Mortgage

Quick Hits, FAQs and Calculators

Preparing for Home Ownership     Am I better off renting?     Am I better off refinancing?     What home can I afford?     How much should I put down for a new home?     

Understanding Finances         How advantageous are extra payments?     How much can I borrow?     How much can I save in taxes?      How much will my mortgage payments be?    Should I pay points to lower the rate?     Which is better: 15 or 30 year term?    Which is better: fixed or adjustable?    Which loan is better?

Considering Home Equity Financing   How much will my loan payments be?    Should I consolidate my debts?    Buying a vehicle – auto or home equity loan?    How large a line of credit can I obtain?    What will it take to pay off my line of credit?    

The Scoop on the New Good Faith Estimate

If you’re in the market to buy a new home this year, you may have heard mention of the new Good Faith Estimate that has been in use since the beginning of the year. There has been much written nationally regarding the new form. Much of the drama has revolved around whether or not it is actually helpful to consumers and much of the griping has come from lenders and title companies who’ve had to adjust their routines a little.

I think anything that clarifies what to expect going forward for the home buying consumer is a positive step for the industry. You know, complete disclosure and total transparency and all. So far this year, there’s been a little hand-wringing by both Delicious Real Estate Buyer’s lenders and title companies but no hold ups, real confusion or problems around closing time–having to do with this anyway.

So please note that there is a new form, it’s for your benefit, and you can find it right here. For all the discussion, it’s really pretty self-explantory. If you don’t think so, the two humorless NAR guys in the suits in this video will do their best to explain it to you. Remember, always compare apples to apples when judging one lender’s program with another lender’s program.

Columbus Home Mortgages – Updates on FHA, Jumbo Loans and Stated Income

I’ve said before that FHA changes are coming and that Stated Income Loans are dead. Here is Mortgage Man Dan Green with a healthy prognosis on Jumbo loans and the scoop on FHA loans after March 31….

More from Dan on FHA changes can be found here.

Are Columbus Mortgage Rates on the UP?

Which way are Columbus Mortgage rates going?

It’s hard to imagine that mid December of 2009 wasn’t a potential bottom point for Columbus Mortgage rates. Today, the best rates are somewhere around 5.125% and as the economy improves (or at least as we’re told it is improving) the rates will rise.

If you plan to buy this year, I would do it sooner rather than later. I’m reading a lot of predictions about year-end 2010 rates in the 6’s.

Don’t just take my word for it….From Reuters the the other day….”The U.S. Federal Reserve will have to raise interest rates as the economy improves or risk losing the public’s confidence in its commitment to keeping inflation low and stable, a top Federal Reserve policy maker said on Tuesday.

Charles Plosser, president of the Philadelphia Federal Reserve Bank, said expectations for future inflation are currently “well-anchored,” but warned that there is “considerable uncertainty” clouding the outlook for price pressures over the next two to five years.” more.

How To Dispute, Appeal or Contest Your Franklin County Real Estate Tax Increase

Real Estate Taxes vary by School District. Where in Franklin County Do you Live?

EDIT: 12/17/2009 Please see the end of this post for a clarification and correction of any inaccuracies from the Franklin County Auditor, Clarence Mingo.

If your home has been re-valued by Franklin County recently, you probably received a notice in the mail regarding the new property tax. Per the Ohio revised code, Franklin County appraisers review property after a sale and/or every three years or so.

If you receive a notice, you’re no doubt glum about having to pay more real estate taxes to Franklin County. When you realize that the tax increase is for the ENTIRE 2009 year retroactively and that the tax bill you get in December for the January 1- June 30 tax cycle will reflect the increase and be based on this new value, you’re downright hot under the collar. What to do? Where to turn?

First, stop and consider if the new value is reasonable.  After all, if Franklin County is saying your home has appreciated in value, that’s a good thing isn’t it? Isn’t that, in part, why you purchased a home – to build equity?

Not buying that? OK. Here is everything you should know about appealing your Franklin County Tax Increase:

• Everything you need to contest the tax increase is available from the Franklin County Board of Revision site, here.
• Make sure you fill out the forms accurately and completely because the Ohio Supreme Court says a complaint MUST be dismissed if it is not completely filled out.
• You will need to sign your appeal in front of a Notary Public.
• If the property

was purchased after January 1, 2009,you will need to include a copy of the closing statement (3 pages), the purchase contract, and the deed with the appeal form.

Appeals to your Franklin County tax increase must be filed between January 1 and March 31. You can call down to the Franklin County Board of Revision (The best phone number is 614-462-HOME (4663)) and ask what properties were used as comparables for the new value (remember that their appraisers don’t just pull the new tax value out of the air). These will tell you something about wether or not your increase has much viability for an appeal. For example, let’s say you live in Hilliard and the comps the County Appraiser used included both of your next door neighbors whose homes are exactly like yours. That’d be a small chance for appeal.

While you’re assembling any paperwork to take to your hearing, call me for the most recent comparables in your neighborhood and I’ll see what I can find that might help your case. I’ll also tell you if I think you just drop it and suck it up because your home may be worth even more and maybe you shouldn’t call attention to it right now.

There has been lots of talk this year about how far behind many Franklin County Offices are, especially in regard to filing deeds and especially in the case of filing deeds via sheriff sale. The Board of Revision, while not ready to hear your case today, isn’t too far behind in the overall scheme of things.

Consider that there were 6700 complaints filed regarding 2008 tax increases and that the Franklin County Board of Revision is a three member office and that they can hear about 32 cases per day. They’ve even added an extra panel so that cases can be heard simultaneously. Still, your absolute best case scenario is an April 2010 hearing on an appeal you file in January of next year (and, remember, you can’t file before that).

To answer a couple obvious questions…

• Yes, you have to pay your next or pending Franklin County Real Estate tax bill according to the new amount while you’re waiting to hear about an appeal date.
• If you have a hearing before the end of June and it turns out you’ve overpaid, you’ll likely have the overage applied to the 2nd half taxes.
• If you have a hearing after that (and let’s face it, most of you will) chances are the overage will be returned to you.

How long do you have, after the purchase of your home, before the real estate taxes will be increased to reflect the new purchase price? It depends on lots of things but you should plan on them being increased right away. In fact anyone considering a home purchase should estimate the new taxes based on the purchase price (HERE is a handy calculator that does just that) and feel comfortable with that number on top of your pricipal, interest and insurance each month.

You should realize that you were probably pre-approved for your mortgage based on the pre-purchase taxes and You should expect it to take somewhere between 3-12 months, sometimes longer, before you hear anything about a tax increase.  It’s not so much the county as the local Columbus School District where you bought your home that wants your tax dollars increased and they may, in the case of multi-family or commercial properties, file for an increases based on your purchase prices.

VERY IMPORTANT, PLEASE CONTINUE READING: Dear Joe, I have read with interest your post yesterday regarding the appeal of real estate taxes. The article does a fine job of outlining the thought process owner’s should follow when deciding whether or not to appeal. There are a few factual matters, though, which I would like to address:

• The appeal is filed against the valuation of the property, not the tax amount. There are two components to the calculation of tax, the tax rate and the value. Only the value may be appealed to the Board of Revision. The tax rate on the other hand is set by the voters and may not be challenged.

• The notices which were recently mailed were notices of the change in value, not tax amounts.

• It is not only the Columbus Schools which actively file complaints against values. Virtually all school districts participate in the Board of Revision one way or another. Still, very few school districts file complaints against owner-occupied residential values, limiting their filings to commercial, industrial or investment properties. Therefore your home buyers have little to fear from the school districts unless the home owner initiates a complaint requesting a reduction in appraised value greater than $50,000 (or $17,500 assessed value). The Board of Revision is required to notify school districts of decrease requests of such magnitude and the school district may then elect to become a party to the complaint.

• On an annual basis the Auditor examines only approximately 5 percent of residential sales, those which have significant differences between their selling price and the auditor’s value. These property values may be subject to adjustment either up or down if needed. All other sales are verified and utilized by the Auditor to establish values for all county properties in each three year adjustment cycle.

• The best phone number to give to clients is 614-462-HOME (4663). Our Public Information staff is highly trained to handle tax-payer inquiries. Thanks so much for your kind and supportive words regarding our processes and staff and our hats are off to you. Keep up the great work! Sincerely, Clarence E. Mingo II Franklin County Auditor

5% Down on a Conventional Mortgage with No PMI? Still? Really?

A couple weeks ago at a Realtor meeting, a lender was touting a program through Parkvale Mortgage Corporation that still offers 95% financing without PMI and no rate increases. This is for clients with a minimum credit score of 720 or above.

I believe that’s an 80/15/5 product. That means an 80% first mortgage, a 15% second mortgage and a 5% down payment. Most of these types of loans have gone away. Not all that long ago, 80/20 100% mortgages were all the rage. Of course we all know what happened next.

This is available on Parkvale’s conforming fixed or adjustable, jumbo fixed or adjustable, construction perm loans and Sellers may pay up to 3% of the purchase price for buyer’s closing costs and prepaids. (Yes, that’d mean you’re only coming out of pocket 7% for the down payment) Of course, most buyers these days who feel a little cash strapped are avoiding conventional loans altogether and are going straight for an FHA loan which offers as little as 3.5% down.

Parkvale is a portfolio lender and that makes a difference in what they can and can’t do. Often, Portfolio lenders can be more flexible than big box lenders. I deal often with Arlington Bank who is also a portfolio lender and, for the most part, if the project/building/home and the buyer look good from a few different angles, they’re willing to make a loan after discussion in round table. Sometimes there might be a catch like opening an account at the bank or putting a little more down but when you can get a loan you couldn’t get anywhere else, a concession here or there is OK.

I don’t usually talk much about individual lender’s mortgage packages and you should explore many different options. I’m not suggesting or endorsing any program here, just passing along useful information. I’m sure readers are always looking for options. This is one.