Buying a home feels like surgery without anesthesia!

Buying a home today is no longer a walk in the park. Contained in this video is a little explanation and a few tips on how to make it just a little bit better!

Pre-approvals require commitment and documentation. It Matters!

I wanted to take a moment to address what it really means to get pre-approved. There are several thoughts out there and many may believe a little differently than I do. However, I am writing this to you the consumer. The times really have changed and the requirements to buy a home have come back in line with reality. Investors really want to make sure that you can AFFORD the home. This has lead to increased scrutiny of income and employment, time on the job, the line of work and overtime, bonus and commission paid.

1. Loans Officers still do pre-quals sort of and does that benefit you – The goal is to be able to buy a home. A pre-qual is nothing more than a conversation and some details being exchanged to determine whether or not you roughly fit in the box. There is limited analysis of items that are important to the overall ability to borrow. Many times the borrower says I make 5K a month. The Loan Officer fails to ask if this is W-2, 1099, this year only, consistent, paid hourly, bonus, commission, flex pay, cafe 125 accounts and many other items that could play a factor in the debt to income. They then send you on your way to look at homes and you get in contract only to find out of the 5K only 4K is acceptable. The bonus that you receive has only been this year and there is not a two year history. Now that house is history and the excitement has been lost.
2. Consumers must plan for a good experience – If you want to have the ultimate purchasing experience that is allowable in today’s market you must be ready. You would not go to Disneyland without reservations to a place to stay and an idea of what you were going to do on what day. Plans do change but a plan is in order. To get the best experience buying a home I suggest that you plan on doing the following: -Take time to put together exactly what the Loan officer request. The items should include but are not limited to: 2 years of Federal Taxes all pages and all schedules, two years w-2′s if applicable, current pay-stubs spanning 30 days, two months bank statements ALL PAGES, current statements for assets like stocks, IRAs, etc ALL PAGES!!!! - Answer a lot of questions without getting frustrated. The questions are asked to make sure that the package is presented to the source of funding appropriately. – Take time to speak with your Loan officer about all the options and get a worse case scenario for the cash you will be required to have available to make this happen.
3. Consider the Financing your solid Foundation – Without the money you wiull not be able to buy a house. A house cannot stand without a solid foundation. Assuming that you make plenty of money or are good will lead to heartache. There have been several situations that I have been called by Realtors on Transactions they are working on with Lenders. Those questions go something like this: “Matt, can I pick your brain for a minute. I have a client that is working with (XXXXXX) and the have a 780 fico score, make about 200K a year, have more than 20 % down and the bank is asking them to provide such and such. They cannot provide a full year as they did not keep this stuff on file. They have 8 months not a year worth. Is this going to kill a deal or is there a way around it?” I have seen the most qualified of buyers be put through the ringer. The underwriters want to make sure that if they sign on a loan with their name they have gotten every piece of paper that the investor may want. Falling out of escrow is everyone’s worst nightmare. Do yourself a favor by putting in the work upfront, take your time and then go look. You will not miss out on the home of your dreams if you take an extra day or two to do your due diligence.
4. Don’t worry about the past! – The past is that and it will not be re-written. Lose all ideas of how things were done in the past and do not listen to the opinions of those that bought in 2003-2007 because things are completely different and all that advice is out the window. Learn about what it takes to but in today’s market from industry professionals. We are here because we work hard at understanding our businesses. Don’t believe everything that you read on a blog and yes that includes mine. Some of it is opinion or it would not make a good story. Read and research and be a kid and ask LOTS OF QUESTIONS!!!!!!!!!

Summary – when it comes to getting pre-approved help us help you. Three tips:

1. Provide all the documentation
2. Take time to meet and ask questions either in person or on the phone
3. Do not rush as this will cause delays. Do not cut corners.

Thank you for reading. Until next time.

President’s Day Push

Ch Ch Ch Changes!!! This time for the better!

I feel that the word of the year or the anthem of the last 6 months has been change. With all the increased regulation and processing times I feel that the experience of home-ownership was starting to become a burden versus exciting. So I decided to make some changes that I know will help keep buying a home exciting and fun. Recently, I was able to throw a housewarming for a client, help another move and this is all because I made a change that got me out from behind the desk. Our job is in the field meeting, approving and working with our trusted partners and that was fading. The video below will describe five reasons I am excited to be a Loan Officer in 2010 and how I know this will help me help you!

Efficient Lenders Needed! Reason #1 on how my team can help!

With all the changes in the lending landscape I think that it is important to change as well in some ways. The era of increased documentation has lead to increased processing times and paperwork delays. How then can a Loan Officer find the time to help promote their mutual business partners, be present at the networking meetings, attend the open houses, create the flyer’s and have the important face to face meetings with the clients. Let’s also not forget picking up the phone when the agent calls.

This led me to make a change that I have been contemplating for over a year. The reason that I did not take the leap before was always a financial choice. However, much of my business has come from being there to help the homeowner and all other parties through the transaction. To facilitate phone calls, watch the market and be present and visible. The last six months I felt hunkered down in a cave dealing with paperwork upon paperwork to make sure that our deals closed. This lead to less face to face and less time to be ahead of the market with innovative ideas and  good all fashioned face to face business. I felt like a telemarketer not a loan officer.

I decided that I needed to make sure that the files moved even when I was not in the office. While I was out generating more business for myself and my partners I wanted to make sure that the file did not stagnate over an updated pay-stub. I decided that I would hire  a team member that is the best in the business when it comes to creating a sale-able clean loan package. Upfront we will do a lot of work to make sure that the back end the closing is as smooth as possible. Chris Kohler is going to be a valuable addition to the team and I feel privileged that he accepted the role. It has been 9 days that we have began and I think that we have really made it seamless. I have five reasons that I know will be positive for us and all those that we are blessed to work with. So here is the first reason that the new change I have employed will help your business in 2010!

Reason #1 : Two experienced professionals working on your closing

What does this mean?

• My new partnership with an experienced associate will make certain that the smallest details of a transaction (that make or break a deal) are quickly addressed and followed up on. Two sets of eyes are better than one and ensure that no point is overlooked on your purchase transaction.

• Your buyer will rarely wait, if at all to have their question answered.

• While I am Pre-approving your client on the spot, my inside team will make sure our other transactions are still moving forward in an efficient manner.

• Increased Time for Marketing, Open House & Tours

• Continuity in the transaction

• Imagine your life without a transaction coordinator. That is how I have been serving you over the years. Adding my associate will be like having a TA on the lending side so that we can focus on what we do best.

Stay Tuned for reasons 2-5. If you would like a copy of the power point to review at your leisure message me or if you want to hear more about the change in person let’s do coffee. I am really excited for 2010. May it be fabulous for you.

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Business Partner Spotlight!

I wanted to let everyone know that I will be featuring local business partners that do amazing work right here on California Home Strategies site. The format will be an interview like process, question and answer, either in video or dialogue. The first two professionals that you will see soon. are Marguerite Crespillo of Sell State Realty First and David Pabalate of Farmer’s Insurance. They are both amazing people who do a ton in the community. My goal is too shed light on the person behind the business that makes the business go. n

Stay Tuned for more! May 2010 offer everyone bright possibilities!

HUD Postpones Implementation of HVCC for FHA

Breaking news is that HUD has Postponed the implementation of HVCC for FHA loans until February 15th, 2010. This delay is too allow time for Lenders to adjust to the changes. It is a two part action plan:

1) Prohibition of Mortgage Brokers and commission based lender staff for the appraisal process

2) Appraiser selection for FHA Connection

This will be effective for all case numbers after the 15th of February.

Happy Thanksgiving! 10 Things I am thankful for.

THANKSGIVING is the holiday that we all get to take a moment to be thankful. 2009 has been one wild ride for many of us. Many times we can get so caught up in the middle of the ride we forget what we have to be thankful for. So here goes my TOP TEN things I am Thankful for:

1. Jesus Christ – He is my Lord and Savior and without him I would not have the opportunity to be thankful and reminded of the things that I am so truly blessed with.
2. My Children – I have three of the most wonderful children in the world. They love me through it all regardless of my status. To them I am famous and so is there mom as she was on TV recently. A simple hug from one of Children is a constant reminder of my many blessings.
3. My Parents and Family – For being there for me through all the things that they do. They love me unconditionally.
4. Realtors that refer me business – This is one of the most important although it is fourth on the list. I have been so blessed that there are Real Estate agents that have come to trust me enough with not only there clients but with their financial well being. As I perform they perform because no house is bought without Money:) Those people include but are not limited to: Nathan Novelo, Dayna Neuse, Karen and Robert Wallace, Peter Bond, James Herron, Keisha Mathews, Brook Terhune, Bryan Hill, Marcus Fillipi, Paula Nelson, Jennifer Walker and Melanie Wright. There are several others that I would like to mention but these mentioned I successfully closed at least one transaction and enjoyed working with them immensely.
5. My Clients – Thank you for placing your trust in me. In today’s world it can be hard to trust a Mortgage Professional as the picture that is painted s not always rosy. For whatever reason you placed that trust in me. I am thankful for you and your families and I hope to serve you for many years to come. You are the backbone of what I do and without you and the interactions and the lessons that you taught me about life I would not still be a successful Loan Officer today.
6. Adversity - adversity is the obstacle that leads to growth and change. Without it I would remain the same and would not grow. Growth is necessary always and I hope to continue to grow until my final days here. 2009 has placed so much adversity in front of me that I feel like a new man going into 2010.
7. Capitol Mortgage – Greg Teeter has done an amazing job giving us a place to work. It has been a pleasure to be part of a company that is moving forward, growing, and so Loan Officer friendly.
8. Facebook – This has giving me the opportunity to reconnect with so many great people in my life. I recently received and email from a friend I have known since Kindergarten letting me know that I have always been one of his dearest friends and that he cherishes our friendship. It came at a great time!
9. Opportunity – I am so happy to live in the United States. I am thankful for the soldiers that fight for our Freedom and Independence. I have had opportunities that some will never see. The opportunity to be a homeowner, Father, Husband, to own my own business, to get a degree, to learn grow and develop and even when I do not accomplish them at the highest level I get the opportunity to try again. I am thankful for that.
10. THE RAIDERS AND THE FACT THAT THEY PLAY THIS THANKSGIVING DAY!!!!!!!!!!!!!!

What are you thankful for? There is so much that I could write about that I am thankful for. This just touches some of the things. Feel free to comment about the things that you are thankful for……………………………………..

25% Gross Income. Don’t become a Jones!

When we set out on our home search we often think of a lot of things but rarely do we really analyze our budget totally. For many years Conventional Lending and Conventional Wisdom would tell you that your Housing payment Taxes and Insurance should not exceed 28%. Government Lending would set that standard over the years at 31%.

What do the Experts Say? In the book Total Money Makeover by Dave Ramsey he suggests that 25% is a great number to shoot for.

So what do these percentages mean? Debt to income is a measure of your debt versus your income. In this case the debt that we are talking about is your total housing responsibility. The income is your Gross Monthly Income not what you take home to live on.

Let’s Look at Example – Borrower A makes $8,000 per month Gross Income. Their Future Housing Payment will be $2,700 out the door. Their Debt to income in this case would be 2700/8000 = 34%. Based on conventional wisdom or even the number for government lending this would be higher than we would like to see. However, it is very common that this is acceptable through the automated underwriting engines. In fact I have seen ratios that are in the high 30′s and low 40′s make it through the system. In this example it would be advisable to have a payment that does not exceed $2500 on the government side and $2240 on the traditional conventional thought. According to Dave Ramsey $2,000 would be the max and I tend to agree with him.However, if I insisted on this I would be out of business!

Why are high ratios bad? Just take a look at the numbers as a whole. Going back to Borrower A. Borrower A represents a family of five. They like most families have expenses like daycare, food, insurance, cell phones, and you know the rest. So let’s mock an expense report.

Gross Monthly Income $8000 in a 30 % tax Bracket leaves the take home pay at $5600 per month.

$5,600 – $2,700 Housing – $800 Food – $500 in Auto Loans – $800 in Daycare conservatively = $800 remaining for all the everyday life expenses. It would be impossible to not use a credit card. How could you save for retirement, Christmas, incidentals etc.

Same Example: $5,600 – $2,000 Housing – $2,100 = $1500 which would be better.

So why do we not all buy with a 25% housing ratio? The Jones’. We get so caught up in the need to have a home like our friends. Facing the fact that we simply may not be able to afford a home is just to difficult. We, as a society, have not been taught about the numbers. I realize that some wise individual may read this and say you did not mention the tax benefits of home ownership. You are making a lot of assumptions on net income as they have three dependents, 2106 expenses, and a whole slough of write-offs. I understand that. I also know that I did not include many of the incidentals that we come across or even mention vacation. I simply want to illustrate a point that may get us to challenge ourselves to look deep into our finances. Owning a home is awesome. Living to service the home is not. When you are stressed each month about whether or not you will be able to pay by the first your whole life is affected.

Please consider your entire budget and consult a CPA before you even look at homes – The reason that I say this is simple. If I go to the local lots and test drive a 2010 Range Rover and then I realize that to have a life I would have to buy a base model pickup truck disappointment would overtake me.

My Job as your professional consultant for Mortgage is to lay out the facts – I want to make certain that I set you up for financial success not only a mortgage. I wish that I had been set down and taught these very basic principles before I entered the work world and housing market.

The principles out-lined here are not my own. They are a collaboration of wisdom that has been passed on to me over time and through trial and error.They are opinion. I have seen some great devastation and continue to see situations that are less than ideal and always will. Free will is awesome we are all given the opportunity to decide what is right and wrong for ourselves. I hope that you have enjoyed the material.

Debt Freedom including your Mortgage? Dream or Possibility?

“Close your eyes and dream…….. What would it be like to be debt free?  Yes, even your home is paid for in full.”  What if that date wasn’t thirty years from now, but 12, or 10, what if it could be 8? Although you may be thinking that I am on my patio daydreaming and maybe even a little off my rocker it can be done. Your Grandparents or parents are proof that it can be done. So am I simply talking about Fiscal responsibility? Probably not? That seems to be frowned upon in the United States today. I am a firm believer in learning fiscal responsibility and if their is a tool that will coach you through the process that is a effective why would it be a bad thing?

Consider you are driving from Roseville to San Francisco but along the way you exit 12 toward Napa. This is definitely off course. However, most of us now have some form of GPS to alert us of the misdirection and recalculate our next move to insure arrival. The tool that I am going to speak about can be considered a Financial GPS. A tool that if you happen to get off course or life happens and you are forced to go another way (detour if you will) it will assist you in re charting the course. GPS, a coach, a mentor offers peace of mind. It allows you to focus on the important things while all the details are worked out for you. Peace of mind is valuable. So valuable that it can hardly have a price tag. After all I think that peace of mind is what many of us strive for. Paying off your home offers peace of mind.

Dennis and Cheryl Harris

As many of you may already know and for those of you who do not know I love meeting new people and seeing what they have to give back to the world. I do not freely endorse or promote anyone or their product without the opportunity to get to know them a little as a person.  Any product that is revolutionary can also be controversial. However the heart of the business person presenting the product is what I look for. I had the great opportunity to sit down both Dennis and Cheryl Harris on Thursday evening and learn about them. What I came to find out about them is that they are amazing people. I have met many U-first agents and asked the very questions I am going to summarize below and I have got all sorts of answers. None of those answers showed the level of genuine interest that I felt from Dennis and Cheryl. They were not selling me the product that they have. Instead they were sharing with me how it has changed their life. I could sense the peace of mind that they have in knowing that the financial gps they hired will keep them on course to realize DEBT FREEDOM. I would encourage anyone who desires debt freedom to sit down with Dennis and Cheryl and allow them to share with you their story.

Here is what we talked about

Matt: Considering the fact that America promotes Fiscal irresponsibility (cash for clunkers) and refuses to teach in the school systems how money works how do you explain and overcome our hard wiring to leverage and finance our  Dreams?

Dennis and Cheryl: There has to be a paradigm shift on the way we view our money. The first question is how is what you are doing right now, working for you today? If you continue to do the same thing will you achieve peace of mind or freedom from your debt? If you are serious about getting your debt paid off and someone shows you the way it is hard to ignore.

Matt: The cost of the product can be quite substantial. A Garmin or Tom Tom can cost about $199 but this “Financial GPS” is $3500. How can someone who is looking to become more fiscally responsible justify spending this much?

Dennis and Cheryl: $199 for a Garmin saves you the time and the gas of getting lost. It helps to increase the quality time that you will have once arriving. It is an investment into the quality of your life. Although the cost of the U-First Software is $3500 dollars the savings can be hundreds of thousands. If I said you can invest $3500 and yield a return of $200,000 and show you this with factual numbers would you not invest the funds? The investment is a fraction of the return.

Matt: If the system no longer used a Home Equity Line of Credit and now is done through the use of a checking, savings and Credit Cards, What happens if the consumers credit card balances are reduced to the current balance? This is quite common today.

Dennis and Cheryl: Although the use of the Credit card is a factor and part of the program it is not reliant on the card solely. The program works to help you also pay off your debts such as auto loans and credit cards a s well as your home. The upgrades that have been made include total DEBT FREEDOM not just the home. If you follow your financial GPS it will again help to reduce the balance on the card regardless of the limit so that you will free up space to use the credit card as necessary. I understand the concern, what happens if things change to the point the program no longer works. I lose my job or my investment income dries up or… The Financial GPS will recalculate and get you headed back to San Francisco. It will also tell you if you don’t have enough gas to make it to S.F. and how long you will last at the current spend rate. The system is based on interest cancellation and is a result of money movement in favor of the consumer not the bank.

Matt: I think that it would be hard to hear about this product and not get excited. However, each year on the first people get super excited about working out and losing weight. That last the first two weeks of the year and then they fall flat on their face. How would this product be any different than the elliptical trainer sitting in the corner of the room with dust and clothes draped all over it?

Dennis and Cheryl: I would love to see the stats on those that hire a trainer and see how long they last. I would bet that those that have a coach and an accountability partner have a much higher success rate than those who do not. This program comes with not only great math behind your financial decisions but it also comes with Cheryl and me. We are a part of the process. Once you’re on this trip to financial freedom we are along for the ride with you. As much as you will allow us we want to walk this road home with you. We are just a phone call away and we stay in touch with our clients. The program requires desire. Remember I said at the beginning we want to partner with people who are serious about becoming debt free. However, the program requires discipline. All great things require discipline and obedience. To achieve DEBT FREEDOM you will have to make some changes in your life in the way you manage your money– changes that don’t affect your life style very much, but do affect the handling of your money. (Cheryl) I’m always encouraged by the graphic interface that shows our years to pay off, remaining interest to be paid and the date we will be out of debt coming down. U-First provides a written guarantee that if you follow the program you will get the guaranteed results shown in the free analysis that is done in the beginning. It is a lot like P90x or other workout programs. If you work them they will get you results.

Matt: How have you overcome the fact that is yet another Network Marketing Pyramid like business. The Stigma that accompanies this type of business can be a turnoff.

Dennis and Cheryl: First off this isn’t Network Marketing. There is nothing about the program that requires me to involve other people for it to be successful. It stands on its own. I follow the on screen prompts and I’m out of debt sooner rather than later. The hint of network marketing comes in when we start talking about the business opportunity that is here. I look at it like this: When is the last time that you got gas? The attendant gets paid when you do and the supplier and the company and etc. etc. Every business transactions have multiple levels of payment. The thing is I have a product that can impact the lives of many. That is what I present. If my business grows and others that I have helped want to share it and get paid for their efforts where is the harm in that. If it were only Cheryl and I think of all the people that I could not reach. I think that everyone should know about this great opportunity.

Matt: Today’s economy has created in many cases a Financial Paralysis among many. The instability of  jobs, the market, home ownership and life in general has lead to indecision. Given the fact that we often make Emotional decisions and our emotions are out of sorts how have you reached the consumer.

Dennis and Cheryl: Indecision is like inverted insanity. Doing the same thing or doing nothing hoping for something is just crazy. Whether or not this product is for you is purely MATHEMATICAL! The numbers are either supportive of a decision to move forward, or it just plain doesn’t work. (Cheryl) If you had a hole in your gas tank and were leaking gas would you not fix the problem. This is something I wish I would have known earlier. However, we will have our home paid off in less than twelve years leaving me plenty of time to enjoy the fruits of our labor.

Matt: Who is the ideal client?

Dennis and Cheryl: There are three different types of people that I have found have a genuine interest in the product. They get the concept and they move forward. Those people are:

1. People serious about getting out of debt
2. Those interested in Wealth Building
3. Those interested in increasing their income.

Dennis and Cheryl chose to take a hard look at where they wanted to be in the near future. They chose to go outside of the conventional way of thinking and take a look at something that could impact their life significantly. They took the steps to do so and they are already experiencing the results. This one choice has helped to change their thinking. They have seen the system work for them first hand. The Financial GPS has redirected them when “Life Happened.” Dennis and Cheryl would like to share with others what they have learned for themselves. It may not be for everyone but if I were looking for a coach whom I could trust Dennis and Cheryl would be just that. Their passion to help others is evident. If you are interested in hearing more about what has changed their life contact them at:

(916) 367-3453 or dennisgharris@gmail.com.

Thank you Dennis and Cheryl for taking the time to sit down with me and share your story.

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