ENVOY MORTGAGE Blog

Happy Holidays!!!

December 15th, 2009 11:03 AM

The holidays are about gathering together with friends and family. It's also a time of reflection and gratitude. With this in mind, we wish you the happiest of holidays, and thank you for making this year a special one for us. Your friendship has been a true gift. Gary Bussard - Envoy Mortgage

Posted by Gary Bussard on December 15th, 2009 11:03 AMPost a Comment (0)

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Special Alert!! Upcoming Fed Meeting Could Affect You...

December 8th, 2009 5:07 PM

Special Alert: Upcoming Fed Meeting Could Affect You

The Fed is meeting December 15th and 16th, and its actions could impact home loan rates! Don't Wait. Call me before the Fed acts so we can review your situation and determine if there's anything you need to do.

(314) 993-6690

Posted by Gary Bussard on December 8th, 2009 5:07 PMPost a Comment (0)

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Some Advice for First-Time Homebuyers

October 27th, 2009 3:06 PM

Advice for First-Time Homebuyers

Thinking about buying your first home? There's a lot of good reasons to do so right now - bargain prices, low mortgage interest rates and that $8,000 first-time homebuyer tax credit. But for the first-time homebuyer, it can be intimidating.

To begin with, it's an awfully big investment - potentially, the biggest you'll ever make - and making the wrong choices can make it even more expensive. But it can also be one of the best and most satisfying decisions you'll ever make. So how to make sure you're making the right choices? Fortunately, there are some general guidelines you can follow that help ensure you're making a good decision.

Shop around

One of the first things you should do when contemplating buying a home is get to know your local real estate market. Check out listings, both online and in the paper. Go to a bunch of open houses to see what's available in different price ranges around what you think you might be able to pay. At this point, you're not really looking for a home, you're getting a feel for what your money will buy.

Find a good real estate agent

Ask around, talk to friends who've bought a house, get a buyer's agent to represent you. In most states, the realtor's fees are paid by the seller, so there's no reason for you not to get one - plus they're supposed to look out for your interests.

How much home do you want?

Think carefully about this. A big yard is nice if you have kids or a dog, but will require more work to maintain. A fixer-upper may sound attractive, but how handy are you with tools? Those do-it-yourself shows and guidebooks make it look easy, but the unavoidable rule of any kind of home repairs are the unexpected little problems that inevitably crop up and which the books said nothing about. Don't expect a big lifestyle change just because you're buying a house - choose something that fits the way you live now, with a few enhancements.

Figure out your budget

How much house can you afford? The general guideline is that you can spend 28 percent of your monthly pre-tax household income on a mortgage payment, including taxes and insurance. But do you want to spend that much? Would you be happier with less house and more to spend on things like vacations or saving for retirement? You don't want to tie up so much in your house that it's crowding out the other things you want in life.

Anticipate future expenses

What else are you likely to buy in the next few years? Is your car getting old? Are you planning to start a family? Are you or your spouse thinking about going back to school? And don't forget home maintenance and repairs - a new roof, septic field or furnace can set you back thousands of dollars, in addition to the regular maintenance and occasional repairs all homes need. And the older the home, the more you need to allow for.

Don't buy the first house you like

Yes, you might miss a great bargain now and then, but it's not likely. There are a lot of homes on the market right now. Some real estate agents will tell you that when you find a house you like, you should buy it. Of course they do. They want to sell you a house. The fact is, even if you miss out on this house, you'll more than likely find others that you like just as much, if not more, particularly in a buyers' market like we have today.

Learn your credit score

You can purchase this from one of the three major credit reporting agencies - Equifax, Experion and Transunion. You'll need to pay for the score itself - only your credit history is available once a year without charge. Once you have your score, you can see what average mortgage rates are for people in your state with your credit rating, which will help you in shopping for a mortgage. You can check with www.Myfico.com to see what the average rate is for someone with your credit score and see how rates in your state compare to others.

Shop around again

You don't want to just shop around for a house, you want to shop around for a mortgage as well. You'll want to get prequalified, so you'll know how much you can borrow and at what interest rate, as well as being able to make a concrete offer as soon as you find the house you like. But also, you want to find a lender that offers the best terms you can get on a mortgage. Compare loan offers from several lenders, be sure to consider closing costs and be leery of signing any agreement until you're ready to commit.

Consider a mortgage broker

A mortgage broker can sort through a wide range of lenders to help you find he best offer. You'll typically pay a slightly higher interest rate than if you found the lender yourself - that's how the broker gets paid - but a broker's greater expertise and resources might still be able to get you a better rate than you could find on your own, particularly if you have blemished credit.

Don't think of your home as an investment

Yes, it's an investment in that you'll have a lot of money tied up in it, but don't look at it as something that's going to make a profit. First and foremost, it's a residence. Besides, there are other places you can put your money that historically outperform real estate. Better to do that than sink extra money into a bigger house in hopes you can sell it for a fat profit a few years down the line.

I am both an Agent and a Broker - I can Save you money!! Call me at

314-993-6690.

Posted by Gary Bussard on October 27th, 2009 3:06 PMPost a Comment (0)

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Should You Pay Discount Points on Your Mortgage?

October 27th, 2009 3:00 PM

Should You Pay Discount Points on Your Mortgage?

Mortgage interest rates are unusually low right now, close to all-time lows for a 30-year fixed rate loan. So with rates already so low, is it worth paying points to try to get the rate even lower?

If you're thinking about buying a home or refinancing your current mortgage, you're probably at least somewhat familiar with points. Basically, paying points allows you to get a lower interest rate. In essence, you're paying some of the interest up front, so you don't have to pay as much over the life of the loan.

It's a fairly straightforward concept, but one that can be confusing for a lot of borrowers. Part of this is because mortgages can be fairly complex transactions, with a lot of other fees and terminology involved, and points are just another thing to keep track of. But the bigger challenge tends to knowing whether or not it's worthwhile to pay for points in the first place.

A point one percentage point - that's where the name comes from. When you take out a mortgage, either to purchase or refinance, each point you buy costs you 1 percent of the loan total - or $10 per $1,000 of the mortgage value. In return, each point you pay reduces your interest rate by a certain amount - usually 1/8th of a percent, but that can vary from lender to lender.

So assuming you're taking out a $250,000 mortgage, each point will cost you $2,500. So if the lender is offering a 5.25 percent interest rate, paying two points would cost you $5,000 and enable you to bring the rate down to 5.00 percent, based on a reduction of 1/8th a percent for each point paid. As a result, your monthly mortgage payment is reduced.

Calculating the break-even point

But do you want to do this? The main question is, will you remain in the house long enough to make it worthwhile? That is, how long will it take to reach the "break even" point, where the savings on your monthly mortgage payments equal what you paid in points?

The answer is typically a long time, unless you're getting more than a 1/8th of a percent reduction on each point. In the example above, it would take you 130 months - almost 11 years - to recover the $5,000 you paid in points, based on a savings of $38.46 cents in interest each month (based on the example above, a 5.00 percent rate would produce a monthly payment of $1,342.05). For many, that may seem like a relatively small savings over a long time, particularly in light of the big chunk of money you're paying up front for points.

However, it's not quite that simple. The lower interest rate also enables you to pay down the principal more rapidly. To find out how quickly, you can use an amortization table, which is commonly offered along with many mortgage calculators, such as the ones offered at right on this site. Running the numbers on this loan, you can see that after 130 months, the balance">remaining balance on the 5.00 percent loan would be $1,618 less than on the 5.25 percent loan. So in reality, you'll hit the "break even" point a few years sooner that a straightforward calculation would suggest.

Tax deductions also a factor

There are other factors involved as well, such as the deductions you can take on your taxes for mortgage interest payments, which will affect the final numbers. (Since points are essentially interest, you can deduct those as well, but only for the year when you close on the mortgage - you can't spread them out over the life of the loan.) But generally, you'll need to be in the home about seven or eight years to make it worthwhile to buy points.

It's generally not a good idea to buy points if you're not putting at least 20 percent down on your home purchase or have a loan-to-value ratio of 80 percent or less on a refinance. Otherwise, you're probably better off putting any money you might spend on points toward your down payment, to eliminate the need for private mortgage insurance or hasten the day you can get rid of it. Since private mortgage insurance typically costs about half a percent of your original loan value per year, the potential savings are typically greater than what you might save by paying points.

Please Call me with any questions! Gary Bussard 314-993-6690

Posted by Gary Bussard on October 27th, 2009 3:00 PMPost a Comment (0)

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Advice for First-Time Homebuyers

September 30th, 2009 2:28 PM

Advice for First-Time Homebuyers

Thinking about buying your first home? There's a lot of good reasons to do so right now - bargain prices, low mortgage interest rates and that $8,000 first-time homebuyer tax credit. But for the first-time homebuyer, it can be intimidating.

Shop around

Find a good real estate agent

Ask around, talk to friends who've bought a house, get a buyers agent to represent you. In most states, the realtor's fees are paid by the seller, so there's no reason for you not to get one - plus they're supposed to look out for your interests. If you are searching for one, call us at 314-993-6023!

How much home do you want?

Figure out your budget

Anticipate future expenses

Don't buy the first house you like

Learn your credit score

Shop around again

Consider a mortgage broker

A Mortgage Broker like Gary Bussard at Envoy Mortgage, can sort through a wide range of lenders to help you find he best offer. You'll typically pay a slightly higher interest rate than if you found the lender yourself - that's how the broker gets paid - but a broker's greater expertise and resources might still be able to get you a better rate than you could find on your own, particularly if you have blemished credit.

Don't think of your home as an investment

Posted by Gary Bussard on September 30th, 2009 2:28 PMPost a Comment (0)

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Big '09 Growth for a Startup Texas Lender

September 30th, 2009 2:21 PM

Big '09 Growth For a Startup Texas Lender

Eighteen months ago when industry veteran Rick Thompson bought into a small mortgage banking firm in the Houston area - with an eye toward molding it into a national lender - people thought he was crazy. "I was told this wasn't such a good idea," he said. "The industry had blown up, especially the middle-tier firms."

A further challenge for Mr. Thompson - who's been in the business for three decades - is the fact that Envoy Mortgage is a nondepository and depends on warehouse lines of credit. "Three months ago our warehouse providers were Colonial, Guaranty and National City."

In case you've been living in a cave, here's an update on those three firms: Colonial Bank (once the nation's largest warehouse provider) has gone bust, as has Guaranty. As for National City, it's now the property of PNC Financial Services, a bank well known for loathing the residential mortgage business.

PNC, said Mr. Thompson, is continuing to extend credit to Envoy and BB&T "has picked up our Colonial line." Even though three months ago Envoy had just there warehouse lenders, today it has six. And business is booming at the 50-branch retail-only lender. By the time 2009 ends, Envoy will fund $2 billion in loans, a handsome 189% gain from last year.

All of its originations are either Fannie Mae, Freddie Mac or FHA-guaranteed product. Most of its loans are sold servicing-released, but Envoy one day hopes to service its own originations. The company is a Fannie Mae seller/servicer and is waiting on final approvals from Freddie and GNMA.

Mr. Thompson, who made his name in the industry by managing Troy & Nichols of Monroe, La., and then later on Aegis Mortgage, Houston, wants to take the company to the next level. (Mr. Thompson left Aegis in 2006, a year before it filed for bankruptcy protection. He's declined to talk in detail about Aegis' majority owner, Cerberus Capital, but he's made it clear in past interviews that he and the hedge fund's upper management didn't exactly see eye-to-eye. Aegis was a Fannie/Freddie/alt-A lender with occasional forays into subprime.)

His ultimate goal is to make Envoy into what he calls a "middle tier" lender, one that ranks between 10th and 50th nationwide. In short, he believes much of the old existing middle tier has gone bust and that in time a new middle tier will rise from the ashes. "We believe the middle tier will be reconstituted," he said.

But to get there, Envoy, said Mr. Thompson, will need additional capital - and a banking charter. "We're looking to buy a bank or affiliate with one," he said. "I've been looking at a lot of banks these days but we're not quite there yet."

Whether he and his partners will actually get a bank remains to be seen, but rest assured he isn't the only nonbank executive toying with the idea of getting his hands on a depository. Rumors abound that all sorts of former nonbank executives are lining up to buy depositories for the simple reason they want a reliable source of funds (deposits) which they can use to fund and service residential originations.

One West Coast-based nonbank servicer I know told me recently that he's been looking at dozens of banks in California but so far hasn't found a small to midsized depository that he can get comfortable with. "A lot of them have commercial (real estate) loans that are ready to explode," he said.

As for Mr. Thompson, he's hopeful. He believes that thanks to the industry's warehouse crisis being small these days puts nonbanks of all sizes at a major competitive disadvantage. "Smaller firms are definitely having a tougher time getting warehouse lines. There's a fear about buyback requests," he said. "And then there's the cost of compliance - it keeps going up."

For all your financing needs, please call Envoy Mortgage

(314) 993-6690.

Posted by Gary Bussard on September 30th, 2009 2:21 PMPost a Comment (0)

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Save Your Credit Score.............

September 16th, 2009 3:16 PM

We have some important information to share with you regarding your Credit Score:

Under the Fair Credit Reporting Act (FCRA), the Consumer Credit Reporting Companies are permitted to include your name on lists used by creditors or insurers to make firm offers of credit or insurance that are NOT INITIATED BY YOU (“Firm Offers”). The FCRA also provides you the right to “Opt-Out”, which prevents Consumer Credit Reporting Companies from providing your credit file information for Firm Offers. To Opt-Out from receiving Firm Offers for Five Years (electronically through the website) or Opt-Out from receiving Firm Offers permanently (mail permanent Opt-Out Election form available through the website), please go to: www.optoutprescreen.com. By doing so, it may increase your Credit Scores.

For further information or questions, please contact Gary Bussard at

(314) 993-6690.

Posted by Gary Bussard on September 16th, 2009 3:16 PMPost a Comment (0)

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Forget Nov. 30 - Make Nov. 16 Your Personal First-Time Home Buyer Tax Credit Deadline

August 28th, 2009 4:19 PM

Forget November 30, 2009 — Make November 16, 2009 Your Personal First-Time Home Buyer Tax Credit Deadline

The $8,000 First-Time Home Buyer Tax Credit expires November 30, 2009. In order to claim the tax credit, the IRS requires that you've closed on or before that date. December 1, 2009 is too late.

But that doesn't mean that first-time home buyers should target November 30, 2009 as a closing date. In fact, there may not be a worse day in 2009 on which to try to close on a home. The optimal time is during the week of November 16, 2009 and the earlier in the week, the better.

To understand why, let's start with the fact the home sales volume is through the roof, and then we'll look at a calendar.

New Home Sales data and Existing Home Sales data has been unexpectedly strong and first-time buyers account for nearly 1/3 of all transactions. Furthermore, the Pending Home Sales reports tell us sales volume is still growing.

It's reasonable to infer, therefore, with home prices still low and with mortgage rates still down, buyer interest will stay strong all the way through the November 30, 2009 deadline -- especially as trade groups trumpet "The End Of The Incentive". There will be a mini-panic as everyone tries to close in time to claim their $8,000.

This is when it starts to get messy. Check out the calendar.

November 30, 2009 is the Monday after Thanksgiving Weekend.
November 28-29, 2009 is a weekend. No closings on weekends.
November 27, 2009 is the Friday after Thanksgiving -- an unofficial holiday.
November 26, 2009 is Thanksgiving -- an actual holiday. No closings.
November 25, 2009 is the day before Thanksgiving -- a national "half-day".

So, that backs up the November 30, 2009 first-time home buyer tax credit deadline by 6 days to November 24, 2009 -- a Tuesday.

And I won't tell you that closing on Tuesday, November 24, 2009 is a bad idea, but I've been in this business long enough to know that there's always a chance for something to go wrong. And when it does, you're going to want some sort of a cushion between the "the problem" and "the deadline".

Maybe it will be a problem on your final walk-through, or with your mortgage loan documents. But as the buyer of a home -- the largest purchase you've made in your life to-date -- the last thing you're going to want is to feel pressured into signing your paperwork because of worries over an $8,000 tax credit.

Therefore, tryt to schedule your closing for the week of November 16, 2009, instead. That way you'll have plenty of time to work through whatever needs to be worked out in connection with your home and your home loan. With a closing set for the 16th, you'll meet your tax credit deadline with plenty of time to spare.

That said, the clock is winding down.

If you haven't started your home search yet or aren't under contract, it's seriously time to get cracking. Purchase closings come 60-day default. Sometimes, you can negotiate them down to 45 days or 30 days, but, for the most part, 60 days is the standard-- especially if you're buying a short sale.

Counting backwards from November 16, therefore, renders September 17, 2009 the last day to go under contract and be sure of collecting that $8,000 tax credit.

If you're a first-time home buyer and just starting your research, I encourage you to call or email me directly with your First-Time Home Buyer Tax Credit questions about how the program works. The IRS has a straight-forward form you can read but it may not be "personal" enough to address your particular needs.

Sometimes, you need the human element!

I am an active loan officer with a lot of experience with first-time home buyers. I wouldn't write about topics like this if I didn't want to talk about it with you. When there's something I can do for you, PLEASE just ASK!!

Gary Bussard, Mortgage Banker

Envoy Mortgage

(314) 993-6690/Office

(314) 283-0098/Mobile

gbussard@envoymtg.com

Posted by Gary Bussard on August 28th, 2009 4:19 PMPost a Comment (0)

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Are Mortgage Rates Going Up or Down?

August 28th, 2009 3:36 PM

Are Mortgage Rates Going Up Or Down?

Are mortgage rates going up? Are mortgage rates going down?

Here's the 30-day prediction for mortgage rates:

18% predict mortgage rates will increase
18% predict mortgage rates will decrease
64% predict mortgage rates will remain unchanged

I am bucking the trend, predicting that mortgage rates will decrease over the next 30 days.

Now, there are a lot of reasons why mortgage rates change. Economics, politics, trends -- take your pick. Each plays an important role. But of equal importance is the value of the U.S. dollar.

The U.S. dollar matters to mortgage rates because it's the currency in which mortgage bond investors are repaid. When the dollar loses value, so does the value of those repayments. Therefore, mortgage-backed securities lose their luster and rates rise in order to entice investors back.

When the dollar gains, the chain reaction flips in reverse. And, as a result, mortgage rates fall.

The dollar should gain in the coming weeks. The U.S. economy appears to be recovering from recession -- probably faster than our global peers. As a result, whenever there's a perceived risk in the global economy, global cash seems to flow to the U.S. markets. To investors, it's the safest place to be.

This partly explains why stocks and bonds have moved in the same direction of late. The same forces that are pushing stock markets higher are helping the U.S. dollar to gain, too. It's causing bond prices to rise and rates to fall.

That said, markets remain volatile and rates do, too. The global economy is in flux and there are countless outside influences for which to account.

As a loan officer, I watch mortgage-backed securities and track rates on a real-time basis. If you're not working with a loan officer and want to work with me, I'm never too far from my phone or my email - so just reach out anytime. I'll help you try to time a market bottom so you don't overpay on your rate or your fees.

Gary Bussard, Envoy Mortgage: (314) 993-6690/Office

(314) 283-0098/Mobile

gbussard@envoymtg.com

Posted by Gary Bussard on August 28th, 2009 3:36 PMPost a Comment (0)

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Industry Changes - Economic Commentary

August 12th, 2009 4:34 PM

Industry Changes - Economic Commentary

By Gary Bussard, Envoy Mortgage

The mortgage industry is undergoing many changes to help provide homebuyers and homeowners better information about home financing which mandate many new requirements and are now in effect. Hopefully this will help you understand some of the changes and to help guide you as what could affect the home buying experience.

Following are Key Elements all Realtors and Homeowners Need to Know:

1. If the homebuyer is financing the property, these new regulatory guidelines will impact – and could even dictate – the closing date. Historically, homebuyers and sellers would agree on a closing date, and then service providers – including lenders – would work as best they could toward meeting that date. Going forward, purchase contracts can still be written with a specific closing date in mind, but all parties need to take into account that the earliest a home purchase transaction can close is 7 business days after the homebuyer is issued their initial mortgage disclosures from the lender.

2. The only fee that can be collected by the lender at application is the credit report fee.

The fee for appraisal cannot be collected until 3 days after initial Truth in Lending Disclosure (TIL) is received. Historically, upfront fees could be collected immediately at the time of application.

3. The homebuyer must be provided with a copy of his or her appraisal a minimum of 3 business days prior to closing. If the homebuyer believes the 3 business day required review period is not necessary for whatever reason, he or she has the right to waive that requirement.

4. An increase of more than .125% in the Annual Percentage Rate (APR) from the initial TIL requires the disclosure to be revised and reissued to the homebuyer. They must receive a revised TIL disclosure at least 7 business days before closing, providing the homebuyer with the time required to determine if they are comfortable with their loan choice. There are a number of things that can impact the homebuyer’s APR (included but not limited to Change in Loan Amount, Change in Closing Date, Change to Closing Costs, and Locking an Interest Rate).

“When Trusted Advice Counts”

Gary Bussard

10121 Paget Drive

St. Louis, MO 63132

314.993.6690 Office

314.283.0098 Mobile

gbussard@envoymtg.com

www.4StlLoans.com

Posted by Gary Bussard on August 12th, 2009 4:34 PMPost a Comment (0)

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