This new video conveys the relationship between rising purchasing power and advancing home prices. It puts perspective on what happened and why. Also covered is the condition that exists today and what that means for would be buyers.Share
Tag Archive: brian larrabee
Many a homeower in the making has inquired as to why advance taxes and insurance money has to be paid into an escrow account when they’re already settling up on taxes and usually pre-paying their entire first year insurance premium at the closing. These are good questions and the answers are equally straightforward. The following video is short but to the point and provides good visual reinforcement of the how and why:
Estate of Mind Subscribers have their own personally branded video player in which this video and many others appear. To view a sample of this, click here.Share
In this video, we clearly evidence that despite prices rising over the last 3 decades, the cost of financing a median priced home has continued to fall. Making it clear to your clients and prospects that price is but one component in affordability can be an important threshold to overcome and this short clip does the job.
For Estate of Mind, Inc. subscribers, this video launches on their own personalized web page/video player which gives a viewer the option to email a direct response, share the video, post it to Facebook, etc. To see an example of this, click hereShare
To most first time buyers and even many that have been there before, an escrow account is a mysterious beast. It can be hard to understand not only why it’s often required but how it really works. We’ve all seen many attempts at providing clarity and many that fall short. Granted, it’s not a simple feat and just getting borrowers past the fact that money has to be paid out up front for a bill that might not be due for months yet can be a non-starter from the word go. The biggest challenge is in making the complexity simple or in the case of our stab at this situation, making it visual. The following flyer actually provides both a graphic representation and an explanation of how that works in print too. Throw in a litle color and a minute or two to grab the concept and we think it does the job. We hope you do too.
What you see below is a generic or unbranded version of this. As with all of our flyers, Estate of Mind Subscribers have these customized with their own personalization and online tools to make distribution via email, PDF, direct posting to Facebook and even some video versions as easy as logging in and clicking a few buttons.Share
The latest FHFA numbers we’re released and it’s no secret that it’s been pretty grim lately. There are a few bright spots here and there and on that note, it’s still interesting to see how real estate has significantly outperformed the stock markets over the last 10 years. Despite the recent declines, average rates of appreciation in most states are pretty healthy and for those lucky enough to have purchased in Washington, DC, they’ve still seen double digit performance. Download the free chart copy below to see how your state has fared and compare the ten year averages to a pretty flat stock market (well, more like a roller coaster – a thrilling ride with lots of ups and downs but when it ended, it was right back where it started).
Our stock brokers will tell us that stocks have a higher historical rate of return than real estate and on a top line basis, that is true. However, they forget a few very important facts when making that comparison. Primarily, that we don’t need stocks yet we do all need a place to live. Beyond that are what we might hear and talk about a little more which is the benefits over time of tax deductible leverage and the current level of affordability being so good that it’s now often cheaper to own than it is to rent.
We must apologize for that last line there though as renting always costs money and while many have suffered lower values and hardship recently, those that have hung on in the past and through the cycles both up and down, owning has almost always made money. Want to see how that works? Here’s an online calculator that you can use to see exactly what owning can mean over any period and given any parameters Total Cost & Benefits Calculator
But hey, owning stocks can be a good thing too, we all need to be diversified and they provide a way to earn or build wealth without having to do anything. Owning real estate isn’t always a picnic and it’s not for everyone. Still, for those of us that want to be the CEO of our own destiny and actually know what’s going on in our boardroom, want to know that our investment is grounded in earth rather than a certificate and hence, even if our home burns to the foundation, it’ll still be worth the ground it was built on rather than the paper on which it was printed, real estate can be a great opiton. You of course have to decide for yourself and educate your clients accordingly but for us, it doesn’t get much safer than that.
The 3 Most Important Questions for Today:
1. Have you ever owned a stock that went to zero?
2. Have you ever owned a home or piece of land that went to zero?
3. Now that you’ve thought about it, which do you fee safer owning going forward?Share
The recent letter from the Desk of David Steven’s alerted lenders to the upcoming decrease to the UFMIP and the increase to the monthly MI. Being the inquisitive type and wondering whether this was going to be good, bad or a little of both for borrowers, I did what I usually do when faced with a math challenge – I fired up a new Excel sheet. I’m making the results of that available here and will continue to update and refine it as we go. You can download it here and it’s yours to do with as you please.
While the spreadsheet has already been expanded beyond the making of this video, you can take a look at this too in order to get a very quick run through of how to utilize the spread and what the MI cost differences may be. Note, the proposal has not yet been released (as of this writing) in the form of an official Mortgagee letter and that won’t be available unles or until this is signed into law by the President. Until then, word is that the MI over 95% will be .90 but the letter implies that they’ll have authority to go as high as 1.55%. You’ll see exactly how much of a negative impact that could have if it were to happen. Video available here.
Our latest flyer falls into the general educational category. As delivering an honest and applicable rate quote is ever more difficult, yet no less in demand by consumers, it’s critical to be able to quickly educate our prospects so they are not falsely lured by the many misleading advertisements that still exist.
This flyer should go a long way to quickly and easily convey the real story and allow borrowers to be properly inclined to provide the information essential to providing accurate estimates.Share
We’ve just witnessed either a massive, pre-emptive, wholesale sentiment shift in the bond and MBS markets or one heck of a dress rehearsal.
Like the old EF Hutton commercial, when Bill Gross speaks, the markets listen. To those that missed this, Bill really detonated the destruction by suggesting that the US of A could lose its AAA debt status. It was all downhill from there.
Inflation at its core IS a monetary event and when the supply is increased, it is inflation but for all practical purposes, is it really? For in reality, it ultimately depends on the environment.
Even a limp balloon becomes full in a vacuum but let the atmosphere back in and it’s still just another shriveled piece of rubber. Alternatively, put that balloon in a pressure vessel and you’ll realize that it’ll take a lot more air than usual to inflate it.
By all accounts, we’ve seen the abyss or at least teetered on the edge. It’s only by way of massive stimulus (and plenty of hot air) that we’ve avoided the plunge. Have we now gone too far and to the point that a deflationary environment and Armageddon are just soon to be forgotten hitchhikers in the rear view mirror? Does it really happen that quickly?
Don’t get me wrong please, those that know me understand that I’m only a couple T-bones short of pure bred perma-bull, but I also bear the scars of the branding iron. I’ve learned my lessons by being there and though I’d love nothing more than to see an end to our current crisis, I also feel the foundation is not yet cured. Low rates, while artificially colored and flavored, were just beginning to have the intended effect. We’ve only just begun to grill that burger and there’s a lot of pink left on the flip side.
Maybe I’m just an idealist and would like to see the nation’s homeowners all locked in at 4.5%, maybe I just like helping people achieve that or maybe I’ve studied the past well enough to know that the likelihood of significant inflation occurring immediately post recession or unless hindsight proves differently, still in the midst of one, would be a phenomenon by classical definition.
Looking at the chart above, we can see that inflation (orange field) is nowhere to be seen, in fact, we’ve been in a deflationary environment and unemployment (red line) has propelled its way close to double digits. Absent the skew of the birth death ratio adding rather than subtracting jobs and the real rate is even worse. Each instance of recession (grey verticals) has seen inflation and thus interest rates continue to abate, often for a year or more after the end.
In simple terms, this is not the classical environment during which rates should rise.
So what gives? Well if you’re old enough to remember, think Heinz 57 and Carly Simon.
Markets will move in anticipation of current fundamentals and policy leading to the most popular collectively expected results. In other words, if we print more money, it’s worth less and investors or lenders demand higher yield.
Head Fake or Pipeline Cleansing Pause?
I’m still more bullish on housing than I am on stocks and the “V” shaped equities recovery we’ve seen can still become a “W.” If that happens, then we may very well see a renewed flight to safety, lower bond yields, the continuance if not the further expansion of the Treasury MBS purchase program and don’t say it too loudly – lower mortgage rates.
Are these necessary for ultimate recovery, NO. Would they help further the nascent stabilization we’ve begun to witness with sometimes deeply discounted homes going to truly qualified buyers, YES. Would they help enhance the needed confidence for the shell shocked or side-liner’s urge to get back in the game, YES. Would they provide a continued enhanced family cash flow so that dollars currently servicing debt could be freed to fuel saving, discretionary spending and investment, YES. Would the lower interest rates actually help the government by increasing the taxes paid by homeowners but doing so in a way that benefits debtors directly by still lowering overall outlay, YES. Would they further benefit the government by simply lowering the cost of financing the national debt, YES.
Regardless of what would be nice, if what we’ve experienced is truly collective expectation acting as a barometer of coming economic growth, then let it rain. However, if all of this is the negative consequence of too much stimulus and not enough sizzle then let’s hope that recipe can be tweaked in a way that better enhances and defines the escape plan, brings strength back to the dollar and provides for rates more truly in line with realistic expectations for forward growth. For with sustained rates at a level that allows everyone eligible to lock in durable affordability, we’ll have truly created an environment that will foster a balanced and healthy housing market.Share
The revolution is coming. The brain child of Mark Green from Top of Mind Networks, this event is gearing up to be “the” gathering of like minded, ethical and ready to learn ever more type loan officers from around the country.
A grass roots event by the industry and for the industry. Speakers will not be paid and will not be pitching product from the stage, admission will be inexpensive and all proceeds above and beyond costs will be donated to charity. The accounting for this event will be visible to all and maintained on the web site (coming soon) at: www.mortgagerevolution.org
Enlist now, come join us, learn, network, do the right thing for charity and blow off a little steam.
More info at the Mortgage Chili Blog
Or register on the interest listShare
Without any fanfare, we’ve been quietly building out and testing our new personalized video player. This is the answer to many things including:
- I like the idea of educational video marketing but don’t know where to start nor have the time
- My referral partners need some coaching on the Home Economics Charts data
- I’m busy and need to work more efficiently
- I need a way to address common questions that’s available even when I’m not
- I need something unique to enhance the value of my web site or blog
- I understand the power of viral marketing but don’t have the resources to do anything about it
- I like the idea of having a clear, concise and infinitely repeatable message to avoid misunderstandings
- My budget is limited, yet I need to know that new educational/marketing content will be created regularly
- Etc., etc.
We’ve not yet posted this new video player as an available item other than in our new subscriber program. As well, we want to be sure that we have added at least a sufficient number of relevant videos for your clients and referral partners to benefit from before we formally introduce it.
Following, are three of the latest additions and we’ll be continually adding more in the weeks and months to come:
This system allows you to send email templates with an invitation to watch the video and the “player” allows a viewer to forward the video (thus the viral element), respond directly to you via email, launch the main video player where a main menu of available videos is available, etc.
Check it out, let us know what you think and if you have any questions or would like to have one personalized for you, give us a ring at 866-953-5550 or email email@example.com