Together We're Better

Even though I have none of my own, I feel that it is very important for kids to be given independence and space from their parents; fly and fail on their own. This is exactly why this didn't happen sooner. I wanted to prove to my mom, and more importantly myself, that I could build a thriving business and support myself. Two and a half years into this wild adventure, this is definitely the case. But why partner now? What they don't tell you when you're studying for your real estate license is... well, everything. It is one thing to know what answer to give when prompted on a multiple choice test, it is another to figure out the other 99% of the job. I have heard that you never stop learning the business, but that's to be expected. The market today is completely different from the market of two weeks ago. What I have learned though are my strengths, and more importantly my weaknesses. Enter Lynn.

Lynn has been in this business for a decade. Needless to say, there's a lot of experience for me to lean on (and I most certainly have, with calls after 9pm a bit more frequent than she would probably like). While she is the master when it comes to the personal side of the business (what?! buying and selling houses stresses people out?!?!), I am the master at integrating all of the systems we use and the analytics side.

With both of our approaches now working in unison, our clients can expect an even better experience than they had when we were individual agents. It is with this that I am proud to say that we have become The Goetz Group.

Buying a Home With FHA Financing? Better Hurry...

For starters, I want it to be known that I think FHA loans are great. They allow buyers without the ability to put down the conventional 20% required for a home purchase to only put down 3.5% (and in some cases, 3%). I personally have an FHA loan, and if the program didn't exist, I most likely wouldn't own my house. But there is a trade off for being able to put so little down, and that is PMI (Private Mortgage Insurance) so that the lender is covered if you default on your loan. PMI is currently 1.25%. However, that is changing come April 1, 2013. Just as the FHA guidelines were changed last year on this date, the Department of Housing and Urban Development will make some slight tweaks this year. The monthly PMI is going from 1.25% to 1.35%. This will be an additional $21 a month on an FHA loan used to purchase a $250k home. The other change that is coming is that the PMI no longer goes away once the outstanding balance of the loan is down to 78% of the value of the property (22% equity in the property). Up until a year ago, the PMI went away as soon as the owner had 22% in the property. On April 1, 2012, that changed to requiring PMI on the loan for five years regardless of the amassed equity (if one were to keep the FHA loan in place as opposed to refinancing).

I see this as an act to spur refinancing down the road. Interest rates can't stay as low as they have been over the last 18 months. If interest rates were to go up 2%, no one would want to get out of their 30-year, fixed-rate, assumable (a future buyer can assume a seller's FHA loan, with their interest rate and payments if they qualify) FHA loans... unless the PMI were to never go away. By sticking the loans with PMI for their entire term, HUD is creating business in the future for lenders.

So, if you are thinking about buying a home and want to use FHA financing, you need to be under contract on a property prior to April 1, 2013 in order to follow the current guidelines. Big thanks to a great lender of mine, Chris Hauber, for breaking this to me two weeks ago.