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Anthony’s Office: Where There’s a Will, There’s a Way

Recently I had a client in my office brainstorming ways she could acquire more rental properties. She was 64 years old and was dressed somewhere between homeless and casual.

She already owned 12 properties, seven of which were owned free and clear, but she wanted more.

I was amazed and wanted to learn more about how she acquired and paid off so many investment properties, so I asked how she did it. She told me her story as she was double dunking a week old donut into her coffee (don’t ask me why we had week old donuts in the office, we just did). I warned her the donuts were a week old and she still ate two.

It was 1976, she was 22 years old, and living in an apartment building across the street from the University. She had the bright idea that she would like to own the apartment building. She strolled into her bank, sat down with the bank officer and told her she would like to buy the apartment building she was living in. The bank officer started rolling in his chair with laughter; he couldn’t believe his ears. He brought the bank manager into his office to have her tell him what she came in for and they both started laughing and cracking jokes at her.

She had never been so humiliated, crushed in her life. She walked out of there feeling devasted, but also with a profound sense of vengeance and “Screw you!” attitude towards the bank officers. She promised herself she would purchase those apartments and nobody would ever treat her like that again.

In the following year, she bought her very first condo. A couple years later, she bought another condo, then another, as well as a single-family home. In the 42 years since her first rejection, she has acquired a total of 12 properties – Did I say seven of which are now owned free and clear? She has not sold a single property. Her average monthly income as a result is over $15,000, a gross income over $180,000 per year.

Roadblocks have not been an option for her! Her resulting success is middle finger enough to the nay-sayers that threatened to thwart her from her path. If she would have accepted her initial “no” answer, she surely would not be where she is today. Refusing to take “no” for an answer clearly afforded my client the life she has always dreamed about, perhaps more.

At some point in every one of our lives, we face rejection as a natural reaction to be being in alignment with our goals. Life puts many roadblocks in front of us and it is our job as individuals to either let those blocks separate us from what we want or accept them and find ways to overcome them. Challenging the odds and refusing to give up hones our character to be able to defeat obstacles standing in our way.

My client’s success did not come overnight. It came brick upon brick or condo upon condo over 42 years. It’s amazing to me what we can accomplish slowly and over time with diligence and staying close to our goals.

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10 Ways to Avoid Boredom This Summer!

Summer is in and kids are out – of school, that is. After the summer camps, the family trips and the holidays, a lot of parents are left wondering what activities they can use to keep the kids busy and get them out of the house. With triple digit weather just around the corner, we know you are looking for simple, cool and entertaining ideas for the kiddos this year. Beside perhaps letting the kids frolic in the yard, what’s a parent to do?

Fear not! We’ve compiled a list of 10 fun summer activities for you, all within the Salt Lake Area. Get your planning in gear today!

  1. Red Butte Garden Outdoor Concert Series – Located on the upper east side of campus, the Red Butte Garden will be hosting some amazing musical talent this summer such as Sugar Ray, Steve Miller Band, and a host of well-known artists.
  2. Hit the biking/hiking trails – Some of the best biking trails are also some of the best trails for a great hike. There are trails just east of the U of U campus; you might also consider nearby canyons such as City Creek Canyon and Millcreek Canyon.
  3. The Utah Arts Festival – The Arts Festival will be held at the downtown Library Square from June 25 – June 28. See more info on their Facebook page by clicking here.
  4. Fireworks at the park (twice in the same month) – One of the benefits of living in Utah is that we have two July holidays with fireworks—the 4th of July and the 24th of July (Pioneer Day). Why not take advantage of both days?
  5. Go to the pool or water park – You can go to a local pool or you can try out Seven Peaks Waterpark (formerly called Raging Waters) at 1200 West and 1700 South.
  6. Twilight Concert Series at Pioneer Park – Join gatherings of outdoor concertgoers for some of the hottest shows in town, such as Death Cab for Cutie. Tickets are only $5 in advance and $10 at the door.
  7. Drive-In Movie Theater – Pack up a cooler with your favorite beverages and snacks, along with some blankets and beach chairs, and you’re good for a relaxing time with two great flicks for a low price. Click here for more information.
  8. Hogle Zoo – Not only are there dozens and dozens of exhibits for kids to bounce back and forth between, there are also great clubs, camps, Harry Potter themed zoology classes and sunrise/sunset safaris where no kids from 1 – 92 will be able to find anything to be bored about.
  9. Boondocks Fun Center – Tuesdays will never be boring again when you can get unlimited Laser Tag, XD Theater, Kiddie Cove and video games all for $12 at Boondocks. For an extra $8 per person, you can buy an Outdoor Upgrade with Go-Karts, Batting Cages and more. Military discounts apply.
  10. Wheeler Historic Farm – This is a working farm with a museum and a great amount of open space for kids to run around. Picnic facilities and a playground make for a good afternoon escape, and wagon and train rides give a very nostalgic feeling to the whole experience. Did we mention it’s a public park, so it’s free?
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Mortgage Insurance : A Breakdown

What is Mortgage Insurance?

Mortgage insurance is a specialized protection for the lender -not the buyer- if you are unable to make your mortgage payments, for any reason. If you fall behind, your credit score may suffer, and you could stand to foreclose on your home.

How does it work?

Mortgage insurance lowers the risk to the lender making the loan to you, that way you are eligible for a loan you might not otherwise get. This does increase the cost of the overall loan but if you are required to get it, it will either be included in your monthly payment, your costs at closing, or both.

Who needs Mortgage Insurance?

Typically, borrowers making a down payment of less than 20 % of the purchase price of the home also will need to pay for mortgage insurance. This insurance is also usually required on FHA and USDA loans.

Are there different ways to pay for Mortgage Insurance?

There are several different kinds of loans available to borrowers who have low down payments, and the resulting mortgage insurance can be paid for in a number of ways:

  • Conventional Loans – your lender may arrange for a private company to insure you. Private mortgage insurance (PMI) rates vary by the amount of the down payment amount and credit score, but are tend to be cheaper than FHA rates for good credit. Under certain circumstances, you may be able to cancel your PMI. (see last question)
  • FHA Loans – premiums from your insurance are paid to the Federal Housing Administration (FHA). This insurance is required on all FHA loans. FHA insurance is paid by both monthly payments and upfront costs included in closing. Loan amounts can increase if there is not enough cash on hand to pay upfront and the fee is rolled over to the mortgage.
  •  USDA Loans –  Similar to the FHA but typically cheaper. You will pay for insurance both upfront and monthly. You may choose to roll the upfront portion to the mortgage but again, this will increase overall loan cost.
  • VA Backed Loans – replaces mortgage insurance and functions similarly to it. There is no monthly premium with this loan but there is an upfront “funding fee”, which varies depending on the type of military service, the down payment amount, disability status, type of loan (buying or refinancing), and whether or not it is a first VA loan. You have the choice to roll the upfront fee with this as well.

Can you get rid of mortgage insurance?

In order to remove private mortgage insurance (PMI), you must have at least 20% equity in your home. You may ask the lender to cancel PMI when you have paid down the mortgage balance to 80% of the home’s original appraised value. When the balance drops below 78%, the mortgage servicer is required to eliminate the PMI.

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Housing Becoming Less Affordable Along Wasatch Front

 

In March, researchers at the Kem C. Gardner Policy Institute found that our current market conditions are threatening to cause a crisis in Utah based on a growing housing shortage, while current home prices continue to appreciate.

The Wasatch front housing market is stronger than ever with an increasing demand for both single family and multifamily rental units through the northern part of the state. New research shows that demand has outpaced wage growth which is causing a greater rift in affordability. Studies show that median home prices during the first three months of 2018 were not affordable for average wage earners in about 68% of the counties included in the US report.

Incomes in Utah have failed to keep pace with interest rates, the report noted. The report also defined housing affordability as a unit where an owner or tenant pays no more than 30 percent of their household income toward housing costs — rent or mortgage.

Davis, Utah and Weber counties, which are located along the Wasatch front rated less affordable than any prior quarter average during the first three months of 2018, while Salt Lake county was equal to its historic affordability index.

Affordability often suffers during booming economic cycles, which frequently outpaces incomes for at least the start of these growth spurts. The risk is that individuals and companies could pull out of the area when they are no longer able to operate or live because of the expensive housing.

Home values are going up quickly [but] the negative side of that is that the homes themselves are also becoming less affordable. Three factors that could help improve affordability in the short term are things like decreasing home prices, increasing wages and although cited as the least likely to happen, decreasing interest rates.

However, the Wasatch front is still a more reasonable market than other large surrounding urban areas like Northern or Southern California, Las Vegas, Seattle or even Denver. Housing prices in Utah will continue to increase at rates well above the national average due to relatively high rates of population and economic growth. As long as the state is considered a bargain for some other competitive markets, we will probably see home prices continuing to grow and affordability continuing to be an issue.

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Five Signs You Are Ready to Buy a New Home

Have you been asking yourself if it might be time to fulfill the American dream of home ownership? There are many factors to consider before making this decision — beyond low interest rates and competitive pricing. Here are five signs which might indicate that the time is finally right for you:

1. Debt Elimination

Being able to conquer outstanding car payments and credit card debt means you won’t have as many extra bills, which could diminish your available funds to be able to support a mortgage. The increased cash flow (which is now not going toward debt) gives the opportunity to make sure other homeowner related expenses can be covered, such as property tax, homeowners’ insurance, repairs, maintenance, furnishings, etc.

2. Job Security

While any job always comes with the possibility of uncertainty, the longer you are in a position or have obtained enough years as a business owner, the more likely that your job will be viewed as sustainable enough to back up home ownership.

3. Income Increase

No more than 30 percent of your total monthly income should be going toward a mortgage payment. However, you are able to put as much as 50 percent toward the mortgage payment, if you know you are able to live within your means until a raise comes your way. Earning more means you won’t have to put as high of a percentage of your earnings toward your house payment. Otherwise, lack of extra income could put you at risk for financial vulnerability.

4. A Solid Savings/Emergency Fund

Acquiring a new home can mean many potential surprises. In general, something unexpected will always come up in life as well. It is logical and vital to minimize stress and prepare in advance with extra accounts, including a savings account and emergency fund. After all, having to rely solely on a monthly income to cover unexpected costs (since monthly income has already been calculated and is needed for the mortgage and other bills) can create avoidable issues.
By having funds set aside in the amount of an equivalent of at least a year of monthly bills — is a good position to be in before considering a big move. Setting and sticking to a firm goal is the only way to attain this level of security for your household.

5. Higher Credit Score

After paying off debt and monitoring your credit report, you are able to increase your credit score to obtain a more ideal interest rate. Qualifying for a better interest rate means you get to enjoy a lower monthly mortgage payment, making the option to become a homeowner an obtainable goal.

 

These are just some of the signs that you can use to determine whether or not you are ready for the home-buying process. Our friendly and knowledgeable staff is happy to answer any questions or concerns you might have. Please contact us if you feel you are ready to pave the road to your new home!

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The Great Easter Egg Hunt!

Looking for the best egg hunt to attend this Easter? There are so many to select from that it can be nearly impossible to choose!

Easter is easily one of the most memorable kickoffs of Springtime. Kids gleefully filling baskets with incredible amounts of goodies… ones that mom and dad can eat once the kids are in bed. In Utah, Easter egg hunts are serious business. Figuring out which would be the most fun for your family can be a tough choice. Luckily for you, we’ve compiled a list of most all of the locations in the better part of Northern Utah. Whether you are hunting for a new home (or eggs), we are here to lend a helping hand. Now all you have to do is hunt for the best fit!

Saturday, March 31, 2018

  • Bluffdale – Lions Club Easter Egg Hunt – 10:00 AM
  • Cedar City – Sigma Nu Easter Egg Hunt – Cedar Main St. Park – 9:00 AM
  • Clearfield – Easter Egg Hunt – 10:00 AM
  • Clearfield – Easter Egg Dive – 10:30 AM – 12:30 PM or 1:30 PM – 3:30 PM
  • Clinton – Easter Egg Bash – 9:00 AM
  • Cottonwood Heights – Easter Egg Hunt – 10:00 AM
  • Daybreak – Easter Egg Hunt – 1:00 PM
  • Delta – Easter Egg Hunt – 9:30 AM
  • Draper City – Easter Egg Hunt – 10:00 AM
  • Fruit Heights – Easter Egg Hunt – 10:00 AM – 10:30 AM
  • Helper – Easter Egg Hunt – 9:00 AM
  • Herriman City – Easter Egg Hunt – 10:00 AM
  • Ivins – Easter Egg Hunt – 9:00 AM – 10:00 AM
  • Kaysville – Easter Egg Hunt – 9:00 AM – 9:30 AM
  • Kearns – Easter Egg Hunt – 9:00 AM
  • Layton – Easter Egg Dive – 10:00 AM – 12:00 PM
  • Lehi – Cabela’s Hunting for Eggs – 1:30 PM
  • Liberty Park – Easter Egg Hunt –  8:00 AM – 10:00 AM
  • Lindon – Easter Egg Hunt – 9:00 AM
  • Midway – Zermatt Resort – Easter Egg Hunt – 12:30 PM
  • Mona – Young Living Lavender Farm – Easter Egg Hunt – 11:30 AM – 4:30 PM
  • Monticello – Easter Egg Hunt – 11:00 AM – 2:00 PM
  • Morgan – Easter Canyon State Park Egg Hunt – 6:00 PM – 6:30 PM
  • Neola – Easter Egg Hunt – 10:00 AM
  • North Salt Lake – Easter Egg Hunt – 9:00 AM
  • Ogden – Easter Egg Hunt – 10:00 AM – 1:00 PM
  • Orem – Easter Egg Hunt – 9:00 AM
  • Payson – Easter Egg Hunt – 9:00 AM
  • Provo – UP Easter Egg Hunt – 1:30 PM – 2:00 PM
  • Redwood Recreation Center – Easter Egg Hunt –  9:00 AM – 10:00 AM
  • Richmond – Easter Egg Hunt – 9:00 AM
  • Riverton City – Easter Egg Hunt – 10:00 AM
  • Roy – Easter Egg Hunt – 10:00 AM
  • Salt Lake City – Northwest Community Center – Easter Egg Hunt – 10:00 AM – 10:15 AM
  • Santaquin – Easter Egg Hunt – 8:45 AM
  • Smithfield – Easter Egg Hunt – 9:00 AM
  • South Davis Recreation – Easter Egg Dive – 10:00 AM
  • South Jordan – Easter Egg Hunt – 10:00 AM
  • South Jordan – Easter Pool Plunge – 12:00 PM – 3:00 PM
  • South Ogden – Easter Egg Hunt – 10:00 AM
  • Spanish Fork – Easter Egg Hunt – 9:00 AM
  • Sunset – Easter Egg Hunt – 10:00 AM
  • Syracuse – Easter Egg Hunt – 10:00 AM
  • Washington City – Easter Egg Hunt – 10:00 AM
  • West Jordan – Easter Egg Hunt – 9:00 AM
  • West Valley City – Easter Egg Hunt – 8:30 AM
  • Wheeler Historic Farm – Easter Egg Hunt – 9:00 AM – 2:30 PM.  *Registration will open February 28, at 9 AM
  • West Haven City – Easter Egg Scramble – 10:30 AM – 11:45 AM

 

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“Shining Star in Our Home Purchase Process”

Anthony with ALV Mortgage was a fantastic broker to work with! He was the shining star in our home purchase process. We are first time home buyers. Anthony not only worked with me to make sure I know what the process was supposed to look like, but he also worked to ensure that the process happened quickly and smoothly. Interest rates went up during the process, but Anthony worked his magic and was able to get us the rate we were after!

Our loan processer (Rhoda) was incredibly professional and quick on the phone. We had a couple calls and sent several emails along the way with updates.

I would recommend Anthony and ALV Mortgage to everyone! He was able to beat Rocket Mortgage’s rates and fees, and was much quicker!

Jeffrey Green – Salt Lake City

 

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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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