Do you have or use Cryptocurrency?

October 25, 2018

If you do…you might be able to use it in a mortgage loan!!

Bitcoin

Cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. The most common form of cryptocurrency is Bitcoin; which uses a virtual wallet identifying the account holder utilizing a coded address incorporating letters, and numbers, rather than the standard name and account number making it difficult to determine ownership.

Now, how do we document this, because you know, mortgage lenders and banks LOVE to have clients document ANYTHING having to do with a mortgage loan, right?  The buyer must validate the ownership of the cryptocurrency with the most recent 60 days transaction history that clearly identifies the owner.  Documentation must be provided to show the liquidation of this Space Money from the cryptocurrency account, transaction of units to US dollars, and evidence funds have been deposited into a US financial institution.  Transfer and liquidation must be completed prior to the closing/funding on this homes purchase.

Are we ready for the future?  They fly “cars” to work so that is exciting, just not sure where I will ride my bike…

A personal note to share: Last year my 14-yr. old son was building his own desktop computer for gaming. He did all the research on parts, watched countless video (still watches countless videos now that I think about it) and was saving his money. One day I heard him and Julie speaking, he was very upset.  He shares; “dad there was an article that listed the processor I wanted to buy as the best to mine for Bitcoin and it now costs $150 more!”  His disappointment was that he was so close to having the funds to buy and this moved his purchase date out. Luckily for me I have a client and friend who lives and breathes computers and was able to listen to what my son was using for parts and made a recommendation for a new processor that brought the costs back down!  He quickly pulled the trigger and made his parts purchases.  Who knew right, a computer processor can help you mine for Bitcoin!!??

Geoffrey Davis, The Frisco Mortgage Loan Officer

NMLS #206192

geoffrey.davis@Movement.com

Cell: 214-529-9622

6801 Gaylord Parkway #202

Frisco, TX 75034


Client Benefits of Downsizing Early

October 17, 2018

After

Most of us have plans to downsize at some point in our lives as we look to simplify. For many, this is a few years after the kids finish college, but the question is…. should we downsize earlier? For many, there’s a real argument for downsizing when the children go to college versus waiting until after they finish. I’ve had several clients come to me to evaluate the cost to do a cash-out (specifically to invest other places) or downsizing into something smaller. I believe it’s important that clients do the math before their kids go to college, weighing the financial pros/cons of moving to something smaller with lower monthly expenses, tax ramifications with a new “homestead” and how the equity could be leveraged to make other investments.

As always, I recommend clients visit with their Financial Planner to make sure any decisions align with their overall investment strategy.  Then, contacting a quality local Realtor to gauge the market and if your goals fall in line with that market’s reality!!

Geoffrey Davis

Frisco Mortgage Loan Officer

NMLS #206192

geoffrey.davis@Movement.com

Cell: 214-529-9622

6801 Gaylord Parkway #202

Frisco, TX 75034


Why the Stock Market is Out of Whack…

October 11, 2018

Stock

Traditionally, the Bond and Stock markets have been the Ying and Yang to one another. In other words, when one is high the other is low and vice versa. As many of you know the Federal Reserve, until recently, has been holding down interest rates for years by heavily supplementing the Bond Market. The Fed recently ended this program (Quantitative Easing) so the Bond Market is now standing on its own two feet once again, the training wheels have come off! During Quantitative Easing, however, many investors took their dollars to the Stock Market because the yields (i.e., what they would make) in the Bond market wouldn’t be enough to give them a good return on their investment.

Recently, Bond yields have been creeping up and are starting to give Stocks a run for their money. Needless to say, the Stock Market doesn’t like this because it means that investors have another place to put their money. I imagine they liked being the only one at the dance for so many years! As a result, we’re seeing atypical things in the market such as both Stocks and Bonds being down at the same time versus the normal Ying and Yang situation. So as you see this type of thing happening you should know it’s everyone adjusting from the old status quo to the new one.

Geoffrey Davis

Frisco Mortgage Loan Officer

NMLS #206192

geoffrey.davis@Movement.com

Cell: 214-529-9622

6801 Gaylord Parkway #202

Frisco, TX 75034


Fed Raising Rates Doesn’t Impact Mortgages?

October 3, 2018

Rates don’t always go up when the Federal Reserve (a.k.a, The Fed) brings up the Prime rate, the amount banks charge one another when borrowing money. If done well, there shouldn’t be any surprises on what the Fed plans to do as they are very transparent around their long-term plans. This makes investors and the market happy because they don’t like “surprises.” In other words, the market anticipates a change based upon what the Fed forecasts and has course-corrected what they’re doing before the Fed makes their rate moves. The means that rates typically remain stable and sometimes go down, rather than spiking up.

What is impacting the market? The end of Quantitative Easing, which is where the government purchased mortgage bonds to help keep interest rates low. For almost ten years the Fed has reduced our interest rates through this method, but it’s officially over and the market is standing on its own two feet. Net-Net? Mortgage interest rates are influenced by the Fed and the Market. The degree of which rates are influenced short-term (e.g., daily, weekly changes) is much more market sensitive than it driven by the Fed.

Meaning – rates go up from here – how much and how fast is literally anyone’s guess.

Geoffrey Davis

Frisco Mortgage Loan Officer

NMLS #206192

geoffrey.davis@Movement.com

Cell: 214-529-9622

6801 Gaylord Parkway #202

Frisco, TX 75034


Storage Unit Debacles..and the Ugly Truth

September 26, 2018

I Ain’t Responsible for Nothing!

So, over the Summer we put a bunch of stuff into storage. After much arm wrestling, my wife convinced me to put our nicer items into Air-Conditioned storage versus the good ‘ol fashioned “hot” storage that we would usually leverage at a substantially lower price. And, because these items were of a decent value she also took advantage of the 3rd party insurance offered onsite to give us a little incremental coverage. Just to be sure.

And then came water.  In our storage unit.  Soaking our things.

The storage company said it wasn’t their fault–insurance would have to take care of it. After all, things happen! The 3rd party insurance company said that if it didn’t come from a roof leak (a.k.a. surface water, poor construction/maintenance) they couldn’t cover it. Our home policy said the same thing. Can I just say this is not a good situation?

Here’s the Ugly Truth about Storage Units: when you sign your contract, you indemnify them from any responsibility to ANYTHING that happens inside their property to your stuff. It’s standard language which means you’re totally exposed–or, at least your items are. Let’s say a neighbor unit accidentally leaves something flammable in a unit next to yours. Their items catch fire causing the sprinkler system to go off and all your stuff is now completely drenched. Who pays for that? Well, apparently you do.

Let’s imagine that someone decides to throw their pantry items into storage and rodents discover this treasure trove.  Then they migrate to your unit to create a brand-new multiplex inside your Pottery Barn sectional. Who pays for that? You guessed it–you do! Pretty much anything that happens to your stuff while at a storage unit facility is entirely your responsibility. You might have a chance of getting someone to admit fault if you want to spend the time and money to take them to court–but that’s about it.

Here’s what it comes down to–learn from our mistakes. Don’t let your clients put valuables in storage without comprehensive coverage from an agent who will be responsible for the outcome on the other end of that transaction. Do I think the storage company we used should step up and cover our losses even though not “legally” obligated? Absolutely. Because the situation we’re in isn’t an Act of God–it’s an Act of Man. We don’t own/maintain that asset and there was no possible way for us to have influenced water getting in/not getting into our unit. It comes down to the same thing I tell my kids…accidents happen all the time. And, when we do something on “accident” we are still accountable for making the situation right even if we didn’t intend to do something wrong.

It’s called Integrity.

Geoffrey Davis

Frisco Mortgage Loan Officer

NMLS #206192

geoffrey.davis@Movement.com

Cell: 214-529-9622

6801 Gaylord Parkway #202

Frisco, TX 75034


Same old housing market road or new one?

September 19, 2018

Geoffrey the Mortgage Guy speaks

Same old housing market road or a new one?

How many of you remember the Mortgage Meltdown and Financial Crisis that occurred around 2007? It was a perfect storm that not one product, industry or trend was 100% to blame.  Yes, people pointed fingers at each other saying it was sub-prime loans, inflated home prices, low down payment programs or appraiser working too closely with lenders. Basically, everybody in the business contributed to that debacle.

I won’t forget those times as I lived them as a mortgage loan officer here in Frisco since 2002!  What’s eerie is that I’m starting to see some of the same kind of practices that got everyone into trouble the last time. Are we about to see the second coming? I’m hearing nuggets like Dodd/Frank policy is loosening and stated income loans are back. Now, there’s a company that will buy your new home while you sell yours. And give you up thousands to fix up your previous home as well as your new one. This is Risky Business folks.

Meet Knock.

They’ll buy the house you want, and let you move into it, while you sell yours through them. No hassles showing your current home AND they’ll lend you up to $10k for the house you’re selling to fix it up and $10k on your new home to make the changes you want.

Things that make you go Hmmmmm…

This has so many things that could go wrong I don’t think I could fit them all here. The biggies for me are:

1. A group you do not know now owns your new primary residence. They could go bankrupt–yikes.

2. You cannot sell your original home for what you needed and now don’t qualify for the new loan.

3. If you were silly enough to borrow the $10k to improve on your new home, you just spent money on something that’s not yours yet.

4. You’ve borrowed the $10k to get your original home ready for sale and must pay the company back somehow

I haven’t even touched on the complexities of what happens if there are problems such as the appraisal not hitting value, you realize that you’re stuck with an awful Realtor you can’t fire or that they can totally have you over a barrel on financing. I cringe when I think about the possible outcomes.

Legit Ways to Buy that Next House

If you do have a client who wants to learn about other ways to qualify for a new purchase without having to sell their current home, here is a great article I posted last April.

Please feel free to share my posts, I just ask you leave in my name as the source.

Geoffrey Davis

Frisco Mortgage Loan Officer

NMLS #206192

geoffrey.davis@Movement.com

Cell: 214-529-9622

6801 Gaylord Parkway #202

Frisco, TX 75034

      


Kids and their FICO

September 4, 2018

Increased Credit Protection for Children

As a self-declared mortgage nerd, I love keeping tabs on my credit score. Even more important than keeping tabs on your credit as an adult is keeping tabs on your children’s credit scores.

While parents actively manage their own credit scores, it often doesn’t occur to us to monitor our children’s credit as well. The good news is that a new law goes into effect September 21st that will make it easier to protect your children’s scores. The law will allow you to freeze your child’s credit free of charge. This freeze will help prevent lines of credit/accounts from being opened using your child’s information until the age of 16. Right now, this level of protection is offered in some States, but this new law offers the protection for everyone free of charge.

After your child turns 16, you can continue to freeze his/her credit, but you will need to generate a new credit freeze and PIN to “unfreeze” it when you are ready later.

This is a great step as kids identity fraud has been increasing year after year with us as parents not able to have the resources to help protect our kids. Last year the Federal Trade Commission took in more than 14,000 complaints of identity theft for kids 19 and younger!

Learn More about Credit and Identity Fraud.

Geoffrey Davis

Frisco Mortgage Loan Officer

NMLS #206192

geoffrey.davis@Movement.com

Cell: 214-529-9622

6801 Gaylord Parkway #202

Frisco, TX 75034