Faye's Blog

15 year fixed, below $417,000 loan amounts at 3.25% with no points, no fees, and no closing costs. APR 3.25%

30 year fixed , below $417,000 loan amounts at 4.25% with no points, no fees, and no closing costs. APR 4.25 %

By Faye Miran
Guest columnist - Ventura County Star- Article featured Sunday, June 19, 2011

Planning is one of, if not the most, important aspect of achieving financial freedom. It defines where you are, where you want to be and what steps need to be taken to get there. Having a thorough plan with a well defined goal and ultimately executing it will bring you to your desired financial destination.

In my long residential lending career, I have talked with thousands of families, all with varied financial backgrounds. They all practiced different savings and spending habits. The single most important realization I have reached is that, “it is not about how much you make but more importantly is how you manage what you make”.

I have discussed loans with families with a yearly income in excess of $450,000 who were on the verge of bankruptcy. I have also met with families, earning minimum wage who have been able to purchase their first house. These families developed a plan, had a clear goal, and worked together making some sacrifices to achieve their goal of investing in their first home.

Effective planning leads to increased savings which can result in investing. This formula of Planning + Saving + Investing, I believe, is the foundation of financial freedom for average Americans.

In today’s market, the affordability index is very high for home buyers. The ability for first time homebuyers to invest in their first home is very positive. Purchasing a first home can result in one of the most solid investments and long term will result in financial freedom.

To further illustrate how to “manage what you make”, consider the example of a family paying $1500 each month in rent in today’s market. With 5% inflation for adjusted growth, they would pay a total of $6176 in monthly rent 30 years from now. If this same family were to pay that amount monthly toward their mortgage payment for the same 30 year period which is the average life of a mortgage, they would have no mortgage payments 30 years from now. The only payment they would have would be for property taxes and home insurance. Consider now with an original purchase price of $300,000, 30 years from now the property tax would be approximately $554 and insurance would be about $200-$300 a month. As you can see, through careful planning, this family will be $5,322 ahead per month having purchased a home vs continuing to rent. This savings will be available for their retirement which is generally a time when additional resources are needed.

This is just one example of why I am so passionate about young couples following the financial freedom formula: Planning + Saving + Investing leading them to the purchase of their first home and ultimately to Financial Freedom.

By Faye Miran
Guest columnist , Ventura County Star, Sunday, April 17, 2011

Home ownership remains one of the most solid investments for average Americans.

It may be hard for people who have lost their homes during the recent economic downturn to agree with this concept, however with most successful investments, the initial investment should be made with careful planning including keeping long-term benefits in mind.

Taking this same approach when considering home ownership can lead to a safe, secure, tangible and potentially great source of income.

Here are some ways home ownership can be beneficial.

Significant tax benefits

You can deduct the annual interest paid on your mortgage, the annual property taxes paid and in some cases the amount of the monthly mortgage insurance paid.

This ultimately reduces your annual taxable income and results in a lower tax obligation.

It freezes inflation

Payments for a home purchase in today’s market with today’s interest rates on a 30-year fixed loan program are fixed for the life of the loan. This is not true when you are renting a home. Rents have the potential to rise over time between 4 percent and 7 percent in some areas. A $1,500 monthly rent payment in today’s market will go up to about $2,328 in 10 years. This is assuming a 5 percent inflation-adjusted increase in the monthly rent.

Value appreciation

One major fact a majority of people tend to forget is even though property values have decreased approximately 30 percent to 40 percent in some areas, when you look at data for the past 15 years which includes this decrease, there has been a 69 percent increase in property values in Ventura County. According to DQnews.com, a website that maintains statistics related to home values, it shows that in recent months the median home price in Ventura County as of March 2011, was $349,000. According to LAalmanac.com, a site that maintains a chart of real estate values for the past 15 to 20 years in different areas, the median home price in Ventura County in 1995 was $205,720. This is an increase of 69 percent in home values within a span of approximately 15 years. No one really talks about this type of statistical data as the media prefers to focus on the negativity of a somewhat difficult real estate market.

Principal reduction

Another benefit of home ownership is that of loan principal reduction. This is especially true when you have a fixed loan. As you make your monthly mortgage payments, part of that payment goes toward the principal portion of the loan. This will, over time, pay off the mortgage and once it is paid off you would not have any more monthly payments to worry about. Quite an accomplishment.

Emotional benefit

Finally the most important benefit of homeownership is an emotional one. With homeownership you are the master of your domain. You can design your home the way you want it from choosing carpet color, granite countertops and paint color to building a pool if desired, and most importantly, you don’t feel like you are in a temporary housing situation, therefore you can make better long-term decisions relating to the future of your family and your employment.

By Faye Miran
Guest columnist - Ventura County Star- Article featured Sunday, March 13, 2011

Contrary to what you might hear or read in the news, home loan financing is not as hard to get as you might imagine. This is especially true for first time home buyers. As economic indicators stabilize, lending guidelines are becoming more relaxed.

There are a number of loans currently available that were unheard of a few months ago. Many first time home buyers are not aware of these loans and are choosing to rent instead of purchasing a home. Every day I find myself speaking with clients about the misleading information regarding what is needed to qualify for a home loan. I would like to put a few of these misconceptions to rest.

First, it is not true that you need to have a 20% down payment. There are options available that would allow you to put down as little as .5% (half of a percent). In addition it is possible to have all your closing costs paid by the seller. This means that on a purchase price of $300,000 you would be required to put down a total of $1,500. This is considerably less than the money needed to rent a home which would include; first month’s rent, a security deposit and possibly an extra deposit for a pet.

Secondly, many would be home buyers also believe that a minimum FICO score of 700 is required. This is also a myth. The truth is they can actually purchase a home with as little as 3.5% down with an FHA loan and a FICO Score of 620. Some old derogatory information and collections on credit reports may also be tolerated.

The last misconception is about having to show proof of employment for at least 2 years. While this is true for the majority of applicants, professionals are exempt from this requirement. A teacher, engineer, doctor or lawyer for example who has just graduated from college and is newly employed can be eligible to purchase a home provided they have a job contract with their employer.

With easier lender guidelines, home prices at much lower levels since their peek in 2006 and low interest rates, this may be just the right time to purchase a home rather than using your hard earned cash to pay rent to someone else. 

It’s that time of year again, one year has ended and New Year has begun. The joy of the Holiday season has passed. We’ve experienced the love and generosity of others and returned the love and generosity as well. It is usually around this time of year when the “horse drawn carriage” turns into a pumpkin and reality strikes. The credit card debt we had before the Holidays is still with us and more than likely it has increased. Many of us have no idea how to start paying off this debt and how to begin saving. It is time to take charge by making a firm commitment to reduce our debt and start saving and pledging to not spend money we don’t have. Here are some helpful tips for saving money each month, and with the extra savings you can always pay down your credit card debt, invest in a tax deferred retirement plan or put money aside for a down payment on your future dream home.

First, create a simple budget. This will show a clear picture of the money coming in and going out. I am often surprised at the number of clients I talk to who have no idea the status of their household budget. (For an example of a simple budget worksheet, login to my website at www.trustedmortgageloans.com) To create your budget, start by listing your household necessities such as; rent utilities, groceries, car insurance, health insurance, and gas for your car along with the monthly cost for those items. Next make a list of expenditures you consider to be luxuries such as; eating out, manicures, pedicures, brand name items (do you really need that $300 Coach bag?) , ordering alcoholic drinks with your meal, going to the movies etc. and include the monthly cost for these items as well. Now review these two lists and you will be surprised at the amount of money spent on items that are not necessities. The challenge now is to determine more cost effective alternatives which will result in monthly savings for you and your family.

Here are some more ways you can save; do general household repairs yourself, consolidate your credit cards into one card with a low interest rate, request a refinance of your car loan to lower the payment, consolidate your landline and cell phone costs (you may discover you don’t need both services), and instead of paying extra each month for the special movie channels on cable, check into Netflix or Blockbuster offers on line for movies. Consider researching car pools to get to and from work. Dry cleaning all clothing including the washable items can be expensive so just dry clean those items that cannot be washed by hand or in the machine.

If you examine your monthly obligations closely and determine ways to cut your expenses, you will be able to save at least $200.00 per month. Some of my clients discovered they were wasting as much as $800 per month! With your savings you will be able to pay down your debt and start saving too.

The main idea here is to develop a habit of saving money. Pay yourself first. These ideas are used by millionaires who have attained their wealth and carried minimum debt.

Whether you pay down your credit cards, save for a down payment on a new home or invest in a retirement plan, these are all steps you can take toward attaining financial freedom.

Article was printed in Ventura Star February 6, 2011

“A dollar saved is a dollar earned.” We have all heard this at one time or another. Most of us neglect to actually put this into practice. It is however, a key factor considered by most millionaires. They are always looking for ways to save a dollar and earn a dollar.

To illustrate what can happen when we do put this theory into practice, I am going to share with you an example of a refinance proposal I recently presented to a client.

The proposal was based on a loan for $417,000 with a reduction in interest rate from 5.125% to 4.375%. It was to be a loan with no points, no fees and no closing costs. The monthly mortgage obligation was reduced by $193 per month. The client decided not to proceed with this new loan because he felt that a savings of nearly $200 a month was not a significant amount and in addition to this his schedule was too busy.

Had he decided to accept this new loan, the savings realized would certainly have been significant over time. To illustrate this point consider the following:

A savings of $193 a month totals $2,316 a year in savings. Over the life of the loan the savings equals $69,480! While a new interest rate would have reduced his monthly obligation, if he still continued to make the old payment after the refinance, in another words, pay the $193 savings towards the principal of the loan, this would result in paying off the loan in 25 years 2 months rather than 30 years. By paying the extra amount toward the principal and reducing the term of the loan, there is an additional savings of 4 years and 10 months worth of principal, and interest payments made. All totaling a savings of $131,660!!

It takes approximately 4 hours to complete the process of requesting a loan. Each of the 4 hours in this example represents $32,915 in cost to this client! This means he is taking $131,660 away from his family, and giving it to a lender. As you can clearly see the savings are available with very little time invested to accomplish this out of someone’s busy schedule

Do you think a millionaire would have been too busy to complete this loan application given this information?

I would love to hear your thoughts!