A recent article in Realtor Magazine told the amazing story about a young couple who were negotiating with a seller to purchase a home. It seems their addiction to revealing themselves on social media got the best of them. Take a peek at this story.

Be Careful, Buyers!

“A couple who had made an offer on a home shared a detailed account of their deal on a social networking site. They severly compromised their negotiating position by writing about how badly they wanted the house, and even the actual amount they were willing to pay! What is it with the social networking phenomenon that makes people feel compelled to share every detail?”

If you are a Realtor, it seems today’s market demands you have a social media consultation as part of your seller and buyer prep talk. Cases like this are the reason why!

Buyers – please think twice before you reveal confidential information to a public internet site! What appears to be a private conversation with your friends is actually being published to the whole world!

The traditional, conservative, “go to” loans have always been the 30 year and 15 year fixed rate. Few people are aware there are other great options as well – the 25 year and the 20 year fixed. With these shorter terms, you can save thousands of dollars in interest and pay off your home faster.

Dan and Sue bought their home five years ago. They came to me recently because they heard a news report that interest rates were at an all-time low. They are paying 6.00% now and wanted to know if there was any way they could capture these lower rates for their mortgage. “Yes, there is!” I replied. Dan and Sue wanted to look at a 30 year fixed rate because they thought the payment on the 15 year would be too steep for their budget. I recommended we also look at the 25 and 20 year term – two loans they did not know existed.

Let’s take a look at the numbers to see how much money Dan and Sue can save by refinancing their mortgage to a lower rate and shorter term.

Current Loan
Interest Rate 6.00%
Original Loan Amount $175,000
Current Loan Balance $162,000
Monthly Payment $1,049

New 25 Year Loan
Interest Rate 4.25%
New Loan Amount $165,000
Monthly Payment $894
Monthly Savings $155
Interest Savings over 5 Years $13,540

New 20 Year Loan
Interest Rate 4.25%
New Loan Amount $165,000
Monthly Payment $1,022
Monthly Savings $27
Interest Savings over 5 Years $48,600

After looking at the numbers and discussing their options, Dan and Sue decided to proceed with the 20 year term. Their monthly payment is approximately the same as what they pay now, and they can shave another five years off of the financing, thus saving a pile of money in the long run. That was a great decision for their budget and their family!

Do you have a refinance story to share? I would love to hear how you saved money by refinancing.

With your aging parent now living on social security income and your college bound teen ready to launch, it’s easy to feel the pressure of your family situation. Each of these loved ones need a nice little place to call home. How can you help? By utilizing the Family Opportunity loan program.

The Family Opportunity Loan Program

This little known program will allow you purchase or refinance a home for your college bound son or daughter, your disabled son or daughter, or your elderly parent, and treat the property as if it were owner occupied, thus enabling you to obtain a better interest rate and a reasonable down payment.

You could qualify for this type of program if you have the following situation:

• College bound son or daughter residing in a one unit second home residence purchased by their parent(s).
• Adult children purchasing or refinancing a primary residence for elderly parent(s) who are unable to work or have insufficient income to qualify for a mortgage.
• Parents purchasing or refinancing a primary residence for a disabled son or daughter who are unable to work or have insufficient funds to qualify for a mortgage.

Here is an example of how I used this program to help a client this week.

After her father passed away a year ago, the family decided it was time for mom to move closer to her children and grandchildren. She found a cute two bedroom ranch just a few miles from her oldest daughter, Amy. With mom living nearby, Amy and her husband Tom can help mom with household chores such as lawn care and snow removal.

Mom’s income is enough for her to live on comfortably, but not enough to qualify for the mortgage payment. The mortgage broker told Amy she can purchase the home for her mom, but it would require a huge down payment and the interest rate would be substantially higher because the property would be considered as “non-owner occupied”. That doesn’t sound fair! This home is for her aging mother!

Enter the Family Opportunity loan. By utilizing this loan program, I was able to show Amy how she could purchase this home with a substantially lower down payment and the interest rate on the 30 year fixed rate mortgage would be exactly the same as if she were purchasing the home for herself. After showing the numbers to Amy and her mom, they realized this was perfect for their budget.

Now Amy’s mom is settled in her new home, the monthly payment is affordable, and they can easily spend weekends and holidays together as a family!

Do you have a similar situation? You can share your story by leaving a comment below.