Yearly Archives: 2018

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Year-End Tax and Mortgage Planning Tips

As 2018 is winding down, it’s a great time to think about your real estate goals for next year. I’ve had a number of conversations recently from past clients and friends who are thinking about buying a home in 2019 and want to make sure their 2018 tax returns will show what they need to qualify for a mortgage. Many of these folks are self-employed, and they have some flexibility in shifting income into this tax year versus postponing it until next year. Many of us have various tax write-offs that we can choose to take to lower the taxable income shown on our returns.

 

While not everyone has this flexibility, if you are self-employed or have some ability to adjust deductions and taxable income from one year to another, it’s a great opportunity to have this discussion. Because mortgage lenders want to see borrower’s most recent 2 years of complete income tax returns when they review an application, it can make the difference between getting approved for the home you want or not. (I am not a licensed CPA, so our discussion will be general and I will recommend you also consult with your tax advisor.)

 

Planning ahead can also give you the opportunity to review your credit and make sure there are no surprises on the report. If anything unexpected shows up, it’ll allow more time to dispute and correct any errors and make sure your credit profile and scores are as clean and high as possible. This will ensure that you’re eligible for the best interest rates.

 

Conforming Loan Limits Rising

 

We just received some good news from the Federal Housing Finance Agency that the conventional conforming loan limits are going up again in 2019. Starting in January, the maximum conforming loan limit for a single family home will rise from $453,100 to $484,350! Duplex, triplex and fourplex loan limits are even higher. This will help accommodate the higher real estate prices in the Central Texas area, under the better rates and terms offered on conventional conforming loan products.

 

Mortgage rates and home prices continue to rise here in Central Texas, so if you have been thinking about buying real estate, the sooner you do so, the cheaper it will likely be. I’d be happy to have a free, no-obligation conversation with you and help you position yourself for buying a home and getting great financing.

 

With over 25 years in this industry, I’ve helped thousands of families successfully purchase and finance homes, and I’d love to be a valuable resource to you as well. Please let me know how I can help you or someone you know and care about with trusted mortgage advice and assistance.

 

Thanks!
Michael
(Image courtesy of www.401Kcalculator.org)

What’s Going On With Interest Rates?

If you’ve been following real estate or mortgage news lately, you’ve likely seen that mortgage rates are up to their highest level in the last 8 years and are now approaching 5% for 30 year fixed rate loans. What’s going on? What is causing the rapid rise in long term fixed mortgage rates that we’ve seen consistently in 2018, and what is the outlook for the future?

 

Although there are many factors that have contributed to the rise in mortgage rates this year, the short answer is that the largest buyer of mortgage-backed securities (MBS) in the market, the Federal Reserve Bank, has drastically been cutting its purchases. The Fed has massive amounts of MBS’s in their portfolio – approximately $1.75 trillion. In addition, other large purchasers like the European Central Bank recently announced a 50% cut in the amount of MBS’s they will be buying. With these huge institutional buyers stepping back from the purchase market, it means less demand for bonds. Lower demand for bonds causes their price to drop, which then results in the “yield” or the mortgage rate to rise.

 

Because we have experienced such historic lows in the mortgage rates over the past 7-8 years, this has come as a shock to many, but as you can see from the chart above, historically rates are still excellent. If you look at the average 30 year mortgage rates going back over the last 50 years or so, the vast majority of those years rates were well above where we are now. Many homes were bought, sold and financed over these years and families built equity owning real estate. Any time there is a rapid upward movement in rates, there can be “sticker shock” for a while, but this chart helps give some historical perspective.

 

There is continued upward pressure in rates, and some industry experts are predicting that mortgage rates could continue to rise this year and into 2019. With the Central Texas area experiencing strong economic and population growth, real estate prices and values continue to rise. Waiting to buy could cost you more money, both in price and in mortgage rate.

 

Now would be a great time to buy a primary, vacation or rental home. If you or someone you know has been thinking about buying a house but putting it off, please let me know. It may be that waiting to save more money to put down or for another reason could result in paying higher rates and prices in the future. Please give me a call or email and we can discuss personalized options so you can make the best decisions for your family.

Thanks!
Michael

Free Roof Inspection with Certificate

When was the last time you had your roof inspected?

 

Now that our two-week stretch of rain and storms have passed in the Central Texas area, have you thought recently about your roof? When is the last time you either went up there yourself to look at its condition or had a licensed professional roofing inspector give you an assessment?

 

Texas storms can be fierce, often times with hail, torrential rain and damaging wind. If your roof suffers damage from any of these forces of nature, it could lead to water leaks, higher utility bills and costly repairs. It’s important to have your roof checked out periodically to make sure it’s maintained and functioning properly.

 

I’d like to introduce you to my friend Paul Jones, owner of Universal Construction and Roofing. He is a great guy, and really knows what he is doing. He and his company are reputable, capable and honest. He has graciously offered to clients and friends of Everist Mortgage a complimentary roof inspection.

 

Simply contact him (contact details below) and let him know you received this offer and are a client or friend of mine at Everist Mortgage. He will help you set up a convenient day and time when they can come out, get up on your roof and check it out thoroughly. When he is done, he will go over its condition with you and offer any recommendations. He will give you a certificate of inspection for your records.

 

If by chance there is damage from hail or other issues, you may be eligible to file an insurance claim and get your roof replaced, with only the cost of your deductible. Paul is also a licensed insurance adjuster, so he knows how this process works. If your roof needs repairs or replacement, he can work to get your claim covered with minimal cost to you. He has helped many homeowners in the Austin and Central Texas area, and I can highly recommend him.

 

Paul Jones, Owner: 512-966-0439
Email address: paul@universalconstructionroofing.com
Website: http://www.universalconstructionroofing.net/

 

Thanks!
Michael
PS: If you would like a free copy of the inspection checklist, email or call me and I’ll send you one.

What’s a “Reverse” Mortgage?

What’s a “Reverse” Mortgage?

 

I met with a sweet elderly woman recently, whom I’d helped with a mortgage some years ago. She was struggling to make ends meet on her fixed social security and retirement income. Because of life circumstances, she didn’t have much money in her retirement account, and she was unsure how to manage emergencies, deferred maintenance on her home and rising medical bills.  She wanted to find out if she could access the large amount of equity in her home.

 

I analyzed her situation to see how I could help. Because of her low income, she couldn’t qualify for much of a home equity loan, despite having great credit and lots of equity. She is independent, self-sufficient and loves her home and doesn’t want to sell it. Additionally, she loves her neighborhood and location, as she has been there for years.

 

As we talked and I listened to her goals and needs, it became clear that a “traditional” mortgage refinance or home equity loan wasn’t the best fit for her. We began to discuss a different kind of mortgage: A “Reverse Mortgage”.

 

This is an unusual mortgage loan product, but one that can be a good fit for situations such as this. Unlike a traditional “Forward Mortgage” where you borrow money and then make monthly payments to the lender, this loan doesn’t require any monthly mortgage payments, which can really help someone to improve their monthly cash flow. In addition, there are no credit or income qualifications necessary.

 

You have to be at least 62 years old to be eligible for a reverse mortgage, and the product works best if you either own your home free and clear or have a very small mortgage balance. The loan allows you to access equity in your home in a variety of ways: in a lump sum, in a monthly payment to you, via a line of credit, or in some combination of these options. There is no payment required from the borrower – the interest on the loan is accrued, causing the outstanding loan balance to rise over time.

 

As long as the home remains the primary residence of the borrower, there is no repayment required for their entire life. A common misconception is that the bank “owns the house” and takes all the equity. This is not the case. If the borrower dies or moves out of the home, the loan will need to be repaid, and the heirs/family can either sell the home or refinance the loan, allowing them to pay off the balance and keep any remaining equity.

 

There are many moving parts to this unique loan product, but it can be a helpful option for seniors in certain situations. If you have an aging family member or friend who is in this situation and may have questions about how a reverse mortgage works and whether this might be a good option for them, please let me know. I’d be happy to talk with them and give more details and specifics.

 

Thanks in advance for your referrals and recommendations!

100% Financing Idea

I talk to people all the time who want to buy a home in the Austin area. It’s one of the strongest real estate markets in the country, and most people realize the many benefits of owning your own home. However, with mortgage rates and prices rising rapidly, some people think owning a home in Central Texas is becoming out of reach.

 

Many of the people I speak with think they need a lot of money to buy a house..20% or more! Depending on where you want to live, it may not take as much money as you think.

 

If you are willing to live just outside the city limits, there is a great 100% financing program you may not know about. It’s called the “U.S. Department of Agriculture Rural Development Loan” (USDA for short). It’s designed to help prospective homeowners get into a home of their own with very little cash. It offers 100% financing, and you can even roll the closing costs into the loan if the appraisal value allows it. This can be a great way to break in to the real estate market while prices are still relatively affordable.

 

Eligible areas around Austin for this great program include Florence, Liberty Hill, Jonestown/Lago Vista, Bee Cave, Dripping Springs, Driftwood, Hays Country, Cedar Creek, Bastrop, Manor/Elgin and the Hutto/Taylor area. Here is a link to the USDA eligibility map. Simply plug in a proposed address and it will show you if the property is eligible for 100% USDA financing.

 

https://eligibility.sc.egov.usda.gov.

 

This program does have certain parameters, requirements and limitations. For example, for a family of four or less in this area, you can’t make more than approximately $99,000 per year in total household income. There is also home buyer education required as part of the approval process. However, it’s a great option for people wanting to own a home without a big up front investment.

 

If you or someone you know would like to own a home without investing a lot of cash and you’re willing to drive a little further to do so, please let me know. I’d love the opportunity to talk and find out how this (or some of our other low-down payment loan options) might help. There’s no cost or obligation to talk and have me custom-design a path to home ownership for you. I love helping Texans find creative solutions to owning real estate!

Please allow me to introduce you to my friend Paul Fuller

Paul is a friend of mine I’ve known for many years.

He is the owner of Paul’s Lawn and Landscape, and he has graciously offered a special discount service to my Everist Mortgage clients.

 

You may be interested in having some help mowing, edging and weed-trimming your yard. Or, you may have an interest in some landscaping or even an outdoor living area. Paul and his team are excellent and can handle all jobs, small to large.

 

Paul started mowing lawns in his neighborhood at the age of 14, pushing his lawnmower from house to house. Over the last 20 years, he has grown to a company that now has multiple crews, landscape designers, stone masons and full outdoor entertainment area capability.

 

I can highly recommend Paul and his team. They do a great job, are competitively priced, and conduct themselves with high integrity. Feel free to contact them to discuss any lawn maintenance or landscaping needs you may have.

 

Here are two special offers if you mention me and Everist Mortgage:

 

  • With a new mowing service contract, you’ll get the first mow free ($45 value).

 

  • Free 1 hour yard cleanup ($125 value)

 

Here below is Paul’s contact information for more information. I hope this offer is helpful to you!

 

If I can help you or someone you know with trusted mortgage financing advice and counsel, I’d love the opportunity. Now is a great time to buy a home!

Thanks,
Michael

Paul’s Lawn & Landscape, LLC.
512-553-LAWN
www.paulslawnaustin.com

Thank you!

Over the past 25 years that I have been helping people with mortgage financing in Central Texas, I have been blessed beyond measure by the support of wonderful clients and referral sources like you.
I could not continue in this industry without your trust and referrals, and I want to truly thank you.

 

Everist Mortgage has received the coveted Five Star Mortgage Professional Award again this year, making it 7 years total and 5 years consecutively. It is an honor to receive this recognition, and I do not take it for granted.We will be featured in the upcoming June issue of Texas Monthly Magazine.

 

For those that may not be familiar with this award, it is not a paid advertisement – it can’t be bought.
It also can’t be solicited – you must be nominated, and it is based on past customer satisfaction.

 

Out of over 2,075 mortgage originators in the greater Austin/San Antonio area, only 120 were chosen this year. This represents only the top 5.7% of the industry. Five Star is the largest and most widely-published mortgage award program in North America.

 

Five Star obtains a list of recent homebuyers in the area who secured a mortgage.
They contact them and ask them to rank their mortgage provider based on 5 criteria:

 

  1. Customer Service level
  2. Integrity
  3. Communication
  4. Product ad service options
  5. Overall Satisfaction – would you recommend to a friend?

 

Industry peers (Realtors, Title Companies, vendors) are then contacted to offer feedback and ranking of the candidates. Lastly, the candidates’ licensing and regulatory records are reviewed to see if there are any complaints, claims or other concerns.

 

It is a rigorous process, and one that I’m quite proud to have gone through successfully. I and my team couldn’t have done it without you. If you would like more details about the award review process and Five Star criteria, here is a link:

https://www.fivestarprofessional.com/spotlights/20523

 

I am truly grateful and want you to know that I strive to earn your continued trust and referrals to friends, family and coworkers. If you know anyone who plans to purchase or refinance a home, I’d love the opportunity to talk with them and give them Five Star service!

Millennials spend nearly $100,000 on rent by 30

The millennial generation is one of the largest in history, comprised of young, vibrant, creative and passionate men and women. Tech-savvy and often urban-oriented, these millennials tend to choose renting over owning a home for many reasons at this stage of life. However, they may not realize the true cost of this decision over time.

 

According to a just-released study by RentCafe, these young people are spending on average, 45% of their incomes and approximately $93,000 on rent between the ages of 22 and 30! That is a huge sum of money that gives them no long-term benefit.

 

Despite earning more at their age than previous generations, higher rent, student loans and other debts and more discretionary spending hold many of these young people back from owning their own homes. With rents continuing to rise and no equity being built over these years, their hard-earned money is going to pay off their landlord’s mortgage instead of their own.

 

What many young people don’t realize is that they can own a home if they really want to. There are mortgage financing options available that only require 3-5% down payment, and a family member can help with this if needed. The seller of a home can pay some or all of your closing costs and taxes and insurance, again reducing the total cash investment needed to buy. Often, the mortgage payment is the same or less than rent, and you can keep your housing cost somewhat fixed as opposed to rents that can go up every year.

 

With average rents in the Austin/Central Texas area in the $1,400 range and rising 3-5% per year, a renter could own a nice $175K-$180K home with the same monthly payment, and invest as little as $5,250 down payment. If you’re going to spend nearly $100,000 on housing by age 30, wouldn’t you prefer to invest that for yourself, building equity in your own home?

 

I’d love to talk with you or someone you know who is interested in becoming a homeowner.. It’s not as difficult as you may think. I’ve been helping families in Central Texas get great financing for their homes for over 25 years, and we have many low-cost options to offer. I love working with first time homebuyers, and believe home ownership is a great way to build wealth.

What does Trump’s New Tax Plan mean for housing?

What does Trump’s new Tax Reform mean for housing?

On December 22nd, 2017, President Trump signed into law the new Tax Cuts and Jobs Act. There were many changes implemented into the tax code for 2018 and beyond. Wondering how these changes might affect you as a homeowner or soon-to-be homeowner? Although I am not a licensed CPA and this is not intended to be definitive tax advice, here are some highlights:

 

The good news:

  • Tax rates lowered for most people
  1. Single filers:taxable income between $38,700 – $82,500 drop from 25% to a 22% tax rate
  2. Single filers:taxable income between $82,500-$157,500 drop to a 24% tax rate
  3. Married filing jointly:taxable income between $19,050-$77,400 drop from 15% to 12% rate
  4. Married filing jointly:taxable income between $77,400 -$165,000 drop from 25% – 22% rate
  • Standard Deductions nearly doubled
  1. Single filers’ standard deduction goes up from $6,350 to $12,000!
  2. Married filing jointly standard deduction goes up from $12,700 to $24,000!

The bad news:

  1. Personal exemption has now gone away (was approx $4,150/person)
  2. Mortgage interest deductibility has been limited. (Maximum mortgage amount for first and second homes now capped at $750,000 for deductions)
  3. Home equity mortgage interest is no longer deductible
  4. Property tax deductions have been limited. Now the total tax deduction (State, local, sales, property taxes) is capped at $10,000
  5. Unreimbursed employee moving expenses no longer deductible (except active duty military moves)
  6. Miscellaneous deductions eliminated (tax preparation, unreimbursed employee expenses, etc)

 

The net effect of these changes will discourage taxpayers from itemizing, and push more toward the standard deduction. While only about 30% of U.S. taxpayers itemize currently, one of the nice benefits of home ownership has been the ability to write off mortgage interest, property taxes, etc.

 

These deductions often allowed a taxpayer to benefit from itemizing, opening up their ability to write off charitable contributions, medical expenses, etc. The effect of these changes will be to reduce some of the tax benefits of home ownership, essentially making the cost of home ownership more expensive after taxes.

 

While the other tax changes, reduced tax rates and raised exemptions should offset some of these negative aspects, the housing market will undoubtedly feel the effects, especially in higher cost and higher tax areas of the country. Home ownership is still a great investment, and the Central Texas market is still going strong, with rising values. It’s a great time to be a homeowner!

 

Call or email me to discuss your personal situation and how I can best help you with your housing and mortgage goals. I’d love to help you or those you care about in any way I can!

Happy New Year!

Thanks and happy new year!

As we enter into the new year, I and the Everist Mortgage team want to sincerely thank you for your continued support and referrals. Your trust and relationship is the lifeblood of my  business, and I want you to know that I don’t take you for granted. I hope to stay in touch with you this year and beyond and remain a trusted resource to you and those you care about who need mortgage financing advice and counsel.

 

The Central Texas real estate market is going strong, and values continue to rise. Rates are still very low, and it’s a great time to invest in real estate! Some of the new year’s changes in the mortgage industry include:

 

  • Higher conforming loan limits: To keep up with rising home prices, Conventional, FHA and VA loan limits have gone up this year. Here are some of the new loan limits:
  1. Conventional conforming & VA limits: single family homes: $453,100
  2. Duplexes: $580,150
  3. Triplex: $701,250
  4. Fouplex: $871,450

The FHA loan program has also increased its loan limits in this area, making it easier for first time homebuyers to access the low downpayment options and flexible underwriting requirements offered with FHA. Single family home loan maximum is $384,100 and fourplex loan maximum is now $738,650.

 

Other new changes in the industry to expect for 2018 involve a re-vamped loan application form with more regulatory data collected, especially the “HMDA” data. This is data regarding the borrower’s ethnicity, gender and other reference points. 48 new data points have been added to the new form, which should be coming out soon. One of the purposes of the HMDA data is to monitor lending activity to minimize discrimination.

 

2018 should be a great year in the Central Texas real estate market! Call or email me if I can help you or someone you know to better understand their mortgage financing options. I’m here to help and would love to talk about your personal goals and plans.