The Mortgage Go To Guy!!: 2007

Tuesday, December 18, 2007

Florida Mortgage | Financial Advice ~ Own your home outright - Good or Bad Advice??

Diversify Diversify Diversify... that's the mantra of today's Financial Planner. Many people disagree with that quote - big notable investors like Trump, Buffett etc...

But that's what we're taught... diversification reduces risk and increases return over the long term.

But ... when we're talking about our Primary Residences and diversification, are traditional Financial Advisors barking up the wrong tree??

Most traditional Financial Advisors are eager to get you on the path to owning your house outright. They have all sorts of ways to teach you how to scrimp and save so that when you are in your 50's and 60's you have paid off your house.

But... what exactly is the advantage of paying off your house?

If their mantra is "Diversify Diversify Diversify" yet in another breath they say, "No Mortgage, No Mortgage, No Mortgage" then aren't they contradicting themselves??

Let me tell you why they are!

Because they are essentially telling you that you need to take a large portion of your potential retirement funds... your nest egg... and sink those funds into an illiquid asset.

These are funds that should be there for you in retirement...but instead this large sum of money is funneled into your house where you cannot use it.

Think of it...sometime in the future when you need money for something big - like an emergency or to finally replace that old car that just passed away right before you could pass it on to your grandson... and you have worked a long time to make that money. Then you have to call someone like me and I have to tell you how much it will COST YOU to access your money!

To read the entire article, follow this link -o--> Florida Mortgage | Real Estate, Investment and your Primary Residence

More Florida Mortgage and Real Estate News You Can Use From
David A. Podgursky, MBA
TheMortgageGoToGuy.com
Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida

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Florida Affordable Housing | great choice for your College Student instead of the dorm or apartment

Trying to figure out where your college student will live while he/she is at school?

Dorm is reserved for freshman?
Frat house is only for parties?
Off campus apartments are in terrible condition and expensive?

Consider buying an affordable housing condominium for your student instead!

Using FHA loans, you can qualify as a non-occupant co-borrower and have your child on the loan to purchase a great condominium or townhouse near campus.

Why would you consider it?

First of all, Credit. This is a great credit builder.

Secondly, most students prefer living with a roommate, who pay rent to your child which can go to paying the mortgage.

Third, responsibility... owning as opposed to renting means your students have to learn to take care of the place.

Fourth, the tax benefits of having more mortgage interest deductions (consult your CPA)

Fifth, there's a better market to resell an affordable house/condo than a run down duplex near campus. Believe it or not!

For more information, visit the full article at -o-> Florida Affordable Housing | College Students’ perfect place to live

Sunday, December 16, 2007

Florida Real Estate Development | Martin County Florida

The Palm Beach Post had an article ( link )this week regarding developers in Stuart Florida - the county seat of Martin County Florida. The city officials are bracing for an influx of developers looking for extensions on their development timelines.

Due to the market conditions they have been unable to continue their efforts to develop land that they purchased 2-3 years ago. Planned Unit Developments that are reaching the end of their original approved building timeline are now in jeopardy of ever being built due to the lack of financing available for new construction… and not just in Florida!

The biggest blow to development in this Florida market is that lenders are just not funding projects right now without major pre-construction sales numbers.

With the market prices dropping - especially on condominiums in major (overbuilt) markets, many buyers have walked away entirely from large cash deposits leaving developers, lenders and investors stranded.

To get the good news (not mentioned in the article!) that will help the market recover, follow this link -o-> Florida Real Estate Development | Stuart and Martin County Florida

Celebration Florida Affordable Housing | great choice for your College Student instead of the dorm or apartment

Trying to figure out where your college student will live while he/she is at school?

Dorm is reserved for freshman?
Frat house is only for parties?
Off campus apartments are in terrible condition and expensive?

Consider buying an affordable housing condominium for your student instead!

Using FHA loans, you can qualify as a non-occupant co-borrower and have your child on the loan to purchase a great condominium or townhouse near campus.

Why would you consider it?

First of all, Credit. This is a great credit builder.

Secondly, most students prefer living with a roommate, who pay rent to your child which can go to paying the mortgage.

Third, responsibility... owning as opposed to renting means your students have to learn to take care of the place.

Fourth, the tax benefits of having more mortgage interest deductions (consult your CPA)

Fifth, there's a better market to resell an affordable house/condo than a run down duplex near campus. Believe it or not!

For more information, visit the full article at -o-> Florida Affordable Housing | College Students’ perfect place to live

Thursday, December 13, 2007

Florida Mortgage | Subprime Bailout ~ Preliminary views of the plan

I had to at least make a mention of the new plan to bail out the Subprime Mess and I was in a Clint Eastwood Western sort of mentality. So, I will relate my feelings to the Good the Bad and The Ugly.

I think that in all, it will help some people... but I just don't believe the way that things are being carried out are in the best interest of the masses for more than one reason.

The Good - There are a lot of loans that are about to jump, some even double. This Congressional Bailout of these borrowers will help those people who are about to get a shock... a BIG shock.

The Bad - OK... so these borrowers have some relief.

Now the big test is will they learn their lesson from the scare and start a financial plan to get themselves on track for the big three issues for a loan application so that they can refinance in the future.

They need to work on:

Credit
Income
Assets
Also - Equity

The Ugly - now this is where I'm going to be bordering on ranting.

Congressman Barney Frank - are you reading this??

This plan is by far one of the most dangerous pieces of legislation in US History. This was bred from ignorance and arrogance.

I do not care how bad this problem is or will become...

The Mortgage Industry is built upon the freely moving, market driven Mortgage Backed Securities Market. Rates, programs, etc are all based on this FREE market that is without government interference!

The US Government has NO business regulating this market and industry in anyway.

YES! The Homeowners are hurting... but they have been in this position for at least a year and have heard enough news that this storm was coming. Ohh... now I'm unpopular...

But... there are investors around the world who bought into these investments. They made the decision to back risky mortgages and who's right is it to tell them that they do not deserve the returns that they signed up for??

No ones! Especially not the Federal Government of the United States.

For the FULL ARTICLE follow this link to -o-> Florida Mortgage | Subprime Bailout ~ Preliminary views of the plan

Friday, November 23, 2007

Florida Mortgage & Real Estate | Developers moving In & Out!

While the real estate market is definitely in a bad place in Florida, many big, national banks and big, national builders are feeling the pinch.... some are even hitting the bricks - figuratively speaking.

With announcements that Hollywood Florida based TOUSA and Fort Lauderdale Florida based Levitt & Sons are filing bankruptsy, and that Levitt ceased all construction due to massive debt... it would seem that we've seen the end of development in Florida until we absorb what we already have... but that may not necessarily be so!

Now that some of the big boys are hurting, a new breed of smaller, leaner developers are descending on Florida like Snowbirds of Prey.

These developers are well positioned to find abandoned projects, builder close-outs, and distressed projects at bargain prices that are ready to be salvaged.

These new, smaller developers are more nimble and more agile than the big names like D.R. Horton, K. Hovnanian, Toll Bros. and GL Homes. They can buy smaller parcels and still make money on them.

They also have the vision to pull off more interesting projects that have margins that are significantly lower than a big developer's shareholders require.

Couple with this the terrible brain drain due to the middle class heading for the greener pastures with lower property taxes, these developers are able to build condos & townhomes that will help first time home buyers, low and moderate income buyers, and local workforces find properties near where they work at appropriate prices.

Keep an eye out for these Snowbirds... and if you're sitting on a project that needs some TLC to get it off the ground, think of them fondly. They might just want to partner with you to make your project a reality!

For the full story, follow this link -o-> Florida Mortgage & Real Estate | Developers heading In and Out

Wednesday, November 21, 2007

Florida Mortgage & Real Estate | Opportunity Costs in a Bad Market - Why to buy now

Can a very fundamental notion within Modern Economic theory help you make a decision whether to make a move or not in this current Florida Real Estate Market downturn?

There is no doubt that if you're living in it or renting it out, you want to be sure you're making a wise financial decision (note I did not say investment!)... but sometimes with such bad market news you're going to hesitate, especially if you're reading horrible articles like on MSN Money.

That's what is happening here in South Florida. There are listings that are just sitting there. Sure, sometimes they are priced wrong for the current market and have ignored the dips in prices... but the buyers are waiting because there are still some sellers acting like we're in a sellers market.

There are buyers that are gun-shy because they think that they'll lose some value right off the bat. I had a conversation with one a couple of months ago. He said that he thinks there is another 2-3% drop before rebounding. I told him this:

First of all, there is no magic prognostication software to determine what's going to decline and how much. Overall, he COULD be right... but that doesn't mean that every little area will suffer it...
Some may go up and just have the average brought down due to foreclosures or a glut of Condo inventory in Miami. West Boca Raton (75mi North of Miami Beach) might be more stable because it isn't condo based and he's looking for a home near a particular demographic neighborhood and schools for his son.

What is more important to consider is that Rates aren't going down significantly for a while. SO I spoke to him about ENTRY and EXIT Strategies. I told him that if he waits 6 months and the rates tick up 1/2%, he could easily be $100-200 more per month depending on the loan amount - even if he sees a 5% decline in the property values he still will pay more monthly which will cost him much more in the long run!

The Opportunity Cost of NOT buying could mean:

SCARCITY - Qualifiable - Losing the property that you love and not being able to replace it
SECURITY - Qualifiable - A bird in the hand is better than two in the bush - there is security in knowing that his family will be in place and comfortable before the fall term begins ...
PRICE - Quantifiable - the property may go UP in value based on other market factors while other parts of the market or the market as a whole goes down
RATE - Quantifiable - the interest rates may rise causing him to end up spending more on the monthly payment than if he were to buy today
UNKNOWN - Qualifiable - things could crop up that cause an issue that keeps him from qualifying for a loan later - Quantifiable - there may be nothing suitable in that area to buy in 4-6 months

So I summed it up this way:

"If you're buying a home - buy a house you LOVE. If you have this many regrets causing you to keep from purchasing then maybe you just don't LOVE the house. Don't, though, let a good deal or the right house slip away from you because you're betting on the market. Know what is controllable and what isn't. The right house could disappear as quickly as it came on the market and you could miss out on the right property while trying to figure out the right time to make your move"

Wednesday, November 14, 2007

Boynton Beach Florida | Pollo Campero ~ New Restaurant Opening Soon! 2

Boynton Beach Florida is about to get a highly anticipated new restaurant chain - Pollo Campero. Located in the Boynton Town Center, with direct road frontage on Congress Road north of Boynton Beach Boulevard.

Pollo Campero - translated from Spanish - means "County Chicken"... this restaurant is the Latin American version of Kentucky Fried Chicken. The menu varies from KFC in that they offer plantains (patacones), rice and beans (arroz con frijoles), flan and other traditional Latin American dishes.

The interesting thing to this writer is the location... the new destination of Boynton Town Center will drive in lots of traffic... but the direct competition of a Kentucky Fried Chicken 2 blocks South, a Boston Market 6 blocks North and a Pollo Tropical 8 Blocks North will definitely create a stir in Boynton Beach Florida for chicken lovers!

Set to open in December 2007, you can find information about this new restaurant at:

Boynton Beach Florida Pollo Campero ~ New Restaurant Opening Soon!

Florida Mortgage | Green News ~ BioFuel Alliance on shaky Political Grounds

Lurking in the shadows of the current Florida Property Tax issues, Florida Governor Charlie Crist (R) has been traveling with several key Florida Legislators through South America working different trade agreements. The most lucrative of which would have created an enormous trade agreement with Brazil to import Ethanol into the United States.

Florida would serve as the National Headquarters for this effort potentially bringing billions in profits to the state to help fill our tax coffers when they are depleted from property tax cuts. Unfortunately, the deal with Petrobras seems to be on the back burner -- indefinitely.

According to an article on Tallahassee.com, the issue at hand for Governor Crist is that Petrobras (NYSE stock symbol PBR) has confirmed business links to Iran. That linkage violates the spirit of a bill he signed in June that forbids the state from investing its $140 billion pension fund in companies that do business with Iran.

This is a big disappointment considering the benefit it would have for the Florida Economy as well as the National effort to "Go Green". This also shows that the US needs to consider its many options for producing its own Ethanol and other Bio-fuels domestically to reduce the US dependence on Foreign Fuels.

To learn more about this political issue, please follow the link to:

Florida Mortgage | Green News ~ BioFuel Alliance on shaky Political Grounds

Technorati Tags: florida, mortgage, real estate, charlie crist, biofuel, bio-fuel, ethanol, Go Green, petrobras, boca raton, boynton beach

Thursday, November 1, 2007

Florida Mortgage | Short Sales & Bank Owned Properties

Right now one of the most popular requests that I am hearing is that someone wants to buy a bank owned or short sale property. These two property types are very similar in that they both entail negotiating with the bank for the ultimate purchase price.

The other similarity is that in both instances you are asking the bank to take a loss on their asset - their asset is the mortgage on the property you want to purchase. This is not always as easy as some of the Real Estate Experts might say... but if you have your ducks in a row, then it can be accomplished in a way that can save you a good bit of money on the property you want to purchase.

The most vital step in the process that is often pushed until later-on in the process is making sure that the finances are in place.

This can mean any number of things... but we can narrow them down with one simple question:

Do you have enough cash to close on the property without financing and without hurting your financial well-being?

If you answer is no... and for most people it is, then you need to pull back the reins and start at square one... get with your favorite mortgage broker, like me!

Your Mortgage Broker will help you understand the process involved in financing a short sale property. He will also help you understand the costs...

Right now there are some amazing deals out there... foreclosures on properties with lots of equity. Getting your team together before you start trying to find the property is important... but getting your Mortgage plan in place is key.

For more information on Short Sales and Mortgages, please follow this link to learn more about the different options of financing a short sale:

Florida Mortgage | Short Sales & Bank Owned Properties

Thursday, October 18, 2007

Florida Mortgage | Builders Focus on Value

This is a little departure from my normal posts that are mainly informational - call it an Opinion Piece.

The Real Estate Industry in Florida is hurting as evidenced in all the bad news being reported. It isn't all bad, as the reporters would like you to believe. Houses are selling because there are people that need to buy and there are those that are finding bargains already.

Now builders are spending their time marketing value and affordability into their homes... the reverse of the trend when they were marketing luxury and amenities. Honestly, they should have caught on sooner.

Affordability... Value... Attainable... Steven Webster at the Florida Workforce Housing Network discusses how these new buzzwords are showing up in builders' marketing efforts. He cites that Lennar challenged local builders to build affordably and Centex chose the path of becoming Florida's leading affordable housing builder.

This article would not be complete without discussing the other side of the story... the Real Estate Industry has another industry that it works hand in hand with that needs to be a consideration of these builders - the Lending Industry.

You see... the big, production builders builders can control most of the costs related to the homes they are building. What they can't control is mortgages.... only the market itself can do that!

My recommendation to builders is to keep in mind what buyers need - affordable payments. This means making sure that the larger homes stay within conforming lending limits so that the interest rates stay low. It also means to quit blackballing lenders and mortgage brokers from projects. The buyer should have free choice of who they use and all the enticements from the advertisements to buy.

For buyers who will need 100% financing, builders should make sure to keep an eye on the median home prices in the area - that will be the lending limit for FHA, Fannie Mae and Freddie Mac 100% loan programs. Builders could offer to pay closing costs up to 3% of the loan amount as an enticement for $0 down homes.

For more information about this trend, please follow this link to visit my main site: Florida Mortgage | Builders Price your homes appropriately

Wednesday, August 29, 2007

Florida Commercial Mortgage | Anthology of Posts

For those of you interested in, practicing, or investing in Commercial Real Estate in Florida or the rest of the United States, here are some posts that might help you understand more about the industry and how it affects both the owner occupant and the investor as well as the Realtors and the Mortgage Brokers that work in the industry.

Enjoy!

Florida Commercial Mortgage | Investment Formula - Debt Service Coverage Ratio

August 28th, 2007

DEBT SERVICE COVERAGE RATIO or DSCR
What is it?
Who came up with this?
Why do we need to know another math equation?
How can it save a deal? or a client?
[Read more →]

Florida Commercial Mortgage | Loans for Small Business ~ Underwriting Methodology

August 25th, 2007

Commercial Mortgages for Small Businesses are a notably animal than Residential Mortgages. Commercial Mortgages are based on three main criteria but there are many variables that can make those criteria flex based on the lender and their goals. Yes… the Lender’s goals.
In Residential Finance, my goal is to take the borrower’s unique needs and match […]
[Read more →]

Florida Commercial Mortgage | Just 3% Down - Small Balance Commercial Loans

July 1st, 2007

So I was driving to a client and heard on the radio a commercial that played out like a skit
One guy was telling the other that he was expanding his business and needed a commercial loan.
The second one told him he just refinanced his commercial office condo and it was great.
Come to find out you […]
[Read more →]

Florida Mortgage | Land Surveying Primer ~ Why you should order a survey every time!

July 29th, 2007

ARE YOU BUYING A HOME OR AN ENCROACHMENT??
A Land Surveying Primer
Ok… I am a little biased right now. I grew up in a Real Estate Industry Family…specifically my parents own a Land Surveying Company.
I remember at 11-12 years old going in and doing tax book research and answering phones…yes I was a master of microfiche […]
[Read more →]

Florida Commercial Real Estate: Redevelopment of Industrial Zoned Land in South Florida

May 23rd, 2007

Who loses most when city planners rezone commercial land in order to make room for more housing? Is it the right of a citizen who moves into an area rich in industrial zoning to complain about trucks and businesses or is this a buyer beware issue?
In Boynton Beach, Florida there is a controversy brewing about […]
[Read more →]

Florida Mortgage | Advice ~ Your Mortgage Advisor is WHO???

April 21st, 2007

Today’s Mortgage Industry is a vast, complicated landscape of amortization, interest calculations, equity lines and bond prices.
People are clamoring to get in on the profession but soon find that it is far more education intensive than they ever would imagine.
Just keeping up with the ever changing progams offered by the major lenders is a […]
[Read more →]

More Florida Mortgage and Real Estate News you can use from David A. Podgursky, MBA
The Mortgage Go To Guy!!
Your Source for Residential, Commercial, Investment, and Relocation Mortgages in Florida

Florida Mortgage| Real Estate Industry Commentary

When I first moved to the State of Florida, I was very surprised to find Realtors and Mortgage Brokers that were so busy and so successful that they would limit their businesses to loans, listings and buyers of over a certain dollar value. The reason it was so surprising was that the dollar amounts that were mentioned were enormous to me.

One listing agent I know would not work on listings under $650,000. One Mortgage Broker said "No first time homebuyers". I even knew of some agents that would not take anything but multimillion dollar listings or superstar, VIP buyers.

In this current market, changes are creating a new paradigm for Real Estate Agents and Mortgage Brokers everywhere. There are many who are just leaving the field. They are just absolutely sure that there is no way to survive this market downturn.

Read the rest of this piece at: Florida Mortgage | Real Estate Market Commentary

More Florida Mortgage and Real Estate News you can use from

David A. Podgursky, MBA
The Mortgage Go To Guy!!
Your Source for Residential, Commercial, Investment, and Relocation Mortgages in Florida

Sunday, August 12, 2007

Florida Mortgage | Blogging - New and Improved Style

Sometimes, change is good... and freshening things up is always a great idea. I have tried to manage this site on the Blogger platform but alas a higher calling has led me down another path.

The other day a journalist found my "answer" on Trulia Voices and wanted to use some quotes from my answer and my blog to help substantiate her position in an article....

Wednesday, August 8, 2007

Florida Mortgage | Loan Servicing ~ What Consumers Need to Know in this Market...

Bad economic news tops every news broadcast with big lenders like American Home Mortgage, Geneva Mortgage, Homebanc and many more completely cease all operations. This change in the game is leaving many homeowners worried about what is going to happen to them now that their lender is KAPUT!

Do not fret... don't worry at all... in fact, get ready to make your September payment as scheduled. Just keep your eyes open for your letter regarding who will be servicing your loan from now on.

You see, many of the lenders that you are paying your monthly payments to are in fact only servicing your loan. They are not holding the note, but instead they are collecting and distributing funds for the actual mortgagee - typically an institutional investor.

A lender that holds loans is called a Portfolio Lender. Meaning that the loan is part of their investment portfolio much like we would keep stocks, bonds or a mutual fund in our retirement portfolio. Most lenders do not portfolio loans, they sell them on the secondary market instead.

The Secondary Market is made up of investors like Pension Funds, Insurance Companies, FNMA (Fannie Mae), and FHLMC (Freddie Mac). These investors have contracts with lenders to service loans on their behalf.

A lender that services loans performs certain tasks for a Portfolio Lender or Institutional Investor. These tasks are:

Collecting Payments - the most visible function
Collecting Escrow payments
Maintaining appropriate Hazard Insurance - including fire, hazard, windstorm and flood
Paying Real Estate taxes
Collecting Private Mortgage Insurance (PMI) payments
Paying Net Proceeds to the Investor/Lender

Other tasks that these service lenders provide that are not as evident are:

Sending out compliance documents - like the escrow analysis forms
Preparing Mortgage Interest Tax Deduction forms for your taxes
Disclosing the principle and interest due and paid monthly and annually
Dropping the Mortgage Insurance when it reaches appropriate levels
Calculating payoff amounts upon sale

and finally... (what we're seeing so much in this market)

Accelerating the note and foreclosing on the borrower in the event of default
Taking title to the property and liquidating the collateral on behalf of the Investor.

So in this market when we see some big name "lenders" going under, many times they are not the ultimate mortgagee... but instead the servicing entity. Despite the servicing entity's demise, the investor will have another lender contracted out very quickly so they do not lose the revenues.

Unfortunately, there is little or no transparency in this area of the lending industry to show you who you ultimately owe your money to...

So... as I mentioned before... be ready for your next month's payment. It will be due to someone even if your "lender" shut its doors.

More Florida Mortgage and Real Estate News You Can Use From
David A. Podgursky, MBA
The Mortgage Go To Guy!!
Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida

Technorati Tags: real estate, mortgage broker, mortgage, loan servicing, lender, florida, palm beach county, boca raton, boynton beach

Tuesday, July 31, 2007

Florida Mortgage Loans | Condo-Hotel/Condotel Rental Income Rules

Condo Hotels or Condotels continue to grow in popularity in Florida, especially in hot tourist areas like West Palm Beach, Fort Lauderdale, Orlando, Tampa, Bonita Springs and Miami. Because of this, it is important to keep in mind what Lenders are requiring in their lending guidelines concerning this unique property type.

One major issue that comes up with Condo Hotels is the rental pool. Part of the allure of the property is the ability to allow the hotel to rent the room out to guests while it is not being used by the owner.

Unfortunately, Lenders require that the rental pool be voluntary. Involuntary rental pools are to be classified as Timeshares.

What this means is that when the owner of the Condotel unit wants to rent out their unit, they must make sure they put the unit into the rental pool... it isn't automatically rented without their say so.

Considering issues like seasonality, major local events, and discount room rates/sales, there is no valid way to forecast the actual income that will be shared by the hotel and the room owner.

An owner that does not want to rent their Condo Hotel room at all has that option under a voluntary rental pool. While this might bother some hotel operations that want the room to rent, this is the only way that financing can be obtained.

The voluntary rental pool also affects the potential net income. A buyer cannot be promised $10,000 a year return on a property if they are only going to make it available for 6 months out of the years or only on weekdays.

Realtors (listing agents) and Developers are therefore strictly prohibited from advertising rates of return, cap rates or even offering investment advice concerning Condotels. Any potential rate of return could only be hypothetically based on an assumed usage rate that may never be reached.

Because of this, any rental income will not be counted as part of the qualification income for the Condo Hotel Loan. To the borrower, this means that their debt to income ratios will not benefit from any potential cash flows from the property.

Given this information, it is prudent that Realtors and Mortgage Brokers advise their clients who are interested in purchasing Condo Hotel properties that they will need to be able to qualify for this purchase on its own with all their other current debt.

If they are unable to meet the Lenders' Debt to Income Ratios with their current debts and current primary residence, then they will likely not qualify for a Condo Hotel Loan.

Technorati Tags: condotel, condo hotel, mortgage broker, loan, real estate, mortgage, florida, palm beach county, palm beach loan, south beach, pompano beach, miami, fort lauderdale, boca raton, boynton beach

Monday, July 30, 2007

Florida Mortgage | Fixed Rate or ARM ~ the decision depends on YOU

Fixed Rate Mortgages (FRM) versus Adjustable Rate Mortgages (ARMs) is a hot topic of debate right now. There is a camp of Fixed Rate evangelists that want to force-convert all mortgagors into their fold... all-the-while the ARM holders are scared by the news of impending doom sung from the rafters by Journalists and FRM propaganda.

So now YOU want to buy a house or refinance your loan and you're getting drawn and quartered by your "trusted advisors" about whether you should get a Fixed Rate Mortgage or an Adjustable Rate Mortgage (ARM).

Different people swear by different financial philosophies... the problem is they are DIFFERENT FROM YOU. The only person that knows your financial situation is YOU. The only other person who can help you decide which loan program fits you best is your Mortgage Broker.

Your Mortgage Broker will understand the nuances of your unique financial situation and will help you decide on a loan program based on your needs and preferences TODAY as well as help you plan for the future.

The information you give to your Mortgage Broker will all filter down through his/her consultative funnel and allow them to offer you two to three loan programs to choose from as well as the features and benefits of each program for you.

There are several criteria that are weighed to make the decision. A few of them are as follows:

Your life stage
Your career stage
Your income and future potential
Your family stage
Your stability
Your property needs

A good way to show how the decision process works is via the table below.

	Fresh out of college Just got first great job Family recommends buying not renting Single 600sq ft - 1br - Condo Down Payment Assistance from Parents
Fixed Rate Mortgage Secure - Rate is good for 30yrs Higher Payment Building Equity Assurances beyond period of time borrower will need	Adjustable Rate Mortgage Likely won't be in small condo long New job = money is tight Interest Only option helps reduce Monthly expenses No real need to "build" Equity Low cost of property means low appreciation Really this is just a step above renting
	3 years later Promotion at work Engaged - two incomes Need more space 1000 sq - 3br - Townhouse
Fixed Rate Mortgage Secure - Rate is good for 30yrs Higher Payment Building Equity Assurances beyond period of time borrower will need	Adjustable Rate Mortgage Double Income but increase in expenses Nice but small profit on other property Further from work means cost of commute Interest Only option frees up monies to repay fiance's student loans Interest Only frees up monies to pay off credit cards
	Married Husband gets promotion New Baby Refinance for Renovation of Nursery
Fixed Rate Mortgage Secure - Rate is good for 30yrs Higher Payment Building Equity Assurances beyond period of time borrower will need	Adjustable Rate Mortgage More babies in the future Space is already tight Cash is tighter Cash out with Interest Only Exit Strategy - 2 yrs Max
	Dad now Middle Management Second child First child in private school New Dog - Need a Yard Need a 5 bedroom
Fixed Rate Mortgage Secure - Rate is good for 30yrs Longer period in Home "Family Home" Salary plus investments makes comfort 30yr Hybrid with 10yrs Interest Only	Adjustable Rate Mortgage Expenses are manageable 10 year timeline unsure (max ARM length) Interest Only nice option
	Son headed away to College Daughter in Private School Mom going back to work Refinance to renovate home office Some of Cash Out used to buy 4-plex on campus for son and friends
Fixed Rate Mortgage 10yr Interest Only expires soon Double Income Investments Up Salary plus investments makes comfort 30yr Hybrid with 10yrs Interest Only Primary Residence	Adjustable Rate Mortgage Expenses are manageable 10 year timeline unsure (max ARM length) Interest Only nice option 4-plex purchased with Cash Flow ARM... increased monthly returns Investment
	Both Kids in college / Empty Nest Mom's career is taking off Dad has promotion Buying Vacation home in South Florida Buying Investment Property as well
Fixed Rate Mortgage Secure - Rate is good for 30yrs Appreciation = good equity position Investments well stocked Not sure if/when full time move to Florida Cash out of this property to buy 2nd Home another 30yr w/10 IO? - could go either way Primary Residence	Adjustable Rate Mortgage Likely won't be in House for 10 years Wintering in South Florida is great! Many friends already full time Florida residents 4plex in 1031 for 20plex Retail Strip Center Purchased where Mom's office resides 20plex bought with OptionARM Strip Center 5/1 ARM Investments
	Retirement Full time residents in Boca Raton Living on investments Sold home Up East Enjoying grandkids' visits
Fixed Rate Mortgage Timeline unknown on Primary Using monies from sale of other home to add on to retirement funds Great Ranch House in Gated Community Ability to travel Can always refinance if need for equity HELOC in place for emergencies Another 30yr Fixed with 10yr Interest Only Primary Residence	Adjustable Rate Mortgage Investment Properties 1031 Exchanged for more Properties Large Portfolio of investment properties growing Future Cash Out Refis fund purchases Cash flow establishing further income for retirement Investments restructured into LLCs to put in trust for kids/grandkids Investments

___________________________________________________

As you can see, the borrowers' unique needs changed throughout the different lifecycles that they experienced. From just starting out in a job to getting engaged and needing to pay down accumulated debt to having kids that eventually went off to school to retirement...

Even investing in rental properties posed a dilemma about which way to go - Fixed Rate or ARM.

The consensus wants to say that since there are so many Winner icons in the Fixed Rate column, that it is obviously the winner by majority rules. The problem with that philosophy is that in any case shown above, if the timeline varied just slightly, the ARM might have come back in favor.

If an ARM had been chosen over a Fixed Rate Mortgage then the timeline had run longer than expected then Mr and Mrs. Borrower would have had to refinance ahead of schedule. Although, this isn't the worst problem they could have - it could speed up their timetable for investing in other properties or other investment vehicles.

The truth is that it is hard to predict change. The best that can be done for these borrowers is to sit down and consult on:

Where they are
Where they are going
What is their entry strategy for the property
What is their exit strategy

The best mortgage vehicle is whichever plan that will give them some security to make sure that their personal and financial lives are not burdened - but instead enhanced by their Mortgage.

When this occurs, their mortgage actually becomes a tool for their:

wealth accumulation
debt elimination
college planning
Investment strategy
future retirement incomes

The choice between the Fixed Rate Mortgage and the Adjustable Rate Mortgage is ultimately up to the borrower. The Mortgage Broker can only advise... but a good mortgage broker can show that there are definite advantages to both programs for all borrowers.

More Florida Mortgage and Real Estate News You Can Use From David A. Podgursky, MBA The Mortgage Go To Guy!! Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida

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Sunday, July 29, 2007

Florida Mortgage | Land Surveying Primer ~ Why you should order a survey every time!

ARE YOU BUYING A HOME OR AN ENCROACHMENT??

A Land Surveying Primer

Ok... I am a little biased right now. I grew up in a Real Estate Industry Family...specifically my parents own a Land Surveying Company.

I remember at 11-12 years old going in and doing tax book research and answering phones...yes I was a master of microfiche then!
I remember at 14-15 going to the courthouse and looking up deeds and plat maps.
I remember at 16-17 following the field crew around and watching and helping them spot houses
I remember at 17-18 after drafting and architecture classes at High School drawing the mortgage inspections (the simpler ones)...

I remember driving out and doing Mortgage Inspections... spotting boundaries, driveways, decks... anything that may have been added either after construction or since the last sale.

Why am I relating this to you??

Because... the mortgage industry has become cheap!

Everyone is worried about closing costs and interior inspections... but who is making sure that you are not buying a property with an encroachment?

Who is making sure that you're buying a home without a huge easement?

No one!!!

Why?? Because lenders are not requiring mortgage inspections... much less full surveys, or pins.

Mortgage Inspections are rudimentary checks of the house to make sure that whoever built on the land colored within the lines.
Surveys actually find benchmarks, setbacks, landmarks, centerlines and easements and detail them on paper...they are of legal record if recorded.
A Staked Survey is when the crew marks the corners with wooden stakes or flags. They are temporary but are important for construction.
Pins is when the surveying crew does a survey and then puts iron rods, usually capped with an orange plastic cap with the surveyor's initials and license number. These are "permanent".
Plat... the drawing to the left is a "plat map" ... it shows all the dimensions and directions of a property including where the house sits. Note the dotted lines, those are set backs. Transits, GPS and Triangulation are used to find these dimensions and their latitudes and longitudes.

The biggest issue that arises from not ordering at least a mortgage inspection is border disputes!

What a survey or mortgage inspection helps to prove is whether your neighbor has a deck or driveway on your property and whether the area you wish to expand upon is buildable land!

If you purchase a piece of property and the neighbor has his driveway over the lot line, you can request that he move it.

If he cannot, you have to do a "sell-off" of that portion of the land to the neighbor - which leaves you with an irregular lot and some deed restrictions will not allow you to have a smaller lot than you already have ... this requires rezoning!

You can also create an easement... a legal pass-through allowing your neighbor to use that part of your property. The easement will be written for a number of years and for one specific use.

My community is Zero-Lot-Line... because of this, the Eastern boundary of my lot abuts my neighbor's house. Well... the roof line hangs over my lot so there is a legal "Overhang Easement" drawn onto my property allowing the neighbor to have his roof and a satellite dish overhanging but not attached to my property.

An easement can also be created to provide access to a lot behind another parcel that has no direct road access... and the driveway created would be the responsibility of the property owner to maintain not the person behind them.

Easements can also be for Utilities, Sewers, Phone, Roadways, access, etc...

Because of the complicated nature of land - raw or unimproved - it is up to us - the Real Estate professionals - to encourage the use of Land Surveying techniques. It is up to us to step forward and head off the purchase of land without an inspection of the parcel because then we can ensure a smoother transaction and a peaceful existence for our clients on their properties for the entire term of ownership.

More Real Estate News You Can Use from
David A. Podgursky, MBA
The Mortgage Go To Guy!
Your Source for Residential and Commercial Mortgage Loans in Florida

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Friday, July 20, 2007

Florida Mortgage | Foreign National Homebuyers: How to get your Loan Started!

Florida is a HOT market for Foreign National's to purchase both Second Homes and Investment Properties. This is a great time and a great market for their purchases. With the weak dollar and the strong Euro and British Sterling, European investment in Florida is at an all time high!

A Foreign National Loan is a very simple process if you have your documentation in place. Here is a great checklist to use when you want to get the ball rolling on that process.

Documents needed for a Foreign National Loan Program:

1) Three Personal Reference Letters from Country of Origin. Letter must be from a lending institution and include the following:

Credit was extended to the Borrower
Borrower is in Good Standing
High Balance
Current Balance
Payment Amount
Payment History

2) Two Months' Bank Statements from a US Based Bank.

3) Employment Verification Must Include the Following:

Must be on company letterhead from Country of Origin.
Must state Income for for prior 2 years and current income.
Length of Employment
Position of Borrower
Type of Business

For Self Employed Borrowers, please include:

Percentage of Ownership in company
Address of business for the past 2 years.

4) Copy of Visa (if applicable)

5) Copy of Passport

All letters must be translated into English by a certified translator.

For more information about Foreign National Loans, please check the following links:

More Florida Mortgage and Real Estate News You Can Use From
David A. Podgursky, MBA
The Mortgage Go To Guy
Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida

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Thursday, July 19, 2007

Florida Mortgage | Foreign National Homebuyers - Visa Waiver Program

When applying for a Foreign National Loan in the United States, a Foreign National Borrower must provide a copy of a valid passport and Visitor Visa for the lender to verify the eligibility of the borrower.

The Visa Waiver Program is available to residents of certain countries to come to the United States and stay for a period of no longer than 90 days without obtaining a visa. These Foreign Nationals can come for either Tourism or Business reasons... Business or Pleasure.

Currently there are twenty seven (27) countries who qualify for the Visa Waiver Program. They are:

Andorra	Iceland	Norway
Australia	Ireland	Portugal
Austria	Italy	San Marino
Belgium	Japan	Singapore
Brunei	Liechtenstein	Slovenia
Denmark	Luxembourg	Spain
Finland	Monaco	Sweden
France	the Netherlands	Switzerland
Germany	New Zealand	United Kingdom

In order for a Foreign National that qualifies for the Visa Waiver Program to obtain a Mortgage on a Second Home or Investment Real Estate, the Foreign National Borrower will need to obtain a letter certifying their Visa Waiver Program status from the nearest US Embassy or Consulate.

Foreign Nationals using the Visa Waiver Program as opposed to obtaining a full Visitor Visa will likely have trouble qualifying for a property as a primary residence, therefore only a Second Home or Investment Property mortgage program will work for these borrowers.

For more information on the Visa Waiver Program choose one of the links below:

Department of Homeland Security Customs & Border Protection website.
Visa Waiver Program Traveler Guide

Technorati Tags: foreign national, loan, real estate, visa, mortgage, florida, palm beach, financing, second home, investment property

Monday, July 16, 2007

Florida Mortgage Loans | Equity Line for Hurricane Preparedness

Hurricane Season is upon us once again in South Florida. People are checking their rations, stocking up on bottles of water, vital medicines and cans of tuna, buying batteries by the case and trying to meet the Hurricane VIP - the neighborhood roofer! All the while they are forgetting to have ready CASH in an emergency - cash that could come from a Home Equity Line of Credit (aka HELOC).

The HELOC is a life preserver when there is a sea of people out there all clamoring to get their home repairs done. Having ready access to cash is essential to quick repairs. Many contractors will be very busy and turn away business if they have to offer financing.

When a homeowner does not have cash available, we see the all-too-familiar blue tarps for months until finances catch up to repair costs...

...and when there are major repairs to do, it may be hard to get financing! A lender may not write a loan on a property in need of hurricane repairs

A Home Equity Line can solve this issue which is why I recommend one to all of my clients.

Advantages of having a Home Equity Line

Low Cost

There are typically two options, the Low Cost Home Equity Line and the No Cost Home Equity Line. Both have their advantages but neither will have anywhere near the closing costs associated with a Conventional Mortgage

Interest Only

The payment is low because it is an Interest Only payment. This helps the borrower afford the payments when cash is tight.

Easy access to funds

A HELOC will have a checkbook associated with it and often even a credit card. These checks and cards draw money from the line rather than a checking account. This gives the borrower 24/7 access to their money.

Tax deductible

The repairs are always deductible when a state of emergency is issued. The IRS has a box to insert the repair costs due to a Hurricane. The interest paid may qualify for mortgage interest deduction as it is technically being used for home improvement. Consult with your tax professional to make sure.

Easy Processing

Typically the Home Equity Line is an easier program to process with less time needed.

Loan Amount

The HELOC can go as high as 95% Loan to Value in many cases. I prefer to see a 90% Loan to Value which leaves some equity in the home to pay for expenses in the case that the borrower needs to sell the property in the next few years.

You can evacuate

FEMA guidelines are pretty strict. If you were able to evacuate and did not stay in the home or a FEMA shelter, then you will likely be denied assistance.

Caveats to Home Equity Lines!

No discussion of mortgages could be complete without the pitfalls!

The HELOC payment will be in addition to the current mortgage payment on the property so you will need to qualify for the combined payment.
Using up too much your Home Equity can flip you upside down should the market drop.
Almost all HELOC's have some sort of prepayment penalty. It is usually small but there nonetheless.
Home Equity Lines are Prime-Based Loans. That means that the interest rate on the loan will be determined by what the Prime Rate is at the time. Prime is currently 8.25%. There are teaser rates offered by many banks but make sure to read the fine print!
HELOCs are Adjustable Rate Mortgages and will adjust as Prime Adjusts. There are loans that are fixed as well. You should ask about fixing the rate as an option if possible.
HELOCs are not ATMs. The money should be used for home improvement or debt consolidation and should be budgetted carefully.

Don't wait until it is too late. Consult with your Florida Mortgage Professional today to talk about your options before the storm is in the box!

Tuesday, July 10, 2007

Florida Mortgage | Foreign National Homebuyers - "Dollar weakens on Subprime Woes" is good news for you!

Today my Google Alerts popped up with a story from DowJones' MarketWatch.

Euro at high vs. dollar amid subprime worries

This is great news for Foreign National Buyers in the US.

"The euro was up 0.7% at $1.3717. The dollar was down 0.9% against the yen at 122.12 yen. The British pound was up 0.5% at $2.0255."

As the US Dollar weakens, Foreign Investors and Foreign Nationals looking to buy investment and/or vacation homes in Florida will find that the conversion rate will be that much more favorable. In terms of where the dollar should be, this presents foreign buyers with veritable bargains in this market.

While the US economy remains shaky under the pressure of the subprime mortgage woes, big stocks like Home Depot are suffering. The confidence in the current administration coupled with these economic problems and the Fed's current stance on controlling inflation are all fueling this continued market upswing in favor of Foreign Nationals.

While interest rates are low, Foreign Nationals are finding it easier than ever to purchase properties in Florida that will allow them to cash flow as well as capitalize on long term asset appreciation.

It is not often that both assets - Cash and Property - can appreciate simultaneously. For US Buyers, Inflation aka Time Value of Money assures there is no such thing as Return on Equity - but Foreign Investors can overcome this over time when the dollar recovers.

While the Florida Real Estate market remains at its current state of high inventory and low prices, bargains do exist. The resurgence of Foreign Investment should pick up some of the slack in the market and help the market rebound from the past two brutal years. In the meantime, Foreign buyers will surely benefit from the market rebound that they will help kick start.