Importance of Mortgage Planning

Real estate industry last year! Current turmoil in financial markets, particularly real estate and home buying process to the mortgage market and bought several questions about the origination of the loan. Instead of repeating everything we hear on the news for trying to place blame for the current environment, I share my thoughts and how it has changed me want to loan origination business.

There are always questions to be prepared when things go wrong is going en masse. I "The Internet boom and bust" a Wall Street trading boutique outside New York City as a stock broker during the saw. Then, the "investors" were quitting their jobs, their two homes in three days time the stock market to trade pledge. That can go wrong? A morning and afternoon to buy a stock at 20% -30% or even more to be sold! It was really crazy. All for a public company was not just an "Internet strategy was announced and the stock 100%, 200% or even days increased 300%. Not months or years to the day.

For example, I remember a million books I owned it, yes I was drunk in the hype as well. $ 3 range and a $ 40 range business books a million in business within months. Not long after it was back to $ 1 range, 75% lower than where it is pre-Internet business. But hey, at least they are still around, right? There are not hundreds of companies from that era. I words can not express enthusiasm during this time. Ring a bell?

What should we learned?

First and foremost we plan and learned the importance of dealing with a professional planner should have. Whether it is financial planning, mortgage planning, estate planning or tax planning or other professional service to clients who sees the overall situation and the professional planners include specific recommendations or products that customers with overall financial objectives correlate is grappling with is always the best way and always cheaper in the long run.

Cost, time required

It is my experience that's worth the time and need the top three reasons people planning the route is not known. They think that the service (they did not agree) are expensive, they believe that they do not have time or they think they do not have particular service provided. I a wide range of clients why mortgage planning is extremely important to use some real life examples would. So, the next few issues of my newsletter that I have or plan the route does not go away with what they thought was the real-life examples will give the cheapest, was better or easier way.

Down payment, to put down or not put down

In April 2006, I have a potential customer that their purchase of northern Virginia, where the loan through the 1 / 3 of the way and had contacted me because he was a better rate to come in contact with. I speak with him some time and the information we need to get together after spending time getting laid. My oldest son, Bennie, a man with a planned night out to see Washington Wizards play the pre-game and told him that I can stop. This particular transaction was buying a condo for $ 435,000 and put 20% down at $ 2,100 was paid to keep.

I recommend:

An interest only option with a $ 348,000 6.875% and a total payment of $ 87,000 to $ 2,646 a month before other mortgages. I recommended it to put my financial planning partner with the $ 87,000 income and 0% vs 8-10% deposit on the house. Now, the payment is $ 500 per month for what he wanted to spend but it is more than the strength within and also I have to say that my rate was higher, no money down because of what He was quoted on down to 20%. With my recommendation is to collect out of his $ 110,466.91 mortgage and $ 2,000 per year will receive additional tax savings. Needless to say, he had nothing against the proposal so far, he thought of the process, a switch to another lender.

Fast forward 12 months:

We talk again after the April and he wants to refinance. I get all the numbers in Northern Virginia to call my appraiser will appraise the property for only $ 350,000% 2B / -. Wow. So we see in this particular instance, he paid down and profits of $ 110,466.91 and additional tax savings lost $ 4,000. Only known fact is that it take years to recoup the down payment that was lost will.

Now, what position would have been better? 100% mortgages will be the best thing to home. What happens if there is a job loss can not be paid and paid? Who's got skin in the game more? If you are a victim Katina, a California fire victims or victims of a disability or was just a job loss. Would you rather detailed mortgage your house or 20%, 50% or more equity? What in your home or want all your money in your pocket?


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