FHA MIP Release

FHA loans require mortgage insurance premium to cover a possible loss to the lender if the property has to be foreclosed and sold. The premium is substantial and eliminating the MIP would reduce the payment considerably.

The MIP must remain in effect for five years but after that, when the balance is 78% of the original purchase price, FHA will release the requirement and your monthly payment will go down. Since amortization is affected by interest rates, the normal time to reach this 78% point could be from 9 to 12 years at today’s interest rates.

In the example below, the MIP would be released in 9 years 6 months with normal payments. An extra $100 a month would allow the borrower to reach the release point in 7 years 1 month. To reach the release point in the minimum five years, the borrower would have to make an extra $268.04 per month principal contribution.

Releasing the MIP in this example would save the borrower $177.67 per month. The borrower would also save interest, build equity and shorten the term of their mortgage. Once the MIP is released, the borrower could continue the same payment schedule to further accelerate the debt reduction.

To make some projections on your mortgage, click here.

Home Safety & Security Tips

A quick once-over of the items on this list may improve the safety and security of your home and could protect your family and friends. It is important to periodically pay attention to these things because things change over time.

Security

• Does each exterior door have a deadbolt?
• Does the lock on each window work?
• Have you added pins or clips to your windows for additional security?
• Do you have dowels or broom sticks in the track of windows and sliding glass doors?
• Do you have security company labels or signs displayed prominently?
• Do you have an alarm system? Is the system monitored?
• Do you have a dog that barks when strangers approach the home?
• Are emergency numbers posted near the telephones?

Fire

• Do you have smoke detectors near all sleeping areas?
• Do you check the batteries monthly and change them annually?
• Do you have two carbon monoxide detectors?
• Do you have an escape ladder for upper floors?
• Do you have fire extinguishers near exits and in the kitchen?
• Do you have an emergency escape plan and is the family familiar with it?
• Are any outlets or switches warm to the touch?
• Are kitchen ventilation systems working properly?
• Is the dryer ventilated to the outside and is the exhaust free of lint?
• Is the furnace cleaned and serviced yearly?
• Is the space around the hot water heater clear of combustible materials?

Falls

• Are all electrical and phone cords out of the flow of traffic?
• Are rugs and runners slip resistant?
• Is your step-stool sturdy and in good condition?
• Are stairs clear of objects that could cause a fall?
• Are all entrance ways, exits, halls and walks well lighted?
• Do bath tubs and showers have non-skid strips or suction mats in them?

Other

• Do you keep drugs and medicines out of reach and sight of small children?
• Are interior doors designed so small children cannot lock themselves in rooms?
• Are pool and play areas fenced to keep small children in and uninvited guests out?
• Are firearms kept out of reach and sight of children?
• Is a well-stocked first aid kit available for emergencies?
• Is there one member of your family trained in first aid, CPR and the Heimlich maneuver?

Rates Are Down But It Costs More?

The latest Housing Affordability Index from the National Association of REALTORS® shows an interesting trend taking place this year that needs buyers’ attention. Most people know that the mortgage rates are still at incredibly low rates but don’t feel there is much sense of urgency.

This report shows that mortgage rates have fallen from 4.37% in January to 3.81% for June. However, the report shows that the payment as a percentage of income has gone from 12.1% to 13.9% which simply means that buyers have to spend more of their income on a home.

The reason is that the median price of homes nationally has gone from $154,600 in January to $190,100 in June which is a 23% increase. The two major components of housing affordability are the price of the homes and the mortgage rates a buyer must pay.

Even if one of those components is going down, the other could have a significant affect as is shown in this year’s trend in housing affordability. In the past few weeks, the effects of which are not show in this report, mortgage rates have been moving up.

Home buyers and investors who have been taking a wait and see approach need to make a decision if now is the time to act.

Dull or Sharp

As borrowed from my Facebook friend and fellow REALTOR®, Steve Shelton!

I dulled a perfectly sharp blade on my pocket knife today. I did it cutting up a cardboard box. Isn’t it strange how you can dull a steel blade on something as weak as cardboard? There is a lesson in there for us.

Many of us are spending all of our time on people, projects and things that will never make us better. These “cardboard boxes” in our lives only serve to dull us and drain us of our usefulness. Can you think of someone or something that only wears you down? We need to look for ways to be “sharpened”. This honing of our lives takes place just like Solomon said in Proverbs 27:17, “As iron sharpeneth iron, so a man sharpeneth the life of his friend.”

Seek out the people, projects and things that provide an edge of iron for you to be sharpened upon. Also, look for ways that you can provide the same benefit to the lives of others. There are enough naysayers, drama queens/kings and troublemakers in this world. The world needs men and women of integrity who will stand like iron not wilt like cardboard. Listen, read, and meditate on the words of those that seek to strengthen you. Be a sharp blade and a sharpener of blades, my friend.

Handling the Eyesore

It can be unsightly and upsetting when a home in a neighborhood isn’t being maintained like the others. It might be an overgrown yard, a fence in need of repair, paint peeling on the home or even a car parked in front of the home that hasn’t moved in weeks.

I believe most people want to be good neighbors and may be willing to correct the issue once it is brought to their attention. In some cases, they may not agree with the same urgency and it might be necessary to seek other remedies.

The most expedient solution may be to contact the responsible person and describe your perception of the problem. An owner-occupant may be sympathetic to the neighbors and more than willing to correct the issue.

However, if you suspect that it is a rental property, check with the county tax records to identify the owner. They may be unaware of the situation and would actually welcome the “heads-up” to protect their investment.

The next step might be to notify the homeowner’s association if there is one. The covenants or bylaws will specify how properties must be maintained and the association can enforce them.

The final step would be to notify the city for a possible code violation. Most cities have a separate code and neighborhood services division and some cities have 311 for non-emergency assistance.

Church, lightening bugs and Home of the Patriots

I love to reminisce about where I grew up in Shellman, GA.   Randolph County is a small county in southwest Georgia mostly known for farming peanuts, cotton, soybeans, corn and nights of hugely competitive basketball and baseball teams.  I’ve been gone 32 years and all of my family has left there now.  We moved there when I was a newborn baby.  My daddy was a truck driver and had his own hauling business.  My brothers started their business there straight out of high school and both lived there for many years until moving closer to Albany, GA.  My sister left right out of high school and never came back.  My parents also left a few years after I married.  Ever since then my visits there are very few.  My best friend’s mom from Shellman (we are still best friends) is pretty much my only connection there now.  When I go back for an occasional funeral and most recently a couple of high school reunions there is very little that has changed.  What has changed are many of the people who I knew growing up.  My neighbors watched out for me as I rode my bike around town, told my mom if I was somewhere I shouldn’t be, taught me how to make blackberry jelly (thanks Grace Wall, my adopted Grandmother), learned how to drive, had teachers that truly cared about my future, swam in the coldest pool EVER where I had to be at 8:00 am for two weeks straight for swimming lessons and enjoyed the best “spend the night” parties.  The train track that was 3 houses down from my home came by a few times a day.  The man on the caboose always tossed candy and bubble gum to the kids as the train came through town.  We would hear it coming and run up to the corner.  You could see kids all the way down the road scrambling for the treats.   These were days before cable TV, cell phones, tablets and iPads and laptops.  We had record players, Barbies, treehouses, mini-bikes, games, storytelling and bicycles were our primary mode of transportation everywhere around town.  I rode my bike most every afternoon after school up town to the local drug store where you could get a real fountain cherry coke.  There was no worry of being abducted and coming in after dark was normal with dirty feet of red Georgia clay and lightening bugs in a jar.

This is the church where I was baptized and married.  The house is the home I grew up in.  I had a fun childhood.  The differences in how I grew up and how my grandson is growing up is two different worlds.  I pray he will look back on his childhood as happy and innocent and doesn’t grow up too fast.  As I approach 50 next year, I hope my next 50 slow down a bit so I can enjoy the rest of the ride.

Friends

One of my Facebook friends posted a really cool post I’d like to share today.  From Steve Shelton posting in “Realtor – The Professional”:

“Vitamin F…… Why do I have a variety of friends who are all so different in character? …

How can I get along with them all? I think that each one helps to bring out a “different” part of me. With one of them I am polite. With another, I joke. I sit down and talk about serious matters with one. With another I laugh a lot. I listen to one friend’s problems. Then I listen to another one’s advice for me. My friends are like pieces of a jigsaw puzzle. When completed, they form a treasure box. A treasure of friends! They are my friends who understand me better than I understand myself. They’re friends who support me through good days and bad. We all pray together and for each other. Real Age doctors tell us that friends are good for our health. Dr. Oz calls them Vitamin F (for Friends) and counts the benefits of friends as essential to our well being. Research shows that people in strong social circles have less risk of depression and terminal strokes.
If you enjoy Vitamin F constantly you can be up to 30 years younger than your real age. The warmth of friendship stops stress and even in your most intense moments, it decreases the chance of a cardiac arrest or stroke by 50%. I’m so happy that I have a stock of Vitamin F! In summary, we should value our friends and keep in touch with them. We should try to see the funny side of things and laugh together and pray for each other in the tough moments. Thank you for being one of my Daily Vitamins!”

Steve Shelton, you always post such profound and worthy readings.  Thank you for sharing!