Morning Everyone!  Buying a home in 2017? Well today I have Mike Hardy from V.I.P. Mortgage in San Dimas to give us an update on Lending in 2017.  Mike has a background not only in real estate lending but as a financial advisor.  Trust me, this comes in handy when you are buying a home or an investment property.  Not only does he cover your lending needs but he also takes into account your overall budget needs and future financial goals.  While we were introduced by Marilyn Sparks from Farmers Insurance, Mike and I have a similar mindset on how to do business.  We have a Client First Mentality.

To let you know how this usually goes…when I have someone that records with me, I will start gabbing away without recording.  So this time, I caught myself.  Before Mike could really get a chance to respond, I asked him if we could just record what was happening. So this post will have 2 videos.  One video will be about PMI suspension and the other is Mike looking into his crystal ball.

Video 1: Changing of the Guard: PMI reduction will be suspended.  Mike equivalates it when a new financial advisor is hired for your household and there may be changes or items that had been implemented by the previous financial advisor.  When the new one is hired and has now decided to freeze what was being done to review and confirm, that in this instance, there are 3 months of savings documented that they actually have it accounted for.  Now in this instance, they want to confirm that there is the amount of reserves they say so that FHA can make the investments and cover the loans they are creating.

We didn’t say it in the video but the “cost” of the PMI suspension that I have read from various sources ranges from $29 per month to $80 per month.  The funds paid to PMI is set up to go into an account to safeguard the insuring company of your home loan in the case of bankruptcy.

DEFINITION OF PMI (PREMIUM MORTGAGE INSURANCE): Source is Investopedia. Private Mortgage Insurance (PMI) is a special type of insurance policy, provided by private insurers, to protect a lender against loss if a borrower defaults.

Most lenders require PMI when a homebuyer makes a down payment of less than 20% of the home’s purchase price – or, in mortgage-speak, the mortgage’s loan to value (LTV) ratio is in excess of 80% (the higher the LTV ratio, the higher the risk profile of the mortgage).

PMI allows borrowers to obtain financing if they can only afford (or prefer) to put down only 3% to 19.99% of the residence’s cost, but it comes with additional monthly costs.

 PMI costs can range 0.25% to 2% (but typically run about 0.5 to 1%) of your loan balance per year, depending on the size of the down payment and mortgage, the loan term and your credit score. The greater your risk factors, the higher the rate you pay. Also, because PMI is a percentage of the loan amount, the more you borrow, the more PMI you’ll pay.

 

Video 2: We cover interest rates, the benefits of owning a property Vs. renting and more importantly the cost of owning a property Vs. renting. In an off-camera conversation, we figured out that rent of a specific friend of mine has increased 5% per year over the last 7 years.  There is so much to discuss but it is hard to get it on video so if you have a topic that you

There is so much to discuss but it is hard to get it on video so if you have a topic that you would like to discuss, please, by all means, let me know.  You would get an answer to your question and I would be able to put out another vlog post.

Alright! Hope this was useful information.  Please let me know if you have questions.  Mike and I are here!

Christyna