KMG Blog

 KMG Mortgage Group - FHA approved ... AGAIN!

For the second consecutive year, KMG Mortgage Group is proud to announce that we are still a "Non-supervised Loan Correspondent" lender for FHA loans!

What does that mean?

KMG Mortgage Group has undergone two straight years of audits and the Federal Government has authorized us to, yet again, originate FHA loans.

The Feds continue to trust KMG Mortgage Group to perform home loan originations in a meaningful and trustworthy manner.

This is a noteworthy distinction.

Usually only banks or mortgage companies with large corporate backings get this kind of recognition from FHA.

Contact us today and take advantage of the flexibility FHA loans have to offer!

Government cracking down on mortgage scams!  READ ON...

I ran across an interesting article on "YAHOO! News" the other day.  It pointed out what I blogged about back in September, 2008:

Don't Lose Your Home in a Foreclosure Recovery Scam!

Here's a brief snippet from the article by Alan Zibel and Christopher S. Rugaber (Associated Press Business Writers)...

Government Cracking Down on Mortgage Scams

Federal and state officials are cracking down on mortgage modification scams, accusing "criminal actors" of preying on desperate borrowers caught up in the nation's housing crisis.

Government officials said Monday that scammers are seeking to take advantage of borrowers in danger of default by charging them upfront fees of $1,000 to $3,000 for help with loan modifications that rarely, if ever, pay off.

The frauds often involve companies with official-sounding names designed to make borrowers think they are using the Obama administration's efforts to help modify or refinance 7 million to 9 million mortgages... (emphasis added).

To continue reading, CLICK HERE!

If you are behind in your mortgage payments and are afraid of losing your home, please remember that there isn't something these people can do for you that you can't already do for yourself ... FREE OF CHARGE!

Maryellen Garasky
Mortgage Broker
KMG Mortgage Group
Idaho: (208) 664-3600
Washington: (509) 638-3455
   

Am I **REALLY** a Soccer Mom???

Well, I guess it's official ... I am a Soccer Mom.  Kevin and I sponsored a Mini-Kickers (3-4 year old) team for the Hayden Recreation Dept.  I can hardly believe it.  Is my baby already 3 years old?  Consider my mind blown!

Well, if you happen to be in the Hayden area each Saturday for the next several weeks, feel free to stop by and say hello.  It's bound to be a hoot!

All games are on Saturdays at Finucane Park (corner of 4th St. and Prairie Ave.) in Hayden.  Hope to see you there!

DATE	TEAM		TEAM	FIELD	TIME
4/11	KMG Mortgage Group	v.	McDonald's	5	10:05 am
4/18	KMG Mortgage Group	v.	Yates Funeral Homes	5	10:05 am
4/25	Team Kids World of Post Falls - Blue	v.	KMG Mortgage Group	3	10:05 am
5/2	Little Smiles Pediatric Dentistry	v.	KMG Mortgage Group	4	10:05 am
5/9	Specialty Mobile Mix	v.	KMG Mortgage Group	5	10:05 am
5/16	Fred's Plumbing - Green	v.	KMG Mortgage Group	2	10:05 am

p.s.  Guess who volunteered to be Team Mom???

Wish me luck!!!

The Crisis of Credit:
What does it mean and how does it affect you?

I came across this video just recently and wanted to share with the loyal followers of my blog.  If you, like so many others, are simply turned off from words like:

"Collateralized Debt Obligations" "Frozen Credit Markets" "Credit Default Swaps"

because you aren't sure what they mean, then this video is for you!

In just 11 minutes you will have a better understanding of what has happened, and is still happening, in our national economy.  And, hopefully, a better understanding of how it affects us here at home in Coeur d'Alene and Spokane.

I hope that you, like me, find this helpful and expands your understaning.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Maryellen Garasky
Mortgage Broker
Coeur d'Alene, Idaho and Spokane, Washington
(208) 664-3600
(509) 638-3455

Kootenai County, Idaho: Important Numbers to Know

In this series, I will be featuring the photography of Tim Eberly.  There is no one who better captures the essence of North Idaho! 

 Local Governments:

Athol	30355 Third St, Athol	683-2101
Coeur d'Alene	710 Mullan Ave, Cd'A	769-2300
Dalton Gardens	6360 4th St, Dalton	772-3698
Hayden	8930 N. Government Way, Hayden	772-4411
Kootenai County	501 N. Government Way, Cd'A	446-1000
Assessor		446-1500
Building		446-1040
Planning		446-1070
Recorder		446-1480
Surveyor		446-1570
Treasurer		446-1005
Post Falls	408 Spokane, Post Falls	773-3511
Rathdrum	821 Main St, Rathdrum	687-0261
Spirit Lake	6159 W. Main St, Spirit Lake	623-2131
Worley	9936 W. "E" St, Worley	686-1258

Other entries in this series include:

Utilities

Law Enforcement

Government Agencies

Licenses

Post Offices

Schools

Medical Facilities

A Brief Tutorial on Adjustable Rate Mortgages (ARMs) in THREE easy steps!

STEP 1:

You typically see ARMs advertised as follows:

1/1, 3/1, 5/1, 7/1, 10/1
or
3/6, 5/6, 7/6, 10/6

What does this mean?  In the former's case (3/1, for example), it means the loan is FIXED for the first 3 years and adjusts every 1 year after that.

In the later's case (3/6 for example), it means the loan is FIXED for the first 3 years and adjusts every 6 months after that.

STEP 2:

What if you get into your adjustment period?  How is your rate determined?

Index + Margin = New Interest Rate

Every ARM is linked to an Index at the time of origination.  Some to the U.S. Treasury, some to the LIBOR.  These indexes change frequently.  Furthermore, every loan is given a Margin at time of origination.  This margin is a FIXED number and does NOT change.  Add these two together and you get your new interest rate.

STEP 3:

All ARMs have CAPS, usually written as follows:

2/2/6
or
5/2/5

What does this mean?  The first number is the greatest your rate can adjust at the initial adjustment.  The second number is the greatest your rate can adjust at any subsequent adjustment period.  The final number represents the greatest adjustment over the life of the loan.

* * * * * * *

We will use my real life ARM as an example:

• In March 2008 I got a 3/1 ARM with 2/2/6 CAPS with an initial interest rate of 4.875%.
• My loan is due to have its first adjustment in April 2011.
• If my rate goes up at this point, it CANNOT go higher than 6.875%.
• My loan will then adjust every 12 months after that, with the second adjustment being April 2012.
• Over the life of the loan, however, my rate CANNOT go higher than 10.875%.

* * * * * * *

I know what you're thinking!  10.875% - eegad!!!!!!!  And, you're right.  Outrageous!

But, I have an ARM and my rate is about to go down!

A few nights ago I was at a Wine, Women and Wealth meeting.  The topic was mortgages and, thanks to my friend and colleague Erin Zasada (Financial Advisor at Wachovia/Wells Fargo) I had center stage.

Normally I would be all over the topic and ready and willing to give pointers and help in any way I can, but with the current economic climate, people are filled with worry and doubt.

To my pleasant surprise, the ladies had a mountain of questions, like "How can I pay my mortgage off early?" and the like.  It was a great time to re-enforce the positive, dispel the negative, reflect on the what's happening in today's market and, of course, drink some wine ;)

* * * * *

At one point in the evening, the topic changed to Adjustable Rate Mortgages (ARMs, for short).  All the ladies, as if on queue, started to express their concerns and fears in relation to ARMs.  Such is the case when groups of people get together and talk about home loans these days.

But, to my surprise, one of the ladies present at the meeting said, "Ya know, I just have to say one thing.  If people don't read their loan documents, it's their own darn fault.  I have an ARM, and it's a great loan."

Yikes!  My head spun around so fast I got dizzy!  Who is this speaking?  Who would dare insert dissension amongst the ranks?

She continued to explain why she liked her loan - for one, her rate is now LOWER than it was at the time she took out her loan.  Noticing the opportunity to educate my fellow club members, I gave a brief tutorial on ARMs (but only after making a note to myself to check my loan documents when I got home - more on that later!)

 * * For a brief tutorial on ARMs, CLICK HERE! * *

Remember my friend?  After our Wine, Women and Wealth meeting, I went home and looked at my loan documents.

If my rate were due to adjust today......drum roll please......my rate would go DOWN!!!

LIBOR today = 2.12%

My Margin established at the origination of my loan = 2.25%

My new rate would be:
2.12 + 2.25 = 4.370%

Who says mortgages and wine don't mix?!?!?!

"Goin' Green!" with the Hayden Lake Library on St. Paddy's Day

On Tuesday, March 17, 2009, the Hayden Lake Library will be conducting a FREE workshop on "Goin' Green!"

There will be a Master Gardener presenting and teaching about organic gardening and the importance of using sustainable materials.

The Kootenai County Solid Waste department will be present and able to answer any questions you might have about their recycling program.

Information will, also, be provided for kids and families on how going green can help save money!

There will be a short movie with popcorn and crafts for the little ones.

This program is open to all ages and NO registration is required.

Tuesday, March 17, 2009
4:00 - 6:30 pm
Hayden Library
8585 N. Government Way
Hayden, Idaho 83835

For more information, contact the library at 208-772-5612 ext. 120 or visit their website at www.ksalibraries.org

Keep Your Goals in Mind When Refinancing!
Don't be taken advantage of by an "Eager Beaver" Loan Officer.

I attended a Wine, Women and Wealth meeting last Tuesday night and the topic was mortgages.  My friend and colleague, Erin Zasada (Financial Advisor at Wachovia/Wells Fargo) gave me the floor.  Yikes!

Normally I would be all over the topic and ready and willing to give pointers and help in any way I can, but with the current economic climate, people are filled with worry and doubt.  To my pleasant surprise, the ladies had a mountain of questions and it was a great time to re-enforce the positive, dispel the negative, reflect on the what's happening in today's market and, of course, drink some wine ;)

One question, which I love to get, was "How can I pay down my mortgage?  I have a 30 year and want to pay it off in 15 years."

After corresponding via e-mail over the last few days, this is what I was able to outline for her:

Current rate on 30 year fixed:	6.250%
Current Principal and Interest Payment:	$1,650.13
Additional Principal Needed to cut loan to 15 years:	$647.76 per month!
TOTAL payment needed to cut loan to 15 year: (excluding taxes & insurance)	$2,297.89
Savings, if she were able to make additional payment each and EVERY month:	$297,023.40

Now, in interest of full disclosure, I am in the mortgage business.  I wanted to see if I was able, at all, to assist her in achieving her goals and earn a paycheck at the same time.  I was able to come up with the following (it's a 2 step plan, only one involving me):

* * * * * * *

The Action Plan - Refinance into new 30 year, Fixed rate (Step 1):

New Interest Rate:	5.125%
New Principal Balance:	$270,000.00
New Principal & Interest Payment:	$1,470.12

* * * * * * *

The Action Plan - Increase her monthly payment (Step 2):

Payment she will make:	$1,650.13 (what she pays now)	$1,700.13 (what she pays now + $50)
Term reduced by:	78 months	93 months
Total savings over life of loan:	$128,710.14	$153,462.09

* * * * * * *

Now, if she wanted to take this new loan and pay it off in 15 years, the payment she would need to make would be just shy of the payment she would need to make with the loan she has now.  So, it would be a waste of her time and resources to refinance.  So, I called her and asked what her "real" goal was:

1. to pay the loan down in 15 years?
2. to save some money in the long run (albeit not as much as the chart above clearly shows), but leave her payment where it is now?

She agreed that, although it would be nice pay her house off in 15 years, making an additional $647.76 each and every month is out of the question.  She was happy with the options I laid out for her and we are closing her loan in a couple of weeks.

So, remember that when you are refinancing, you need to keep your REAL goal(s) in mind.  It may not be possible to do everything you want, but by using a professional who has the same goals in mind, you are ahead of the game.

If you want an honest assessment of whether refinancing is a good option for you, please give us a call at KMG Mortgage Group.  We will be happy to assist you, even if it means we don't close on a loan for you.

Best regards!

Idaho Business Review call on little 'ole me!

Yesterday I received a call from Dani Grigg, Staff Writer and Reporter for the Idaho Business Review.  She was asking my opinion on the $8000 tax credit that is now available to first-time home buyers with the recent passage of the "American Recovery and Reinvestment Act."

I was happy to oblige.  But, first, some background:

In 2008, the Bush Administration passed the "Housing and Economic Recovery Act of 2008" which included, among other things, a $7500 tax credit for first-time home buyers.  However, the $7500 was not a tax credit in the true sense of the word, but a no-interest loan to be paid back to the Federal government.  When word got out about how this "loan" was to work, excitement about it fizzled almost over night.

This week, however, President Obama has signed the "American Recovery and Reinvestment Act" which includes an $8000 (or 10% of home value, which ever is LESS) tax credit for first-time home buyers.  All of my research regarding the issue gives me every reason to believe that this is a tax credit in the true sense of the word.

How?

According to CnnMoney.com:

"I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"

The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:

Scenario 1:
Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.

Scenario 2:
Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.

Scenario 3:
Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.

To read full article, CLICK HERE.

How do you qualify for this new tax credit?

• Purchase a home any time between Jan 1, 2009 and November 30, 2009.
• Have not owned a home in the previous 3 years.
• Income limitations: $75,000 per year for Single filer, $150,000 per year for Married filers.  (Even though partial credits may be given for individuals and married couples with higher income).
• File it on your tax return.

So, what's my opinion?

I am glad to see that, unlike the previous measure passed, this is REAL money into the pockets of home buyers.  They can choose to do with it what they want: make improvements to their home, re-invest, spend, pay bills, you name it.

And, even though the measure is supposed to make buying a home more attractive, I feel it's impact will be delayed, at best.

1 - Home buyers won't see this money until AFTER they have purchased a home.

2 - It does NOTHING to assist those individuals with down payment or closing costs.

3 - And, with underwriting guidelines getting more strict, 0% down loans are becoming a thing of the past - with the rare exception of USDA and VA loans, and maybe FHA loans with down payment grants.  And, with several states tightening their purse strings, even down payment grants (though not impossible) are tougher to get.

So, my regard toward this measure is luke-warm at best.  I hope that it will create a catalyst of interest in buying a home for those who show interest, but I'll have to wait and see.

Best regards!