CarolinaMortgageConnection.com

Archive for December, 2007

What do you think about the NC Real Estate Commission’s decision to make written notice of agent bonuses to buyers?  Personally, I think it’s a great idea because it’s basically putting in writing what we already spend the time to disclose to our buyers and sellers orally and if one doesn’t take the time to do this, then that is precisely why this rule is needed in the first place.  Read the rest of this entry »

Driving down the road today I heard the funniest commercial.

A local spa that offers body wraps claims that you can lose 7 inches in one visit. That is a tremendous claim to say the least. But what struck me as funny was the serious claim in their guarantee…

They absolutely guarantee that you will keep those 7 inches off! As long as you dont gain weight.

I just thought this was a funny thing and laughed for quite some time.  Is that where we are in “truth in advertising?” What can I offer in this fashion?

• The Foreclose-Free Guarantee: “The lender will never foreclose on your loan. (as long as you make your payments on time.)”
• 100% APPROVAL ON OUR SPECIAL ONE TIME PAYMENT MORTGAGE: “We offer 100% approval to all borrowers that will pay the mortgage loan off in 1 simple up front payment… Cash is preferred.”
• The 0% Interest Rate Mortgage: “You are guaranteed to pay NO INTEREST on your mortgage when you make one easy payment of 100% of the total balance on the day you buy or refinance your home.”

I know, these are all silly, but that one commercial made such a big deal of such an obvious truth. Does the general public really fall for that?

Personally I think the public is smarter than that. As such, I treat all my customers with the ultimate in respect for their intelligence. And when they may not be as educated on certain areas in regards to home loans, I take the time to inform them so they can make a solid decision.

No smoke and mirrors… after all… “when time and money really matters”… you want someone you can trust!

So folks, for real truth in marketing and in home finance, give the Carolina Mortgage Connection a call. 877-411-9327.

Ed

Its almost that time of year again. TAX SEASON! Just after the Ho Ho Ho’s are done, for many people its the Woe Woe Woe’s of tax time. This is especially a crazy time for the self employed. Most business owners take advantage of all kinds of write-offs and tax breaks to eliminate most, if not all of their tax liablility. While that is awesome, it may not be the right move!

If you are thinking of buying a home this next year, be careful with your taxes. Just because you grossed $250,000 last year does not mean you get to use that for your income level. Lenders are not looking at your gross sales. They are looking at your net taxable income on your Schedule C. For many people this could be a problem.

Many business owners pay a professional to handle their taxes. These professionals have one goal in mind… to bring your net taxable income as low as possible so that your tax liability is small. But this also will affect any income that you can use to qualify for a home (or any other loan.) And with lender’s tightening up their loan programs, the old “stated” income deals are hard to find!

Here is a real life scenario I just went through…

A business owner filed taxes last year with gross income revenues of over $250,000! He had a fantastic year! He also had a fantastic accountant that was able to get his taxable income down to $2,500.00. Yeah, that’s right… $2,500.00. But even if it was $25,000, he would have had the same problem…. This year when he decided to buy his family a home, the lender is qualifying him off the NET income of $2,500! That means with no other debt at all, he could afford a house payment of roughly $75 a month. Oh, that also includes taxes and insurance. Not much home huh?

Lenders are figuring that if you are able to write off these expenses, then you are not holding that as cash. They can only go by your net income… and that is what you pay taxes on.

So what do you do? Either pay lots of taxes or keep renting? NEITHER! You can have the best of both worlds IF you know how to do it…

This year when you file your taxes, have your accountant show as much income as possible on the Schedule C. Yes, I know, that means you have taxes due… don’t worry about that right now. You have until April 15th to pay anything. Once you have FILED you taxes (and it does need to be filed) you can apply for a mortgage and be qualified on that income. Then GO FIND A HOME! Get started right away in finding the right home. Once you close on your home, have your accountant go back and AMMEND your tax returns, taking all the deductions you “forgot” to take the first time. Get this ammended return in by April 15th, and any check you may need to write Uncle Sam will be much less.

In doing this, you have achieved both goals… buying a home and reducing your tax bill.

ADDED 12/21/2007

I have recieved a few emails from folks concerned that this might be considered fraudulent. Please understand that I am not in any way promoting any type of fraudulent activity. However, we all know that when a good accountant is done with all the allowable write-offs that the IRS allows, the taxable income that a business owner may be left with is NOT the useable income they have lived off of for that past year. Majority of the time, the taxable income is dramatically less than what that individual actually used to live and pay bills. So using the Schedule C net income is not a totally accurate representation of a borrower’s income producing ability; however, it is the number lenders use to qualifying a self-employed borrower for a mortgage. So if you are self employed and plan to buy a home, I guess the best advice is to show your taxable income as what you actually lived off of last year when you first file, and then you can go back to ammend your taxes to take advantage of the additional items the IRS allows you to write off. Self employed individuals take the most risks in life and we all benefit from that. They should also be given the most opportunity as well. Is it working the system? I guess it is… but in my humble opinion, it is no different than what the accountant can work the system for in finding additional writeoffs.

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This is just one of the many creative solutions you will find when you work with a professional in the mortgage industry. If you are thinking about buying a home, you really need to work with those that know the in’s and out’s of the business. To get pre-approved, contact the Carolina Mortgage Connection at 877-411-9327 or apply online to pre-qualify.

The reality of real estate is that real estate is really local.

This basically means that you can’t judge what’s going on in your neighborhood by what you see on the nightly news in California! If you live in Charlotte, NC and the surrounding areas, you will want to read this!

Forbes Magazine ranked Charlotte, NC as the 14th most affordable housing market in the nation! That means that Charlotte homes are some of the most reasonably valued homes! With the solid job market and the great wages available, buying a home in Charlotte is very affordbale!

More good news! Forbes Magazine has also ranked the Charlotte Real Estate Market the 4th strongest market in America! This means that you are currently in one of the strongest markets in the country. Now before you discredit this ranking, Charlotte, NC is the 4th strongest real estate market in growth with and average growth of over 8%! HELLO! Charlotte real estate is still strong!

So if you have been putting off taking advantage of what is a buyer’s market for fear of what has been in the media, now is the time to turn off that tv and start looking for a home in Charlotte! You can’t afford to let this opportunity pass you buy! With Charlotte mortgage rates at their all time lows, you simply need to act now!

Let the experts of the Carolina Mortgage Connection help you get qualified to buy a home today! We know home loans in Charlotte!

In today’s Charlotte Observer, there was an article written about Affiliated Business Arrangements. The article spoke mainly about real estate agents and title services. There were many big companies that have recently come to major settlements with the government (in regards to fines) related to such practices.

From a business standpoint, I understand the Affiliated Business Arrangement. I don’t blame real estate companies for wanting to not only make money from the mortgage, insurance, title and other related services, but also to have some control over them. This allows companies to keep things moving.. I get that.

However, what this article talks about is the “steering” that takes place in many offices and the fact that the buyer has no idea that agents may get a cut from those services. Again, I understand why, but as a mortgage professional that has had the media on my tail along with several agents over the years blast me due to ysp, I find this an ironic turn of events.

I am not a big fan of married services. How does the buyer get the best service if everything is being pushed “in house”? Its one thing when an agent refers a buyer to the in house lender because that lender gets the job done and saves the buyer money… but when the referral is because the agent has extra money (or bonuses) in the balance, I feel that sorta goes against the whole “fiduciary duty” that real estate agents are supposed to be held to.

I am a big fan of everyone making as much as they can for the work we all do. I think it should be a win-win for all involved, especially the client we all are working for. And now it seems that mortgage brokers are not the only ones with cross-hairs on their backs…

As a buyer, one is best advised to ask if the one referring you to another is compensated in any way for the referral. This may help you decide if using that referral solely based on one referring is the best move.

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For professional mortgage assistance and home loan pre-approval in Charlotte, NC and the surrounding areas, call me at 704-248-8694 or visit www.EdNailor.com/apply