mortgage Archives - Page 4 of 15

Real Estate is the Spice of Life

Written by Elise Loan Tucson on May 28, 2019. Posted in Real Estate Statistics. Leave a Comment

Real Estate Priority Lending LLC

Continuing the theme from last week’s Priority Pulse of offering something insightful and unique to your potential customers rather than reposting a meme that every realtor and their cat have already posted, I’ve prepared this idea for you. This idea is meant to reach those who believe they know enough about the “investing world” that it’s hard for them to decide between purchasing a home or investing their money elsewhere. (My “preferred” message for these types of people is to slap them upside the head and say something profound like, “Don’t be a fool,” but this idea involves less violence and will persuade more people.)

When you meet these folks who are weighing a purchase against another type of investment, ask them this simple question: Have you given your choices the SPICE test? No, this isn’t a test designed to determine what investment the Spice Girls would recommend – it’s far less complicated. While you still have their attention, tell them that SPICE stands for the following: Security, Payoff, Imitation, Control, Effort.

Real Estate S.P.I.C.E

Security: Because real estate is brick and mortar, it’s not going to vanish. Even if catastrophe (fire, flood, tornado, etc.) were to strike, you can insure your property against loss. Most other types of investment don’t have any mechanisms that allow you to insure against loss – they have far less security than owning property.

Payoff: Even when things went to hell in a hand basket in the earlier part of this century, if you didn’t do anything drastic and continued living your life in your home, your values have likely recovered, and you’re ahead again. (The same can be said moving forward.) If your investment is stock in a particular company or product, you can’t decide whether that company or product will stay in business, and your payoff could be gone. With a house, it’s still yours and the potential for payoff still exists.

Imitation: Millions of people have done this before you, and just as many will do it after you – they’ve all demonstrated that the success of purchasing a home and owning it is easily imitated and repeatable. Other types of investment don’t have anywhere close to that type of track record that you can trace and follow like you can with homeownership.

Control: It’s your property. You maintain it and improve it. You’re the CEO and Board of Directors of your home. With other investments, you’re HOPING the CEO and the Board will do smart things, but you have no control.

Effort: You have to live somewhere. You might as well make some money through paying down your mortgage and appreciation while you’re living your life – renting is not going to do that – so no extra effort is required. Other investments don’t offer that effortless combination.

You might say that I’ve oversimplified it, but the fact of the matter is when someone is trying to decide between purchasing a home or investing their money elsewhere, they’ve overcomplicated it. By asking them to apply the SPICE test to their Real Estate choices, they’ll have a clearer view of what they’re truly undertaking, and you’ll be seen as the expert who helped them gain that vision.

Contact Priority Lending LLC for any help dealing with Real Estate today. Contact us to get started.

Let the Fear Motivate You

Written by Elise Loan Tucson on May 21, 2019. Posted in Home Loan. Leave a Comment

So, the other day I receive a newsletter from a fellow mortgage person detailing how the “little squabble” (i.e. the trade war) between the US and China is keeping mortgage rates down. Makes sense: the longer the squabble lasts and more tariffs are introduced, the longer the global economy will hold its breath waiting for the next shoe to drop, and mortgage rates will remain lower. It’s a tale as old as time – at least as old as my time. Obviously, this little bit of news is intended to make us want to break into song in the middle of a crowded train station letting our fellow commuters know that all is right with the world.

Mortgage Rates Down

While the rest of you are sorting out who’s going to sing the melody and who’ll harmonize, I started thinking about the many ads I’m seeing on social media trying to catalyze people into buying a new home or selling their existing home to trade up or downsize. The ads all seem to have a common theme that plays on the topic of the aforementioned newsletter: the rates aren’t going to be this low forever, so get off your hindquarters and do something! Sure, some of the ads aren’t quite that discrete, but I think I’ve captured the general mood, right?

I’ll be the first to admit that I’ve created a lot of FOMO – Fear Of Missing Out – ads in my lifetime, and there’s absolutely nothing wrong with them if they motivate someone to respond. The teenie tiny problem I’m seeing here with these “mortgage rates down” ads is that they’re all practically the same. Sure, the FOMO factor may motivate a reader to respond to the message, but are they going to respond to YOUR message? In other words, if your ad looks and feels like everyone else’s, what are the chances that YOUR ad is the one that lifts them out of their malaise and gets them dialing the phone – or is your ad going to be lumped in with everyone else’s, and the reader will eventually call on your competitor’s ad? Let the fear of missing out on a chance to set yourself apart be your motivation.

The next Facebook Ad or Instagram post you put out there should tell people why they should call YOU – why your brand and product are going to change their lives. And when they do allow you to meet them face to face, make sure you have something unique to offer or they’ll feel like you duped them. I have a unique way of making contact with real estate agents, I’ll admit, and when I am able to convince them to give me fifteen minutes of their time, I make sure I offer them something none of my competitors are offering (that’s legal, of course). After one such meeting, this is what the agent said to me, “I’ve been in real estate for over 15 years, and I’ve never had a loan originator offer that to me.” I’m not going to tell you what “that” is (but get your minds out of the gutters, kids!) for two reasons: (1) it’s something I worked very hard to perfect and make valuable, and (2) you should stretch yourself to come up with a unique offering that sets you apart from everyone else, too. But I will give you this last piece of advice: whatever you come up with, I can assure you if it involves a photo of you flexing in the mirror at the gym or of the kale smoothie you’ve convinced yourself to drink, you’re on the WRONG track!

Talking is Still in Style

Written by Elise Loan Tucson on May 15, 2019. Posted in Home Loan. Leave a Comment

This is a few days later than usual – sorry – but the first part of the week had me doing some other things that, quite frankly, were more important. I attended the funeral for the teenage son of some very dear friends of ours.

The last gentleman to address all who were gathered at the funeral made a comment that reminded me of a very important lesson for those of us who work in the real estate and mortgage world. He made it clear that he was not decrying technology and what it affords all of us, but he said we should make a concerted effort to talk more to one another – actually TALK, not communicate through email or text messages. If one were to start a list of people guilty of using email and texts more than making phone calls and speaking face to face with other human beings, I’d very well be near the top.

Talking is good

Talking affords everyone the chance to get immediate feedback and see if their message was received as intended. Talking allows us to show emotion (excitement, concern, worry, etc.) and spur others to give it right back to us. Don’t fool yourself into believing that was the reason emojis were invented.

We argue that email and texts are a much more efficient way to communicate. No, they ARE more efficient means to DELIVER a message, but that’s not communication. Long ago, before email and text messages existed, I learned that in order for actual communication to take place, the message has to be delivered and FEEDBACK has to be given. All too often, we forget about that second part because we feel our message is more important than anything else and don’t care how it’s received.

While I’ll certainly admit to being guilty of using technology more than I should, I always try to meet with people whenever possible. I want to see the expressions on their faces when I say something; I want to be able to read their body language to make sure we’re COMMUNICATING. Meeting someone in person is worth 100 times more than the time I’d save by talking to them on the phone instead of driving across town or to another metropolitan area to make that meeting.

If you think about it, this article is the perfect example of NOT communicating – I’m basically talking AT you rather than WITH you. In that vein, give me a call and let me know what you think about this and what you do to communicate better with your clients. I’m all ears!

Keep it Basic

Written by Elise Loan Tucson on May 6, 2019. Posted in Home Loan. Leave a Comment

Priority Lending

Fair warning: I’m going to brag a little, but there’s a point to it – I’m not just taking this moment to crow while I have a captive audience. (Come to think of it, you’re not a captive audience at all. You can leave anytime you like. Are you still there?)

When I started my career in the mortgage world over four years ago with Priority Lending, I made a point to meet with as many real estate agents and escrow professionals as possible (to this day, I STILL do). You’re my partners in this, so it made sense to talk with you and find out as much as I could with respect to how you viewed mortgage folks. I was regaled with a lot of stories, both good and bad as you can imagine, but one of the most common themes I experienced was that they noticed how loan originators hop from one company to the next every 18-24 months. To a newbie, that was odd and, I’ll admit, a little troubling. Troubling, of course, because I was wondering what I got myself into.

The reason I found this so odd, though, was that as I looked at the other loan originators working at Priority Lending, that timeframe didn’t apply. One of the loan originators had been with the company for over eight years, and another had been there for five. Fast forward to now, and those folks are still with us, and we’ve brought on more loan originators who have made Priority Lending their home. Buckle up, kids. This is where I’m going to brag a bit.

What creates an environment at Priority Lending that makes it so we want to stay and keep this our home? ABC. Assortment & Breadth of product offerings: other lenders have 10-15 core products (with some, that number is high) that they offer, and if the borrower doesn’t fit into one of those products, they’re told “thanks, but we can’t help you”, and they’re shuffled out the door. We have over 80 different products so we’re NEVER the “thanks, but” guys (I have to admit, though, that “The Thanks, But Guys” would be a good name for a band). In other words, we have no reason to leave because if we did, we wouldn’t be able to help you close those transactions that don’t exactly fall under the “standard” category – and we all know, the population of that category is dwindling. Consistency: as you know, this industry isn’t for someone who expects things to stay the same; at times, we see things change on almost a daily basis. However, amidst all the change and upheaval (that’s a great word that just doesn’t get used enough) in this industry, we know that our operations remain consistent. That doesn’t mean they don’t change – of course, they do – but the approach and the attitude remain the same so we know what’s coming.

Whether other loan originators are hopping from one company to another is due to the company changing the game plan midseason on them or because they’re just restless souls who are always looking for the greener grass (I used two wholly unrelated metaphors in the same sentence – sorry), I can’t say. What I CAN say, though, is that because we have an ASSORTMENT & BREADTH of products found nowhere else and we’re CONSISTENT, it doesn’t make much sense to follow an LO from company to company because you never know where her hands are going to be tied or when he’ll have to come back to you and say, “thanks, but . . .”

Find out more about Priority Lending

When You Don’t Have a Rich Uncle

Written by Elise Loan Tucson on April 26, 2019. Posted in Home Loan. Leave a Comment

Jumbo Loans

What you are about to read isn’t for everybody – that sounds sinister, right? – but you really should read all the way through because you’re going to want to be prepared when the appropriate situation presents itself. We’re talking about Jumbo Loans . . . well, sort of. We’re really talking about coming up with the down payment and how that becomes a slightly larger feat when the purchase price starts climbing northward.

We have a partner who is looking to help your clients either come up with enough money for a 20% down payment or increase your client’s down payment so they can purchase a larger house. Let me break this down for you:

The limit for a conforming loan is $484,350 as of right now. That means any home that has a purchase price of $605,438.75 or higher is where this partner of ours is helping your client. (Here’s the math: $605,438.75 – 20% for the down payment = $484,351, which is the point where the loan steps out of “conforming” land and into “jumbo” land.)

This partner of ours is NOT a lender; they’re an investor. In other words, they’re not loaning your client the money to help with the down payment; they’re becoming an investing partner with them who will share in EITHER the gain or the loss of the change in value of the home. There’s NO interest being charged, and there’s NO monthly payment – as I said, it’s an investment. Let me be clear right here: I am not trying to sell this to anyone; I’m simply presenting you with an option that could be that extra help your client needs to purchase that dream home.

In broad strokes, here’s how it works: they will invest between 5-10% to be coupled with your client’s down payment to total at least a 20% down payment on a home. This could mean that your client brings 10% to the table, and they contribute 10%, so your client can buy that $750,000 home. Or, let’s say your client has $150,000 for the down payment already, but the home your client REALLY wants is $815,000. Our partner could come in with the additional money needed, and your client’s monthly payment for the $815,000 home would be the same as the $750,000 home. In many cases, that extra 10% they can bring to the table is the difference between a great home in a great neighborhood and THE home in THE neighborhood.

Now, here’s how the investing partner makes their money in Jumbo Loans – they’re not doing this for their health remember: The home your client purchased for $750,000 you’re now selling for $850,000 ten years later. The mortgage balance is $470,000, which means your client has $380,000 in proceeds. The investor gets their initial investment of $75,000 plus 35% of the change in value of the home. In this case, the home increased in value by $100,000, so 35% of that is $35,000. All told, the investor gets $110,000 ($75,000 + $35,000) out of the proceeds of the sale.

Remember how I said they’ll share in your client’s gain OR loss? Different scenario: your client purchased the home for $750,000 with 10% down from their pocket and a 10% investment from these guys. Five years later, your client needs to sell the house at a loss – it’ll only sell for $650,000. The investor’s initial investment of $75,000 was for a 35% share of the “change in value”. In this case, the change is $100,000 (in the negative), so they’re going to take a $35,000 loss against their $75,000 investment. In other words, your client would only owe them $40,000. If the negative change in value were more than $215,000, your client wouldn’t owe them anything ($215,000 X 35% = $75,250 > $75,000 – anything beyond the investor’s initial investment cannot be recovered).

There are other details in the agreement that range from time periods to fees, but I won’t bore you with those at this point. If this is something you can see helping your client get into THAT home, I’ll be more than happy to sit down with you and your client and go over ALL the details so everyone’s fully informed.

In addition to this helping you with existing clients who are currently frustrated because they need that little extra something, this could help you start a new marketing campaign to find more of those clients who just need that little extra to help them get into the home of their dreams. Also, you could use this tool as a way to attract more listings in these higher price points because you have a way to help them attract more qualified buyers. Call me. We can sit down and brainstorm other ideas where this could help with Jumbo Loans. Get me a 44-oz Coke, and I’ll be ready.

Tag: mortgage