Former Buffalo Bill quarterback Jim Kelly lost his son Hunter on Friday. He was diagnosed with a fatal disease called Krabbe leukodystrophy that affects the nervous system.

I’m a die hard Jets fan and I often rooted againt Jim Kelly and his K-GUN offense with the Buffalo Bills during the early 90′s. During my college years, Jim ate up the Jets as he lead his team to the Super Bowl an impressive four straight times.

When Jim retired he left a huge void and the Bills were never the same. Three years ago he was inducted into the Football Hall of Fame and got emotional when he said his son was his hero.

Read more in the Buffalo News

First and foremost, I need to state that I work with a handful of realtors. I like the realtors I work with but for the most part they’re a different breed. On Saturday, August 6, the Rocky Mountain News had an article in their Business section that basically said people are flocking to the real estate profession in droves.

Record 45,764 brokers vie for slice of Colorado home sales

By John Rebchook, Rocky Mountain News

Ron Buss, 47, chucked his corporate perks and an income “of well over six figures” to become a residential real estate agent. Jessica Padilla, 25, started selling homes after the company where she worked filed for bankruptcy.

The two rookie residential real estate agents got into the profession for totally different reasons, but both are among the record 45,764 licensed brokers in Colorado trying to grab a piece of the roiling housing market.

Read more…

Finally after seven long months football is finally here! Here are my predictions for each division:

SUPER BOWL: NEW YORK JETS (AFC) BEAT THE MINNESOTA VIKINGS (NFC)

What did you expect from a J-E-T-S Jets Jets Jets fan!

I wanted to revisit Paying for Points. Recently I encountered savvy borrowers who understood the benefits of paying for points. When we discussed each option I presented, they understood that there was a difference between the rate I offered and the APR.

What is APR?

APR stands for “Annual Percentage Rate” and is the cost of credit expressed as an annual rate. APR is one of the most misunderstood numbers people come across when applying for a loan.

As consumer loans, and mortgage loans in particular have become more complicated, it became necessary to help standardize the ways lenders advertise and quote interest rates. APR was created to help people compare similar loans from different lenders and to explain the ultimate cost of credit. Quoting APR is required by Regulation Z of the Federal Truth-in-Lending Act.

Why is the APR higher than the interest rate?

Because you may be paying loan discount “points” and other “prepaid” finance charges at closing, the APR disclosed is often higher than the interest rate on your loan. This APR figure can be compared to the APR on other loan programs to help you compare the cost of credit for each type of loan.

How do I find the APR on my loan?

Once you have applied for a mortgage loan, the Federal Truth-in-Lending Disclosure Form (TIL) will be sent to you. If you have applied for more than one type of loan, you will receive a TIL for each loan type. At the top of the form, you’ll find your “APR.”

Revisiting our example from Paying for Points Part II, here are the rates and their corresponding APR’s

During my high school and college days I listened to rap. We’re talking old school and back in the day rappers like Heavy D and the Boyz, Black Sheep, A Tribe Called Quest, KRS-ONE and Boogie Down Productions, Busta Rhymes, LL Cool J, just to name a few. I still listen to rap but it’s no longer my music of choice.

A rapper named Mike Jones is blowing up in a big way. He’s got mad skillz but I couldn’t understand what he was saying in his “Back Then” rap. If you’ve seen the video or heard the song you know what I’m talking about. I went on Google and found the lyrics to”Back Then.” Here’s the line that perplexed my mind:

My mind is now at ease.

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!

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:

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.

If you want the lowest possible payment, consider paying points. Here are three things to consider:

1. 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.
2. 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.
3. 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).

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!

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.