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Gina McKinley

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Eleventh Hour Gifts Without Shopping

by Gina McKinley

Don't panic about finding the perfect gift, sometimes the sweetest gifts are simple words or gestures...​

If you’re beginning to feel the pressure of running out of time to find the perfect gift, here are a few suggestions that may not be on their “list” but will certainly be appreciated.The perfect gift-300.png

The gift of really listening without interrupting, daydreaming or planning your response can be exactly what people want when they have something important to say.

The gift of affection with appropriate hugs, kisses and pats on the back can demonstrate your love for family and friends better than words.

The gift of laughter by sharing articles, cartoons and funny stories will say "I love to laugh with you."

The gift of a simple, written note shows sincerity and real heartfelt sentiment that may be remembered for a lifetime and could even change a life.

The gift of a sincere compliment supports a person’s need to be accepted and appreciated. "You look great in that color", "That was outstanding" or "I really enjoyed that" can make someone's day.

The gift of random kindness or good deeds like holding a door or allowing someone to move ahead of you in a checkout lane shows respect for others.

Your smile, however, may be your most rewarding gift. Invariably, the person receiving the smile will in turn, smile back. The gift you gave will now be given back to you. It will be the right size and you can always use one more smile.

Let us know what gift is special to you!  Info@LocateArizonaHomes.com

Don't Pat Yourself on the Back Just Yet

by Gina McKinley

It is likely you are in this age range, and own a home, if so you may fit this scenario. Even if you are not the following information is very interesting. Read on…

You’ve got $500,000 in liquid assets for your retirement and you’re still 15 years away. All your bills are paid; you have a small mortgage on your home; cars are paid for and great credit. Don’t break your arm patting yourself on the back yet.31001231_s.jpg

People think more about what they’re going to do when they retire than whether they’ll have the funds to do them. Ask anyone who has retired, it takes more money than you thought it did. Let’s look at a hypothetical situation.

To retire with $125,000 income in today’s dollars with a life expectancy of 25 years after retirement, you’ll need to have a net worth of $1.5 million at retirement including what Social Security may provide. Your $500,000 will grow to $1,045,420 in 15 years which will leave you about a half million short. You’ll need to save $24,149 each year for the next 15 years to reach your goal.

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Is this surprising? Did you imagine that this example would be that far from its goal? It might seem staggering to save $24,000 each year but there is another way…investing in rentals.

Real estate over the long term has proven to be a solid, predictable investment.  Cash flows, appreciation, equity buildup and tax advantages are the components that contribute to the rate of return. Increasing rents, available financing and solid appreciation make rentals particularly attractive in today’s environment.

Call me at 480-355-8645 OR email me at Info@LocateArizonaHomes.com to find out more about how rental homes can help you reach your retirement goals.


 

FHA is a Good Option

by Gina McKinley

I get a lot of questions from people about the different loan programs that are available.  Knowing your options before you start looking for a home is a great idea: while there are some loan programs that are only offered for a short period of time, FHA loans have been a lower down payment option for years.  If you also have a past bankruptcy, foreclosure, short sale, or less than stellar credit, they're also more forgiving than some of the other options.  Read on for more details about the general loan requirements to see if an FHA loan is right for you.

FHA insured mortgages serve a sector of the market that is not necessarily being met by other loan programs.

Securing an 80% conventional mortgage that doesn’t require mortgage insurance may be the lowest cost of financing, but if the buyer doesn’t have 20% down payment, it isn’t really an option.42257772-250.jpg

Securing a 100% VA loan doesn’t require a down payment or mortgage insurance, but if the buyer isn’t a veteran with his/her eligibility intact, it isn’t an option either.

There are conventional loan programs with as little as 3% down payment but they not only require mortgage insurance, they also require a credit score of 740 or above, which may eliminate some buyers.

For these reasons, FHA is a viable alternative to about 20% of new and existing home sales. The Federal backing of these mortgages makes it easier for first-time and low-income buyers to qualify because the requirements are not as demanding. They’re even more lenient towards buyers who have previously experienced bankruptcy, foreclosure or a short sale.

Finding the right mortgage for the right home is a team effort where both mortgage and real estate professionals work in harmony to get a buyer into their own home. Call us at (480) 355-8645 for a recommendation of a trusted mortgage professional.

General FHA loan requirements include:

  • The loan is for primary residences only but can include two, three or four units.
  • The property must be appraised by an FHA-approved appraiser.
  • The property must be safe, sound and secure, in compliance with minimum property standards as defined by the U.S. Department of Housing and Urban Development.
  • The borrower must be a legal resident of the U.S. and have a valid Social Security number.
  • The minimum credit score of 580 with a down payment of at least 3.5 percent, or a minimum credit score of 500 with a down payment of at least 10 percent.
  • The borrower may not have delinquent federal debt or judgments, or debt associated with past FHA loans.
  • The borrower must have steady employment history.
  • Documentation is required if the down payment was gifted by a family member.
  • The borrower must have a debt-to-income not exceed limits of 31% for front-end and 43% back-end ratio (some exceptions may apply).
  • Any judgments or collections on the credit report must be resolved or satisfactorily explained.

Give me a call at 480-355-8645 or email me at Info@LocateArizonaHomes.com for a recommendation of our trusted mortgage partners.  They can also compare the different loan programs to find one that best fits within your budget, too.  Remember, our business relies on referrals from our trusted clients like you, so please contact me if you know of anyone who may be in need of our services.

Lighting Conversion Plan

by Gina McKinley

Switching out your light bulbs to energy efficient options can mean great cost savings over the long run, although it doesn't make it easy to do all at once! I find that creating a plan and knowing what kind of light bulbs you have where before going to replace any is a much more manageable task then standing in the light bulb isle at the home improvement store and wondering which light bulb you should get. Plus, when you know what you need in advance, it creates another bonus: free order pick-up at the store!

In 2007, Congress passed an energy act that required new energy-efficient standards for basic light bulbs. Standard incandescent bulbs are being phased out and eventually will be unavailable.41630011-250.jpg

The alternative bulbs differ considerably in price. LED bulbs are the most efficient but they also cost the most. CFLs are a less expensive alternative.  Interestingly, the more expensive replacements offer lower operating costs and longer economic life.

One approach will be to inventory the different types and quantities of light bulbs you need in your home. Then, research either online or a big box store to find out what each type of bulb costs. This information will give you a total budget for converting your lighting.

It could be a significant expense to replace all the bulbs in a home at one time, especially when most of the bulbs still work. That’s where a plan might make sense.  

Replace the bulbs in the rooms where the lights are used the most such as kitchen, family rooms and bathrooms. There may be other “rooms” where the lights are used frequently like certain hallways or stairs. Outside flood lights for security purposes may be a large energy consumption.

Bulbs can vary in light output measured in lumens as well as color of light from warm white to bright white and daylight. The lighting label required by the Federal Trade Commission on all packaging will help you determine which will give you the most bang for your buck.

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I also find it helpful to list the wattage of each light bulb you need, and note if the size of the light bulb is different from a standard light bulb, too.  When I had to replace my ceiling fan bulbs, they came in a different measurement and I spent around 30 minutes trying to find the correct size! Having a plan in advance would have definitely helped. For other home tips, feel free to email me at Info@LocateArizonaHomes.com or give me a call at 480-355-8645. Our business relies on referrals from our trusted clients like you, so please contact me if you know of anyone who may be in need of our services.

Holiday Travels

by Gina McKinley

Making sure to have some peace of mind while you're traveling is great...luckily, my home has never been broken in to (knock on wood!) but I did have clients whose home was broken into by neighborhood kids.  They just watched them pack up their car and drive away, and knew the house was empty.  Another tip in addition to the ones below (from a client who's a police officer) is to consider getting security alarm stickers or a sign outside your house - even if you don't have an alarm system! Burglars tend to go for easy targets, and are more likely to avoid a house if they think they'll set off an alarm.

The last thing you want if you’re traveling these holidays is to worry about someone burglarizing your home. Use this check list to add some peace of mind while you’re out of town.15632491-250.jpg

  • Ask a trusted friend - to pick up mail, newspaper and keep yard picked up to avoid an appearance of being empty.
  • Consider discontinuing your mail (USPS Hold Mail Service)
  • Don’t post about your trip on Facebook and other social media until you return – some burglars actually look for this type of announcement to schedule their activities.
  • Do notify police or neighborhood watch – especially if you’re going to be gone for more than just a few days. Let your monitoring service know when you’ll be gone and if someone will be checking on your home for you.
  • Light timers make it look like someone is home – use several sets for different times to better simulate someone being at home.
  • Do unplug certain appliances – TV, computers, toaster ovens that use electricity even when they’re off and to protect them from power surges.
  • Don’t hide a key – burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may protect your belongings while you’re gone while adding a level of serenity to your trip.

For other real estate tips, please don't hesitate to call me at 480-355-8645 or email at Info@LocateArizonaHomes.com today! Our business relies on referrals from our trusted clients like you, so please contact me if you know of anyone who may be in need of our services.

Cash-In Refinance

by Gina McKinley

Would someone really refinance their home and not take money out of it? Certainly, if they could get a lower rate, build equity faster and pay off the home sooner.65125303-250.jpg

For people with extra cash available, this can be very attractive compared to the low savings rates being paid by banks.

In the example below, the current mortgage is 5% for 30 years after 48 payments of $1,342.05. The owner can refinance for 15 years at 3.37%. If they put $36,000 into the refinance, their payments will be slightly more but the mortgage will be paid off in 15 years. At that same point, if they keep the current mortgage, their unpaid balance will be $136,049.03.

If you have a goal to get your home paid off and have the available funds, a Cash-In Refinance may be just the strategy for you.

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Contact me TODAY if you have any questions or need a name of a good lender.

 

 

 

Email me, Info@LocateArizonaHomes.com OR Call me, 480-355-8645

 

Up-front Points to Lower the Rate

by Gina McKinley

While there is an overall savings by paying up front “points” (now known as discount fees  – “points” is so 1990) there is even more in tax savings. Over the past number of years the IRS has treated the payment of discount fees or points by the Buyer as “pre-paid interest” which creates a deduction at tax time. Current tax reform may change that and as always I suggest you consult your tax professional when considering this. You might use this to get a tax deduction on this years taxes even though you have only owned the home for a short period in 2017. Home buyers might even be helped with their end of year tax planning.

When loans are quoted by lenders, most buyers pay attention to the interest rate but not so much to the points that may be charged along with the rate.19269905-250.jpg

A point is one-percent of the mortgage amount and considered pre-paid interest that affects the yield on the loan. Buyers or sellers can pay points but there can be limits based on underwriting guidelines for different types of loans.

A lower note-rate would obviously make the payments less. However, with a little analysis, you can determine how much points paid up-front can save a borrower or whether you'll recapture the additional costs in the anticipated time in the home.

In the example below, two choices are compared; a 4.25% loan with no points vs. a 4.00% loan with one point. If the buyer stays in the home at least 69 months, he will recover the $2,700 cost for the point on the lower interest rate.

If the purchaser stays ten years, he’ll save two thousand dollars over the cost of the point. A less obvious advantage will be realized because the unpaid balance on the lower interest rate loan will results in an additional $1,780 savings.

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This is an example of a permanent buy-down but temporary buy-downs are also available. A trusted mortgage advisor can help you determine alternatives. Of course I can guide you to some of those trusted advisors, all you need to do is CONTACT ME at Info@LocateArizonaHomes.com or 480-355-8645


 

Debt Relief May Trigger Tax

by Gina McKinley

The Mortgage Debt Forgiveness Act, originally passed in 2007, was extended three times to protect homeowners from paying income tax on debt that was relieved due to foreclosure, short sales or deed in lieu of foreclosure.  Mortgage Debt Relief example 2017.png

The law expired on December 31, 2016 and unless it is extended again, homeowners with debt relief in 2017 may be subject to tax.

A homeowner might feel a sense of relief without the obligation of a delinquent mortgage but just because the payments are no longer due doesn’t mean that there isn’t another obligation that replaces it. If a lender cancels or forgives debt, a taxpayer must include the cancelled amount in their income for tax purposes depending on the circumstances. The tax significance could be serious.

This previously allowed relief only applied to a taxpayers’ acquisition indebtedness of their principal residence which did not include second homes and investment property. The maximum amount was limited to $2 million of mortgage debt forgiveness or $1 million if filing separately.

Due to the serious consequences involved in short sales and foreclosures, it is advised that homeowners faced with this possibility should seek expert advice from their legal and tax professionals.

If you or anyone you know may be in this situation, please do not hesitate to contact us, we can connect you with a tax accountant that can assist you with your situation. EMAIL us Info@LocateArizonaHomes.com or CALL us 480-355-8645

Indecision is Not a Decision

by Gina McKinley

Wanting to buy a house takes some definite and strategic planning. The very first thing to do is make sure that you can get a loan. What do I need to get a loan? Typically, it takes about $60,000 gross income per year to qualify for a $300,000 home loan, and a good credit score. You need to ask “How can I improve my credit score?” Sadly, some lenders have gotten into the mode of “producing” and have forgotten the joy of helping those who need it.

There could be some legitimate reasons for not buying a home but indecision is not one of them. Indecision is rooted in not having enough information to move forward to own a home or continue renting.18443593-250.jpg

If you keep renting, at the end of the year, you have had a place to live and a pile of receipts that helped the landlord pay for his investment. Deciding to buy a home will give you a place to live that is yours and all the things that come with that.

When you consider principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you’re paying. The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation as the home goes up in value. The equity is part of your net worth and an investment in your family’s future.

The income tax savings can be an additional financial consideration if the combined interest and property taxes are greater than the allowable standard deduction.

Trends are showing that both tenants and homeowners are staying in their homes longer. It’s been said that whether you rent or own, you’re paying for the home. Do you really want to buy the home for your landlord? Check out your numbers on a Rent vs. Own and then, call us to help make it happen.

As you consider the possibilities of home ownership there are a lot of questions…some I can answer and others a loan officer is needed. However, home ownership is still the best investment for long term growth. And even though you own a home, you still need to keep your credit sparkling clean for the next opportunity that will show itself. Do not let those credit cards get behind, and make those minimum payments. Therefore when those questions arise make sure to reach out and contact us at 480-355-8645 OR Info@LocateArizonaHomes.com


 

Risk Rate Relationship

by Gina McKinley

Many years ago when I was just starting in real estate, I had clients who would shop interest rates and pick a lender based upon the rate quoted. More often than not, and in spite of my advice, those rates would be for a 10 day close. That meant the loan had to close in 10 days or less to get the rate quoted. Normally, that did not work out, but after all the trials and tribulations of getting that initial approval, the borrower would stay with that lender, not always a pretty result...

Regardless of what a lender quotes on mortgage rates, the actual rate a borrower pays is based on a number of variables. Lenders determine whether to loan money and at what rate based on the risk involved with the transaction.Sorry not available.png

Factors that increase the risk that the loan will be repaid will proportionately increase the interest rate charged to the borrower. If the risk becomes too high, the loan will not be approved.

  • Loan amounts – conventional mortgages above conforming limits as set by Fannie Mae and Freddie Mac are considered jumbo loans and generally have a higher interest rate.
  • FICO score – the lowest interest rate is reserved for the highest score; the lower the score, the higher the rate the borrower will pay.
  • Occupancy – borrowers occupying a home as their principal residence are considered a better loan risk than second homes and investment properties.
  • Loan purpose – purchase transactions generally have the lowest interest rate with refinancing for better rates and terms being priced slightly higher. An even higher rate might be charged for refinancing and taking cash out of the property.
  • Debt-to-Income Ratio – a borrower’s monthly liabilities divided by their gross monthly income develops a ratio that helps lenders to assess the borrower’s ability to repay the mortgage.
  • Property Type – some types of property are considered higher risk than others which could adversely affect the rate.
  • Loan-to-value – the lower the percentage of the loan to the appraised value of the property will generally lower the interest rate.

Any combination of these factors could limit a borrower’s ability to secure a mortgage at the rate initially quoted. Pre-approval by a trusted mortgage professional can be the best way to know what rate you can expect to pay. Please call for a recommendation of a trusted mortgage professional.

Currently we have clients, who will be home buyers soon, but are in credit repair, services that good mortgage companies offer to their clients in need of increasing their credit scores. Often procedures include new credit cards that are pre-paid, paying off small debts and closing some accounts. But honestly, just by following what I just said, you might not get the right accounts repaired. So, to get the best rate, today or a year from now, do not go it alone.

CONTACT US 480-355-8645 OR email us at Info@LocateArizonaHomes.com and we will direct you to a good lender that can help get you ready.


 

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Gina McKinley
RE/MAX Masters
2390 W. Ray Road, Suite 4
Chandler AZ 85224
480-355-8645
Cell: 1-480-779-9420
Fax: 480-355-8912

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