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“The Struggle is Real…” Estate

For homes priced under $400,000, almost every property put up is going into a multiple offer situation. Home buyers are getting frustrated and feel like ripping out their hair when they finally find their perfect house, only to have some “punk” outbid them by $400.

The reason being is the lack of listings to satisfy the high property demand. Too many buyers want to take advantage of today’s low rates before they inevitably change. Buyers are snatching up homes faster than agents can list them on MLS. There are also not enough owners wanting to sell, perhaps waiting for values to continue appreciating. Many people are simply staying put, remodeling what they already have, perhaps due to lower rates from years ago. Others are converting their current homes into rental properties. In addition, builders are not able to keep up with the high demand to build new homes, as dwindling options give rise to a need for greater diversity.

Millennials are finally coming of age, buying homes unprecedentedly. Good paying jobs in Utah’s booming tech industry afford them the opportunity to be able to move into a starter home with a greater success rate than previously experienced.

According to the Salt Lake Tribune, Utah has the nation’s third highest growth rate in the country. They cite the reasoning being a continuation of high birth-rate and big-family culture, which many millennials in Utah are compelled to maintain. In fact, Utah has been in the top 10 for its growth rate every year so far this decade. As the number of new families continues to grow, the demand for property will sustain, putting increasing pressure on an already pressurized market.

The top 7 things you can do to get YOUR offer accepted:

  • Strong Pre-Approval Letter
  • Escalation Clause
  • Tighter Deadlines
  • Higher Earnest Money
  • Letter to seller from buyer
  • No Closing Costs
  • Shorten or drop due diligence

Having your documents in order for the lender, along with a specific, strong pre-approval letter goes a long way in getting an offer accepted. It lets the seller know that you are not flighty and are qualified to purchase the house in the first place.

Escalation clauses tell a seller that you will pay x amount (i.e. $2,000) over any other offer in order to ensure that the offer closes on your bid over another’s.

Many of our buyers are writing letters directly to the seller, saying how much they love the home and the neighborhood to help persuade the seller to choose their offer. The biggest help we have seen is not needing the seller to pay closing costs. One challenge with multiple offers is the property gets bid higher than what is actually worth. If the seller has to lower the purchase price to meet the appraised value, not needing the seller to pay closing costs is a huge help to seller to net the highest amount. Don’t lose your hair (or potential home) over the struggle of the current market! Our firm grasp on the buying process will give you peace of mind without losing pieces of your hair. But, let’s be honest; we all know you wear extensions anyway… 😉

 

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“She Works Hard for the Money”

As the Donna Summer’s song goes, “She works hard for the money.” We want to help you put that money to work for you by exploring the advantages of a cash out refinance on your home.

A cash-out refinance may be the key for opening financial doors for you and your family. We have assisted hundreds of clients in putting their equity to work in many ways, including:

 

  • Eliminating high interest rate credit cards
  • Finishing a basement, remodeling their home, etc
  • Starting a business without seeking outside lenders and investors
  • Diversifying their investments into such things as stocks, rental properties, etc.
  • Helping with unexpected or major expenses such as medical and education needs
  • Pulling cash out for the purchase of a new primary residence

 

I recently closed a loan for a family who had gotten in trouble with their credit cards. The husband had gone on a little shopping spree and neglected to tell his wife that he had opened a few credit cards without her knowledge. Upon the loan application, imagine her shock learning that there was more debt than what she was aware of! This family was in a FHA loan and paying high FHA Mortgage Insurance. Their home had appreciated an astounding $100,000 in the 5 years they had lived here.

We decided to complete a cash out refinance and ended up helping them pay off $32,000 in credit cards. We refinanced into a Conventional Loan and removed the FHA Mortgage Insurance. Because we did raise the loan amount, their monthly payment increased, but only by an additional $172 per month. By paying off the $32,000 in credit cards, they saved $1,238 per month in credit card payments. This cash out refinance gave them the freedom they sought by alleviating the heavy debt burden they had been carrying.

A family who owned a three-bedroom home with an unfinished basement initially bought the home with two kids, which fit them perfectly. After having their family grow by an additional two kids, they had become completely crammed. We completed a $24,000 cash out refinance, which afforded them the ability to finish their basement, as well as add two additional bedrooms, a bathroom, and a TV room for the kids to do exactly as they pleased with plenty of space to run around.

One of our clients, who is a mechanic, had worked for years at large dealerships fixing cars. He decided he was ready to work for himself, so he came to us to complete a cash out refinance for $40,000, which gave him enough to open his dream garage, as well as purchase the lifts and other equipment he needed to be independent. He now works longer hours for himself than before at the dealership, but he followed through with his vision of owning his own business successfully because of his decision to refinance!

A client of ours, for whom we did a cash out refinance four months ago, took $120,000 in cash out of his house. He felt that the equity in his home was not working hard enough for him and decided to turn it around by investing. He immediately bought a condo for an investment property and as a result, is now cash flowing $350 per month. He kept half of his cash and is actively looking for another investment property to buy. He is seeking to turn his equity into about $700 in monthly cashflow with additional property, made possible by the services we were able to provide.

In 2012, a couple came to us seeking to cash out $50,000 to fund in vitro fertilization treatments and other expenses incurred while trying to expand their family. Having no kids of my own then, I thought they were nuts! I have been blessed not to be in a similar position, but now that I have two children myself, I understand why this was such an important step for them. They have expanded to a happy, healthy family with three children (including a set of twins.) I have been able to stay in touch with them through social media and their decision to refinance is one they would not go back on. They put their equity to work for something that not only helped their future, but assisted with their goals of having a loving family of their very own.

In the last 12 months, we have noticed what has become an exponentially growing trend. Many of my clients have sought to purchase a new home by using their equity, keeping their home, while converting it into a rental property as a means of providing future retirement income. This works by pulling the cash out of their current house, then using that as a down payment toward their next purchase. There is only one move here, which eliminates stress about selling their house and trying to buy a new one simultaneously. They utitlize the existing equity to work for the purpose of providing for themselves looking toward the future..

Owning your own home is not just a fundamental aspect of the American Dream. For many American households, the equity in their homes represents as much as 67 percent of their total net worth. For generations, the power of home ownership has created a solid financial base for millions of families, and a little knowledge offers the potential for even more financial independence. We can assist you with the knowledge and expertise to help you not only envision a possible dream, but live it by ensuring money doesn’t stand between you and your lofty goals. You work hard for your money, and we are here to treat you right!

 

 

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Are Home Prices Too High?

 

A lack of new construction in the last 10 years may actually be a blessing in disguise. For now, that is.

 

’ve been getting a lot of questions lately about home prices. Are they too high? Is the market overheating? I think people are overreacting just a little bit. Here’s why.

As you can see on the chart in the video above, the number of new construction homes being built has moved up and down in cycles for the last 60 years. The gray lines on the graph show our recessions.

If you look closely, you’ll see that we’ve built less than 1.2 million new homes in the last 10 years. We’ve never had another 10-year period where we built less than 1.2 million. We’ve occasionally dipped below that, but those dips have never lasted longer than 18 months.

“If you don’t already own a house, you need to.”

Another topic I get asked about a lot is inventory. The reason it’s so low right now is because we haven’t built enough homes in the last 10 years. Homes are going to continue to go up in value as long as this is true.

If you don’t own a house already, you need to. If you have any questions at all about buying or aren’t sure what you can afford, give me a call or send me an email. I would be glad to help you out.

~Anthony

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Buying a Home: Great No to Low Down Payment Options

 

 

Owning a home is a major element of the American Dream, and many people find that purchasing a home is the wisest financial decision they ever make. However, the belief they need a sizable down payment keeps many potential homeowners out of the market. They end up spending thousands of dollars each year on rent instead of building financial independence with home ownership.

You May Qualify for No to Very Low Down Payments

Recognizing the importance of home ownership, the federal and state governments have enacted several loan programs that require no or exceptionally low down payments. It is well worth your time to explore these programs, even if you have the cash to make a larger down payment. Using any of the programs will often allow you to purchase a home, and perhaps one larger than you might otherwise consider.

We carefully monitor the best programs to get you into the home of your dreams with the least upfront expenses and lowest down payment. I discuss several of our favorites below, and we can help you determine which ones meet your needs and qualifications.

Conventional 1% Down Program

Our current favorite actually allows us to assist you in buying your home. The program we use actually requires 3% down, but we gift you 2%. That means with just 1% down you can get into a home that starts you off with 3% equity. Additionally, your monthly payments average as much as $200 a month lower than other options, such as the FHA Grant and Utah Housing Programs that we discuss below. With these advantages you can see why we are currently completing a number of these loans each month.

FHA Loan with Down Payment Assistance.

The state of Utah and its counties put great emphasis on the concept of home ownership. As a result, there are multiple grants available to help you purchase a home. There are often income restrictions and other qualifying factors, but the help is significant for those who qualify. For example, our favorite, the CDC Grant (https://cdcutah.org/im-a-home-buyer/down-payment-assistance) provides many residents of Salt Lake County an outright grant of as much as $5,000. We can help you explore this option and other grant programs if you live outside Salt Lake County.

FHA Loan with Utah Housing Second

Another popular and useful program has been established by Utah Housing to work with FHA loans (https://utahhousingcorp.org/). The state agency enhances a regular FHA Loan with 3.5 percent down loan with a 6% second note. This amount covers the required FHA down and part of the closing costs on the loan. We find this is an excellent option for homes with a purchase price below $200,000 and borrowers with some credit rating challenges. While the rate on the mortgage may be a bit higher, this program usually generates multiple offers and is a great solution for certain situations.

USDA Loan

If you live in or are looking to live in qualifying rural areas, the USDA loan is a 100% financing option that many buyers fail to consider. Fortunately, we are able to help many clients who live in such qualifying areas as Tooele County, Saratoga Springs, Eagle Mountain, and the Southern part of Utah County. On top of 100% financing, USDA Mortgage Insurance is significantly lower than the required FHA Mortgage Insurance. Our team will help you evaluate this as a preferred source of home financing.

VA Loans

Of course, active duty and veteran military personnel are rewarded for their service to our country with a great 100% financing, program. Additionally, VA loans are generally more flexible on minimal credit scores and you avoid the cost of mortgage insurance. If you have served in the U.S. Armed Forces, let us explain this important benefit in more detail. You may find this an ideal route to home ownership.

FHA Loans

As we mentioned above, a traditional FHA loan requires only 3.5% down. While there are certain restrictions and qualifications, this is a great way to get that starter home and begin the process of building equity in your own home, with the option to later use that equity for refinancing or purchasing a larger house.

Conventional Loan Programs

Contrary to what many people believe, 20% is not a requirement for many great conventional loan options. We constantly monitor the markets for the best options, and we can show you a variety of ways to purchase your house with as little as 3 to 5% down.

Are you sitting on the sidelines because you think you can’t come up with a large enough down payment? Call today and we will show you how you can get into the home ownership game with a zero or very low down payment!

~Anthony

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The Magic of the 1% Down Program

How our Unique Program Is Changing Lives

One of the major financial decisions most individuals ever make is buying a house. Owning a home provides you with a sense of security and stability that simply can’t be achieved by renting from someone else. Additionally, the many long-term advantages of home ownership provide a life-changing opportunity to grow your personal net wealth.One of the great joys we have in our firm is helping many of our clients purchase a home and join the family of contented home owners. Our secret?

It’s not really so much a secret as the way we have designed what we call our One-Two-Three program. As one of Utah’s leading mortgage brokers, we have created an innovative approach that allows buyers to move in to their new home with a net 1% down payment. That’s right, just 1%. We pair our clients with a 3% percent down mortgage and then we gift them 2% of the home value. Again, that’s right – we gift the 2% and you move into your house with an instant 3% equity.

Here are comments from just a few of those new homeowners:

         “Putting 1% down in a hot market like this was a great investment. We were able to use the money we had saved as a down payment to improve the value of the home and truly make it ours: new floors, paint, kitchen cabinets, window treatments, and even furniture. The improvements gave us instant equity and made it feel like home from the day we moved in.” ~Kenneth

Ken really used this program to his advantage. He had the money for the down payment but chose to use the 1% down payment program anyway. This allowed him to use the money he saved for a down payment on renovating and updating his home.

         “I originally got pre-approved with another lender for an FHA loan but the condo I fell in love with wasn’t FHA Approved. If it wasn’t for my mother recommending a 2nd opinion with ALV Mortgage and the 1% down conventional loan I wouldn’t be in my condo today.” ~Tonia

Tonia was pre-approved with another lender for an FHA Loan and was shopping for condo’s. Unfortunately not all condo’s are FHA approved. Not only was our 1% loan program able to get her into her condo, but it did so at a cheaper monthly payment then the other lender’s FHA loan program.

         “My rent kept increasing year after year so I decided to buy a condo, but I didn’t have a down payment. I decided to quit my Gym membership, quit going to Starbucks, and save every penny I could. It took me 3 months, but I was able to save for a 1% down payment. My rent will never go up again.” ~Angela

I am so proud of Angela. It wasn’t easy but she set a goal and made it happen.

         “When a house came up for sale across the street from my aging parents I just had to buy it, but I didn’t have a down payment. Scrimping up 1% to purchase this house wasn’t easy, but we did it. We wouldn’t have been able to buy this house any other way. Now we love our house and being so close to family.” ~Sofia

This loan wasn’t easy but I am so glad we were able to get it closed. Buying this house made Sofia so happy she could hardly contain herself. She couldn’t wait to get the keys.

Call me today and I can explain how I can get you into a home with just 1% down. We work hard to make the mortgage loan process the easiest part of your biggest financial decision.

~ALV Mortgage

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Cash Out Refinance

Let’s discuss when it’s right to turn your home equity into Cash.

Is it Right for You?

Owning your own home is not just a fundamental aspect of the American Dream. For many American households, the equity in their homes represents as much as 67 percent of their total net worth. For generations the power of home ownership has created a solid financial base for millions of families, and a little knowledge offers the potential for even more financial independence.

Building Long-term Value

Most people understand that the total equity in their home represents the current market value minus the balance of the underlying mortgage. The initial equity balance usually starts with the down payment, and equity value generally grows over time due to a combination of factors. These include:

  • Improvements made in the home

  • Paydown of principal from monthly mortgage payments

  • Overall increase in market value

While this growth in equity provides an overall sense of comfort, it may also provide some significant financial opportunities. One of the fundamental principles of financial management is to keep your money at work earning the best possible returns. While the equity in your home is working for you, it can also be leveraged to provide even more financial benefits.

Putting Risk versus Reward to Work

Loans on primary residences are considered relatively safe bets by financial institutions. That is why mortgage rates are significantly lower than most other consumer loans. Likewise, it generally means you can access your equity with a cash-out refinance.

If you have equity in your home, you can usually take advantage of an equity line of credit or loan. However, the rates on such loans are higher than regular mortgages because they represent more risk to the lender. That risk comes from being second in line behind the primary mortgage holder.

On the other hand, the cash-out refi replaces the original mortgage and assumes the first position on your home. Depending on your specific situation, you may end up with lower or very similar payments due to changes in interest rates and other factors. Our experienced loan advisors can quickly help you evaluate your options in this area.

Taking the time to consider a cash-out refinance may open a variety of financial doors for you and your family. We have assisted clients put their equity to work in many ways, including:

  • Eliminating debt with much higher rates

  • Simplifying their financial picture by consolidating multiple payments into one

  • Starting a business without seeking outside lenders and investors

  • Diversifying their investments into such things as stocks, rental properties, etc.

  • Helping with unexpected or other major needs such as medical and education

In light of the new tax changes, your advisor may show you just how much additional financial leverage a cash-out refi may provide you. For example, consider the savings of replacing just $16,000, which is the 2017 average for U.S. Households with credit card debt, carried at 18% for ten years. (https://www.nerdwallet.com/blog/average-credit-card-debt-household/))

A refinance mortgage that gives you that $16,000 to pay off the credit cards with a 4.5% mortgage would save nearly $15,000 over those ten years. That is called a savvy financial strategy, even before adding in the potential returns from investing that “extra” $15,000.

As the song says, “You work hard for your money.” Let us help you put that money to work for you by exploring the advantages of a cash out refinance on your home.

~ALV Mortgage

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The Road Map for Home Ownership

Let’s discuss when it’s right to turn your home equity into Cash.

Is it Right for You?

Owning your own home is not just a fundamental aspect of the American Dream. For many American households, the equity in their homes represents as much as 67 percent of their total net worth. For generations the power of home ownership has created a solid financial base for millions of families, and a little knowledge offers the potential for even more financial independence.

Building Long-term Value

Most people understand that the total equity in their home represents the current market value minus the balance of the underlying mortgage. The initial equity balance usually starts with the down payment, and equity value generally grows over time due to a combination of factors. These include:

  • Improvements made in the home

  • Paydown of principal from monthly mortgage payments

  • Overall increase in market value

While this growth in equity provides an overall sense of comfort, it may also provide some significant financial opportunities. One of the fundamental principles of financial management is to keep your money at work earning the best possible returns. While the equity in your home is working for you, it can also be leveraged to provide even more financial benefits.

Putting Risk versus Reward to Work

Loans on primary residences are considered relatively safe bets by financial institutions. That is why mortgage rates are significantly lower than most other consumer loans. Likewise, it generally means you can access your equity with a cash-out refinance.

If you have equity in your home, you can usually take advantage of an equity line of credit or loan. However, the rates on such loans are higher than regular mortgages because they represent more risk to the lender. That risk comes from being second in line behind the primary mortgage holder.

On the other hand, the cash-out refi replaces the original mortgage and assumes the first position on your home. Depending on your specific situation, you may end up with lower or very similar payments due to changes in interest rates and other factors. Our experienced loan advisors can quickly help you evaluate your options in this area.

Taking the time to consider a cash-out refinance may open a variety of financial doors for you and your family. We have assisted clients put their equity to work in many ways, including:

  • Eliminating debt with much higher rates

  • Simplifying their financial picture by consolidating multiple payments into one

  • Starting a business without seeking outside lenders and investors

  • Diversifying their investments into such things as stocks, rental properties, etc.

  • Helping with unexpected or other major needs such as medical and education

In light of the new tax changes, your advisor may show you just how much additional financial leverage a cash-out refi may provide you. For example, consider the savings of replacing just $16,000, which is the 2017 average for U.S. Households with credit card debt, carried at 18% for ten years. (https://www.nerdwallet.com/blog/average-credit-card-debt-household/))

A refinance mortgage that gives you that $16,000 to pay off the credit cards with a 4.5% mortgage would save nearly $15,000 over those ten years. That is called a savvy financial strategy, even before adding in the potential returns from investing that “extra” $15,000.

As the song says, “You work hard for your money.” Let us help you put that money to work for you by exploring the advantages of a cash out refinance on your home.

~ALV Mortgage

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Dayvina Stewart

I cannot tell you how amazing Anthony and Keith have been to me from getting me back and forth to school as a teenager to helping me get a loan for my first home these two have just been outstanding they made this process so easy I tried to go with someone else before and it was the most horrible thing I’ve ever experienced I was so discouraged until I reached out to Keith they worked so hard and kept their word on everything they told me what happened they are truly amazing they took care of everything for me 😄
And miss Allie you you are also amazing thank you guys so much for everything we are truly blessed 💜🙌😇

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The Christmas Box House

Three weeks ago I was at my bank sending a wire when the banker found out I was from Richfield. He told me he lived in Richfield for a while. Surprised, I asked how he ended up living in Richfield and he told me he was there living in a boy’s home for a few years.

I had known about the boy’s homes in the area and had previously thought they were only for kids who had gotten in trouble. I made a joke, (a bad one) about what he could have possibly done to get sent to a boy’s home.

It turns out he never got in trouble…not really.

He goes on to tell me that when he was young his parents got sent to jail. Him and his brother moved in with their 80-year-old Grandmother. One Christmas his mother promised them that a box of toys and gifts would be coming in the mail for Christmas. By Christmas day the box had not arrived. His Grandmother had not bought them anything, but they were not discouraged. They figured it just got caught in the mail and would be there soon. The day before school was to start his mother’s package had not come.

He and his brother were so embarrassed that they hadn’t receive at least one new Christmas sweater that they didn’t want to go to school and have any of their friends ask them what they received for Christmas. They decided the best thing to do was skip school until their mother’s Christmas box arrived.

After about a week of not going to school the Division of Child and Family Services showed up and they were removed from their Grandmother’s home. The Utah Foster Care System was full at the time and had no place for them. They were sent to live at a boy’s home near Richfield. Despite this boy’s home being rough (as most of the kids there had gotten in major trouble) he went on to tell me how great of a time he had living there and how he wouldn’t be the man he is today without that experience.

His story affected me and stuck with me the past few weeks, partly because I felt terrible about the bad joke I made and partly because no child should have to go through Christmas without a single gift. I wanted to do something to help foster children, so I called The Christmas Box House, a non-profit organization, that serves children in the foster care system and operates an emergency children’s shelter and asked them what I could do to help. They sent me an urgent needs list. I accepted this list as a challenge and decided to donate $100 worth of goods for every item on their urgent needs list. If you would like to donate here is a current list of they need:

www.thechristmasbox.org/salt-lake-project-elf-wish-list-2017

 

 

 

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NEW TAX PLANS AFFECT UTAH HOME OWNERS


The Final tax plan that will affect Utah Home Buyers and Owners has just been approved. One of the biggest new changes will be the proposed doubling of the standard deduction. This will leave very few people to itemize deductions and write off their mortgage interest. The plan increases the standard deduction for individual taxpayers who don’t itemize from $6,350 to $12,000, and from $12,700 to $24,000 for couples.

My opinion is raising the standard deduction is great for families and most people will save money on their taxes as the majority of tax returns that I review have itemized deductions far below $24,000. I think this is a great thing that will save a lot of people a lot of money. The National Association of Realtors (NAR) believes that this removes an incentive for people to purchase houses and that home values will decline 10%. I do agree with NAR to a degree, but I don’t believe this section will truly hurt home owners or lower home prices. In all my years of helping people buy houses not one has bought a home for the tax write-off. It’s a bonus, but my experience is that people buy homes to house their families, stop throwing money away on rent, and to better prepare for retirement.

The Current tax code allows home owners to deduct mortgage interest on loans up to $1,000,000. The New tax Plan lowers that to $750,000 on mortgages.

Some great news is that the final tax plan eliminated the verbiage changing the capital gains exclusion for primary residences. Currently if you live in your home for 2 out of the last 5 years you will not pay any capital gains taxes. The initial plans were a big concern for me because both the senate and house proposed tax plans increased the live-in time period to five out of the last eight years. This means that owners would need to live in their homes for 5 years in order to claim the exemption. If they were to sell their house prior to living in it 5 years they would be required to pay capital gains taxes. I am glad this changed.

I think had this been approved changing the live-in time period for the capital gains exemption is a tragedy. This would have caused fewer people to sell and purchase a new house, further tightening home inventory. If an individual gets a raise and wants to upgrade their home, they may think twice if they’ve experienced home appreciation. They would not be able to use all of their equity for the down payment on the next house because they would have to pay hefty capital gains taxes. This may cause fewer entry level houses to come up for sale and less buyers looking for move up properties.

Lastly, are current home prices in a bubble and could they fall dramatically with this new tax plan?  I don’t think so. I see home prices continue to appreciate modestly for the foreseeable future. I do not see home prices decreasing until there is a significant change in employment. Part of the new tax plan is lowering the corporate tax rate from 35% to 20%. This is going to cause big corporations to have significantly more money in their pockets allowing them to hire more employees and increase wages. I feel that the lowering of the corporate tax rate will keep the unemployment rate at record low levels for an extended time. Until the labor market gets significantly worse people will continue buying and upgrading homes, especially as their wages increase. The lowering of corporate taxes means more home appreciation for longer. If you don’t own, the longer you wait the more you will pay for a house when you do buy.

 

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