excellence, has also linked daydreaming to positive self-reflection and the ability to foster new ideas without judgment.

So what’s my point? A daydreamer isn’t someone who has his head in the clouds and lives in La La Land; a daydreamer is someone who lives in reality but has no problem searching for alternatives no matter how unrealistic they may SEEM.

Without ever talking to anyone or doing any research, tons of folks who have student loan debt believe they won’t be able to purchase a home until they either pay off that debt in its entirety or win the lottery – and many believe the lottery is more likely to happen. That’s a mindset of someone who doesn’t daydream – these same folks claim they’re just being realistic.

However, a daydreamer – despite her student loans – is going to reach out to a mortgage professional to see what options are available to get into that home sooner than hitting the lottery (or having her fist grandkid). And she’s going to learn – happily – that there are ways to address the student loans that open the door to purchasing her first home.

This same “daydreaming” mindset can be helpful in seeking out options available to someone who has gone through a bankruptcy, foreclosure, or short sale previously. The waiting periods can be MUCH shorter than they believe.

Daydreaming doesn’t cost you anything – NOT daydreaming could cost you a great deal!

Happy Endings Take Time

Written by Priority Lending Admin on May 22, 2017. Posted in General. Leave a Comment

Please allow me to introduce you to a gentleman by the name of Benjamin Hammond Haggerty. He didn’t
invent a cure for a dreaded disease or build an engine that runs on hugs and sunshine. However, what he did
may have greater influence on and provide more inspiration to our current generation of first-time homebuyers
than any inventor in the 21st century. So what did he do, you may ask.

In 2000, he stood up to decades of “how things are done,” went against the advice of some of the brightest and
most successful minds in his industry, and struck out on his own: he recorded an EP (album) and distributed it
all by himself. In essence, he told the record executives he didn’t need them and their infrastructure to be
successful – and he was right. You may know Mr. Haggerty better as Macklemore.

That first album, titled “Open Your Eyes”, only sold 15,000 copies – which is 15,000 more than I’ve ever sold –
and I’m reasonably certain the proceeds from those sales didn’t buy him a big house, or any house for that
matter. He had a plan, though, and he was sticking to it. Never looking back, he released a bevy of chart-
topping hits all on his own under his own label that have made him, to use a technical term, stinking rich. I’m
fairly confident he’s living in a nice house now – he’s earned it. For first-time homebuyers, this is an especially
poignant (and inspiring) lesson: first, Macklemore didn’t listen to the experts who told him he couldn’t release
music under his own label; second, he went into this whole thing with a plan not expecting to be “one and
done”.

For most potential first-time homebuyers, getting into a home that has a chef’s kitchen complete with Sub-Zero
refrigerator and a Viking range, hardwood floors throughout, a six-head shower in the master suite, and a
backyard patio overlooking an infinity-edge swimming pool just isn’t realistic. What IS realistic is the
possibility of purchasing a home that has older kitchen cabinets that have been painted a color you didn’t know
existed, a living room with shag carpeting, a master bedroom that will double as a home office with a bathroom
that has a shower the size of a telephone booth, and a backyard with a lawn that has crabgrass – and if you ask
nicely, the sellers MIGHT throw in the inflatable kiddie pool. Anyone who tells you that you shouldn’t “settle”
for that should be told that their advice is as welcomed as that which the record companies gave to Macklemore.
This is the first step in YOUR plan.

As I said, you MUST NOT see this as settling – you should see it as strategizing. The hideous cabinets, the shag
carpeting, and the crabgrass are all cosmetic. With a couple of YouTube videos and elbow grease on the
weekend, those items can be addressed fairly inexpensively – that’s Step 1. The master bedroom and the tiny
bathroom are the Step 2 items in your plan – and Step 2 could manifest itself as moving later to another house
with a more ideal master bed/bathroom configuration (so you just have to “tough it out” for a while) or a
negotiation that takes place at the purchase of the home to reduce the price and includes a renovation holdback
in your original mortgage. With the right mortgage company (hint hint), you have a lot more options in that
department from the outset.

There’s nothing wrong with WANTING to have that ideal home as your first purchase, but I’m willing to bet
that if you got it straight out of the gate, you’d grow tired of it sooner than you think and just want something
bigger and grander. Macklemore has a song called “10,000 Hours” – it’s about the scientific concept that it
takes 10,000 hours of practice to become really good at something and see the value of your hard work. Doing
the math, 10,000 hours is only a little over a year – you can live in a “less than ideal” house that long, right?

Everyone Digs a Scar

Written by Priority Lending Admin on May 15, 2017. Posted in General. Leave a Comment

Currently,
there’s a commercial on television for Allstate advertising their policy for
full replacement of a motorcycle if you total your new one. It’s short but succinct with a bit of humor
at the end. Good for you, Allstate! However, it doesn’t exactly ring true.

If
you total your car, there’s a good chance you’re going to be a bit banged up –
that’s the nature of an accident where your car gets totaled, of course. However, it’s certainly POSSIBLE that,
because of airbags, crumple zones, improved seat belts, etc., you could walk
away without a scratch from an accident severe enough to total your car. On the other hand, if you’re involved in an
accident on your motorcycle that’s bad enough that the insurance company is
going to total it AND pay for a brand new bike, the likelihood that you’ll be
walking around without a limp and/or a mild concussion chatting it up with one
of your girlfriends is . . . well,
it’s going to be lower than the space between you and the pavement when you had
to lay the bike down. In the Allstate
commercial, though, the woman who totaled her bike doesn’t have her arm in a
sling or a scratch on her face –
she and her friend are yukking
it up about how getting a new motorcycle after totaling the original is like
upgrading her second husband. Ha ha ha
ha!

If
a real estate agent makes a transaction look too easy –
like she came out of it without a scratch or a slight limp that might only last
for a day or two –
she is sort of doing herself a disservice.
What? Think about this: which
inspires more confidence? (A) “After we
found the house and made an offer, all I had to do was show up at closing, sign
some papers, and get the keys.” Or, (B)
“My agent fought tooth and nail to get my offer accepted over four other
offers, made sure the seller gave us full concessions, and stayed in touch with
the lender every step of the way.” Sure,
there are many people who like things to go super smoothly, and A is
impressive. However, I’ll go out on a
limb here and assert that B is going to be far more compelling and will
motivate more potential clients to seek out that real estate agent.

In
truth, though, both A and B could describe the exact same transaction, but it’s
all in the way the agent tells the story, right? The process of buying a house isn’t like
walking up to a vending machine, feeding your money into the slot, and pressing
the button marked “3 bed, 2 bath ranch style with a pool, 1895 square
feet.” There are so many moving parts in
a real estate transaction that a great agent should take the time to point them
out – helping her client see how she’s addressing them and overcoming obstacles
is not only impressive, but it helps the client more fully appreciate their
home after escrow closes. When we talk
to real estate agents, on both sides of the transaction, we like them to know
what we’ve done to keep things on track –
it’s not bragging; it’s building confidence.

We’re
in the thick of a seller’s market right now (I may have mentioned that once or
twice in past editions of this newsletter), so believe me, agents are going to
have a lot of chances with which to impress you. If you’re a buyer, ask your friends whom they
would recommend and don’t go for the “smooth” agent –
there’s no way to know whether he’s prepared to fight for you because it’s
possible he’s never been battle tested.
Rather, go for the agent with some “scars” –
there’s always a cool story behind them, right?

A Richer Path to Your Dream Home

Written by Priority Lending Admin on May 10, 2017. Posted in General. Leave a Comment

With low inventory of good homes to purchase, what’s a first-time homebuyer to do? Sure, buying a fixer upper is a possibility, but there’s another (more financially rewarding) option to consider.

With only a 3.5% down payment, a first-time homebuyer could purchase a duplex, triplex, or fourplex! Awesome!!!!!

Wait, did I lose you there? Hear me out, and you’ll be glad you did.

You could purchase a multi-unit property (up to four units), live in one of the units, and rent out the remaining units. The rents for the remaining units can pay the entirety of your mortgage (or a major portion of it). Do I have your attention now?

“My income’s not high enough to purchase a property that big,” you might be saying right now. Au contraire. (I’ve never used that phrase before in any of my writings.) The rents of the other units you’re not occupying can be counted IMMEDIATELY as income based on the appraised value of rents in the surrounding area. And you’re only required to live in that multi-unit property for a year.

For many first-time homebuyers, this is the ideal way for them to get into a home AND have an investment property. Because you have other parties paying rent for the remaining units in your property, more often than not, those rents are paying the entire monthly mortgage payment (or a ginormous chunk of it). When you’ve lived in your property for a year, you can move out, slide in an additional renter, keep the property, and go purchase a single-family residence (white picket fence included) possibly with a bigger yard and a little more room to grow.

Let’s recap: only 3.5% down, the possibility/probability that someone else will pay all (or a large portion) of your monthly mortgage, AND an investment property that produces passive income as you move out and buy your dream home. Is there anyone out there who thinks that’s bad? I didn’t think so.

Timing: Truth or Hype?

Written by Priority Lending Admin on May 8, 2017. Posted in General. Leave a Comment

A bunch of small clicks with one big one in the center.

Right
now, there’s a popular . . . I’m not sure what to call it, honestly, but it’s a
thing a bunch of people are doing on Facebook where they post a list of ten
concerts they’ve supposedly attended, and you have to guess which one is an
outright lie. I’m not sure if the object
of this “game” is to see how well your friends (you know, all 3,642 of them on
Facebook) know you and your concert attendance habits or how cool you want
those 3,642 people to THINK you are for having attended the concert of at least
nine bands. While I’m certainly not THAT
old, social media causes me to SMH more often than LOL.

At
any rate, the gist of today’s article is going to be SORT OF similar: I’m going
to tell you three things related to the mortgage/real estate world, and only
one of them is going to be absolutely true.
Don’t
worry, I’m not going to make you guess –
but you can play along that way if you wish.

According
to a recent article I read online, industry experts are telling potential home
buyers that they might want to think about waiting until August or September to
purchase a home to get the best price possible.
They’re basing this on past data showing that, in most markets, home
inventories spiked in those months, which means buyers have more selection and
a stronger position to negotiate a better deal.
Okay, I’m not saying this is patently false –
they’re basing this on historical data, and I’m sure these experts are very
smart people whose mothers are very proud of them –
but 2017 is . . . well, it’s weird, to put it mildly. Using housing and sales data from 2016 to
indicate what will happen in housing and sales in 2017 would be like predicting
Leonard DiCaprio
would win the Best Actor Oscar again in 2017 because he won it in 2016. I digress, sorry. Inventories are ridiculously low at present,
and it’s not looking to vastly improve over the next 3-4 months to give buyers
that advantage.

Next,
a similar report indicated that, based on historical data, the first half of
May is the very best time of the year to list because you’ll see a $1,500 boost
to the final sale price. In other words,
you have only ONE WEEK from the date of publication of this article to list
your house. HURRY!!!!!!! Sorry, I got whipped up into a frenzy by
those same pointy-headed experts using past data to prognosticate the
future. Again, I’m not saying they’re
wrong (or that their mothers have any reason NOT to be proud of them), but
being in the perfect storm that is 2017 –
gobsmackingly
low interest rates and equally low inventories –
I think you’re safe if you list your house on May 16th
or later.

Now,
for the absolute truth! (See, I told you
I wasn’t going to make you guess.)
Whether you’re the seller, the buyer, or one of the real estate agents
involved in the transaction, when you’re throwing around dates for the close of
escrow, I would strongly recommend shooting for the middle of the month. Loan officers and escrow officers are paid
based on what closes in a given month, which means that the last few days of
each month are absolutely insane in their offices. If you want your transaction to get the best
handling and most careful attention, set the close for the middle of the month
because people’s heads don’t catch on fire until about the 23rd
or 24th
day of the month. Also, by closing in
the middle of the month, you have some wiggle room for coordinating moves and
other logistical matters without being crushed for time –
you might even have time to catch a concert or two and brag about it on
Facebook. SMH.

Category: General

Zone Out to Home In

Happy Endings Take Time

Everyone Digs a Scar

A Richer Path to Your Dream Home

Timing: Truth or Hype?