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Tulsa Oklahoma Bond Money

Tulsa Oklahoma Bond Money

Tulsa, OK, has a new down payment assistance program called the TuBond Money in a breifcaselsa County Home Finance Authority Turnkey Mortgage Origination Program.  Paired with an FHA, VA or Rural Development Loan, this program may assist more borrowers in qualifying for 100% Financing.  That’s right; own your home, 0% down payment.  Tulsa Oklahoma Bond Money is back.

In fact, low down payment loans are coming back entirely (click here to see the latest update).

100% Financing – 0% Down Payment

Housing Agencies provide Down Payment Assistance in the form of grants, zero or low interest loans, or assisted rates.  Some cities even have their own home buyer assistance and homeowner rehabilitation programs (click here to see those available in Tulsa, Oklahoma).

The new Tulsa Oklahoma Bond Money Program is a County-wide program and can be used anywhere in Tulsa County limits.  The Tulsa County Home Finance Authority sets the interest rate and terms and table funds the down payment assistance.  You can only use the Tulsa County Home Finance Authority Turnkey Mortgage Origination Program once, and funds are made available on a first-come, first-served basis from a continuously funded revolving pool.

Reserve your funds as soon as possible.  Click here to begin your 100% financing application.

What are the income requirements and how much do you get?

Tulsa Oklahoma HomeThe maximum debt to income ratio allowed is 45%, but a co-signor is allowed.  The co-signor cannot reside in the home and they cannot have an ownership interest.

The maximum household income you can make is $82,880, but we only have to count the income of whoever is on the application.  There is no minimum income required, but you have to qualify with a house payment that fits your budget.  Now here is a cool benefit: if you are hampered with current debt, say student loans, and you need a co-signor, the co-signor’s income doesn’t add to your household income limit.

$214,925.00 is the maximum acquisition amount this particular Tulsa Oklahoma bond money program allows for.  And another bonus:  there is no requirement that you be a first down home buyer.

What properties are eligible?

  • New (never previously occupied), existing, 1-4 unit, condominiums (if HUD approved) and town homes
  • Manufactured homes are eligible but with overlays
  • Land cannot exceed size required to maintain basic livability
  • Residential only – No more than 15% of square footage can be used for business (including child care)

What are the highlights?

  • No federal tax transcripts
  • No recapture tax
  • No first time buyer class required, although it is recommended
  • Gift/Grant Letter is the only additional form to closing
  • Borrower pays zero Origination Charges, zero Discount Points

How do you pay it back?

The assistance provided is a 3.5% grant and is calculated on the Note amount.  The grant can be used for the down payment and closing cost assistance.  There is no second mortgage note.  And here is the best part:

You never have to pay it back!

What is the fine print?

  • The minimum FICO score is 640, 660 on manufactured housing
  • Buyer must use as primary residence
  • Buyer must occupy within 60 days
  • Conventional Loans do not participate
  • Construction to Permanent loans not permitted
  • Government Paperwork Timelines – Extension fees are costly – only use a mortgage professional with bond money experience

Tulsa, OK Bond Money Update:

Increase in the Funding Fee 

Effective with all loans registered on or after June 9, 2014 under the HFA programs, the Funding Fee will be increased to $300.

The response to this mortgage program has been tremendous, and the high volume of applications for underwriting increases every day.

In an effort to decrease turn times, U.S. Bank must increase their staff accordingly. They have reviewed the options and have determined that an increase in the funding fee is the best option at this time to accommodate the related expense.

Check back for further updates!

How to get down payment assistance?Certificate Of Bond Money Training

Reserve your funds as soon as possible.  Click here to begin your 100% financing application.  Your first mortgage funds are locked for you when the reservation is submitted and accepted by the system and a loan number is obtained.  Grant funds are automatically reserved with the first mortgage reservation.

Copyright 2014 John Regur All Rights Reserved – Originally Posted at: Tulsa Oklahoma Mortgages – John Regur

Posted in: For Buyers

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What is A Condo Association?

Tulsa, OK, HUD Approved Condo

Largest HUD approved condo complex in Tulsa

What is A Condo Association?

This is a question often under-looked by Tulsa, OK, condo buyers.  Condos may provide great bang for the buck, inexpensive amenities and low-maintenance, but this is accomplished through all of the homeowners in the building working as a cooperative.  Often, condominium buyers do not give enough consideration to the quality of the Condominium Homeowners Association.

My first piece of advice, find out if the association has completed HUD approval.  Click here to read more about HUD Approved Condos.

Not All Tulsa, OK, Condo Associations are Equal.

Many Tulsa, OK, neighborhoods have a Homeowners Association, or HOA for short.  They are designed to maintain “standards” for the development and keep the neighborhood in good repair.  The developer of the neighborhood typically funds the HOA, establishes the association with the rule and regulations it will uphold, and then hands it over to the homeowners as properties are purchased.  Some neighborhood associations are strong and highly involved in the maintenance of the neighborhood, and some are more social, used to promote the community.  And all the while, many other Tulsa, OK, neighborhoods maintain themselves beautifully without the help from an association.

Condominium Owners Need Associations.

A condominium will always have any association, and it always needs to be strong.  Condominiums share significant amounts of commonly owned property, such as the roof, parking, landscaping and many other common areas.  Each owner exclusively owns their individual unit, but the elevator, swimming pool, and other building amenities required shared maintenance. When you buy a condo, you are entering into an agreement with all other owners in the Condo Association.  All association members agree to upkeep their individual unit and to additionally contribute to upkeep of the shared property.  This provides an economy of scale, and shared costs can provide for very inexpensive benefits.  But if you condo association is weak, you can find your condo association difficult.

How Do You Know if a Condo Association is a Good One?

Well, you have to ask questions:

  • Meeting of the Board

    What I see at Board Meetings where I live.

    What are the condo association rules?  Your parking spaces, swimming pools and patios will all be governed under the condo association rules.  If having pool parties is important to you, ask for the rules.

  • How much are the condo association fees?  Fees vary by community and may cover vastly different items.  Ideally, fees help all association members acquire benefits less expensively then what they would get them for individually.  Possible considerations may include maintenance of the building, insurance of common areas, utilities, amenities, etc.  The point here is to ask and to understand what the cost is and what it includes.
  • Is the condominium complex professionally managed?  You will want to ask for the contact information for whoever runs the property.  It is important to identify who fixes what.  Contact the property management staff or the HOA for all of the information you will need.
  • How much money is in the reserve fund?  Generally, you will want to see 15% – 30% of annual expenses in a reserve fund.  The older the building, the more the maintenance, and the more you will want in the reserve fund.
  • What is the Condo Association’s history regarding special assessments?  These are a one time fee used to cover an unexpected or large expenditure.  If it cannot be covered by the budget or the reserve, a special assessment is required.
  • Rental-agreement-e1347797065418

    Best Practices: Obtain & Read all paperwork

    Is there any pending legislation against the condo?  I know of at least on Tulsa, OK, condominium association that is currently encumbered with a lawsuit.  A lawsuit may impact all homeowners.

  • What is the Condo Association’s rental policy?  A high number of renters can have a negative impact, and many lenders are more reluctant to to give loans on these types of complexes.  Most lenders look for at least two thirds owner occupancy.

Tulsa, OK, condominiums have appreciated at a higher rate than single family homes over the last 2 years.  But this is mostly due to the fact that during difficult economic times (2008-2011), they depreciated faster as HOAs scrambled to absorb foreclosure losses.  If too many units stop paying association dues, the association’s budget falls apart quickly.  They may offer advantages to home buyers such as affordability, the need to downsize or possibly not wanting to have the maintenance issues of single family homes.  But before buying  a condo, make sure you know who you will be partnering with and what the rules are.

Copyright 2014 John Regur All Rights Reserved – Originally posted at: Tulsa Oklahoma Midtown Mortgages – John Regur

Posted in: Condos

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When Do Interest Rates Go Up in Tulsa, OK?

When Do Interest Rates Go Up in Tulsa, OK?

When do interest rates go up in Tulsa, OK?

Everybody is talking about interest rates, particularly about how they will move and when to lock your rate in.  So, how do interest rates move?

It all starts with securitization.  That is when a bunch of individual mortgages are put together into a giant pool of loans.  That pool of loans is further segmented down into mortgage bonds, which themselves are classified based on their risk profile – from AAA rated bonds (the lowest risk class) to unrated bonds (or “junk bonds”,the highest rated risk).

Every day, Mortgage Backed Securities are traded, just like stocks – and like stocks, Mortgage Backed Securities are very volatile.  Today they moved up and down all day, as they do every day.  Now the price of these bonds, and the mortgage rates that are tied to them, move a lot like a teeter totter.  When price goes up, rate goes down, and vice-versa.  To monitor these price movements, charts are used like this one:

candle

This chart is called a Japanese Candle, and we use these charts to identify and forecast patterns in the bond price movements.  These patterns have all kinds of  cool “industry” terms, like “downward breakout”, “triple-bottom” and the “double top”.  Some prefer to see an “inverted hammer”, especially if it is a lead toward a “heads and shoulder pattern”, which can be an indicator for a Stochastic Crossover.  But here is the juxtaposition of it:

Green is Good and Red is Bad.

Anytime you see green on this chart, bond prices are going up and rates are going down.

The point here is that bond prices change constantly and mortgage rates simply follow those prices.

So what can we monitor to stay in front of these price changes?

Well that leads to a big debate in the lending industry:  The Ten Year Treasury vs. Mortgage Backed Securities.

Depending on what your read and depending upon who you talk to, many Tulsa, OK, mortgage companies may tell you that the 10yr Treasury is the preferred index for monitoring the direction that mortgage rates are headed towards in the coming weeks.  But since most rate locks are in regard to a short term consideration, say 30 to 45 days lock periods, I find this method flawed.

There is a huge difference between the 10 Year Treasury and Mortgage Back Securities.  Primarily, there are three:

  1. Maturity – such as 10 year vs. 30 year, or variable factors
  2. Risk – such as default or prepayment
  3. Correlation – short and long term relationships between factors

This is boring stuff, but the point is 10Yr Treasuries and Mortgage Back Securities often diverge, meaning while one is going up the other is going down.  If you want to know the value of Apple Stock, you cannot just look at technology indexes or, let’s say, Microsoft stock.  If you want to know the value of a specific stock, you have to watch that specific stock.  The same principles should hold true to the 10Yr Treasury and Mortgage Backed Securities.

Now, that is not to say that we don’t need to understand 10Yr Treasuries, because Mortgage Backed Securities are competing for the same investment dollar.  And by that I mean that the economy as a whole has an impact on the prices of mortgage bonds.  Depending on what employment is doing, or gas prices or the stock market – all of these have an impact on the pricing of Mortgage Bonds.

The one thing we should really try to avoid is the media.  The mortgage related news is several days behind, at best.  When mortgage rates are improving I often will see negative headlines.

So how do you lock into the lowest rate possible in Tulsa, OK?

Contact me, and let’s get ready to be ready.  The more we can do to get your credit score over 740, the better the rate.  The more we can do to complete document your loan, the shorter lock period we will need.  Remember, we can’t lock until we are ready, so quickly we must get ready.

Copyright 2014 John Regur All Rights Reserved – Originally posted at: Tulsa Oklahoma Midtown Mortgages – John Regur

Posted in: For Buyers

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Principles of Negotiation for a Pawn Star Broker

Principles of Negotiation for a Pawn Star Broker

Yesterday, while in Vegas for the Sales Leadership Roundtable, I attended a breakfast with Rick Harrison, owner of a $60 million franchise that includes a pawn broker business in Las Vegas and a reality TV show on the history channel.  His show is broadcast in 38 countries, and he showed me a video on his iPhone of his arrival in Singapore.  20,000 screaming fans treating him like one of the Beatles. 2014-03-06 19.22.39-3

So how do you build a $60,000,000.00 business and become world famous?  Well, the first thing you could do is persistently tell yourself you are.  Rick painted “The World famous” on the side of his business 20 years ago, and his vision board has come true.

But to deserve that title you have to work hard and negotiate like a champion.  And Rick is a world class negotiator.  Whether it is negotiating to obtain the only pawn broker license being offered in Las Vegas, or putting his business on Nightline, and a major TV show, to publishing royalties for his book, a New York Times best seller – Rick is his own manager.

And it goes right beside the point that negotiated at his pawn shop all day, every day, without a vacation for the first 10 years of opening his business.

So over the airplane ride home I read the book, and it is an awesome five hour read.  And here is what I took out of it:

WORLD FAMOUS GOLD & SILVER TIPS FOR NEGOTIATION

1 ~ YOU HAVE GOT TO BE ABLE TO WALK AWAY

Identifying a potential deal is exciting, but you have to put in the time to consider all potential roadblocks to your desired position.  The Old Man, Rick’s father, taught him “Your sentimentality isn’t mine.”  Sentimentality cannot be reliably transferred, so it is considered a vanished collateral, and therefore present value doesn’t exist. In the process of negotiation, you always have to consider the time it will it take to arrive at the completed objective.

2 ~ IT’S JUST STUFF

Rick has gone through 10 wedding rings in his marital career, and 1 was so he could get another ring re-sized immediately.  He need some scrap platinum to enlarge a ring so he could satisfy the customer’s urgency, and to make himself some big cash.  It’s just stuff.  You can live without it.  And you will get more.  It’s disposable, superficial stuff.

3 ~ DON’T TIP YOUR HAND

This is where you act out the mastery of the other four principles for negotiation.  And the pawn broker recommends this to the buyer and the seller.  Once you know the other side will capitulate, negotiations are over.  You have to focus on this philosophy to embrace it, because it must show in your body language, tone of voice and attitude.  “If the seller shows he is not willing to walk away, if he indicates through body language or words that he absolutely has to get this done, he’s yours.  He’s also lost money.

4 ~ NEVER GIVE THE FIRST NUMBER

Now in a lot of the business I do, this is impossible.  But his point that all information is power still applies.  And everything said gives further indication toward perceived position in the negotiation process. So play your hand close to your chest.  Another point made is that it’s not your job to educate the other side on their value.  They know where it comes from, what their future needs are.  All that is trying to be done at this point is to see if there can be an agreement.

5 ~ NEVER HAVE A HARSH NEGOTIATION

Rick is a big believer in Karma.  Keep things fair.  Laugh, joke and have fun.  Engage, ask for stories, and tell some.  Again, all information is power.  And personal information tells more about where the other side is coming from.  Allow for people to become more comfortable.  If you have ever watched his show, you have seen the pawn star often tell the story about his side of negotiation.  You can win the negotiation and still ask for referrals.

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Can I Buy Furniture While Applying For A Mortgage?

Image 61Almost every home buyer wants to buy new furniture to put in their new home. Commonly asked is whether or not it’s okay to buy furniture while applying for a mortgage. See Joe’s question below.

Dear John,

Question:

We paid off two credit cards. We owe $1,500 ($7,500 limit) on one we have left and $400 ($6,000 limit) which this one is paid off every month. Would it be okay to buy furniture that costs $1700 (on a card that has $4,700 limit)? We just don’t want to screw anything up. Let me know your thoughts.

 

Dear Joe,

I understand wanting to buy new furniture before you close on your new home, but you’re applying for a mortgage and still under scrutiny by Underwriting. I can’t recommend adding any additional debt.  The variable is how the monthly payments will report.  Even though you pay a card down, the minimum payment will not be reduced proportionately.  And even if you pay it off, the credit report will still show a minimum payment to be counted into the debt to income ratio.

As for the new credit: just applying for it will lower your score, and I am not sure how they will report their minimum payment.  Remember, merchant credit cards always damage your credit scores and you should always avoid merchant accounts.  It is the only type of credit that the balance is always assumed to go up every month, until several months are reported and a conservative debt pattern on your part is established.

While you are applying for a mortgage, you want to maintain the lowest amount of debt possible paired with the highest credit score possible.  Neither of these can happen if you buy furniture while applying for a mortgage.  I don’t know that buying furniture would be a deal breaker but it would definitely worsen your credit profile.  If you have to have it let me know and I will spend some time figuring how we might pull it off. I don’t want to be the bad guy but most likely it will hurt us.
You’re getting an awesome home, Joe. Buy your new furniture the day AFTER closing. You can sit on milk crates like you did in college until Mathis Brothers delivers.  -John

Posted in: First Time Home Buyers

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Piggyback Mortgages

Piggyback Mortgages

Piggyback Mortgages are making a comeback

For home mortgage loans over $417,000, piggyback mortgages are making a huge comeback.

According to the 2013 Annual Real Estate Survey of the American Bankers Association:

Piggyback mortgages accounted for 3.8 percent of all loans originated by bankers surveyed in 2012, compared to 1.7 percent of the loans for 2010.  To read more reports click here.

A Piggyback Mortgage loan means a home mortgage borrower is being underwritten for two mortgages simultaneously.  The second mortgage can be structured as a home equity loan or a home equity line of credit.

Piggyback mortgages lost their popularity in the housing downturn, but now they are returning.  They are used to avoid paying for mortgage insurance when a borrower does not have 20% down.

When the lender has more than an 80% loan to value on a property, they require mortgage insurance from the borrower.  Getting around paying for this mortgage insurance is the purpose of the piggyback loan.

 How to Avoid mortgage insurance with a Piggyback Mortgage

  • Down payment:  10 percent of the purchase price or appraisal value, whichever is lower.
  • 1st Mortgage:  80 percent of the purchase price or appraisal value, whichever is lower.
  • 2nd Mortgage:  10 percent of the purchase price or appraisal value, whichever is lower.

But there is still another great reason to use a piggyback mortgage:  to avoid going over the conforming loan limit.  The conforming loan limit is $417,000, and when you borrower more than $417,000 the mortgage is called a jumbo loan, and they tend to have higher interest rates.  Sometimes it can be advantageous to get a mortgage for the full amount, and sometimes it costs less to use a piggyback mortgage.

It is really a game of mortgage comparisons.  To get a free mortgage options analysis for your particular situation, click here.

 Disadvantages of a Piggyback Mortgage

  • When it comes time to refinance, the mortgage company that holds the 2nd mortgage has to agree to remain in 2nd lien position on title.  This is called a subordinate lien position, behind the primary mortgage company.  The agreement we will need is called a re-subordination, and they are usually pretty simple to apply for.
  • It is not easy to tap into the home equity, as 3rd mortgages are not usually allowed.
  • The inconvenience of making two separate payments instead of one.
  • Requires a good FICO score.
  • Requires at least 10% down.

Have a question?  Ask it here.

Posted in: Conforming, For Buyers, Jumbo, Mortgage Types

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Tulsa, OK, Condos Appreciate Faster than Comparably Sized Houses

Image 1

Tulsa, OK, Condos Appreciate Faster than Comparably Sized Houses

A condo can be a great retirement investment if you let a renter pay for the equity on your behalf.  It is the only retirement investment I can think of where you can get someone else to make your entire monthly contribution.  I don’t know how to teach you to get someone to buy you an annuity or IRA, but I do know how to collect income streams off of real estate.  Next to employer matched 401k’s, Condo income-streams, for me, are a strong recommend.

Condos are making a comeback.

Income – Costs = Profit

Condos have better fixed costs than rental houses.  The maintenance expense is minimal, condominium property insurance is a slightly more expensive than renter’s insurance, and real estate taxes are thinned by the quantity of units.  This is a sexy investment.  Some are high-rises looking over rivers and downtowns.  Some are nestled in tree-lined greens of common area.  There is a Tulsa, OK, condo that is built in a public park.

Condos are appreciating Faster

As compared to one year ago, condo values are appreciating much more aggressively than single family residences (reference to the  Case-Shiller Index).

Five years ago, condominiums were among the most distressed sectors of the United States housing market.  Investor’s had bailed out on depreciating assets, and condos became more and more unwanted.  As condo unit owners stopped paying, their condo associations became under-funded, and unable to pay the unit’s common-expenses.  Many complexes failed, and values diminished.

Opportunities in the market

Tulsa, OK, condominiums are making a comeback.  Today, along with the revival of urban living, the condo lifestyle is becoming more popular. And many are virtually maintenance free.  Condo developements represent one of the best places to find real estate, and potential future cash streams, at “good value” prices.  Whether as an owner-occupied residence or as a rental income stream for life, there are opportunities in the market.

To get interest rates and costs for condo financing, click here.

For HUD approved condos, click here.

 

Posted in: Condos, First Time Home Buyers

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What Happens When The Appraisal is Less Than The Purchase Price

Home AppraisalAn appraisal is a documented analysis of the value estimation for the home.  A licensed appraiser will by assigned by the lender to prepare the home appraisal report.  It recognizes fair market value based on the recent sales in the neighborhood, and is required for a mortgage loan approval to ensure the value of the property.  Homes sold in the last 90 days will provide the greatest weight in the sales comparison approach.

So what happens when the appraisal is less than the purchase price agreed upon?

If your home appraises for an amount that is lower than your purchase price there are 3 options

  1. Negotiate a new purchase price that take into account the appraised value
  2. Buyer increase their downpayment to cover the difference
  3. Buyer may choose to cancel home purchase contract through the appraisal contingency

Appraisal contingencies are also exercised to exit or renegotiate contracts when an appraiser identifies repairs that are required to complete the appraisal.

 

Posted in: For Sellers

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How Are Credit-Score Points Earned?

FICO ScoresHow Are Credit-Score Points Earned?

The official FICO scoring model runs from 300 to 850 points.  But your score will very based on the type of credit you are applying for.  There are differing score-models for each type of inquiry:

(in order of risk preference)

  1. Credit request for a mortgage – BEST
  2. Credit request for a car loan
  3. Credit request for a credit card account
  4. Credit request for a store credit card or consumer loan – Worst

Mortgage and Auto Loans are considered more positive because the debt they create will reduce as monthly payments are applied.

Credit requests for credit card loans usually hit the scores the hardest.  This is because the debt balance is expected to go up every month until there is enough account history to show otherwise.

Once a negative condition hits your credit report, the damage is done. Paying a collection account will not regain the points you have lost.

Credit Score Breakdown

65% is tied to 2 things

  1. Payment History
  2. Credit Utilization
  • The amount of money you are borrowing and whether you are paying your creditors back is the primary source of high credit scores

15% is tied to the amount of time you’ve had credit in your name

  • The more time you have spent managing good credit the higher your score will be
  • First time borrowers bring an added layer of risk

10% is scored on the type of credit used

  • Auto loans and mortgage loans are scored as a positive.
  • Credit Cards are negative.
  • Pay Day loans almost ensure credit score deficiency.

10% is scored on a category deemed “new credit”

  • This is an assessment of the most recently opened accounts and the types of credit that have been applied for.
  • It also scores on how long it has been since you opened an account.
  • At the maximum this category is worth 85 points to your FICO.

A mortgage credit inquiry will lower your credit score by 5 points.  You can have as many mortgage credit score inquiries as you want for 14 days and you will only receive one reduction for 5 points.

Posted in: Condos, Credit, First Time Home Buyers, For Buyers, Household Finances

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How much do credit scores drop with a mortgage late payment?

FICOIn the last few years Trans Union, Experian and Equifax have disclosed more specific information about the damage to credit scores after mortgage late payments.  Here are some examples for a FICO credit score:

30 day late payment – damage to credit score

780 score drops to around a 670-690
720 score drops to around a 630-650

90 day late payment – damage to credit score

780 score drops to around a 650-670
720 score drops to around a 610-630

Foreclosure – damage to credit score

780 score could drop to 620-640.
720 score could drop to 570-590.

How much do credit scores drop with a mortgage late payment?

Notice how much risk is attached to a consumer with a recent 90 day late payment;  even with a start point of a 780 credit score, a 90 day late payment is not much different in impact than a foreclosure!

Posted in: Credit

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