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Ryan Parks' Blog

By Ryan Parks | Agent in Chicago, IL
  • Buying a Home? Consider COST not just Price

    Posted Under: Home Buying, Property Q&A, Home Ownership  |  November 19, 2013 8:49 AM  |  291 views  |  No comments

    We have often talked about the difference between COST and PRICE. As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the ‘long term cost’ of the home. Let us explain.

    Last month, the Mortgage Bankers Association(MBA), the National Association of Realtors, Fannie Mae and Freddie Mac all projected that mortgage interest rates will increase by about one full percentage over the next twelve months. We also know that many experts are calling for home prices to also increase over the next year.

    What Does This Mean to a Buyer?

    Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 even if home prices don’t increase:

    Cost Waiting blog

    Purchasing-Impact

  • Simple Real Estate Definitions : Right To Cancel

    Posted Under: Property Q&A  |  July 9, 2012 6:09 AM  |  110 views  |  No comments


    Right To Cancel noticeAs part of the federal Truth-in-Lending Act, refinancing homeowners are granted a 3-day “cooling off” period post-closing during which they retain the right to rescind, or “cancel”, their recent refinance without penalty or cost.

    The Right To Cancel is protection against surprises at closing and/or a change of heart. It’s also a safety valve for homeowners signing paperwork under duress. With 3 days to revisit and rethink the terms of a loan, a homeowner can maintain tighter control of his/her financial situation. 

    If you ever have the wish (or need) to execute your right to rescind, be aware that the process is a formal one. The required steps must be completed on-time, and in order, or else your request will be invalid.

    The process starts with a document labeled “Right To Cancel”. It’s included in your closing package and lists the terms of a rescission in straight-forward language. Among the key points :

    1. You have 3 business days during which to cancel your loan
    2. When you cancel the refinance, the entire transaction is cancelled
    3. You must submit your Right To Cancel in writing

    “Business day” is defined by the government to be every day, save for Sundays and federal holidays. A loan that closes on a Monday, therefore, must be rescinded prior to Friday at 12:00 AM.

    Typically, rescission requests are faxed to the settlement agent, notary, or title company assigned with the refinance. It’s good practice to ask for an acknowledgement of receipt as proof of delivery, too.

    There are some refinances for which the Right to Cancel does not apply, however. This includes refinances linked to an investment property, and loans not collateralized by residential real estate. There are other conditions, too, that may supersede your right to rescind so be sure to ask your lender.

  • Are You Wasting $471 Per Month On Your Mortgage?

    Posted Under: Financing, Property Q&A  |  March 12, 2012 8:23 AM  |  161 views  |  No comments

     

    According to Freddie Mac’s weekly mortgage rate survey, for 13 straight weeks, the average 30-year fixed rate mortgage has held below 4.000% for mortgage applicants willing to pay up to 0.8 discount points plus a full set of closing costs.

    These are the lowest mortgage rates in history and now — with a bevy of loan programs for the nation’s 11 million “underwater homeowners” including HARP, the FHA Streamline Refinance, and the VA IRRRL — millions of U.S. homeowners can exploit the current mortgage rate environment.

    In this 4-minute clip from NBC’s The Today Show, you’ll learn about today’s mortgage market and your refinancing opportunities in Illinois.

    The video begins by telling us that 14 million credit-worthy Americans have yet to refinance their respective mortgages, and are leaving an average of $471 in “wasted savings” on the table each month which adds up to more than $5,600 annually.

    That’s a big number.

    Some of the video’s other key points include :

    • Refinancing is “worth the hassle” when mortgage rates are as low as they are today
    • The best rates are reserved for homeowners with the highest credit scores
    • Comparison shop — your current mortgage lender may not offer you the best rates

    Furthermore, the video reveals the characteristics of the homeowner type most likely to benefit from a refinance. These traits include having with 20% equity in the home; have plans to live in the home for at least the next 36 months; carrying a current mortgage rate of 5 percent or higher.

    It should also be added that, with a zero-closing-cost or low-closing-cost mortgage, even a small reduction in your mortgage rate can make a refinance worthwhile.

    Mortgage rates are low but can’t stay low forever. If you haven’t participated in the Refi Boom, talk with a loan officer and review your mortgage options. You may be able to save hundreds of dollars per month with just modest closing costs.

  • Everyone Lives In A Flood Zone. Are You Covered?

    Posted Under: Quality of Life, Property Q&A  |  September 12, 2011 7:37 AM  |  469 views  |  No comments

    Everyone lives in a flood zone.

    Flooding is the top-ranked natural disaster in the United States, with a dozen potential causes ranging from heavy rains, tropical storms and hurricanes to new housing developments and rain after fire. Floods can occur in all 50 states and, when they do, they leave massive damage in their wake.

    Flood damages exceed $2.7 billion annually.

    As a homeowner, you carry homeowners insurance to protect against theft and loss. Typical homeowners insurance, however, excludes damages from flooding. Homeowners in Chicago , therefore, should make sure to have a separate flood insurance policy. And once that policy is in place, there are other steps you should follow, too.

    First, make a log of your possessions, either on paper or by video. In your log, include everything that you own of value. Next, if you own jewelry, have it appraised and store the appraisal; if you own appliances, log the serial numbers and attach original receipts.

    Then, buy a safe-deposit box at a bank, for example, and store your possession log. 

    All of this information matters because, in the event you need to make a claim, you’ll have an easier time dealing with the insurance adjuster. It’s hard to prove possession of items that have been washed away by flood waters, after all.

    You’ll also want to share this list with your insurance agent in advance so your policy is made with the proper amount of coverage.

    Floods can strike anywhere and, as many people learn the hard way, standard homeowners insurance does not include flood coverage. If you’re without flood coverage, talk to your insurance agent about adding a flood policy.

    Because many policies don’t take effect until 30 days from purchase, this is one form of insurance you’ll want to buy in advance.   

  • Simple Real Estate Definitions : Loan-Level Pricing Adjustments

    Posted Under: Home Buying, Financing, Property Q&A  |  September 6, 2011 7:34 AM  |  479 views  |  No comments

    Loan-level pricing adjustments add to mortgage costsLoan-level pricing adjustments are mandatory loan fees based on a borrower’s specific default risk.

    First introduced in 2008, LLPAs were Fannie Mae’s and Freddie Mac’s logical response to massive balance sheet losses. At the time, the housing market was deteriorating and mortgage delinquencies were rising.

    To “better align with loan risk characteristics”, the two entities created specific fees to be associated to specific loan traits, to be charged to all borrowers.

    LLPAs are still in existence today.

    Today’s loan-level pricing adjustments can be grouped into 5 basic categories. Application exhibiting any of the 5 traits can trigger LLPAs, adding to a borrower’s loan fees:

    1. Credit Score (i.e. the borrower’s FICO is below 740)
    2. Property Type (i.e. the subject property is multi-unit)
    3. Occupancy (i.e. the subject property is an investment home)
    4. Structure (i.e. there is a subordinate/junior lien on title)
    5. Equity (i.e. mortgage insurance is required by the lender)

    In many respects, loan-level pricing adjustment are similar to auto insurance. All things equal, the driver of a “fast” car will pay higher costs than the driver of a “safe” car.  The same is true for mortgages.

    Loan-level pricing adjustments are public information. Fannie Mae publishes the complete LLPA matrix on its website. The chart can be confusing, however. If you have questions about how LLPAs work, talk with your loan officer.

  • Yelp!

    Posted Under: Home Buying, Home Selling, Property Q&A  |  June 15, 2011 5:31 AM  |  258 views  |  No comments
  • Do You Know What Questions To Ask Your Lender?

    Posted Under: Home Buying, Financing, Property Q&A  |  June 13, 2011 8:12 AM  |  244 views  |  No comments

    A mortgage comes with many moving pieces and understanding them is the key getting a great deal. Unfortunately, studies show that few Americans have a firm grasp of how mortgages work — from mortgage types to mortgage fees.

    In this back-to-basics interview on NBC’s The Today Show, you’ll learn some mortgage planning basics to help you get smarter with your next home loan in Chicago or anywhere else — purchase or refinance.

    Some of the topics covered include:

    • The mortgage applicants for whom adjustable-rate mortgages are a better choice than fixed-rate mortgages
    • Why you should include “How Good Is This Lender?”-type questions in the rate shopping process
    • What a pre-approval letter is good for, and what it is not good for

    There is also one of the most simple explanations of “discount points” ever offered on network television.

    The video runs 4-and-a-half minutes. For first-time buyers and experienced ones, it’s worth a watch. You’ll pick up some tips to use on your next mortgage.   

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