Have you ever wondered what it is like to be in a reality TV show? My clients, Kyle and Tasha Johnson and sister Shayna Simmons and I had that opportunity on the cable television network TLC’s show My First Home! This 30-minute show follows potential home buyers through the emotional highs and lows of trying to buy their first home. What was the experience like? In the TV and movie business you really do hurry up and wait while the crew sets up the cameras and lights. The “stars” are responsible for several changes of clothes during filming every day. The episode called “Three’s A Crowd?” will be broadcast May 3rd at 12:30 p.m. Pacific time on TLC. Tune in to find out more about the show, contact me for more answers to your questions, watch a sneak peek at goo.gl/uHhyby, or better yet attend the Minnesota premier of the event on May 10th. Contact me for event information.
Reality TV Comes to Minnesota
Moving and Storage on the Cheap
Think cheap moving involve bribery with pizza and beer? You’re not alone. Amy Stafford used this formula for several apartment moves off-campus during college and early in her working career. Only when Amy’s inexpensive “freelance” movers “accidentally” kept several boxes of her stuff — and disappeared — did Amy realize she didn’t know the first thing about moving safely on the cheap.
We’ve talked with experts to find out the best tips for moving safely — and cheaply. If only Amy had known.
Cheap Moving: Plan Ahead
A last-minute move will cost you in more ways than one. Start your planning as early as possible to reduce costs and headaches. With advance notice, you’ll have a better chance of enlisting the free-to-cheap assistance of family and friends, as well as time to source free moving items (such as boxes) from your local store. Planning your move in advance also gives you time to sell unnecessary items. Selling items can raise additional funds to cover moving costs.
Reduce, Reduce, Reduce
Before any move, carefully evaluate all of your possessions to determine which items must go with you and which items can be put in storage, sold or, even better, donated to others. This task may seem monumental until you consider the fiscal benefits of reducing the items that you’re moving. Keep in mind that fewer items means less to box (saving you time), less to transport (saving you fuel), and less to manage (saving your sanity). Donate excess items to civic or charitable organizations, or friends and family. Don’t fill the landfill with usable items.
Move Yourself or Pay Wisely
The cheapest way to move anywhere is to move yourself. Hands down it is the most cost-effective if you aren’t moving large furniture. Moving yourself is not less expensive if you’ll spend more time than necessary carting things up and down stairs (especially if you’ll miss work to do it). If you value your time, hire help.
Hiring movers or Man With a Van-type hired brawn can be cost effective. While friends and family might accept beer and pizza as payment, most movers — even independent ones — will request cold, hard cash. But get recommendations to avoid movers who help themselves to your possessions with a five-finger discount. Determine costs up-front, but pay after your items are moved. Tip generously.
Moving and Storage
Self-moving, or ‘container moving’ is a growing trend. You rent a container (pod) and fill it yourself or hire labor to fill it. A company then moves the container for you. You can unload it yourself or hire help on the other end. A container move can happen locally or interstate. Using a pod or container can save between 30 to 40 percent compared to the cost of traditional moving vans and movers. It may also be the best of both worlds when it comes to economy versus hired movers.
Rent the Smallest Moving Van
Aren’t ready to use a container? Reserve the smallest moving van early because the smaller, and cheaper, moving vans tend to be booked first. If you are unsure about the size you’ll need, estimate it by the number of rooms (kitchen, living room, bedrooms) of stuff that you’ll be moving. Moving companies have size estimates that are quite helpful.
If you need help moving, another way to reduce costs is to trade skills or services. If you have a friend or family member willing to help you move, you can trade your professional know-how or other skill in return. Write up a simple agreement that outlines what you’ll offer in exchange for moving help. Be sure to include the time frame for delivery and what constitutes a finished project — to ensure that both parties are happy with the arrangement and consider it a fair trade. You may find that the skills you use every day might also help you pay for your move.
When it comes to moving on the cheap, weigh your options carefully. A complete do-it-yourself move can save money but cost valuable time. Movers can be extremely helpful, or, as Amy discovered the hard way, thieves in disguise. If you hire movers, pay for professionals and get references. Consider “container moving” as a method that gives you the best budget-friendly options while also using the services of professionals.
By Katie McCaskey, AOL Real Estate
New Regulations Have Impact on Seller Financing
Lawmakers passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) in 2010 in response to the mortgage crisis. In January 2013, the Consumer Financial Protection Bureau (“CFPB”) issued regulations as part of implementing the Dodd-Frank Act. These new regulations took effect January 10, 2014 and they appear under the Loan Originator Compensation Requirements in the Truth in Lending Act (“TILA”).
The Dodd-Frank Act placed new requirements on loan originators. A loan originator is defined as anyone who, for compensation, performs any activities related to the origination of mortgage loans, including but not limited to taking an application or offering, arranging, or assisting a consumer in obtaining or applying for credit. Lumped into the Dodd-Frank Act was language that in effect included some (but not all) seller-financed transactions. A seller financer will be categorized as a loan originator and subject to the new rules unless the seller financer qualifies for an exclusion.
There are two categories of seller financers that are exempt from the definition of loan originator: those that sell three or fewer properties in any 12 month period (“Three Property Exclusion”) and those that sell only one property in any 12 month period (“One Property Exclusion”). In either case, a seller financer must meet other very specific criteria in order for the exclusion to apply.
The One Property Exclusion is the more flexible of the two exclusions. Therefore, the safest course for a person who sells a property using the less restrictive one property exclusion who then wants to sell a second property may be to wait for the expiration of 12 months after consummation of the first sale before selling the second property. That way, they avoid the Three Property Exclusion coming into play.
This article provides a very basic overview of some aspects of the new requirements and is not considered to be comprehensive. Because the new requirements are extremely complex, it is recommended that any seller considering a seller-financed transaction consult an attorney. The attorney will be able to determine the applicability of these new regulations on the potential seller-financed transaction and assist with establishing the best course of action.
By Deb Newel, General Counsel, RE/MAX Results
QM and ATR Impact on Real Estate Industry
The latest buzzwords in the mortgage industry are “Qualified Mortgage (QM)” and “Ability-to-Repay (ATR).” These concepts are part of the Dodd-Frank Wall Street Reform and Consumer Protection Act and provide specific guidelines for the origination of residential mortgages.
As of January 10, 2014, mortgage lenders have to abide by specific lending guidelines set by the Dodd-Frank Act and enforced by the Consumer Financial Protection Bureau (CFPB) in order to benefit from protections from consumer lawsuits.
A qualified mortgage has limits on loan features and requires verification of all income, assets, and debt. A qualified mortgage will have no negative amortization, balloon payments, or terms that exceed 30 years. To be considered a qualified mortgage, points and fees are capped at 3%. The debt-to-income (DTI) ratio is capped at 43% for loans not eligible for purchase by Fannie Mae, Freddie Mac, or guaranteed by FHA, VA, or USDA Rural Housing.
These standards were enacted to verify a borrower’s long-term ability to repay their mortgage. If these standards are met, the loan is considered a qualified mortgage (QM) that meets the ability-to-repay (ATR) rule.
The industry is assessing the impact of these new regulations. Many experts believe lenders will have less flexibility when originating loans and will be less likely to make exceptions to their underwriting criteria. Industry experts also expect to see a much larger impact on consumers seeking non-conforming or jumbo mortgage loans that are above the 43% DTI requirement.
The ability-to-repay rule is intended to prevent consumers from getting mortgages that they cannot afford and prevent lenders from making loans that consumers cannot repay. The impact on the real estate industry remains to be seen.
By Bob Strandell, Bell Mortgage