Two New PDF’s Showing RE/MAX Huge Market share lead are now out! Check them out below.

Gilbert AZ mid year 2011 market share

ARMLS July 2010 thru June 2011

When shopping for a mortgage, it’s important to obtain multiple quotes from various lenders to ensure you get the best deal, just as you would if you were shopping for a new flat-screen television or a brand-new car.

Yet, only about 40 percent of borrowers actually receive more than one quote and most people spend more time car shopping (10 hours) than mortgage shopping (5 hours). And most of these consumers probably only focus on one thing, the monthly mortgage payment.

Heck, this is what most banks and lenders focus on, so why wouldn’t consumers? But, selecting the right mortgage goes far beyond that monthly payment.

Why, you ask? Well it’s simple really. The less you pay each month, the more you pay over the life of the loan.

In short, you’ve got to look at the big picture when shopping for a mortgage, not just that “low, low payment” you see advertised.

Let’s look at a quick example to illustrate this concept, using a $300,000 loan amount:

30-year fixed mortgage @4.25%
Monthly payment: $1475.82
Total interest paid: $231,295.20

20-year fixed mortgage @3.875%
Monthly payment: $1798.24
Total interest paid: $131,577.60

15-year fixed mortgage @3.25%
Monthly payment: $2108.01
Total interest paid: $79,441.80

So here we have three fixed-rate home loan options. You’ll notice that the mortgage rate rises as the loan term gets longer.

You’ll also notice that the monthly payment drops as the mortgage term increases.

For this reason, despite the higher rate, most consumers would go with the 30-year fixed mortgage rate, which has the lowest monthly payment, making it the “best deal.”

But by doing so, these borrowers would pay $100,000 more in interest over those 30 years than a borrower who chose the 20-year fixed mortgage. And $150,000 more than the borrower who opted for the 15-year fixed.

It would also take an additional 10 and 15 years, respectively, until your home was actually yours.

Now this isn’t to say the 20-year or 15-year is necessarily a better option than the 30-year, but it does demonstrate the impact of a lower payment made over a long period of time.

And it’s certainly worth your time and consideration to weigh different options based on your unique financial profile.

If you are insistent on paying off your mortgage, going with a shorter-term mortgage, such as the 20-year fixed or 15-year fixed mortgage rate, makes sense.

But if you think your money is better served in other investments, such as the stock market or a retirement account, perhaps sticking with a traditional 30-year is your best bet.

Regardless, take the time to shop around and compare all possible loan options. Because you’re not buying a new TV, you’re financing a home — possibly one of the biggest decisions you’ll ever make.

Is it possible to refinance a property if you don’t live in it?

Yes.

But even with mortgage rates as low as they are, for some people, “it just doesn’t make sense” for them to refinance a rental property, or they are being told they can’t refinance an investment property.

How can this be?

In today’s mortgage market, quite a few home loan programs for investment properties are available through Fannie Mae or Freddie Mac — but there are still portfolio lenders offering investment property programs that Fannie Mae and Freddie Mac don’t offer.

Translation: Just because one lender tells you it isn’t possible to refinance your investment property, it doesn’t mean that it isn’t possible.

For those people who have recently heard that it wasn’t possible to refinance their investment property, it is likely that they were given one of two common reasons:

• Your loan-to-value (LTV) ratio is too high
• Your current interest rate is low enough that it doesn’t make sense.

Are these the only reasons that someone would be unable to refinance their rental property?

Of course not — but they are the two most common reasons.

Your loan-to-value is too high

For investment properties, generally speaking, lenders will allow you to go up to a 75% loan-to-value.  This means that if your investment property is worth $200,000 the most that your loan can be for is $150,000.

If you own an investment property that is worth $200,000 and you owe more than $150,000 on the mortgage currently, most lenders will tell you that you are not eligible for a refinance due to LTV restrictions.

LTV restrictions are different by loan program, but generally speaking you should expect to be required to have significantly more equity in an investment property than you would a primary residence.

Your current interest rate is too low

Lenders have determined that loans made to investors for investment properties are riskier than loans to homeowners who live in the home as their primary residence.  As such, lenders will have a different rate for investment properties — a higher one — than they will for primary residences.

Expect a rental property mortgage to generally have a higher interest rate and require having more equity.

Generally speaking, you can expect a lender to have a higher interest rate for investment property loan programs than for primary residence loan programs. How much higher? A good estimate is 0.5 percent higher.

Other items you may need to refinance an investment property

There are more than just a few things that may be required by a lender when refinancing an investment property that are different than what may be required when refinancing a primary residence.  Here are a few of the items I have seen lenders require that is different than what is required for refinancing a primary residence:

• Generally speaking, the minimum credit score for up to 5 investment properties is usually 620. For 5-10 properties, the credit score requirement is higher than 620 (720 at one lender).
• The appraisal will generally cost more (usually at least $150 more).
• If you have other investment properties, usually the lender will not allow you to count the rents from those income properties unless you can document the previous two years.
• Reserve requirements are going to be higher – generally speaking, lenders will require that you have 6 months of monthly payments in the bank.

Is it possible to refinance an investment property in today’s mortgage market?

Yes.

But there are far more reasons that you may hear “it isn’t possible,” than just the two most common ones I just listed.

Your credit profile is one of your most important assets and probably your only intellectual property asset. Each one of us has credit history profile data kept by each of the three major credit reporting bureaus. Those companies started accumulating this vital information about your borrowing and other behavior the first time you applied for a credit card, education loan, or car loan. They have this information because you allowed your lender to provide it to the bureaus each time you applied for credit.

Credit Can Be An Asset or Liability to You

You want those bureaus to have your information so that you can build a positive credit report for yourself by paying bills on time and conforming to the loan terms. Of course, if you pay bills late or not at all, what would have been an asset turns into a liability for you.

Your credit profile stays with you for your whole life and will impact many aspects of your life in positive or negative ways. Note: if your credit profile is a liability based on your past payment and credit history, you can improve it so it becomes an asset – but it usually takes many years of hard work.

Unknown to many, not only will your profile affect the interest rates you pay on all of your loans and borrowing, but it can impact the cost of your car and health insurance premiums, whether or not you can rent a particular apartment, and sometimes whether you are qualified for a specific job. That’s right, insurance and job opportunities can be impacted by your credit profile, but not in every state due to some state laws.

Scoring

The way that most companies analyze your credit is by something called your credit score. The next time you apply for credit that company will do a credit inquiry, which will pull your payment and borrowing history from the credit bureaus, run it through third-party predictive model software, and assign a score to you based on the model. The model software tries to predict your future borrowing and repayment characteristics based on your past history and millions of other individuals’ profiles and payment history. The score will allow the creditor to determine your borrowing capacity, or the interest rate you will pay on loans, or if you are qualified for a job or can rent an apartment.

Most of your important financial transactions in life are governed by your credit score and the difference between good credit and bad credit can cost you dearly over a lifetime, which is why you always want to protect your credit profile.

Protecting Your Profile

To protect your profile, you always need to pay bills on time and in accordance with the terms of the credit. This includes cell phone and cable TV bills – don’t forget them just because you move. You also need to be careful to not overextend your borrowing – that means don’t buy things on credit when the monthly payments will be unaffordable. Don’t overindulge. If you already have gotten yourself into a debt trap, cut expenses and pay off your bills as soon as possible.

You also must make sure you comply with any lease terms so you avoid eviction marks on your profile. And always carry the proper car and rental or homeowners insurance to reduce liability and the potential for a legal judgment against you. Lastly, don’t borrow up to your borrowing limits even if you can comfortably afford the bills.

Basically, live within your means. This will ensure that you get the best borrowing terms on loans and leases that you contract upon during your life. As an added benefit to living within your means, if you lose your job or salary drops, you will be in better financial shape to handle that disruption to your income.

Keep aware of your current profile. You are entitled to a free copy of your credit report from each of the tree bureaus once per year. Go to annualcreditreport.com to get one, which won’t give you a credit score, just the report. But this way you can see what data they have on you and if there are any errant marks or questionable items. If there are, get on the phone and try to get them corrected. It will take time, but if you don’t get them corrected you will pay the price in higher interest rates or other issues down the road.

Credit Already a Liability

If you’ve damaged your credit profile, you can repair it. Get advice from a reputable non-profit credit counseling agency on how you can get your credit “house” in order. Many real estate mortgage lenderscan also pull your credit report, with your permission, and advise you on how to improve your credit score. Be careful about private companies promising quick fix credit score services – many are not reputable and will take your money but not do much for you.

Note: There is no quick fix for negative credit remarks on your profile that are accurate, like late payments or non-payments. Only time and hard work will improve your score.

As you can see, your credit report is really one of your most important assets. It stays with you for your entire life and even if you do not realize it, you will be paying the financial price in life for having bad credit. So get a copy of your report and work hard to protect and improve your profile so that the next time you borrow you are rewarded for your past good credit using behavior.

J.D. Power and Associates announced today that RE/MAX ranks highest in customer satisfaction, for both buyers and sellers, in its 2011 residential real estate survey.

That’s right – we’ve earned the highest level of appreciation from BOTH groups of consumers, which is a remarkable statement about the Outstanding Agents in our organization.

I want to personally thank and congratulate every one of you for contributing to this prestigious recognition. It truly reflects your professional excellence, your enthusiasm for education, your commitment to distressed sellers, your individual drive, and many other qualities that serve the interests of your clients. Your efforts change lives, and those people have spoken.

Our team at Headquarters is working with J.D. Power and Associates to determine how we can use the results of the survey, as well as their name and logo. As soon as possible, we will let you know what the guidelines are.

In the meantime, celebrate this incredible achievement and enjoy the fact that once again you’ve proven yourselves to be the best in the business.

Sellers

Buyers

Home buyers ranked RE/MAX on a 1,000-point scale with a score of 805 and home sellers put RE/MAX on top with 791, leading all other real estate franchises in the survey. Consumers rated RE/MAX in the following categories:
Overall satisfaction
Agent/Salesperson professionalism
Variety of additional services
Real estate office
Real estate company marketing (seller survey only)
The 2011 Home Buyer/Seller Study includes more than 4,200 evaluations from more than 3,680 respondents who bought or sold a home between March 2010 and April 2011. The study was fielded between March and May 2011.

Clear communication between owner, contractor, and architect is critical to a successful home designproject. Agreement on some simple definitions is a good place to start.

“Remodeling” is often broadly used to describe any kind of change to an existing house. Technically, it’s more accurate to say that remodel means to change the character of a house or a portion of a house. So when you convert a den into a master bedroom you’re remodeling the den. When you combine a kitchen and dining room into one large eat-in kitchen you’re remodeling the kitchen and dining room (this is an extremely popular type of project in our office right now.)

“Renovating” is a much more specific term. It means, quite literally, to make new again. An out-of-date kitchen, updated with new finishes and fixtures, has been renovated. Replacing old windows with new ones is a renovation project.

“Restoring” a house is sort of the opposite of renovation. Instead of updating, you’re making the house like it was before (i.e., you can do a historic restoration but not a historic renovation.)

Even if you convert existing spaces back to their original use, you’re still restoring the original rooms.
Removing vinyl siding and fixing up the original wood siding and trim is a restoration project.

Confused? Let’s review. Three similar terms, three different meanings. I remember them this way:

• Remodel: Changing the use of a space or spaces.

• Renovate: Make a space new without changing its use.

• Restore: Return a space to its original use, and/or return a space to its original character.

Whether you call it the can, loo, John, porcelain throne, oval office, potty or any other moniker, the toilet — let’s face it — is not the most glamorous feature of a home. Usually when home buyers take a walk through a potential home for sale, they ooh and aah over the living room, the spacious kitchen and maybe a bedroom or two. The toilet, on the other hand, is a function of the home that doesn’t get much attention — that is, until it’s not working.

The Back Story to the Bowl

Although Thomas Crapper is thought to be the inventor of the modern toilet, he was merely a huge proponent of modern plumbing in the 19th century who also happened to have memorable last name.

The first patent for the modern toilet was actually granted in 1775 to inventor Alexander Cummings. However, several centuries prior, the Romans, India’s Harrappa civilization and the Skara Brae population in Scotland utilized modified plumbing systems. Most of this technology was lost in the Middle Ages of Europe and people then used chamber pots to dispose of waste.

Flushing Money Away

If you had to take a stab at the biggest water waster in your house would you guess the loo, or the shower? According to USGS.gov, the toilet uses the greatest amount of household water and it’s estimated that each person uses about 80-100 gallons of water per day. If the toilet leaks, it wastes 200 gallons of water per day.

While you could go back to the days of the chamber pot, there are a few more modern ways to save water and money. Even Uncle Sam got his hands dirty over the issue of water consumption in toilets and saving money.

In 1992, the U.S. government mandated that all new toilets had to be “low-flow” toilets, using 1.6 gallons per flush rather the previous 5 gallons or more (even though many people feel the politically correct 1.6-gallon toilet doesn’t work).

A Greener John

According to water conservationist George Whalen, switching to water-saving fixtures can save you as much as $100 a year in utility costs. Here are some ideas, from a simple homemade fix to high-end fixtures:

Source: Flickr user marktristan

• Brick trick. A brick or bottle filled with sand placed in the toilet tank can take up space and as a result, cut down on 10 gallons a day per flush.
• Dual-flush toilets. Invented in Australia, a dual-flush toilet changes the water volume depending on the type of waste being flushed. The toilet uses more water for solid waste, less for liquid waste and can save 67 percent water.
• Composting toilet: This is on the far end of the green spectrum and doesn’t use any water to dispose of waste but sends waste to a composter. These cost several thousand dollars and may involve a little more involvement than the usual toilet.
• Tankless toilet: This water-saving commode relies on water from a supply line with enough pressure to eliminate waste rather than a tank of water.
• Other low-flow toilets. A complete list that received the WaterSense designation are atwww.epa.gov/watersense.

Pros and Cons of a Low-Flow Can

Whether a toilet can save you money depends on whether it’s working right.

Real estate agent Toan Nguyen, who has had previous experience in plumbing, electrical work and remodeling, says “green” toilets will only save you money if other elements are not a concern.

“If you live in an older house, your pipes are older, and it’s a longer run to the main sewer on the street, on a house like that I would not advocate dual flush [toilets] because there’s not enough water to get rid of waste,” Nguyen explained. “If there’s not enough force, it can create a sewer problem.”

A dual-flush or low-flow toilet will work best where there’s gravity to help it along, says Nguyen. Otherwise, consider the possible long-term issues with sewer blockage.

A Few Favorite Flushers

In the MLS there are plenty of photos of toilets! Here are a few of our favorites:

The throne (literally)

Tankless toilet

For the guys

If you’re currently home shopping or planning to refinance, it’s important to decide on a specificmortgage program.

Let’s take a look at some of the most popular loan programs out there to determine which will be the best fit for you.

30-Year Fixed

This is the granddaddy of them all, and the go-to for most homeowners.  It also happens to be the simplest mortgage to get your head around.  Go figure.  Put simply, it’s a 30-year term loan with a fixed rate.  In other words, the interest rate never changes during the life of the loan.  So if you’re risk-averse, and plan on staying in your home for the foreseeable future, this is your mortgage.  Just know that the mortgage rate will be higher to compensate for the relative safety.

15-Year Fixed

Another popular (and conservative) choice is the 15-year fixed.  Just like the 30-year, the interest ratewill never change during the life of the loan.  But the mortgage term is cut in half, meaning monthly mortgage payments will be much higher.  This program is good for the homeowner that actually wants to pay down their mortgage, while minimizing interest paid.  You will certainly pay a lot less interest.  Just be sure you can handle the larger payment!

Other FRMs

While the 30-year and 15-year are the most popular and well known fixed-rate mortgages (FRMs), you may also come across additional options, such as 10, 20, 25, and 40-year fixed terms.  Be sure to consider all of them when shopping your mortgage.

5/1 ARM

If you’re a little more daring, you may also want to take a look at the adjustable-rate mortgage (ARM) options available.  The most popular is the 5/1 ARM, which is fixed for the first five years of the 30-year term, and adjustable for the remaining 25.  This makes it a hybrid ARM, meaning it’s fixed for a while before becoming adjustable.  If you don’t plan on being in your home for long, this could save you some serious money, as the interest rate will be significantly lower than fixed-rate options.  Just take caution, as the rate can also surge once those five years are up.

Other ARMs

There are also a number of other ARMs, ranging from as short as a 6-month program to a 10-year product.  Obviously, the shorter the fixed period, the more likely you’ll wind up with an actively adjustable-rate mortgage.  Also know that the shorter the fixed period, the lower the initial interest rate.  So a 1-year ARM may be cheap at the onset, but adjust much higher before you know it.  And a 10/1 ARM may price just slightly lower than fixed-rate options because of its long fixed period.

There are certainly plenty of options to choose from and your risk appetite, coupled with your unique financial/life position, should determine which is best.  But don’t rush your decision.  Crunch the numbers using a mortgage calculator, make a long-term plan, and comparison shop before making your choice!

A great time was had by all at the RE/MAX Alliance Group bowling event. Please check out the video above for all of the highlights. Also congratulations are in order for the two prize winners of the day. Susan Paveza for bowling the first turkey of the evening and Zac Coplan for having the high score(215).

Thanks for all who attended, and thanks to Brunswick bowling for giving us a great venue to hold the event!