Mortgage Definitions: PITI but not the Pity you think.

As we continue the series of Mortgage Definitions brought to by California Home Strategies we take a look today at PITI. This is definitely “PITI” but not the pity you think.

PITI: This stands for Principal, Interest, Taxes and Insurance. If you have a loan with “impounds” which is your taxes insurance are included in your monthly payment then the payment you make every month is PITI. If you have a loan with Mortgage Insurance this would also be included in the monthly payment but is not part of the PITI definition.  PITI is also used in the calculation of your Debt to Income ratios.

It is important to understand what PITI is. Dave Ramsey recommends that you total mortgage (PITI) not exceed 25% of your gross monthly income. Consult your mortgage broker to see what is right for your family. The standard FHA guidelines require a 31/43 Debt to Income.

Thank you again for reading. Until Next Time.

Mastermind Revisted: A blessing to all who attended!

Recently, I returned from the Mastermind Summit in San Diego, California. The event was in it’s 10th year and is hosted by Brian Buffini. For those of you who do not know who Brian Buffini is check out his site www.buffiniandcompany.com. He is the one of the largest Real Estate trainers in the country. His coaching and training have brought my business to a new level and I have only begun to tap into it.

Mastermind Summit is different from every other Real Estate seminar that I have ever attended in my life. I was not sold any products at all. In fact I was given gifts for attending that were not little pens. I received a book not written by Brian Buffini and I got a journal. The point of the Mastermind Summit is to take a hard look at all aspects of your life. It is definitely a more holistic approach to self examination. Brian Buffini has never been shy about his spirituality and this year was no exception. The focus of Mastermind this year was “What Matters Most.” The event started out on Sunday and the very first guest to get the event underway was Sinbad. He was hilarious. It was a great night and it was just the beginning.

The next day Brian started the day and went deep. We had to take a look at the things that mattered the most in our life. After we figured that out we also had to take a harsh look at how an outsider would perceive the order of importance based on out actions. Sometimes our heart does not align with what out actions show. We were challenged to make sure that we are giving the intention to What Matters Most in our life what it deserves. I can say that many times my business was stealing me away from what matters most. We examined that and wrote some joggers down that would assist us in a goal writing session that we would have on the final day.

We had another guest speaker that day in Hyrum Smith. He is the founder of Franklinplanner.com The leader in time management strategies. He was amazing. The take away from Hyrum Smith for me was laying the foundation of my personal Governing Values. My personal Constitution so to speak. We talked about how to come up with those. Write a descriptive sentence about each of them and commit to living them. Our first gift from Brian was a book written by Hyrum Smith with an appropriate title “What Matters Most The Power of living your values.”

Honestly, I cannot even explain all that went on at the seminar so I am going to save you the rest of the details. Go to his site and check out information regarding all the events that they do. What I really wanted to talk about was the impact that it had on my life. Since I have come home from  the event I have been by no means perfect but I have been aware. The first step in getting better at things and breaking age old habits is awareness. I have realized that the business does not go away if I handle my priorities in the middle of a day. It has caused me to be upfront and more selective with my time. It has also led me to be more effective in my work because I now crave the time with my family and have planned it in to my day. I get in do the things that I need to do and get out of the office. I care so much about the result of my clients loan that many times I would find myself micromanaging a file and putting off activities that I needed to accomplish to keep the vehicle moving. This would cause what I would call cardiac arrest results and holes in the business.

So the question that I like to ask my customers and all the readers out there is the following:

What Matters Most in your life? Let’s take that into account when we are getting you qualified for a home loan. Let’s get specific on what we want and what we need and make a plan that fits!

I am very grateful for the opportunity to have attended this event. Thank you to the Real Estate agent Brook Terhune that paid for my ticket to go. It was truly an eye opening experience.

Changes taking Place! Summary of HERA/MDIA implementation

The industry continues to undergo change. The most recent of the changes was what they are calling MDIA. This stands for Mortgage Disclosure Improvement Act. This is a sub component of the Housing and Economic Recovery Act, also known as HERA. HERA impacts the HVCC or Home Valuation Code of Conduct that was implemented in May and affected how appraisals were ordered and done. MDIA, HERA, and HVCC are all so confusing are they not. They continue to develop all these little abbreviations that mean something and each is a Federal Guideline that is overlayed by the wholesalers that we work with. An overlay is an additional requirement laid over the federal guide for that wholesaler. WOW!

So what things should you be aware of and how do they impact you as a consumer? The following are five major changes of the HERA disclosures:

1. Saturday is now a business day
2. Upfront fees cannot be collected until the borrower “receives” the initial Truth in Lending from the lender . The only exception is the credit report fee
3. Initial Truth in Lending now required  on all purchase and refinances on primary residences and second homes
4. Initial Truth in Lending must be received seven days prior to the closing/signing date
5. An increase in APR by greater than .125% requires re-disclosure of the Truth in Lending at least three days before the closing/signing date. If mailed the Truth in Lending is considered “received” 3 business days after mailing.
   

The said new changes went into effect on July 30th, 2009. This was a bill that was signed and passed in 2008. It is my “Opinion” that it is another plan that was not well thought out and will lead to some growing pains ut was done with the right intentions. We will all get used to the plan and it will be virtually painless.The bottom line was to make lending:

• More Transparent
• prevent deceptive lending practices by making more obstacles and checkpoints
• protection against abusive lending practices for borrowers
• Consistent lending practices among all lenders
• Borrowers are more informed and more confident about the mortgage process

A few more things to be aware of are the borrower must receive a copy of the appraisal 3 days prior to the close/sign date. The appraisal cannot be ordered until three days after the initial disclosures have been sent to the borrower. Borrowers do have the option to waive the right to receive a copy of the appraisal. At this point HVCC applies to conventional loans but please be aware that this may extend to all types of loans in the near future.

Call your Loan Officer for clarification on this subject.