Richard's Real Estate Thoughts: July 2010

Housing and GSE reform conference announced.

We have barely finished RESPA reform. We have survived SAFE Act requirements and a housing industry contraction. We now face a massive Financial Reform with most of its regulatory particulars undefined - leaving small businesses and lenders in a state of uncetainty. We now are on notice that we are about to face major reform in the US housing industry. (And let us not forget the health insurance reform.)

Just received from the FHA Commissioner David Stevens' desk: "The Administration is strongly committed to comprehensively reforming our housing finance system. Work is well underway and by early next year, the Administration will deliver a comprehensive housing finance reform proposal."

It seems to me that the agenda and the goal are set. Most decisions on broad outlines already made.

My point is that a major "comprehensive and fundamental" reform is not needed for our housing industry. The combination of FHA, VA, Rural Development, FNMA and Freddie Mac has served exceptionally well our national home financing needs for decades. Our housing market has been generally strong, that is until Congress decides to relax banking restrictions inorder to encourage risk, which Congress has done on occassion to pacify big bank lobbies.

The basic housing system though is sound with each agency providing excellent options for particular segments of the population.

The memo states that the question about major reform of the housing industry "is not if but when." The question apparently is also not what.

Housing reform is coming.

The GSE's, Fannie Mae and Freddie Mac, were conspicuously absent from the recent Financial Reform legislation. And no doubt that changes are needed and that their reform is coming. I think the broad outlines are set. My fear is that the reformers are going to use the abuses of Wall Street, abuses by the way which I think were largely left unaddressed in the Financial Reform bill despite rhetoric otherwise - reformers are going to use the abuses of Wall Street to abuse the most efficient home financing system on Earth.

It is almost like the goal is to keep us distracted so we forget how bad unemployment is. Keep us so off balance and uncertain that it is impossible to focus on the business of rebuilding the housing industry.

Give us a breather from massive regulatory change. Let us, the industry professionals in the trenches, do the work needed to heal our housing industry.

One thing is for sure, like it or not, the Obama Administration will leave its imprint - the administration of unrelenting and massive regulatory reform in all areas of our personal and work lives.

As you are commenting about the forthcoming increase in FHA loan down payments, comment also on the coming massive housing reform. Write to your representatives. I will ask mine to slow this regulatory reform train down just a little. Let's first find out what will result from what has already been done. The NAMB has provided this survey about GSE Reform (primarily Fannie and Freddie) as a start to express your voice on the matter.

Housing shows little signs of recovery. Uncertainty about existing and new regulatory changes is not helping.

UPDATE 7/28/10 - several articles on the GSE reform point to a significant lack of concensus on the form of the reformed GSE's. Here is a good summary on the variety of proposals. It seems to me a change in executive compensation, oversight to ensure the GSE's do not return to purchasing portfolios that are outside their own published underwriting standards, restrictions on lobby contact with Congress will go a long way to restoring the GSE's previous success in building a stable and strong conventional housing market.

No need for "fundamental and comprehensive reform." Just less lobby money for Congress.

 

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

 

Last week FHA announced the beginning of the comment period about the anticipated change to reduce seller concessions

FHA announced began to discuss publicly back in December several considerations to tighten guidelines. The stated goal was to restore FHA capital reserves and to ensure that FHA financing was not at risk again because of large numbers of defaults. Capital reserves had fallen below mandated levels with great publicity.

Specific items included:

•·         Increased scrutiny on the FHA loan portfolio

•·         Effective measures against lenders with excessive default ratios

•·         Increase mortgage insurance premiums

•·         Improvements in appraiser independence

•·         Tighter approval guidelines

•·         More upfront investment from home buyers

 

Several of these changes were announced in January with more detail provided in a March statement. Here is a copy of the March statement from FHA Commissioner David Stevens. The details of the plan to restore FHA capital reserves were laid out in a May with the Commissioner's prepared testimony to Congress. All of these changes, including the reduction of seller concessions, are proclaimed as necessary to restoring and protecting the FHA capital reserve, as essential to maintaining an FHA mortgage program.

HUD/FHA explains their goals and understanding about the actions needed to sustain FHA loan program

In an NPR interview from December 2009, HUD Secretary Shaun Donovan mentioned "it's also important that we not pull back too far, which could blunt these early signs of housing recovery that we've seen."

In my mind we have already pulled back too far and are facing a housing double dip recession, despite the now expired tax credits and the historically low interest rates.

Secretary Donovan specifically stated his insights in the linked NPR interview - "we are going to require a somewhat more skin in the game from our borrowers to ensure that if we do get another decline in the market ahead of us, that we don't see foreclosure rates and delinquency rates rise in the FHA portfolio from where they've been."

Skin in the game

Many in Congress think along these same lines - that there would be less foreclosure if people invested more of their money - more skin - into their purchases. More skin has become a mantra that our representatives and regulators find much pleasure in reciting.

If we are going to change minds with this comment period, this conviction that the Secretary and many in Congress have needs to be understood. The belief that more skin from homebuyers is needed to keep FHA home financing away from future massive delinquencies.

We need to remember that HUD and FHA are armed with many studies and that they, and Congress, believe they have fully documented that delinquency increased with lower upfront investment and increased seller concessions.

"Experience to-date on loans insured from FY 2003 to FY 2008 suggests that claim rates on high-concession loans are 50 percent higher or more than those on low-concession loans."

The perspective from HUD and FHA is that seller concessions must be lowered in order to protect the FHA program.

Effective comments needed to change minds in HUD and Congress about changes to seller concessions and other FHA guidelines

Several points can be made to counter these conclusions by HUD regulators and some in Congress.

One point that I am discussion in this post is that the reduction to 3% will only hurt people buying lower priced residences - the middle income working class who might buy a $100,000 home.

To understand how this works, let's look at a hypothetical example. A typical amount of set closing costs might be around $3000. This covers mostly fixed fees for the appraisal, the lender underwriting/processing fee, the title attorney, title insurance and the recording taxes.

This amount is basically the same regardless of the loan size, and are the standard fees before any money is paid for the loan origination and processing. The fee for origination and processing can vary but probably averages to 1% of the loan amount.

The $3000 in costs also does not include any amount for home owner insurance and property taxes which will be escrowed with an FHA loan.

Considering only the $3000 fixed costs, without origination and T/I escrows, the costs that are the basically the same regardless of loan size.

Without a doubt the 3% restriction prejudices against the lower loan sizes.

With a $200,000 loan amount, the 3% seller concession more than covers the fixed closing costs, plus the origination fee and the amount necessary to set up T/I escrows.

With a $100.000 loan amount, the 3% seller concession will only cover the basic fixed amount of closing costs, with nothing left for the origination fee or for the T/I escrows.

With a $75,000 loan amount, forget about it. That buyer must pay up. The message is we need your skin if you are buying a lower priced home.

The new guideline hurts only buyers purchasing lower priced homes. It does not impact the larger loan sizes.

This seems to work directly against the FHA mission.

Will comments have an impact on HUD policy makers?

The comment period seems to be window dressing, a token concession to a mandatory procedure. The decision has been made, and was made last year. To quote from the NPR interview, "effectively what that means (more skin in the game) is that they would need to bring more cash to the closing table upfront. We're looking at exactly the way to do that and, again, to try to ensure that we're limiting the riskiest borrowers in our programs. So we'll announce by the end of January exactly how we're going to do that."

I will write more points in later posts. We need to change the made up minds of the policy makers. Comments, to be effective, must address directly the convictions and goals that the Secretary has publicly stated. There were many comments about the now lost seller funded down payment assistance. There were many comments about the RESPA changes. No effect. There will be many comments about the reduced seller concessions. The question is will there be an effect from those comments.

FHA and Congress have already decided to require more skin, especially from lower income buyers. Our comments must change minds that are made up.

Here is the public notice for the proposed changes.

Here is the HUD press release about the comment period.

Here is the link to comment on the proposed changes to seller concessions for FHA home purchase loans.

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

Chattanooga Home Purchase Market

The greater Chattanooga real estate market is divided into 16 areas. Over the last three months the overall Chattanooga market has undergone some impacting changes, as has the national housing market.

1. Expiration of the Home Buyer Tax Credit
2. General Loss of Rural Development Funds
3. Increase in foreclosure properties

Our local region has excellent prospects as we head into the remainder of 2010 and the start of 2011. The VW plant should begin production in 2011. The Alstom plant has already started production. Other area companies have indicated increased hiring or that they anticipate an increase in hiring.

The recent quarter trends in home sale activity point to stability, if not growth in our market. 

Greater Chattanooga Area	June, 2009	June, 2010	May, 2010	April, 2010
New listings	726	663	665	824
Units Sold	369	407	411	382
Median Sold Price	148500	142900	145000	141900
% SP/LP	96	96	96	95
		June, 2010
Active Listings		3513
Median List Price		182900
Average DOM		169

The increase in units sold from June 2009 to June 2010 is likely attributed to the Home Buyer Tax Credit which required contracts to be signed by April 2010 and had required that the transaction close by June 2010. That closing deadline was extended at the last minute, but only for pending contracts.

Comparative YTD home sales shows an increase this year of over 250 homes more than last year at this time. Again much of this increase can be attributed to the tax credit. With the improving economic conditions in the local area, we can hope that the trend can be sustained. 

The July sales numbers will give more indication of the local impact from the expiration of the tax credit.

Chattanooga Purchase Mortgages

FHA is a good financing option for homes in the Chattanooga market. Approximately 80% of the home sales in our area qualify under the FHA maximum loan amount.  For many buyers with properties in Chattanooge city limits CNE can provide additional funds for closing assistance. Fro more information about FHA and CNE assistance call or email me. Contact information is below.

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

The Hixson Park is nice and small. It is close to many neighborhoods and easy to find. It is the closest park to my home and it makes for a fund afternoon. Especially if you happen to have a grandkid around.

We have had many birthdays on the pavilion picnic tables. And if multiple parties are at the same time - great more fun. There is plenty of room and it just means more kids.

The bike path goes around the park. They are great for small children.

Swings are fun

Running around is fun too.

 Hixson Kiwanis Playground

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

Mortgage applications not as strong as mortgage rates.

Rates are certainly at the lowest of the lows. We can get excited about these low mortgae rates, but where are the loans. The most recent MBA survey indicates that the number of  mortgage applications have declined almost 3% for the week. Refinances were even down, but the purchase portion of the mortgage application is at its lowest since 1996,and is 43% lower that this time last year.

The slow pace of the recovery is driving our historically low mortgage rates, but it cannot drive the housing recovery.

Paul Krugman speaks of a defacto double dip recession - maybe not technically a double dip but:

"Let's be clear: a recovery that involves growth so slow that unemployment and excess capacity rise, not fall, isn't really a recovery. If we have only have 1 1/2 percent growth, that will amount to a double dip in all the senses that matter."

Last week began with encouraging news about corporate earnings, starting right away with Alcoa. And maybe all the talk about the recovery is sound.

But then the Federal Reserve published it downward revision of GDP growth and its upward revision of unemployment.

Retail sales fell .5%.

Consumer sentiment dropped a whopping 8 points. That I was not expecting.

And Friday 6 more banks closed - the total for the year is now 96. We will certainly hit 100 by the end of July.

The economic news locally in Chattanooga is a little better.

Wrigley expansion

Alstom is expanding

VW plant is nearing completion

And there are other good signs - a day care expanding, some stores opening new locations, some local manufactures winnind bids for new contracts.

But Chattanooga is not in a vacuum.  For our growth, gains are needed in ther overall economy.

It will be another full week of economic reports this coming week. I will be looking for some good news, even if it does push mortgage rates up.

 

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

Is Renting Your Home better than Owning Your Home?

Over the last several decades homeownership has been a given as a part of the dream and each family's goal for financial security. Has the recent housing crisis changed things such that the dream of homeownerships is not thought to be misleading?

Homeownership rate falling

Since 1960's the rate of homeownership in the US has risen from 63% to over 69% in the mid 2000's. In the last couple years that rate has dropped back to the level in 2000, around 67%. And the trend and economic reports seem to point towards even lower levels of homeownership.

The NY Federal Reserve recently made a distinction between the official homeownership rate and the effective homeownership rate.

The effective rate considers homeowners with negative equity - upside down in their homes. The idea is that these homeowners are effectively renters. This effective rate puts homeownership back to levels in the 1990's.

Worse, the percentage of homeowner equity is moving well below 50%. The first time equity fell below 50% since 1945 was in 2007. In June 2009, the blog Calculated Risk estimated the actual equity was even lower.

Even with the official estimate home equity has continued to fall since that 50% milestone was reached.

Data from the Federal Reserve June 2010 Flow of Funds Report (Z1)

This shows that since 2003 home equity has fallen from almost 58% to under 40% - a drop of almost 20%.

Home values have depreciated in most areas.

Many homeowners owe significantly more than their home is now worth.

Many homeowners cannot sell to move for new or better employment.

Many homeowners have mortgage payments that they cannot afford.

Renting would provide more flexibility to move, less impact on credit in the case of default, little requirement to maintain the home.

Is homeownership now seen as overrated? And renting is better?

Many stories are out today indicating that the decades long push to own a home may have been wrong, yet a recent survey indicates that despite all that is negative with the economy and with the housing market, 90% still are pleased with their decision to buy a home.

It is true that not everyone should own a home.

If you are likely to move soon, owning may not be the right choice, because of the initial cost of purchasing, the cost of selling, possibly any large ticket maintenance costs that might arise, and because being forced to sell an asset such as a home or a stock does not generally provide the best market for selling.

Stability is most definitely a consideration about buying a home - location stability and work stability.

"Not everyone should own. Some of us should. I do, and I certainly think it was a good decision for me, but it depends." Professor Joseph Guourko.

Is buying a home an investment?

In an NPR interview from December 2009 Professor Joseph Gyourko, Director, Real Estate Center, University of Pennsylvania's Wharton School, gives many arguments against the goal of homeownership. The article was entitled "Re-thinking the American Dream of Home Ownership.

Professor Gyourko says that real estate is not a "particularly good investment." It generally follows a little better than inflation. He states that after inflation, long term gain on real estate investment has been about 1%.

"You know, it is actually not a particularly great long-term investment. The RIOs(ph) are after inflation. So, adjust for inflation, average return in the United States since 1975 has been about one percent a year. So, it's - that's not zero. It's positive. That's a good thing. But it's not a particularly great way to build wealth. You would have done a lot better in a -even a one-year treasury bond index over that period of time, quite frankly. So, financially, no. It's not nearly as good as people think it is."

Well I find some fault with the professor's reasoning. The house payment is not an investment. The housepayment is a cost of having a roof over your head - whether renting or buying. The gain with buying is that overtime you gain equity and move closer to owning your home free and clear. That is not done with renting. This works with investors also purchasing rental property.

If you want to invest money each month, good. Go invest it. Dollar cost averaging can be a good technique.

We are talking about the right decision with your monthly housing expense. Rent forever? Build equity and eventually own your home free and clear? That is your decision, not whether the home is a good investment.

Not paying a monthly housing payment is a big step towards financial independence.

If the market adds better-than-stock market appreciation, then all the better. Even if the value does not appreciate, you, the buyer can still end with a free and clear home, and no housing payment each month.

The gain is that the homeowner is using housing expense to build equity, housing expense that will be spent regardless just to pay for having a roof. Buying a home means that that regular housing expense will also create for the homeowner a real asset, real wealth.

Get qualified and go buy your home.

Not everyone should own a home. Yes that is correct, but generally you may should not own if you will move soon or do not have stable employment.  The arguments otherwise against homeownership so often tend to encourage lower income workers to remain renters. Sometimes the argument is subtle. "Owing a home is right for me, but maybe not for other people."

Mobility and job stability can be reasons not to own right now, but when a renter's employment and location are stable, it is time to buy a home.

The argument that some people cannot afford homeownership is just wrong. If they are renting, they are paying for homeownership. They are paying for the landlord's homeownership. The other costs associated with homeownership:

Taxes

Maintenance

Insurance

Repairs

All these are covered by the rent check to the landlord. The renter is paying those expenses, only the renter is not paying them towards their own asset accumulation, their own wealth, their own rent free future.

We should not let the current housing crisis change thinking so that people believe renting is better. It is not. Owning your own home is still the better choice.

Home buyers in Chattanooga, Tennessee, and Georgia

In our local area the decision to buy is easy. Growth prospects in our area are strong. You get the positive goal of house payment free living, plus the very real likelihood that your home will appreciate as the region grows. For Chattanooga and it regional neighbors, home ownership is definitely the right choice.

Get qualified. Save you down payment. Find the location you want.

And buy your home.

If you have questions about how to become house payment free call or email me. We can set you on that path. Today's low rates make that dream of house payment freedom even more achievable. You can find a rent vs buy calculator here, but the real choice is the decision to own.

 

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

 

TVA is into the 18^th month of its Integrated Resource Plan a look forward to energy needs over the next 20 years. Last week TVA held an information session at Green/Spaces to inform the public about the IRP, its scope and its current status.

The idea of IRP is to determine future power requirements and to identify capacity structures needed to meet that capacity, covering its entire 9 million people and 7 state region.

TVA is determining what growth to anticipate and what combination of nuclear, coal, gas, or alternative enerty plants will best power that growth. Which alternative energy technologies may provide the best solution.

More detail is available here on the TVA studies to date.

 

The first question is Where are we now?

Followed by Where are we going?

The session last week focused much on the IRP process.

 Where we are going is of course is difficult to discern. The IRP study team has developed 7 scenarios with various growth possibilities.

To meet these scenarios, the IRP is considering 5 strategies.

Combining these scenarios and the strategies gives 35 distinct 20 year expansion plans.

The expectation is to have the initial draft of the IRP published and available by September.  The goal is to provide the right plans for cost, capacity, evironment, and economic. The combination of plans will need to be flexible enough to accomodate to new technology and shifting priorities.

Quarterly reviews will then be held. The first reviews have been tentatively scheduled for  Bowling Green on 10/5, Olive Branch on 10/7, Knoxville on 10/13, and Huntsville on 10/14. There will also be internet access via a webcast to access these reviews. Questions and comments will be possible at the review session and via the website.

Smart Grid concepts were discussed in the question period, as part of the flexibility that must be incorporated into a 20 year plan, to be able to incorporate new technologies. Clean energy was also brought up at the session, especially from the audience questions.

While there were less than 20 people at the presentation, the questions were informed and challenging. This is an exciting project - to look at where our possibilities for the next 20 years. Exciting and demanding.

Take some time to learn, and then get involved in this discussion. It is our future that is the topic.

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

Impact of lower rates for your home purchase in Chattanooga, Tennessee, or Georgia.

If you want to purchase a new home in the Chattanooga and North Georgia market,  the currently low interest rates can boost your home purchase options.  Rates continued to move even lower last week, especially after the Federal Reserve release suggested that the economic recovery was moving slowly enough that additional stimulus might be needed.

With these historically low interest rates combining with generally low home prices, home affordability makes for a great value in the Chattanooga area market for today's home buyers, whether you are a first time home buyer or moving to a larger home or downsizing.

Much of the media has focused on the loss of programs and the number of potential buyers who are no longer qualified. These problems do exist, but for the qualified buyer, there may never be a better time to buy your home.

Much as with mortgage refinancing, low interest rates give you, the home buyer, many options to plan your home purchase in terms your overall lifetime financial goals. In the past the marketed idea was to buy a home and let its appreciation create wealth for you. The payment did not matter, only appreciation in real estate values.

There are some inherent problems with that approach, as has become obvious to all.

Payment and debt liquidation do matter, and with these low interest rates you now today have multiple choices to plan your payment and your goal of House Payment Freedom.<

•1.       Buy more house

Using the interest of 6%/6.259% APR that was the average for 2008, a $1000 principal and interest (P/I) payment would pay for a fully amortized loan of $166,790. With a 5% down payment your home purchase price would be $175,600.

Using that same P&I payment of $1000, with today's 4.25%/4.579% APR interest, you could have a loan amount of $203,275. Adding a 5% down payment you could purchase a home priced at $214, 975.

You could buy over $48,000 more home, plus in today's reduced market each home price dollar buys more home.

•2.       Have a low payment for monthly savings or for other budget items

Using that same, purchase price which would have a $1000 payment with a 6% interest rate loan, from the above example, you could buy that same $175,600 priced home.

Only now, with the 4.25%/4.579%APR interest rate your home payment would be $820.51. You would have the same home, but not the same payment. You would save $180 each month, or over $2000 each year.

What would you do with $2000 more income? Save. Improve the home. Vacation. College plans. Pay your new home loan down quicker.

It would be your money, you decide.

•3.       Reduce the term of your loan when you purchase

Similar to option 2 but with a better interest rate, you could purchase the same price home that $1000 monthly would buy at 6% note rate, but finance the home purchase mortgage at today's low interest rates. Using a 15 year mortgage rate of 3.875%, that same $166,790 loan amount would have a 15 year payment of $1223.31 - just a little over $200 more each month and you same 15 years of house payment.

Wow. House payment free in 15 years. Now you need to decide what to do with 15 years of house payments you would not need to pay to the bank.

It would be your money, you would decide.

If you are looking for a home to purchase in the Chattanooga, Tennessee, or Georgia markets, you can start your home search here with some featured homes or here with a more general home search to see price ranges and a sampling of homes available in the market. Then contact a real esate agent to help you with a more thorough search and contract negotiation.

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

With mortgage rates at truly historical low levels, the question is what does that do for you in your present situation.

You can truly benefit from these low rates, whether you are considering to refinance or looking to purchase a new home.

Home mortgage refinance for current home owners in Chattanooga, Tennessee and Georgia

1. Lower your monthly payment - Reducing your interest rate most often means to home owners that they can reduce their monthly payment. Lower payments are always better, but what can you do with that additional money.

How much money can you save?

As an example, a 30 year loan for $150,000 at 6%/6.250% APR would have a principal and interest (P/I) payment of $899.33. If that loan is 2 years old, your approximate payoff balance might be $146,800.

A new 30 year loan at 4.375%/4.520% APR with a loan amount of $151,000, adding back some for closing costs, would have a P/I payment of $785.76.

A monthly savings of $113.57. Would that help your budget? Maybe, but it would also add 2 years back to your home loan.

What if you kept paying the $899.33, but with the lower interest rate?

You now pay your home off in 22 years. Reducing your time with a house payment by 6 years.

Your goals may be better met with the monthly savings to boost your budget. Your goals may be better met to be house payment free 6 years quicker.

The key is with these rates - You have the unbelieveable opportunity NOW, to decide and to act.

2. Reduce you term

The above example showed how you might be able to boost your budget or find quicker freedom from a house payment.

For many homeowners, the goal of house payment freedom is top priority. With these rates you may be able to afford a house payment that will drop your loan terms to 15 years or fewer.

The same scenario, refinancing your balance with closing costs with a new loan of $151,000. Rates for 15 year mortgages have been as low as 3.75%/4.100% APR. For our example let's use 3.875%/4.200% APR.

You could become house payment free in 15 years with a P/I payment of $1107.50 - just over $200 more per month and House Payment Free 13 years sooner.

WOW! And this is actually real. All rates quoted here are fixed rates with full amortization.

Call to go over your options to achieve your financial goals.

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com

Nightfall

This weekend at Nightfall turn up the volume for the Bottle Rockets. The band's website has a page of YouTube videos with a good sampling.

Last week at Nightfall Raul Midon wowed the audience with his percussion guitar style.

Raul Midon last week at Nightfall

Chattanooga Market

At the Chattanooga Market we will have the Peach Festival with

Lockhart's Spicy Peach BBQ Sauce and Peach Dessert - Market Cafe

Peaches and Cream sundae's and Peach milkshakes at Penn's concessions

Peaches and Herb Ice Tea from Lee and Gordon's Greenhouse

Peach lotions, soaps, sprays and lip balm from Simply Can't Resist

Mayfield's Peach ice cream

From Daylillies there will be Peach Habanera Salsa (many kinds), Peach pie filling, Peach preserves, Peach jellies (many kinds) and much more!

Sunday's music will be Paul Edelman, the Jangling Sparrow at 2pm. Here is a sample of his music - Graveyard 76. At 12;30pm Morgan Bracy will take stage. Here is a listen to When the spell is broken. 

TVA Integrated Resource Plan

For those who are interested, TVA's Integrated Resource Plan Information Session will be Thursday night at 6pm. This is a public hearing "to share information about the concepts, milestones, and upcoming public events related to the release of its Integrated Resource Plan called Environmental and Energy Future."

Try to make it to the meeting at Green Spaces downtown.

Maybe more on this meeting in a later post.

Have a great weekend.

UPDATE I forgot about the Chattanooga Zoo - Cocktails for Conservation, Friday, 6-8 PM. Visit Hank then go on to Nightfall.

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here	Begin your Home Search here	Reverse Mortgage Calculator
	Ask an Expert

www.RichardSmithHomeLoans.com