One Way to Save Money on Your Mortgage

I know this sounds too simple, but you wouldn’t believe how frequently I remind people of the importance of paying their mortgage on time. If you only have enough money to pay one thing, let it be your mortgage. As detrimental as late payments of credit cards or car loans may be, nothing hurts worse than a mortgage late.

Additionally, make your payment by the first of the month. Yes, mortgages are due on the first of the month; Yes, lenders will have a grace period of anywhere from 5-15 days before they will access a late fee; And, Yes, technically, as long as you pay before you are 30 days late you won’t be listed as late. But you will have late payment fees. I had a client who called me needing to refinance. He told me he just needed an extra $150 per month. After talking, I discovered that in addition to his Monthly Payment he was paying $85 each month in late fees because he never paid until the last week of the month. I know it doesn’t seem like much, but $85 over 12 months is the equivalent of a monthly payment for many home owners.

And don’t forget that next time you look to purchase a home or refinance your loan; the payment history is a key factor in determining your interest rate. Zero late payments translate to lower interest rates, which typically mean a lower payment.

Well, that’s it for this week. Enjoy the weekend. Email me if there is a topic you want me to shed some light on. As always, you can get me at jayhart@cottonwoodmtg.com

After all: We Make It Easy . . . Every time!

Zillow is a Fraud

For Utah Real Estate, Zillow is a fraud. A great big hoax! If you are one of the 2.8 Million Americans who logged onto Zillow within the first month of its launch, or one of the countless others who have used the service since April, beware.

I know what you’re thinking: Are you crazy, I use zillow all the time, it’s not that far off. Well, I’m not crazy, but you are if you put any credence to what you’re “zestimate” tells you about your home.

Case in point, I just had my own home appraised by a licensed and certified appraiser. I used an individual with whom I have worked for years, he has over 25 years experience as an appraiser and I can assure you he is one of the most conservative appraisers out there (no worries of appraisal fraud and inflated values with this guy). His appraisal came in nearly 10% higher than then my “zestimate.”

Here is another example: I have a rental property in a nice neighborhood on the south end of the Salt Lake Valley. I had another Appraiser, one who tends to be more aggressive with values, appraise the property. His value, which I will admit may be a bit higher then I could ask on the market, came in $31,513 below the Zillow Value.

Of the 62 Million homes researched by Zillow, only about 40 million property records are detailed enough to provide the company with information needed for its “zestimates.” However, in practice, Zillow values do not appear to be consistent with recent sales trends and in some cases are equal to the assessed value assigned years ago at the time of a home's last purchase.

Look folks, just because your founder is the former CEO of Expedia.com (can’t you just hear the little expedia jingle in your head), and just because you were bankrolled with over $32 Million in Venture Capital Funds doesn’t mean you are qualified to hand out property values.

So here’s the thing, I use Zillow. I keep track of trends in my neighborhood or in neighborhoods where I am considering investing. I compare data from Real Estate Agents and Appraisers with similar data on Zillow. I use it as a resource, but it is only 1 resource out there.

If you want to know the value of your home your first stop should be to a licensed appraiser. This may cost you a bit, but you can be confident in the accuracy of the report. If you want to save some money, or you are just slightly curious, contact a Realtor—just be ready for their efforts to “earn” your listing.

If you must use Zillow, go ahead. But use it at your own risk. Remember, just because a web site tells you something doesn’t mean it should be taken as gospel.

LET ME LOOK INTO MY CRYSTAL BALL . . .

I cannot tell you how many times a day I am asked about the future of interest rates. Actually, I can. At least 5 times. Crazy thing is, I always give the same answer: I don't know! Truth is, nobody knows.

Last week, after the Federal Reserve met and lowered the Fed Rate by a half a point (0.5%) I started getting calls from people who were so relieved to be able to get a lower rate on their home. These same people were confused when I told them that since the Fed announcement we have seen interest rates increase.

So, here is my point: Most people have been mislead in their understanding of what causes interest rates. I have business owners, Financial Advisor's, Accountants, even people with their MBA's and PhD's who don't understand what determines interest rates. To be honest, many industry insiders and loan officers don't fully understand.

Now, I am not an economics professor, and I don't claim to know every aspect of the interest rate system, however, I am convinced that a little bit of good information goes a long way in understanding what is happening with interest rates. There are 5 main factors that affect interest rates: Supply and Demand, Monetary Policy, Inflation, The Bond Market, and The Federal Reserve. No one factor has a greater affect. In truth, all factors are related. When one struggles, the others react; When one is succeeding, the others react.

I wrote a report as a part of my 5 THINGS series that covers the 5 things affecting interest rates. In it I give some explanation of how those things I listed actually affect how much it costs you to borrow money. It's a good report, as those on my Inner Circle Email list will attest.

If you would like more information send me an email and I will send you the report (maybe at some point I will figure out how to link to the report from here, but hey, we just started this whole Blog thing--I am still learning how to post basic messages). Email me at jayhart@cottonwoodmtg.com

As always, remember We Make It Easy . . . Everytime!

Welcome to the 21st Century!

Well, I must admit, I have been hesitant to jump into the whole Blogosphere as of late. It seems like every time I consider something to make me more "cutting edge" I end up taking time away from my clients.

This time will be different. I really feel that I can use this blog to give more time to my clients. I decided that instead of spending a few hours every day responding to emails with important questions regarding the mortgage industry in Utah, I would take that same time and post information where more people can access it. Don't worry, I will still answer each of your questions, however, instead of sending the same email to multiple people each week I will try to post answers that can be beneficial to everyone.

For those of you in my email circle, don't worry. I am still saving the best information for your newsletters. Don't be surprised if some of the information you get in your emails is similar to what I post here, but don't worry I take care of my circle first!

In case you are new, or just stumbled across my page feel free to send me an email. You can email me at jayhart@cottonwoodmtg.com to be added to my email circle. Don't worry, I DONT SPAM. My Inner Circle receives periodic updates on the mortgage industry as well as access to my Special Reports with information that can save you thousands of dollars and years off the life of your loan. From time to time the Inner Circle will get special offers regarding refinancing for them or their referrals.

As always, if you have a question you can email me at jayhart@cottonwoodmtg.com or you can call my office at 801-256-0904.

And, of course, remember our motto: We make it easy . . .every time!