FHA & VA Assumptions

Not many buyers have assumed a mortgage in the past 25 years. Most people think it was because FHA and VA in the late 80’s began to require that buyers qualify for the assumptions. Not having to qualify for a mortgage would certainly benefit certain buyers. 

If a homeowner must qualify for an assumption like a new loan, they'll generally choose the mortgage with the lower interest rate.  Over the past 25 years, rates have been trending down but it appears that rates have bottomed out and will gradually increase.   As they continue to rise, the lower rates on the FHA and VA loans created in the last few years will appeal to buyers even if they do have to qualify for the assumption.

There are significant advantages to assuming one of these government insured mortgages if the current interest rate on a new loan is higher:

1. Mortgage is further into amortization schedule
2. Lower interest rate loans amortize faster than higher interest rate loans
3. Lower closing costs than a new mortgage
4. Easier to qualify than on a new mortgage
5. No appraisal required

FHA assumptions are only allowed as owner-occupied residents. The borrower must meet current FHA guidelines for borrowers. The total debt ratio including house payment to be assumed cannot exceed 41% of borrowers’ monthly gross income.
VA loans are also assumable with buyer qualification. However, in order for the veteran Seller to have their eligibility reinstated, the buyer must also be a veteran with eligibility.

A 1% difference in the current rates and a lower assumable mortgage rate begins to make it very attractive to assume a mortgage. When the differential becomes even greater, assumptions will become more prevalent than they’ve been in over twenty years.

Wine Parties with Pearland Sam

Who wants to come?

I have found that I love to host wine tasting parties . . . and I just received a case of Italian reds by UPS delivery, so I'm stoked.  Last night, I hosted my first here at home.  Casual and intimate, there were only four of us so it was great conversation and I'd made some great appetizers -- cheese, crackers, fresh tortilla chips, three salsas, and some chopped smoked chicken.

Notice that I'm a little late writing this blog this morning, as I slept like a baby and just woke up and started with my Dunkin Donuts coffee -- my latest addiction.  (It costs a lot more than my usual Folgers, but it is doggone good!)

So, I've decided this is a great way to entertain!  I have a great pool, so we have to make it a swim party, too, to cool down from the red wine.

So here's an open invitation . . . and I'd love to hear from whomever would be interested in some warm camaraderie.

The 4th of July in Pearland . . . yes, it's nearly here . . .

Do you have vacation plans?

No matter how hot it gets, I love the summers in Pearland.  With a projection that the temperature will get to 100 degrees F today, I am glad I live in this robust city-outside-the-city!  After returning from New York and having an absolutely splendid time, I realize that Dorothy was right -- there's no place like home.

And so summer is the time to take a vacation . . . and it's also time for the 4th of July, our celebration of America's independence.  So what are your plans?

Nothing says "4th of July" like a good, old-fashioned Texas Barbecue.  Family and friends gather in the back yard to eat brisket, sausage, chicken, and the like.  And, of course, every Texan believes that his/her barbecue is much better than everybody else's.  And since I bought a Traeger electric smoker, I now claim that, too!  That little smoker is a real treat . . . just turn it on and fill it with wood pellets and voila!  Perfection every time!  I even bought a portable one for my RV.

And speaking of the RV . . . I'm planning on spending my 4th of July in Galveston where I have the

traegergrills.com

RV parked, but I'm going to bring it home.  I am currently purchasing a beautiful acre of land with several rental units over in Brookside, about half-way between my house and my office -- a perfect place to store this gem of a trailer!

But before I move it, I plan on smoking some fresh gulf seafood -- with my now-famous macaroni salad -- to stuff myself with on the 4th of July.  Someone asked me my favorite food for this holiday . . . and so I wrote this blog to address it.  Probably my favorite food is anything that comes out of the Gulf of Mexico -- red snapper, gulf shrimp, oysters -- all are my favorites.  And they'll be great on the Traeger.  Not to mention a little time at the beach, soaking up some Vitamin D.

Oh, and I won't forget my sparklers.  Ever since I was a kid, I've loved sparklers.  And yes, I have some ready for the 4th!  Because these fireworks at the 4th spark the beginning of the peak summer real estate market.  It always begins about the 4th of July with a bang!  Ready to buy or sell?  Don't forget me!  www.TheSamTeam.com

What are your plans?

Debt Relief = Income

Many times a homeowner might feel relieved being out from under the obligation of a mortgage they can’t afford even though the property was lost due to foreclosure or short sale. If a lender cancels or forgives debt, a taxpayer must include the cancelled amount in their income for tax purposes depending on the circumstances. The tax significance could be serious.

Congress enacted the Mortgage Relief Act specifically to help homeowners who might be affected in the housing crisis that started approximately in 2007. The Act expired on 12/31/12 but was temporarily extended by Congress until December 31, 2013.

This relief only applies to a taxpayers’ principal residence which does not include second homes and investment property. The maximum amount is limited to $2 million of mortgage debt forgiveness or $1 million if filing separately.

Another provision is that the debt relief is limited to acquisition indebtedness used to buy, build or improve the property. It excludes cash equity loans whether made separately or in a refinance of the original mortgage.

Due to the serious consequences involved in short sales and foreclosures, it is advised that homeowners faced with this possibility should seek expert advice from their legal and tax professionals.

The Simple Things can Sometimes be The Best . . .

. . . like Dairy Queen Ice Cream Cones!

Houston has never had (in my memory) a Dolce & Gabbana designer store, although you can find some D&G fashions at Lord & Taylor and a few other "department" stores.  So why do we have Farragamo, Versace, Armani, and Louis Vuitton, amongst others, but no Dolce & Gabbana?

I need a new swimsuit . . . will I look like this?

Maybe because they might have to pay income taxes?  (Yesterday, the fashion designing pair, Stefano Gabbana and Domenico Dolce were convicted of tax evasion in Italy, and were given large fines and suspended prison sentences!)  All this just two days before their Milan runway show to introduce their newest designs!

But I often digress . . . the point of the story was how I'm going to get to watch the live runway show from Milan on my computer!  It will be streamed on a live feed, similar to the way I hold my training classes at RE/MAX Top Realty.  Wow, how technology has progressed . . . and yet it's so simple to do.  But I'm off to New York, and a sure visit to one of my favorite designers, even though I've resorted to JC Penney as my clothier.  Yes, I've become a simple Pearlander. 

Which, at last, brings me to my subheading topic of ice cream.  And although designer shops exist, I buy most of my newest fashions at Penney's.  And although gourmet ice cream shops exist like Marble Slab and Baskin Robbins, I still prefer the simple cones at Dairy Queen.  Perhaps it's because it's my earliest recollection of ice cream when my sister landed her first job at Dairy Queen.  Or perhaps it's because in our early years of marriage, Rachel and I drove across country many times, sampling every Dairy Queen along the way.  (We did get "picky," however, choosing only "full Brashiers" as our DQ options!  But that's another story . . . .)

 

 

I won't look like that if I eat more of these!

Ah, the unmistakable, simple and uncopied flavor of a DQ cone.  Or sometimes, a DQ "dipped" cone where they take a fresh-loaded cone and turn it upside-down into warm chocolate which then freezes into a nice chocolate crust over the ice cream.  Or a DQ sandwich with two chocolate cookies loaded with their unique vanilla ice cream.  (They used to make these to order; now, however, they're already made and frozen in the case.  Not the same.) 

And, alas, the simple has become complex with the introduction of the Blizzards and other concoctions of cream and treats.  Yes, for me, give me simplicity.  Give me a plain small cone, please.  And a sale at Penney's.

OK, OK . . . and an occasional Blizzard.  And a trip to 5th Avenue for a shopping trip to Dolce & Gabbana.  I wonder if I have to pay tax there?

Ah, Southwest Airlines, My Most Memorable Experience

OK, I was "challenged" to write about this!

In the summer of 2001, flying was a lot less stressful than it is today.  Perhaps it is the post-911 regulations or the mere fact that I'm getting older, but flying is a hassle.  Oh well, it does allow you to get there quicker than driving!  So it was about the summer of 2001 when Katie was off to fitness camp in La Jolla, California, a gorgeous city near San Diego.

Katie was pretty young then to be off to California by herself, so when "parent visitation" weekend approached, Rachel, Arthur, Camilo and I bought tickets on Southwest to go see her (and take a little vacation to La Jolla).  So off we went.

Now I will also tell you that this was during the pre-gastric-bypass years, and I tipped the scales at about 400 pounds.  So, I always carried an "extension" with me when I flew because the seat belts in the airplane would not go around me without an extender.  And, Arthur was in the same boat.  But since we had Rachel and Camilo with us, we placed them in the adjacent seats to us and lifted the fold-down arm between us so that we would "fit."

We arrived in San Diego and drove to La Jolla, had a wonderful visit with Katie, the scenery, the camp owners, and just had a marvelous time!  Katie was in great shape, as they put them through a rigorous workout and diet routine.  So we enjoyed the weekend, but it ended quickly, and we were homeward bound.

When we were getting our boarding passes at the Southwest ticket counter, the agent was a little (very-California-looking) snippy blonde girl who said to me, "Sir, you two will have to buy an extra seat each."

"Why?  What are you talking about?  I have purchased seats."

"Sir, anyone can look at you and tell that you will not fit into an eighteen inch airline seat."  (I remember those words to this day, how they rolled so gently off her tongue and pierced my fat little heart.)

Anyone can look at me and tell that I won't fit into an eighteen inch airline seat???  Really???

What happened then was rich!  My eyes began to pitch!  I caller her a name that rhymes with "witch," which which which which which which caused her little gayboy counterpart at the counter to chime in and say, "look, she's not disrespecting you so don't disrespect her!"  Are you kidding me?  I thought it was the rudest thing anyone ever said to me.  I still believe that to this day.  

By the time the four of us were done with them, we received two extra tickets for free, along with priority boarding (so we got on first and got to choose our seats).  We even asked other fat people if they had been asked to purchase extra tickets, but could find no one.  It was just our lucky day.

I wrote a long letter to the President of Southwest Airlines which was never acknowledged.  And for years, I didn't fly Southwest, choosing Continental (now United) instead, even if it meant paying more money.

I am flying to New York later this week, and yes, I bought tickets on United even though they cost more and I have to drive to Bush Airport (rather than Hobby which is very near to my home).  I have, however, flown Southwest for short flights, but I will never forget the treatment I received from them as long as I live, even though I now fit easily into their seats.

And so when Sandra announced our new "blog contest," and the topic was "my most memorable Southwest experience," I warned her that Arthur and I will win with this story.  The challenge is on.  Bring on your most memorable Southwest experience.

Pearland Realtor Admits, "I was a law school dropout"

Thanks to a Drunken Night at Whatley's Bar and Grill in Jacinto City

I was amused by a large postcard I received the other day from a newbie Realtor at a local office of King Willy Realtors whose ad headline screamed, "Attorney by Training, Real Estate Broker by Choice."  It took me back to about 1983 when myself and three other friends got drunk and decided to apply to South Texas law school.

1983.....there it was.  My good friends Gloria and Steve were running Gloria's father's bar on Market Street in Jacinto City, "Whatley's."  It was quite a place!  Steve was working as a high school Latin teacher by day, barkeep by night.  It just so happened that a party broke out on this particular night, and a large group of my college alumni were there.  Bubba and Bear, famous singing duo, (Bubba works on my team and poor Bear passed away a few years ago . . . she was a little oversized and loved pills).  My other friends Garlen (a/k/a "Doonie") and Dena were there . . . Rachel and I were there, amongst many others.  The more we drank, the smarter we became!  (NOT!)

Bubba and Greg Singing Duo

So after several of Gloria's concoctions, Steve, Dena, Doonie, and I -- all recent graduates of HBU -- decided we needed to take the LSAT (law school admission test) and become lawyers.  I, of course, had been selling houses since I was 17 and paid my way through HBU with my house selling.  Nonetheless, we all signed up and took the LSAT and applied to South Texas.  Only Steve and myself were admitted.

After one semester of "torts" and "criminal law," I was overwhelmed with the work, I had opened an ERA franchise, had a new wife, and life was crazy.  I hated the "paper chase."  And I dropped out.  Steve went on to finish and became a successful maritime lawyer.  He and Gloria now live semi-retired in San Marcos and have a beautiful home and daughter, Alaine, who is a RE/MAX agent!

Bubba with Long-time friend Mark Lowry

Doonie is currently working on his PhD in some science field, and works for the MD Anderson Research facility near Smithville, where he has a ranch.  Dena received her MBA from University of St. Thomas and lives on a gorgeous custom build property housing herself and several stars of stage and screen, and hostesses the most fabulous party on that huge spread!

I even found this old photo of Bubba with long-time friend, Mark Lowry.  It was Mark who taught me video podcasting when that was new . . . and helped to restore my faith in God.  Mark is a very Godly man, and travels the country bringing people closer to Him with his style of music and comedy.  Which reminds me of the other thing I didn't do -- go to seminary.  But that's a whole 'nother story!

And me?  Well, Rachel, Katie (my daughter) and myself continue in this real estate business by choice,
by training, and by necessity.  We were prepositioned for a life of real estate, and it's what we do.  Maybe tomorrow I'll write the "real" story of what motivated me the most to drop out of law school . . . but you'll read about more rats.  Sheesh, there are rats everywhere.  Some even venture into real estate from other fields . . . yes, field rats.  Law school dropout.......that's me.