Don Burns Team- Houston Real Estate

When loans are quoted by lenders, most buyers pay attention to the interest rate but not so much to the points that may be charged along with the rate. A point is one-percent of the mortgage amount and considered pre-paid interest that affects the yield on the loan. Buyers or sellers can pay points but there can be limits based on underwriting guidelines for different types of loans. A lower note-rate would obviously make the payments less. However, with a little analysis, you can determine how much points paid up-front can save a borrower or whether you'll recapture the additional costs in the anticipated time in the home. In the example below, two choices are compared; a 4.25% loan with no points vs. a 4.00% loan with one point. If the buyer stays in the home at least 69 months, he will recover the $2,700 cost for the point on the lower interest rate. If the purchaser stays ten years, he’ll save two thousand dollars over the cost of the point. A less obvious advantage wil

In 1966, a gallon of gas was $0.32 and today, it is $2.49. A dozen eggs were $0.60 but they’ve only doubled to $1.33. A gallon of milk was $0.99 and today, it costs $3.98. You could send a letter for five cents and now, it costs forty-seven cents. The average cost of a new car in 1966 was $3,500 and today, it will cost $33,560. New cars have more features than the earlier models but they’re still ten times more expensive. The median price of a new home was $21,700 and now, is $304,500. Interestingly, mortgage rates are actually lower today at 4-4.5% than they were fifty years ago when they were just under 7%. The rates have been low for long enough that many people have been lulled into believing that they are not going to go up. Yes, rates are a little higher but in perspective, they’re still a bargain. Years from now, will you be remembering and comparing what they were back when? DON BURNS TEAM- REAL ESTATE as one of the TOP 500 Top Producing Teams/Individuals in

Equity is an asset and an appreciating home is an investment. While some people have resolved themselves that a mortgage payment is a normal part of life, others have set goals to get their home paid for as soon as possible. There are several strategies that will work but they all require persistent vigilance. A shorter term mortgage such as 20, 15 or even 10 years will not only pay off sooner, it will generally have a lower interest rate. A recent comparison at Freddie Mac’s Primary Mortgage Market Survey showed a 30 year fixed-rate mortgage at 4.04% compared to a 15 year fixed-rate at 3.20%. The fees for the shorter term were even .1% less. The shorter term with the lower rate would have a higher payment but some people consider it forced savings. Additional principal contributions to any length fixed-rate mortgage will save interest, build equity and shorten the term of the loan. Some homeowners may apply lump sums at various times during the year such as when bonuses are pa

If the candle is your mortgage and the strategy is to get it paid off early, being “burned out” would be a good thing. One end of the candle would be your regular mortgage payments and the other end would represent additional principal contributions. Since the Great Recession, lenders have been reporting a higher than normal number of borrowers getting shorter term mortgages not only when they purchase the home originally but when they refinance them also. It seems like the mindset of America’s homeowner has shifted a little from the belief that they will always have a house payment. The extra $100, $200 or $500 in your checking account isn’t earning interest. Additional principal contributions with your regular payments on a fixed rate mortgage will save interest, build equity and shorten the term of the mortgage. Wealth management is about making financially wise choices. If having your home paid for by retirement age is one of your goals, making extra contributions regularly

The Mortgage Debt Forgiveness Act,  originally passed in 2007,  was extended three times to protect homeowners from paying income tax on debt that was relieved due to foreclosure, short sales or deed in lieu of foreclosure.   The law expired on December 31, 2016 and unless it is extended again, homeowners with debt relief in 2017 may be subject to tax. A homeowner might feel a sense of relief without the obligation of a delinquent mortgage but just because the payments are no longer due doesn’t mean that there isn’t another obligation that replaces it. If a lender cancels or forgives debt, a taxpayer must include the cancelled amount in their income for tax purposes depending on the circumstances. The tax significance could be serious. This previously allowed relief only applied to a taxpayers’ acquisition indebtedness of their principal residence which did not include second homes and investment property. The maximum amount was limited to $2 million of mortgage debt forgiveness

As rates are inching up but still very affordable, buyers should remember that there is an alternative to a fixed rate mortgage that can provide the lowest cost of housing for the homeowners who understand the parameters. A $300,000 fixed-rate mortgage at 4% has a principal and interest payment of $1,432.25 per month for the entire 30 year term. A 5/1 adjustable mortgage at 3% has a $167.43 lower payment for the first five years and then, can adjust, up or down, based on a predetermined index. Another interesting fact is that the unpaid balance on the ARM at the end of the first five years is $4,624 lower than the fixed-rate mortgage. The total savings in the first five years on the ARM is $14,669.00. Adjustable rate mortgages are not the right choice for everyone but buyers should at least consider the options based on their individual situation. It could be an obvious choice for a buyer who is only going to be in the home for five years or less. Use the ARM Comparison  worksh

Awesome home and a great floor plan. The study has built-ins and wood accents. Large formal dining. The formal living room is light and bright. A ''cook's'' kitchen opens into the den. The master bedroom is spacious. Three very decent sized bedrooms and two baths are up along with a game room with shelves galore. There is an extra room upstairs with built in desks and storage that could be a fantastic room to run a business in or a neat playroom and study area for the kiddos.  DON BURNS TEAM- REAL ESTATE as one of the TOP 500 Top Producing Teams/Individuals in Texas CDPE, CRS, ePRO® www.donburns.com http://www.har.com/donburns don@donburns.com (281) 491-6274 (281) 734-8715 Houston, Texas Sugarland, Texas Richmond, Texas Missouri City, Texas Katy,Texas

DON BURNS TEAM- REAL ESTATE as one of the TOP 500 Top Producing Teams/Individuals in Texas CDPE, CRS, ePRO® www.donburns.com http://www.har.com/donburns don@donburns.com (281) 491-6274 (281) 734-8715 Houston, Texas Sugarland, Texas Richmond, Texas Missouri City, Texas Katy,Texas

An Automated Valuation Model, AVM, is a computer approach that looks at public records to make a determination based on square footage, comparable sales and other elements. It is as easy as putting your address in a blank but unfortunately, AVM results may only be accurate about 20% of the time. A popular AVM, Zestimate®, states “It is considered a starting point at determining a home’s value.” While an AVM contains some of the same information as a comparable market analysis, it lacks a critical human factor. Having a pair of experienced eyes consider aspects that are not easily quantified can make a big difference. A skilled professional can tell which properties are truly comparable. A knowledgeable expert can recognize features, floorplans and other things that can affect value but are difficult to quantify. Even if a person isn’t ready to sell their investment, they like to know its value. It is easy to find the price of stocks or mutual funds on any given day but the valu

There could be some legitimate reasons for not buying a home but indecision is not one of them. Indecision is rooted in not having enough information to move forward to own a home or continue renting. If you keep renting, at the end of the year, you have had a place to live and a pile of receipts that helped the landlord pay for his house. Deciding to buy a home will give you a place to live that is yours and all the things that come with that. When you consider principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you’re paying. The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation as the home goes up in value. The equity is part of your net worth and an investment in your family’s future. The income tax savings can be an additional financial consideration if the combined interes

Contact me directly  if you're looking to lease, buy or sell a home in Houston,Katy, Missouri or Sugar Land DON BURNS TEAM- REAL ESTATE as one of the TOP 500 Top Producing Teams/Individuals in Texas CDPE, CRS, ePRO® www.donburns.com http://www.har.com/donburns don@donburns.com (281) 491-6274 (281) 734-8715 Houston, Texas Sugarland, Texas Richmond, Texas Missouri City, Texas Katy,Texas

Ask any real estate professional if they have sold a house without the buyer having physically seen it and they’ll most likely tell you they have. While it may have been an unconventional sale, it is more prevalent today than it was twenty or even ten years ago. The digital world of the Internet has changed the process of buying a home. It is evolving as people have become more comfortable with the reliability of the information available. Getting in a car and driving around all day looking at homes that may or may not fit your needs or wants is not productive for buyers or the agents. The quality and the quantity of pictures has dramatically improved in the last twenty years. Buyers and agents alike can view a property online and get a fairly accurate idea of the condition and layout of home and whether it warrants a physical visit. Videos can “walk” you through the house to be able to assess if the floorplan will work for you. The 2015 Profile of Home Buyers and Sellers reports 8

Regardless of what a lender quotes on mortgage rates, the actual rate a borrower pays is based on a number of variables. Lenders determine whether to loan money and at what rate based on the risk involved with the transaction. Factors that increase the risk that the loan will be repaid will proportionately increase the interest rate charged to the borrower. If the risk becomes too high, the loan will not be approved. Loan amounts – conventional mortgages above conforming limits as set by Fannie Mae and Freddie Mac are considered jumbo loans and generally have a higher interest rate. FICO score – the lowest interest rate is reserved for the highest score; the lower the score, the higher the rate the borrower will pay. Occupancy – borrowers occupying a home as their principal residence are considered a better loan risk than second homes and investment properties. Loan purpose – purchase transactions generally have the lowest interest rate with refinancing for better rates and te

Re-imagining your dream house. It's time to step-in.. Call us now! DON BURNS TEAM- REAL ESTATE as one of the TOP 500 Top Producing Teams/Individuals in Texas CDPE, CRS, ePRO® www.donburns.com http://www.har.com/donburns don@donburns.com (281) 491-6274 (281) 734-8715 Houston, Texas Sugarland, Texas Richmond, Texas Missouri City, Texas Katy,Texas

Real estate lost a lot of value during the recession but most areas have rebounded considerably.  In some cases, the homes are worth more than they were before the housing bubble burst. The dynamics are classic for this type of market: inventories are low, mortgage rates are low and demand is high.  All price ranges are on the rise with some at an even higher rate because the short supply is causing competition among buyers. Another reason many homeowners' may have more equity is simply not staying current with what is going on in the market.  In a recent FNMA study, it indicates that 23% of owners believe they have negative equity in their home when actually, it is 9%.  37% believe they have greater than 20% equity in their home when actually 69% of homeowners do. Even if you're not planning to sell your home, knowing the value helps you understand your financial position better.  The interest on home equity debt up to a $100,000 limit is tax deductible and can be used for

The seller has three tools available to affect the marketability of their home: price, condition and terms. Price is the easiest to adjust for the competing properties, amount of inventory or market conditions. However, lowering the price is not necessarily the best decision when trying to maximize the proceeds of sale. If a home is in poor or outdated condition, updating can be done to make it show favorably with other homes that are currently on the market. Sometimes, sellers rationalize not doing the work by saying they believe the buyers would rather make their own choices. The truth is that most buyers are using all their resources to get into the home and will have to live in its present condition until they can save enough to make the changes they want. Another reason to go ahead and invest the money and effort into improving the condition is that it is difficult for buyers to imagine the home any other way than its current condition. When comparing one home to another, b

For the person who has good credit and income but not enough money for the down payment on a home, their qualified retirement program could offer them some help. The rules are different depending on whether it is a 401(k), a Roth IRA or a traditional IRA. Up to half of the balance of a 401(k) or $50,000, whichever is less, can be borrowed by the owner at any age for any reason without tax or penalty assuming the employer permits it. There can be specific rules for loans from 401ks that would determine the repayment; interest is usually charged but goes back into the owner’s account. You can consult with your HR department to find out the specifics. A risk in borrowing against a 401(k) comes if your employment ends before the loan has been repaid. The loan may have to be repaid with as soon as 60 days to keep the loan from being considered a withdrawal and subject to tax and penalty . Even if you continue with the same employer, failure to repay the loan could be considered a wit

Buyer’s mortgage pre-approval is good for everyone in the transaction. It saves time, money and removes the uncertainty of knowing whether the buyer will be qualified after negotiating a contract. The direct benefits include: Looking at “Right” homes - price, size, amenities, location Find the best loan - rate, term, type Uncover credit issues early - time to cure possible problems Negotiating power - price, terms, & timing Close quicker - verifications have been made There is a significant difference in having a trusted mortgage professional take a loan application and run all the necessary verifications compared to going through calculators on a lender’s website. Beside the peace of mind, the cost of being pre-approved is a bargain and generally, limited to the cost of the credit report. Even if a person has been pre-approved, a second opinion from a different lender may be a good option. It can verify there is a good deal or you’ll discover that you can improve it. Eith