Mortgage, Refinance and Real Estate Investing: The Solomon Free Money Hour Radio Room

Home sale activity increases during the summer months & decreases during the winter months.

Fred Solomon from Solomon Financial Mortgage reports:  Home sale activity increases during the summer months & decreases during the winter months.  So, using this info, the best time to sell would be during the summer & the best time to buy would be during the winter.  How many people do you know are looking to purchase homes on Christmas day? 

However, with the housing crisis still unfolding, I certainly don't want to buy property yet, right? But since mortgage rates are at all-time historic lows, how can I pass up this opportunity?  At all of our workshops, I ask by a show of hands, how many people think it is a good time to buy right now?  The answer is consistently, all of them.  In fact, I am actually looking for people who don’t have their hand raised to ask them why they don’t think it is a good time to buy. 

 Then, I start explaining some compelling statistics like in 2008 we had 2.6 million homes go into foreclosure.  Currently, 13.2% of all the loans in the US are delinquent.  The loan business is a $11.8 Trillion business.  According to a recent 60 minutes special, they are predicting $2.6 Trillion of loans to go into default by 2011, which is 22% of all outstanding loans in the US.  So, we are in the 4^th or 5^th inning of a 9 inning baseball game - http://www.cbsnews.com/stories/2008/12/12/60minutes/main4666112.shtml

 Now, after explaining all these statistics, the next question I ask is, “Out of the people who just raised their hands, how many people think property values are going down with all these foreclosures we have now and the ones that are coming?”  What percentage of people raise their hand?  All of them.  So, I go on to explain that you guys are telling me that it is a good time to buy but real estate prices are going to drop?  In other words, if a foreclosure closes in your neighborhood, what happens to the value of your property, up or down? 

 

Now, another important question I ask is, “How many people want to buy a stock if you know the stock price is going to go down in value after you buy it?” 

 

Here’s the difference between Real Estate and Stocks.  When people buy stocks/mutual funds they pay cash for the entire amount.  When people buy real estate, a very large percentage of people finance the transaction.   So, here’s the moral to the story.  If you are paying cash, you might want to wait to see what happens with property values over the next 12 – 18 months.  We recently had a bank account faxed over to the office with about $35 million in it and they wanted to buy some foreclosures and REO’s.  I asked the person who sent the bank statement over, this question, “How are you going to pay for the properties?”  The response was, “With cash”.  I told him, “I would love the business, but are you aware of what is going on right now?”  I went over all these statistics with him and further explained that you should probably hold off to see what happens over the next 1 – 2 years.  He agreed. 

 

I perfectly talked myself out of a big deal. 

 

Now, if you are like most people and you are going to finance the property, now is probably a great time to buy due to all-time historic low rates.  There is no guarantee that rates are going to remain this low, if/when property values come down some more over the next 1-2 years.  So, I rather take the guarantee and have all-time record low rates and know that as long as I own the home for at least 7 years, it is going to be worth more than what I paid for it.  That’s my personal investment philosophy.

 

Also, the State of California and the Federal Government have added a few more incentives (up to $8k in tax credits) recently.  If you are a 1^st time homebuyer (or you haven’t owned a home in the last 3 years), the Federal Government is giving you a $8k tax credit (that does not need to be repaid).  I am hearing that they are going to extend this credit another 12 months. 

 

Finally, some better news in Real Estate - the Pending home sales index based on purchase contracts signed in March rose 3.2% as 1^st time buyers waded into the market to take advantage of favorable prices and all-time historic low interest rates - http://www.nytimes.com/2009/05/05/business/economy/05econ.html  

 

The last few months we are seeing multiple offers on properties & the lenders have millions of properties (REO’s) that are just sitting there vacant.  We call that “Shadow Inventory”.  My guess is that we have enough REO’s to last us the next 5-7 years.  Hold on to your lug nuts because Mr. Toad’s wild ride is just taking off.

 My Brother & I are buying cash flowing Short Sales in Palmdale & Lancaster right now.

 

Frederick Solomon, Jr.

Real Estate Education & Financial Coaching

(949) 222-0240, ext 221  /  Cell:  (714) 403-7334

(866) 421-1697 - fax

 

Listen to us every Saturday from 1p - 2p on the Angels and Mighty Ducks station - AM 830 or online - am830.net

 

How Owning Real Estate Can Provide Tax Savings To California Investors

 Be sure you are taking advantage of all government tax incentives that are available to you.  The Solomon Free Money Hour Talk Radio Show, sponsored by Solomon Financial Mortgage & Realty, airing on Angels AM 830, Saturday, May 9th is having guest, David Solomon, from Solomon Ross, Grey and Company live at 1 pm PST.  Solomon, Ross, Grey and Co. are Certified Public Accountants.  In fact, Fred Solomon, Sr. was recently recognized as one of the top 25 CPA’s by Los Angeles Business Journal.  Many of their clients own large real estate portfolios and/or businesses.  

David Solomon will discuss many different tax incentives that are available. Often times people are not taking all their deductions and they do not even know it. Knowledge is power. David Solomon says, “When we review people’s tax returns, the amount of potential tax deductions people are leaving on the table can be eye opening -- especially, when you are talking about large companies.”   “A lot of people don’t know that you can purchase real estate with the funds from your IRA,” adds Solomon. 

There are many tax hiring benefits that people do not know about in California.  A lot of real estate investors do not know how they can benefit by accelerating the depreciation on their improvements (on investment property), and how by owning investment property can benefit you and what “chattel” means. 

Additional tax benefits are the GO Zone bonus depreciation where you can take a 50% first year bonus depreciation of the improvement – the cost of the structure (if you qualify), as well as other ways to reduce your taxes by Incorporating.

You can listen live anywhere in the world to the tax deduction discussion on The Solomon Free Money Hour at Solomon Financial's site, call in during the show live to get your questions answered or e-mail info@sfmdirect.com. For additional information, contact Solomon Financial: 800-811-7709.
www.freemoneyhour.com/the_solomon_free_money_hour.php

What Determines Home Prices? Contest Question

So What Exactly Determines Home Prices?  Post your answers here.

Winner will be announced here and on air: The Solomon Free Money Hour. The person who answers the best blog post will win 2 free workshop tickets, a free Flash Factory web site and an opportunity to come down to our radio show or call into the station during The Solomon Free Money Hour and our book: Put Your Money Where Your House Is.

Save your loan through loan or note modification

Business News

Save your loan through loan or note modification

Fred Solomon, radio show co-host, teaches consumers the truth about real estate investing and how to save your home in today's market.

With recent government concerns, Solomon Financial has had tremendous success assisting borrowers avoid foreclosure and keep up with their payments through loan modifications in the U.S.  Fred & Lisa Solomon from the Solomon Free Money Talk Radio Show with host Kerri Kasem is helping people stay in their home through a note or loan modification.

To see if you are eligible go to: http://www.freemoneyhour.com/loancost.php

"A typical call I receive is that a client's home value is declining, their loan is  adjusting or resetting, and they have payments they no longer can afford.  The loan modifications we do are helping people by the thousands.  It is one of the best solutions in today's market, however, you want to make sure you have a reputable, AAA rated company working for you because lenders today do not have the manpower or full ability to assist homeowners," reports Fred Solomon.

A note or loan modification is when your lender modifies your current home loan (mortgage) in order to make it more affordable for you.  It can be in the form of:  1) Modifying or reducing your interest rate, 2) Extending your loan's term, 3) Changing your monthly payments, 4) Combination of the aforementioned.

In the past this was only used when a borrower was delinquent and suffered a hardship such as a job loss, illness or divorce, for example.  You do not have to be behind in payments to qualify either. There are options.  Educate yourself on all the solutions to remain in the comfort of your home and avoid foreclosure.   

 

For Solomon's next live workshop go to  http://www.freemoneyhour.com/loancost.php

 

For more information subject of this release, contact:
Fred Solomon, public speaker/trainer

Solomon Financial Team & The Solomon Free Money Hour Talk Radio
Better Business Bureau AAA Rated

Call (800) 811-7709

www.freemoneyhour.com

mailto:info@sfmdirect.com?subject=Ask%20Solomon%20Financial%20a%20Question

Fred Solomon is author of Put Your Money Where Your House Is, The Truth About Real Estate Finance in Today's Market.

 

info@sfmdirect.com
                    www.freemoneyhour.com/loancost.php

How to Avoid the Top 10 Refinancing or Purchasing Mistakes

Fred Solomon shows consumers how to get the best mortgage interest rates and not fall victim of the lending industry.

Watch Fred Solomon's video http://www.freemoneyhour.com/wll.php and get your free consumer guide: How to Avoid the Top 10 Mistakes When Refinancing or Purchasing: http://www.freemoneyhour.com/articlesmortg.php

Did you ever wonder how to get the best mortgage rates? When you call Solomon Financial or any loan consultant, ask for par pricing as well as the APR (annual percentage rate). Lenders often quote loan rates in combinations of interests and points.

For example, is 6% interest plus 1 point better -- Is this better than 6.25 % and no points? Or 5.5% and 2 points, or 6.5% and zero costs? This is why we will do a free loan cost analysis for you so you can decide based on the numbers. To avoid confusion, ask your loan officer to show you a good faith estimate and not a good fake estimate. http://www.freemoneyhour.com/loancost.php

You want to know the full interest rate with no points. Between par pricing and the annual percentage rate (APR) it’s easy to tell which loan costs less and which doesn’t. This will allow you to compare interest rates just like the pros.

Always ask for a food faith estimate from your loan officer among other important items.   Are you hearing that it’s a “no cost loan” but they are forgetting THREE important words: “Out of pocket”?

Fred Solomon says on his radio talk show, “Humans may lie, but the mortgage calculator does not—it’s humans lying about the numbers.”

For more information subject of this article, contact:

Solomon Financial

(800) 811-7709

www.freemoneyhour.com

Upside Down in Your Mortgage? Fred Solomon Reports 7 Things You Should Know

70% of Californians have some sort of adjustable feature inside of their mortgage (whether it be a Home Equity line of Credit or a 2, 3, 5, 7, or 10 yr adjustable – where the initial interest rate is only fixed for 2, 3, 5, 7, or 10 years).  An alarming 34% of Americans have no clue what kind of mortgage that they have. CNBC reported last week that $1.4 Trillion of loans are going into default.  The loan business is a $10 Trillion business – that’s 14% of all loans in the United States that are going into default.

What are homeowners to do?  Many are considering a NOTE MODIFICATION.  One of the biggest myths is that you have to be behind in your mortgage to do a note modification.  This is an agreement with the lender to change/modify the terms of a loan (usually with a lower rate and payment) in lieu of a foreclosure or short sale.  It’s a win-win situation for the bank and the owner of the home.  It allows the owner to be able to continue living in their home without being forced to sell or having the bank foreclose on their property.  It allows the lender to save on the costs of a foreclosure or having to take a reduced pay off on a short sale.  A note modification is for someone who cannot afford their monthly payment but wants to stay in their home.  For the lender, a note modification is a better alternative than a short sale, which is typically a better alternative than a foreclosure.  All the bank cares about is how much of the original note they are going to collect.   It’s a numbers game and if the numbers make sense they will approve it.

In order to get a note modification approved, the lenders are looking for a debt to income of about 80% of the borrower’s net monthly income.  So you add up all your monthly debts (including your mortgage) and if your debts are higher than 80% of your monthly income, you will qualify for a note modification.  In this example, you would reduce your monthly payment on your mortgage to 80% of your net monthly income. Let’s say your net monthly income is $4,000 per month - 80% of that would be $3,200.  That means, that all of your debts added together should not exceed $3,200 & if they do, then you would reduce your mortgage payment to whatever the amount would be to add up to no higher than $3,200.
If for some reason you do not qualify for a note modification, then you will be faced with the decision of having to do a short sale or possibly even letting the bank take back your property (if the property does not sell via a short sale).  One of the reasons you would not qualify for a note modification would be a loss of job.  For example, you have to prove that you can make the payment. 

When shopping around for a loan/note modification company, ask the following questions:
1.    How many have they done?  Will they give you a list of clients you could call to confirm their customer satisfaction level?  People say they have done a lot of note modifications or short sales and they have not.  Ask for results.
2.    What is their Better Business Bureau Rating?  You want to work with an A to AAA rated company.
3.    If it is an attorney that is handling your note modification, look them up on your State Bar's Website. For instance in California it is http://www.calbar.ca.gov/state/calbar/calbar_home.jsp. Look at what they specialize in.  Many attorneys are jumping into this trend with little to no experience and charging a lot of money.
4.    What is the cost?  Costs can typically range from $1,750 to $4,995 based on the loan balance (under $150,000 to over $1million).
5.    Do they offer a money back guarantee?  Get it in writing. What is their policy? For example, Solomon Financial helps a client in need by explaining to the client all of their options, with a partial money back guarantee, when they can’t afford their monthly mortgage payment.  If the property doesn’t sell, it will end up becoming a foreclosure and the bank will take back the property as an REO.  We take 50% payment up front and if the modification is not approved part of that will be refunded and we can help with a Short Sale.  We can provide our price list to you.
6.    Will they give you referrals for real estate attorneys and CPA’s so you understand all of your tax and legal consequences of a short sale compared to a foreclosure (if you don’t qualify for a note modification).
7.    What happens if the loan modification company does not get the modification approved, do they help you with the short sale and help get the property sold for you?  Are they helping you or just providing a service and if you don't qualify for the service that they provide, do they say, "Sorry, sir, we don't provide that service."  Where does that leave the client and their family? Foreclosure?  You bet.

There are some huge benefits from a credit perspective as well.  A note modification will not affect your credit rating (as long as your payments are made on time). 

For additional information on the news that is the subject of this press release contact Fred Solomon or visit www.freemoneyhour.com.

Fred Solomon is co-host of The Solomon Free Money Hour Talk Show; trainer-speaker on real estate, foreclosure, current mortgage and market trends; author of PUT YOUR MONEY WHERE YOUR HOUSE IS.
Also Contact:
Fred Solomon


Solomon Financial
800-811-7709

fred@sfmdirect.com
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