The Knicks get Larry Brown, Larry Brown gets a mortgage
In 2004 Larry Brown finally hit the apex of his NBA coaching career when he guided the Detroit Pistons to the NBA Finals and won. This year, he almost replicated the feat when his Pistons made it again to the NBA Finals but lost. Yesterday, he was named head coach of the New York Knicks.
At $10 million per year, he’s going to be the highest paid coach in the NBA. Sorry Phil “Zen Master” Jackson but Larry is now numero uno. He’s going to need every penny as he relocates his family from the suburbs of Detroit to the suburbs of New York City.He’s planning on moving to Westchester County. He might end up living down the street from Bill and Hillary Clinton since they live in Westchester (Chappaqua) as well.
Chances are he’ll be getting an estate that will easily run him between $5 to $10 million. Forget the mortgage payment, the property taxes alone are astronomical!
Chances are he’ll be getting his mortgage from a professional, not some smooth talking idiot who talks about getting him the best rate and can beat his competitors rate. I also highly doubt he’ll shop around for the best rate cause his time is valuable.
His time is indeed valuable. He needs to coach a team that finished 33-49 last year with no real center and a point guard that has never won a playoff series. I wish Larry the best of luck in getting a home, in getting a mortgage, and in getting the Knicks to the NBA Championship!
Tags: mortgage, property, rate, vaPaying for Points Part II
Points come in two varieties, origination and discount points. Generally a “point” is a fee that the lender charges to buy down the interest rate and is equal to one percent of the loan amount. “Discount points” vary inversely with the rate quoted-that is, the lower the rate quoted, the higher the amount of points charged. Discount points are used to adjust the yield on the loan to the institution providing the money. Origination points, such as is common for FHA and VA loans, are generally charged by the lender to offset the lender costs of administering the transaction.
Does it make sense to pay the points? The answer is…it depends. There are many factors to consider. One of the primary items to review is the overall long term cost of a zero-point loan versus a loan with points. One easy way to determine the value of paying points is to determine how many months (payments) it will take to recoup the original expense. The math is easy. Simply, divide the cost of the points by the monthly savings to arrive at the number of months it will take for yourinvestment in points to pay for itself. Here is an easy example:
| 2 Points | 1 Points | 0 Points | |
| Loan Amount | $250,000 | $250,000 | $250,000 |
| Cost of Points | $5,000 | $2,500 | $0 |
| Interest Rate | 5.00 % | 5.50 % | 6.00 % |
| Monthly Principal and Interest | $1342.05 | $1419.47 | $1498.87 |
| Monthly Savings | $156.82 | $79.40 | $0 |
| Months to Recoup | 32 | 32 | $0 |
| Total savings over 360 payments | $56,455.20 | $28,584.00 | $0 |
The example is a simple approach to compare the difference between a zero-point loan and a loan with points. However, there can be other factors to consider. Some consumers may try to calculate tax implications of the different amount of points and interest paid and the subsequent tax deductions. Other borrowers may consider the present ‘value’ of the dollars spent on points today, versus the future ‘value’ of the dollars if they were invested instead of being paid to the lender. A great majority of consumers will be able to determine the advantages or disadvantages of a zero-point loan by using the above scenario.
NO COST LOANS There is no free lunch, even in mortgage lending. Every real estate financing transaction has costs for processing the application, appraising the subject property, administering the transaction escrow, securing title insurance, etc. In a typical “no-cost loan” the lender agrees to pay all of the costs of the transaction for the borrower in exchange for the borrowerpaying a higher price for the loan. Depending on the individual borrower’s circumstance, this may or may not be a “good deal.”
You will make the right financial decisions today if you have a plan for your future. In other words, your mortgage professional can plan your mortgage around your goals and aspirations. If you plan to move or refinance your mortgage loan within the next five years you most likely should not pay points. If, however, you know you are going to be in this home for a long period of time, you can definitely save money by paying the points. Take a few minutes and think about where you are going to be in the next 3-5 years. The answers you come up with will help you make the right decision about paying points.
Tags: compare, fha, lending, mortgage, property, rate, real estate, refinance, vaPaying for Points Part I
If you want the lowest possible payment, consider paying points. Here are three things to consider:
- Carefully consider how long you plan to live in your new home. The longer you will stay the more benefit you will get out of paying points. If you plan to pay off the loan, move or refinance within the first five years, it is generally not a good idea to pay points.
- If you would like to get a lower interest rate but do not have the extra money to pay for points, consider asking the seller to pay them for you. Ask your realtor to help negotiate the contract so the seller pays your points.
- Points are normally tax deductible whether you or the seller actually pay for them. Points on a refinance are not deductible in the same way. On a refinance you normally have to spread your deduction out over the amortization of your loan (check with your tax advisor).
Live Strong!
After 21 stages that ecompassed 2,232.7 miles, Lance Armstrong just won his 7th consecutive Tour de France today. That’s the equivalent of riding your bike from New York City to the outskirts of Los Angeles. It’s truly an amazing feat!
After the race he announced his retirement. The Tour de France and cycling will never be the same.
Live Strong!
Tags: vaWhere are rates going?
On a daily basis, I get asked Where are rates going?
Rates are at their lowest point historically in 40 years. If you apply standard logic, rates are bound to go up. I’m not an expert but even the experts don’t really know. All day long on CNBC they talk about mortgage rates, some experts say they’re going up, some experts say they are staying the same. Confusing!
By far the best indicator for mortgage rates is the 10 year bond, as the bond prices go up, the bond’s yield drops, and then rates drop.
Check out smartmoney, they post the yeild for a 10 year bond on their main page. If it’s red, expect rates to go down, if it’s green, expect rates to rise. Keep in mind when rates go up they take the elevator, when rates go down, they take the stairs.
Tags: mortgage, rate, vaMortgage Consultant
Greetings! Thanks for visiting my blog! I was once a software developer starting with BASIC when I was a teenager to FORTRAN and COBOL and ending my career with JAVA. A few years ago I left IT for the brutally competitive world of home loans, financing, and mortgages. The purpose of my blog is to relay relevant loan information such as:
- - rate trends
- - new loan programs
- - home buying strategies
- - refinance strategies
- - my unique perspective on life
Check back early and often.
Cheers!
Tags: home loan, mortgage, rate, refinance, va