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6 Reasons to Buy a Home

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Homebuying 2018

6 reasons to buy a home

 

Given that the past 10 years, since the recession, we’ve been accustomed to a strong demand for housing with historically low rates, one can’t help but question home values and interest rates now that we’ve entered a Seller’s Market.  Here are 6 reasons Homebuying still makes sense, especially for Millennials.

1) Lending guidelines have changed since 2008, creating a stable housing market (lengthy, but stay with me)

The main reason we had a housing bubble was because banks, in the years leading up to 2008, allowed consumers to borrower more than they could realistically afford and on loan terms considered today as predatory lending.  The class of home loans issued to these consumers were sub-prime mortgage loans.  This 4-mintue video by history.com helps explain.  These loans allowed borrowers with poor credit, and nearly no down payment, to borrower loans by stating their income on the application and not being required to support it with documentation.

Fast forward to 2018, lending rules have changed to prevent these kinds of loans and practices ever happening again.  You must show the ability-to-repay your mortgage loan to a bank where the Loan Officer and Underwriter assess your loan approval.  Basically, the sub-prime days are over so that people can realistically afford their homes.  See my recent post on Self-Employed Income and ways to qualify showing the ability-to-repay.

It’s important to note that home valuation practices have also been revised to ensure prices are not over inflated due to under-the-table handshakes and side deals.  Appraisers were hit heavily with regulations to ensure home values are represented with integrity based on local market trends and sales data.  Buying a home today and selling it tomorrow for 50% – 100% markup is behind us.  You only see this now with homes that have undergone extensive remodeling or upgrading, and it’s considered an acceptable practice because the market demands a modern home.

2) Build Equity, Growing your Money

This is probably my favorite reason to own a home because I’ve used my home’s equity to pay off debt and start a business.  Equity is the additional value something gains after it’s purchased.  Stock in a company builds and gains equity.  Your home is similar.  Waiting to buy means you lose the compound effect of your equity gain.  You can see your cost of waiting by scrolling the page in the link.  Be sure to complete the form.

While there are many uses for equity from your home, it’s a good idea to leverage that equity for the future.  Please do not use your equity to buy a boat or an RV (unless selling your home to travel the country).  Think of your equity as an aspect of your financial planning.  You do not want to rely solely on your home’s equity, but it makes for a chuck of your potential savings or retirement in the future.

3) Don’t pay taxes on your equity gains

When you own a home as your primary residence and turn around to sell it later, you do not pay taxes on the equity gains from the sale up to $250,000 if filing single or $500,000 if filing a joint return – IRS Site.  For this to work, the home must have been your primary residence and not have converted into a rental property.

4) Fix your monthly expenses

When you purchase a home with a fixed-rate mortgage, you lock your monthly principle and interest payments for a specified term of 15 or 30 years.  Property taxes and homeowner’s insurance may fluctuate, but the bulk of your housing payment is fixed.  Imagine when you want to renew your lease and the landlord charges an additional $200 to renew.  Over several years, that increase adds up and will eventually force you to move, beginning the cycle all over again of moving.

Moving is a silent expense that you don’t realize until it’s too late.  I’ve seen someone’s hard earned savings, that adds up to be a down payment on a home, get depleted when moving from one rental to another.  Request a Rent vs Buy review by scrolling the page in the link.  Be sure to complete the form.

5) Convert your home for cash flow

One objection I’ve heard a lot of lately is uncertainty about where someone wants to live.  This may be because of lifestyle or employment opportunities.  If you have a relatively stable income and don’t plan on moving for 3 years or so, buy a home.  You will thank me later because you will have the option of selling it and taking that equity or converting the home into a rental property.

The demand for housing (rentals and purchases) is only getting stronger.  You can have someone else pay the mortgage every month while you realize the equity gains.  It’s like someone buying you stock every month in your home.  See the chart below: Household Growth and Housing Completions.

6) A place to call home

Financial benefits aside, owning a home gives a sense of pride and fulfillment for our families.  Watching our children grow up in a neighborhood and making friends or meeting new people and becoming active in a community are just some of the things that come with owning a home.  Last year I helped run a charity picnic with a cornhole tournament.  My family and I got to meet some great people and we supported a great cause.  It was fun creating memories in the community we call home.

Conclusion

Owning a home is a responsibility and should be taken seriously.  The reasons to buy a home in today’s market give consumers financial opportunities for the future.  If you’re on the fence about buying a home, it’s worth a call to explore what it means for you.  A good lender will give you all the options around the idea and help you decide if it’s a good fit.

 

Chris Gonzalez
(480) 442-4494
info@azmortgageprofessional.com
www.azmortgageprofessional.com

Facebook: Chris Gonzalez – Your Neighborhood Lender

 

 



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Notice Higher Rates?

Rates, Home Loan

Interest Rate Shopping
4 things you should know

Mortgage interest rates have gone up since last year and many people are wondering where to get the best deals. We’ve been accustomed to rates in the high 3’s and low 4’s for 10 years. It’s no wonder people are shopping everywhere for the best deal.

This list is not going to be a technical summary of the market. Instead, it will serve as a guide for understanding what you should expect and ask for when shopping for a mortgage lender.

1) Interest rates constantly change

Have you ever watched the stock market? It fluctuates daily by the hour and by the minute. People trade on these fluctuations and the new data entering the markets about consumer habits, government legislation, and many other factors that influence how the market performs.

The same is true for mortgage backed securities which determine interest rates on home loans. A company can quote a rate today, but tomorrow it may change. Don’t settle or focus on the rate quoted as your interest rate when shopping for a home. That rate is not “locked” until you go under contract to buy a home and complete a loan application.

Ask for a loan estimate (LE) and pay attention to the “rate lock” box detailing the expiration date for those terms. Be aware of bait and switch.

2) Pay attention to the lender fees

Clients sometimes shop around and hear a company offering a better deal on the interest rate. When we review the lender fees, almost always do we find the lender charging more for origination than we do. The lender is charging additional points or higher fees to give the client a lower rate to earn the business. You can put lipstick on a pig, but it’s still a pig.

3) Not every pre-qualification letter is equal

It’s a misconception to think your pre-qualification letter for a home loan will be good with another lender. Behind the scenes, lenders can have overlays, or their process can be detrimental to your qualifying circumstances.

It’s important that the loan officer handling your file understands the ins and outs of your pre-qualification. Before you commit to a switch, the lender should have all your qualifying documents in hand and reviewed your documents for a pre-qualification.

Be transparent about your goals and situation. Otherwise, you can run into problems prior to closing and potentially waste your time and money.

4) Choose your lender prior to finding a home

I’ve been on the receiving end of a client switching lenders in the middle of a transaction under contract. A purchase contract has a strict deadline for the buyer to perform on the sale of the home. The lender is tasked with closing and getting the funds to title on time, no exceptions.

A switch in the middle of the process can be very stressful to all parties involved including the Realtors and Sellers. Thankfully, we’ve followed through and gotten things done. But not having confidence in your lender could cost you the house you expected to spend your life in with your family.

Conclusion

It’s a lot of work to pre-qualify someone for a home loan. There are many moving pieces and organizing them is like getting all 3 of my kids to eat their vegetables at dinner with the result being they get a treat at the end. It’s exciting when it’s time to buy a house but, there is work involved on both ends.

These are just some things you should know when shopping for interest rates. Interview your prospective loan officer and find out who will work with you and take your best interest at heart as their own. That’s where the real value is in working with a mortgage company.

Need more information?  Send me a message below

Contact

 

Chris Gonzalez
(480) 442-4494
info@azmortgageprofessional.com
www.azmortgageprofessional.com

Facebook: Chris Gonzalez – Your Neighborhood Lender



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Sponsoring Local Events – My Story

Local Business Owner?  Looking for Sponsorship Opportunities?

Here is my story co-sponsoring last year’s Charity Cornhole Tournament

All Western Mortgage and I are once again proud to be sponsors in the annual Charity Picnic that follows the Daisy Mountain Veteran’s parade in Anthem, AZ.  Last year, I was privileged to both sponsor and announce the tournament play during the picnic.

The Story

2018 Daisy Mountain Veterans Parade Committee

For the past 5 years, Anthem Young Professionals (AYP) has hosted a charity picnic event to raise money and awareness for a charitable cause in the community.  Every year, it’s been a cornhole tournament with 2018 no exception.  This year, AYP is sponsoring Youth 4 Troops and collaborating with Daisy Mountain Veterans to help a Veteran in need.  Follow the links to learn more about each organization.  Both are non-profit 501(c)3 organizations.

Youth 4 Troops  Daisy Mountain Veterans

This year, as a member of AYP, I will be announcing the tournament and Chairing the event itself.  It’s a lot of work juggling my own work and this event, but I’m excited for this opportunity.  Here are the highlights from last year and what to expect this year.

2017 Highlights

Team All Western Mortgage 2017

Last November the weather was warm but not triple digit warm.  Fortunately, we had all the elements of keeping as cool as we could with sunny skies covered by clouds and a light breeze.  Everyone stayed well hydrated and enjoyed themselves.

During the parade, there were unique floats with the highlight being a war bird flyover.  Later, a B-52 flew over several times.

There were 44 teams and 18 sponsors of the charity picnic after the parade.  In all over 500 people attended the picnic and watched the tournament play on.  Live music, beverages, great food from local restaurants, and bounce houses added to the atmosphere.  Businesses from all over Anthem and North Phoenix participated for the title “Champion” in 2017.  It was a nail biter to the end and everyone was proud to participate.

The best part of the event was the band playing the National Anthem with an electric guitar when the finals commenced.  Everyone stood silent and sang along.  It was moving to say the least.

2018 Goals & Plans – Steppin’ it up!

My co-workers supporting the event last year. And my kids hanging out.

This year we expect both the parade and cornhole tournament to double in attendance all while setting the bar high for raising money for the charities.  This year our goal is to raise $10,000.  That means double the players and double the sponsors.

The parade will feature a fly over from Luke Air Force base, eye catching parade floats, and a Mardi Gras-style candy and prize toss to the crowd.

Enhancements to the sponsorships for the charity picnic and cornhole tournament were made to help create a stadium-like atmosphere for game play.  We are working on a hot-air balloon, will host food trucks serving food for purchase, and will have a video game trailer for the older kids at no cost.  Bounce houses will also be available for the kids.

The goal is to continue the fan fair of the parade into an “after-party” family environment so we can continue honoring the Veteran community and raise money for causes around Veterans and their families.

Want to Play and/or Sponsor?

We want you to play and sponsor in this year’s tournament!  You will be supporting a great cause and helping the local Veteran and Armed Forces community.  You can visit aypaz.com/events to register your team or become a sponsor.

The Parade and tournament will be November 3rd, with the parade beginning at 10am and the Tournament kicking off at 11:30am.  Registration for teams is required in advance and will include lunch.  Prizes will be announced at a later date.

I know Youth 4 Troops and Daisy Mountain Veterans would love to see your there.  The venue is a great fellowship and networking event.  I had a blast getting to know everyone and growing my presence in the community.

 

For sponsorship information, call or email Chris at info@azmortgageprofessional.com or 480-442-4494.

Visit Anthem Young Professionals to sign up to be a sponsor or play in the tournament.

To be a sponsor in the Daisy Mountain Veterans Parade, visit their siteClick Here

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www.azmortgageprofessional.com



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Becoming a Loan Officer

Family

Why I went into Mortgage Lending

The Idea

If my kids grow up saying they want to be a Loan Officer, it wouldn’t surprise me.  But if I told my parents that growing up, they would have said, “get a real job”.  Truth is, it’s definitely a real job in today’s market.  The days of predatory lending are behind us since regulations caught up with much of the shenanigans.  Loan Officers must be innovative in their businesses.  An entrepreneur mindset is required because there is no handbook for how to do this job.  But, it offers the potential for a great income and exceptional lifestyle to support my family.

The Decision

I didn’t wake up one day saying I wanted to be a Loan Officer.  It was 2012, and I was fed up with my 8-6 corporate job and the meager salary.  For a lot of people, this is the American Dream, but for me, it felt like a prison.  I was constantly being told what to do and despite my service and sales numbers being exceptional, it was never good enough.  I didn’t feel fulfilled or like I was making any sort of impact that my family could appreciate.  That’s when I had had enough and spoke to a former co-worker about the mortgage business.

Admittedly, I feared the commission only world where truly everything is on you to perform and provide for your family.  I didn’t want to fail and walk away with my tail between my legs.  My wife and I wanted to start a family and we agreed a change in careers then was much better than doing it with kids when she was not working.  It was a tough decision to leave that security of a pay check.  The question that I asked myself, which motivated me to make the move was, “Will I regret this decision in 3 years”?  The answer was a firm yes.

My “yes” answer came with optimism for what my wife and I wanted our future to look like.  We both knew we wanted more freedom from work to raise our family.  This meant having the ability to work my own hours, take time off when needed for school functions, doctor appointments, and vacations without having to get “approval” from anyone.  It also meant choosing who I wanted to work with and how I could generate new business.

The Results

Working in the mortgage industry is having a business within a business.  Some companies allow you to be autonomous while others stick to a strict routine.  What I soon learned was I worked twice the hours and sometimes went without a paycheck for up to 3 months.  That was tough.  But, it was worth it looking back.  Growth is never easy.

Fast forward to 2018, and I am happily still in the mortgage business working as a loan officer.  I’ve developed some close friendships and grown a lot closer to my faith in God and my wife.  It honestly couldn’t have been done without prayer and support during the tough times.  We sold our house, early on, to keep our ambitions alive.

My daughter is almost 5 years old now and this year was this first time I experienced what it was like to say, “I need to leave early because my Daughter is picking pumpkins at school”.  It was surreal in that moment to remember why I made the decision to get into this business.  Ultimately, I can only hope my family and kids realize why I do what I do.  It’s for them.

Chris Gonzalez
(480) 442-4494
info@azmortgageprofessional.com
www.azmortgageprofessional.com

Facebook: Chris Gonzalez – Your Neighborhood Lender

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