The Fiscal Cliff….. 1 – 2 – 3 …… Jump!

Last week, it was to be the end of the World, according to the Mayan calendar.  Did anyone stop long enough to think that there might be another page stashed somewhere?

If we just have our 2012 calendar hanging on the wall, and weren’t fortunate enough to get a 2013 calendar for Christmas, does this mean the world ends on December 31?

Now the news media and Congress jump on the band wagon and relate the looming fiscal cliff to the end of our financial world.  Taxes will go up overnight and spending cuts, however those are defined these days, will go into effect.  The end of the world?  Hardly.

The fiscal cliff scenario may actually be a well-orchestrated plan.  Democrats have been drooling for higher taxes for years while Republicans continuously demand spending cuts.  Does anyone in their right mind think the budget compromise that created the “fiscal cliff” measures was thought to never become a reality?

Both political parties get what they want, and they get to blame the other party for whatever happens.  That my friends is “win-win, Washington style.”

In the meantime, what can we do?

If you are waiting for the window of opportunity for home ownership to open wider, you need not wait any longer.  At some point in the future, the Fed will stop buying mortgage bonds and begin selling.  When the free market enters, interest rates will go up.  They cannot  conceivably go any lower.

Plus, mortgage interest and real estate taxes remain tax deductible.   If you are worried about your future employment, your home is much safer owning than renting.  Landlords have a tendency to evict quicker than banks will foreclose!

Make your plans now to watch the fiscal cliff debacle unfold from your own new home, if you are able.

The fiscal cliff needs to happen.  Current well-meaning government programs provide incentives for people to continue their dependence on them.  They actually should deter.  Enacting the fiscal cliff measures would be the first financially responsible thing Congress has done to take our financial future seriously.

Let’s watch them mess this up too!

Good News for Veterans, and Active-Duty too!

With Veterans Day being this week, I would like to take the opportunity to reach out to all Veterans and Active-Duty military personnel that may be thinking about purchasing a new home.

The great folks at THDA are always on the forefront of great programs that encourage home ownership, and they have a special program just for Veterans and Active Duty military.  You don’t even have to use your VA Eligibility to use the program either… but you can and save even more!

This exciting program is called “Home Ownership for the Brave.”  For more information, CLICK HERE.   I just had the honor of welcoming a veteran who used this program into his new home last Friday!

This program is a valuable tool and can be used in many circumstances.  Already have another VA Loan?  Already used your VA acquisition limit?  Debt Ratio issues?  Simply want a lower interest rate?  If you answered yes to any of these, you need to explore this program!

If you have a preferred mortgage lender, give them a call.  If you don’t call me and I will recommend one!

Mortgage interest rates are lower than they have ever been.  Why not pursue the dream of owning your home?  An Ole South model home is a great place to start

 

Trey Lewis is a licensed Real Estate Broker in the State of Tennessee with Ole South Realty, 615.896.0019  direct 615.593.6340.  Specializing in new home sales in the Greater Nashville area to include Nashville, Murfreesboro, Smyrna, Gallatin, Clarksville, and Spring Hill, Tennessee.

 

Nashville New Homes: Even lower mortgage interest rates? Coming soon.

That’s right.  Even lower interest rates are on the horizon for first-time home buyers, thanks to the folks at Tennessee Housing Development Agency (THDA).  Visit their website, www.THDA.org for more information.

Here are the new program rates that go into effect September 1, 2011 for all files submitted ON OR AFTER that date:

Great Rate – 3.95%       For the first-time buyer that has their own down-payment funds and closing costs, if not paid by a seller.  Perfect for those with front and/or back ratios below 45%.  

Great Advantage – 4.25%     Buyer receives a 2% grant that may be used toward down-payment, or closing costs if not being paid by seller    

Great Start – 4.55%     Buyer receives a 4% grant that may be used toward downpayment, admin fees, and closing costs if not paid by seller.

Remember!  When you purchase a new home from Ole South in Nashville, Smyrna, Murfreesboro, or Spring Hill, and use Ole South Financial (our SunTrustMortgage Joint Venture), ALL CLOSING COSTS are paid!  (note:  certain conventional loans limit seller contributions to 3%)

YES!       A first time buyer can purchase a brand new Ole South home with ZERO CASH DOWN AT CLOSING and receive a 4.55% fixed interest rate 30-year FHA loan.   Find yours at www.OleSouth.com

NOW – an unprecedented time to take advantage of unprecedented opportunities.

 

Trey Lewis is a licensed Real Estate Broker in the State of Tennessee with Ole South Realty, 615.896.0019  direct 615.593.6340.  Specializing in new homes in the Greater Nashville area to include Nashville, Murfreesboro, Smyrna, Clarksville, and Spring Hill, Tennessee

Nashville New Homes: Changing the rules…another great reason to buy now.

Perhaps the best reason to buy a new home in Nashville now is “the rules” and furthermore, knowing that the rules are going to change.

For example, on October 1, 2011, if passed by Congress, FHA loan limits will decrease in 669 counties across the nation.  These 13 Tennessee counties will be affected by the new limits:

Cannon, Cheathan, Davidson, Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, and Wilson.

Currently, a home buyer can acquire an FHA loan up to $432,500.  After October 1, 2011, the proposed limit will be $393,300.  Those wishing to use FHA financing on loans up to $432,500 need to act now!

http://government-mortgages.com/fha/fha-loan-limit-decreases.html

For those looking to purchase a new Ole South home in the immediate future, these changes will have no effect.  Other than with our custom built homes, our most elegant offerings are far below these proposed limits, even though they compare very favorably to homes in the 400’s.   You’ll have to see it for yourself to believe it!  www.OleSouth.com

So, if this change will not affect Ole South directly, why my great concern?

The moral of the story?  All rules and lending criteria are subject to change at any time.   

Purchase a new Ole South home using an FHA loan through Ole South Financial, and Ole South pays all of your closing costs.  There are proposals out there to restrict the amount of closing costs a seller can pay, meaning YOU will pay the difference out of pocket.  Things can changeAct now.

Currently FHA loans require a 3.5% down payment, which can also be funded by THDA for eligible first-time buyers using the “Great Start” program.   There have been numerous proposals floating around to raise the down payment requirement.   Things can change.  Act now.

According to many experts nationwide, home affordability is at a peak.  Especially in Nashville.  Now truly is the time to buy a new home, before the rules that we know change again.

Trey Lewis is a licensed Real Estate Broker in the State of Tennessee with Ole South Realty, 615.896.0019  direct 615.593.6340.  Specializing in new homes in the Greater Nashville area to include Nashville, Murfreesboro, Smyrna, Clarksville, and Spring Hill, Tennessee

Nashville New Homes: How can a government that prints it’s own money go broke?

Raising the US Debt Ceiling has been a topic of discussion all over this great country.  Last week, one of our trusted vendors, Tommy, asked this great question:

“How can a government that prints it’s own money go broke?”   That is a simple question.  One with very complex answers.  Very thought-provoking to say the least.

Tommy has a simple solution.  “Print up all the money we supposedly owe these other countries, stack it on pallets, and airlift it to them.  Then, simply tax them whatever they would tax us on imports and exports.”

Well, hmmm….  simple enough.  Would it work?  Let’s look further at just what our money is:

Notice at the top of the dollar bill is the phrase:  “Federal Reserve Note.”   Take a look at the history of our US Dollar:

http://en.wikipedia.org/wiki/History_of_the_United_States_dollar

In summary, prior to Richard Nixon removing the “gold standard” of our currency, for every dollar in circulation, there was physical gold of the same value in storage, gold that is still stored at Fort Knox, KY.

And there is another analogy comparing our debt ceiling to a personal credit card.  As long as you can continue to raise your credit limit, you can pay your obligations and take on new spending initiatives.  When someone says NO to your request to raise your limit, you have a serious problem.  You have to STOP spending.  And if you cannot pay the minimum payment due, the issuing bank will stop your spending for you.

Many deficit hawks are pushing Congress NOT to raise the debt ceiling because there will still be ample revenue coming in to operate our government.  That is true.  But just like a credit card, when you are not able to pay your minimum payment, in this case the interest on our national debt, word spreads to all the lenders you owe, just like on your credit report. 

Ever read the fine print on your credit card statement about a late payment?  The interest rate goes up.  The same is true with our nation’s debt obligations, only the “world market” determines how much the rate goes up. 

Our nation’s budgets have been in deficit for 80% of the past 82 years, so the problem is not new.  Furthermore, our total deficit has been over 10% of GDP only 4 times in history – The Civil War, World War I, World War II (aproximately 25% of GDP) and the financial crisis of 2008.  

Here is a closer look of where we stand as a country right now, according to Tresury Secy Geithner in February of this year: http://www.bloomberg.com/news/2011-02-14/geithner-quietly-tells-obama-debt-to-gnp-cost-poised-to-increase-to-record.html

And now, this dilemna lies soley in the hands of Congress.  Oh joy.  http://www.washingtonpost.com/business/economy/congress-tees-up-crucial-votes-on-debt-limit/2011/07/17/gIQA40IZKI_story.html

There are many views on deficit spending and its effect on our economy, all of which have merit.  Read this interesting commentary on deficit spending by Marshall Auerback:  http://www.nakedcapitalism.com/2011/07/marshall-auerback-there-is-no-progressive-case-for-deficit-cutting-%E2%80%93-the-myth-of-the-virtuous-clinton-surpluses.html

Now is a time that our elected officials have to put politics aside.  They have to quit posturing for the 2012 elections.  Our nation’s debt ceiling must be raised to continue any hopes of economic recovery, but we must also have serious plans in place on how the excessive borrowing will be spent.  Everyone has a right to know.

I frequently tell prospective first-time homebuyers “every day you do not own a home is another day you will have to pay for one.”

The same applies with our deficit-dilemna.  “Every day we put off addressing the problem is another day we will be affected by it.”

You know what’s really funny?  After hearing all of the many solutions being proposed, I like Tommy’s solution the best!

 

Trey Lewis is a licensed Real Estate Broker in the State of Tennessee with Ole South Realty, 615.896.0019  direct 615.593.6340.  Specializing in new homes in the Greater Nashville area to include Nashville, Murfreesboro, Smyrna, Clarksville, and Spring Hill, Tennessee

Nashville New Homes: Work Equity as your New Home Downpayment?

What is the one thing that everyone in this world has in common?   A FUTURE.  

That’s right…everyone has a future of some kind.   Although there are no guarantees in life, there are steps each one of us can take to make our future more stable and secure.  Owning a home is one such step that everyone can position themselves to take.  Your future really can be in your own hands.

Home mortgage criteria has changed a lot over the recent years, but that doesn’t mean it has to be more difficult to purchase a home.  It just means you have to provide more proof of your ability to be a responsible homeowner. 

FHA loans are the most widely used programs, where 3.5% of the purchase price is required as a downpayment, without exception. 

WAIT A MINUTE…. aren’t there ZERO DOWN home mortgages?  Technically, NO…. but actually…. YES! 

In Tennessee, there are loan programs where the Tennessee Housing Development Agency (www.THDA.org) will grant first-time buyers up to 4% of the purchase price to be used toward the downpayment and/or closing costs. 

If the seller of the property agrees to pay your closing costs, which Ole South will, you can use the THDA Great Start grant for your downpayment and administrative fees.   How does THDA do that?  What is the catch?

There is no catch.  The fixed interest rate for loans using the downpayment grants are slightly higher than those FHA loans with your actual down-payment.   If used responsibly, the Great Start program can be a very useful tool in financial planning. 

With today’s historicaly low interest rates, the money you would normally put down can be used to pay off other debts with higher interest rates.  A trusted mortgage professional can help you evaluate your options.  I happen to know many, so please let me know if you would like to know more.

There are other ways in addition to THDA to secure a downpayment.  You may have a relative or close friend that will give you the money, which has to be documented in the form of a gift letter affidavit that no repayment is required or expected.

And there is another provision that has been around a long time, but has basically been forgotten….WORK EQUITY.   Most builders hate it because it really is a pain in the ass to deal with.  BUT, it is a tool that can bring willing homebuyers to the closing table much quicker!  We offer the program at Ole South and you do not have to be a first-time buyer to participate!

FHA allows the seller to credit the buyer an amount up to $2.00 per heated square foot living area for painting the interior of the home, including all wood trim and doors.  The seller can also furnish the paint!  Please remember in your negotiating, that is the maximum allowed amount and the builder can get the same job done for 1/2 of that amount. 

You can also receive “work equity” credit toward your required downpayment for seeding and strawing your own lawn.  And the seller can furnish the grass seed and straw as well!

Lets do the math using an 1800 s/f,  $150,000 new home example, which Ole South offers plenty of choices.  (www.OleSouth.com

The required down-payment is $5,250.   Paint the home and you can receive $3,600 credit toward your downpayment.  You can seed and straw a typical new home yard and receive approximately $750.00 credit.  That leaves your total cash out of pocket at $900…. and you still get to take full advantage of the lowest rates available!

History proves that over time, owning is always better than renting.  Why not improve your financial future today by visiting one of our Middle Tennessee neighborhoods in Nashville, Smyrna, Murfreesboro, Spring Hill, and Clarksville?  Find out why thousands of home owners are proud to say:

Trey Lewis is a licensed Real Estate Broker in the State of Tennessee with Ole South Realty, 615.896.0019  direct 615.593.6340.  Specializing in new homes in the Greater Nashville area to include Nashville, Murfreesboro, Smyrna, Clarksville, and Spring Hill, Tennessee

Nashville New Homes: The stupid questions are the ones you don’t ask!

After the good-ole days of school, the thought of owning a home seldom crossed my mind.  I knew nothing about the process and was living under the assumption that I would have to have a large down-payment whenever the time came.  I didn’t feel comfortable asking questions.  I did not want to appear stupid.

A few years later, a friend who was a mortgage geek asked me why I had not purchased a home.  Being self-employed, I really did not know where to start, and did not want to admit it.   Swallowing my stupid pride, I finally laid all the pieces to the puzzle out there and purchased a home weeks later.  Then, I backed up to the “ass-kicking machine” for not asking someone sooner!  It really was that easy…and still is today!

Every year you do not own a home is another year you will not build financial security.  If the home you purchase does not go up in value at all, it will still be yours when it is paid for and you still have something to sell.  Home Equity loans have also put many children through college.  No apartment complex has ever managed to do that… except for its owners!

Lets address a few of the many questions that our first-time buyer of today might want to ask:

1)   How much down-payment will I have to have?     Don’t you just hate hearing the answer, “it depends.”  I do, and refuse to use that as an answer.  In most cases, you will have to have a minimum down-payment of 3.5% of your home’s purchase price.  In Tennessee, first-time buyers using THDA’s Great Start can purchase a new Nashville area home with ZERO down payment and ZERO cash out of pocket.  Of course, certain credit and income restrictions apply, but the program is relatively easy to qualify for.   Visit www.thda.org for more details.

Members of our US Military, Veterans and Active-duty, are also eligible for ZERO DOWN financing and can now receive a 1/2% reduction in their fixed interest rate under THDA’s new “Homeownership for the Brave” program.    Please contact me anytime and I will tell you all about these great options!  615.593.6340.

2)  Just what are closing costs?   Much like purchasing a car, closing costs include sales taxes and various fees.  The costs of obtaining your loan are also closing costs, and there are many options there as well.  Also included is an escrow account where you property taxes and insurance is pre-paid into the future.  Typical closing costs to range between 3 to 4% of the purchase price of your home.  This amount is due at the time of closing.

3)  Who pays closing costs?  Everybody pays in one way or another!  Who gives the money at closing is negotiable.  It is very common for buyers to negotiate with the seller to pay closing costs.  If you purchase a new home with Ole South, ALL of your closing costs are paid when using our network of preferred lenders.  In any case, we will pay 2% toward your closing costs with any lender.  We make it easy to own a new home.

4)  How much money do I need when I decide to contract on a home?  The deposit amount you place when you contract is a negotiable figure between buyer and seller.  That deposit is called “Earnest Money” and is held in escrow to apply toward your cash requirements at closing.  We at Ole South ask for a minimum $500 deposit at the time of contract.  If you use the THDA Great Start program through Ole South Financial, you will receive this deposit back at closing!

5)  When do my payments start?  Payments on your new home do not start until the home is completed and the transaction is closed.  Typical first payments are due 30 days forward to the 1st of the next month.  If you close on April 15th, your first payment will be due on June 1.

So get out there and explore the many homeownership options that are in front of you!   See for yourself how new homes are better.  Start by visiting the new home neighborhoods of Ole South.  And remember, if you have questions….. we have the answers!   www.OleSouth.com

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Trey Lewis is a licensed Real Estate Broker in the State of Tennessee with Ole South Realty, 615.896.0019  direct 615.593.6340.  Specializing in new homes in the Greater Nashville area to include Nashville, Murfreesboro, Smyrna, Clarksville, and Spring Hill, Tennessee.