To Infinity and Beyond

To Infinity and Beyond

Buzz Lightyear’s trademark cry of “To infinity and beyond!” from Toy Story is an all time favorite movie quote. Ever wonder why? Think about it, “Why?”, a question we learn to ask at an early age but the older we get, we seem to ask less and less.

Do Not Stop Dreaming

It’s easy for both people and companies to get into a rut and stop asking the fundamental question, “Why?”.  Simon Sinek writes, in his book “Start With Why”, “Very few people can clearly articulate WHY they do WHAT they do. WHY do you get out of bed every morning? WHY should anyone care?  I have found that when we only think in terms of “what” and “how” we stop dreaming- and no one should stop dreaming.

Understanding Your Dream

My wife, Alicia, and I began Revival Lending with a clear understanding of our why- “to help people experience revival in their finances and their lives.” We believe the best way to accomplish our dream is to free people up to dream again about the “why” in their life. As a mortgage professional with 20+ years of experience, I know I can help people navigate the process of home finances to put them on a road to fund their dream. That’s why our loan process always begins with our clients; understanding their dreams, their needs, and their housing situation. Their dreams are not one size fits all, so neither should be their loan solution.

Dreams Realized

As a business owner, I am often asked how I measure success. To me the answer is simple. We talk in terms of dreams launched and funded. More specifically, I talk about my client, who at the age of 62, took the courageous step and started her own company after years of working for someone else. I talk about the young couple who bought their first home once they saw it would cost them less than renting. I talk about the happy homeowners who regained hope after they had lost everything in the last recession. Children sent to college. Kitchen remodels. Retirements secured. Dreams realized. I measure success one dream at a time.

What’s Your Dream

What’s your dream? I would love to hear from you. Give me a call and I will be happy to conduct a complimentary financial review of your situation, and we can talk about how to finance your dream. In fact, I will give away a copy of Simon Sinek’s book, Start with Why, to the first five people who complete a financial review with me.

FREE Copy With Financial Review

Start with Why - Simon Sinek

What’s Your Dream – Let Us Help You Get to Infinity and Beyond!

Free Financial Review


The Home Equity Secret Menu

The Home Equity Secret Menu

The Home Equity Secret Menu. Haven’t heard of it? Well, just like the famous secret menu of In-N-Out , the mortgage industry has a secret menu of its own. Here is everything you need to know about the Home Equity Secret Menu.

Your Situation

So, you want access to the equity within your home? Should you look to refinance your current mortgage or obtain a 2nd mortgage? Does trying to decide make you think of the old Clash song which asked, “Should I stay or should I go now? If I go, there will be trouble. And if I stay it will be double.” Yet, unlike the song, which implies a no-win situation, there are a few easy ways to figure out the best financial option for you.
 

Just the Facts

Here is the reality. To obtain access to your home’s equity, without selling it, you have two main options. 
 
First, you can simply refinance your current mortgage and pull cash out. Choosing this option usually provides you with access to the lowest current interest rates on the market. Yet, obtaining a new first mortgage can be more time consuming and expensive than obtaining a second mortgage.  
 
Second, you can choose to tap into your home’s equity by obtaining a second mortgage. These loans typically can be completed quickly and often provide access to a greater portion of your home equity than many first mortgages. However, these mortgages usually have a higher interest rate than those available on a first mortgage. 
 
So how do you decide? Which option provides you the lowest overall rate?
 

The Blended Rate – The Home Equity Secret Menu Item

 
Let me introduce to your new friend, the Blended Rate. It provides us with the necessary tool by which we can compare the two options above. The Blended Rate is a mathematical equation which allows us to calculate the effective rate when combining two loans. In other words, using the blended rate formula allows us to determine the effective interest rate when combining your current mortgage with a proposed second mortgage. We can then compare this blended rate with a proposed new 1st mortgage rate to see which one is lower.
 

The Blended Rate Applied

 
To see how the blended rate is applied, let’s image you have a current 30 year mortgage of $250,000 at an interest rate of 4%. You needed to get $50,000 to complete a kitchen remodel and make a down payment on your daughter’s college tuition. In speaking with a mortgage professional, you were offered a new first mortgage at 4.5% or you could obtain a 2nd mortgage at 7.99%. 
 
Now, let’s apply the blended rate formula (math explained in more detail below). This reveals the effective interest rate of keeping your current 1st mortgage and obtaining a second mortgage is 4.69%. In this case, the lowest interest rate available to you would be obtaining the new 1st mortgage. Yet a small change in your requirements can flip the equation. Imagine your cash out requirements dropped to $20,000. Now, the blended rate formula reveals your effective rate would instead be 4.29%. In this case, keeping your current 1st mortgage and obtaining a second mortgage would provide you with a lower interest rate. 
 

Complimentary Financial Review

 
At Revival Lending, we work hard to understand the particulars of your situation and find the loan that best helps you accomplish your goals. There is a reason we say, “Your Dream. Your Home. Our Loan Solution.” If you have any question about this scenario or your own financial situation give me a call and I will be happy to conduct a complimentary financial review of your situation.
 
P.S. – Now make sure to apologize to your high school math teacher and parents for saying you would never need this algebra stuff in the real world.
 
P.S.S – If the mere mention of In-N-Out has made you hungry, here is a guide to their secret menu.
 
Blended Rate Formula Explained
 
Blended Rate = (r1*b1 + r2*b2)/tb
r= Rate, b= Loan Balance, tb= Total Balance
 
Example 1: (4%*$250,000 + 7.99%* $50,000)/$300,000 = 4.69%
Example 2: (4%*$250,000 + 7.99%* $20,000)/$270,000 = 4.29%
 
Note: Above Blended Rate assumes the same loan term for both loans
When a Condo is Costing You More Than a Single Family Home

When a Condo is Costing You More Than a Single Family Home

Do you know how to determine when a condo is costing you more than a single family home? For example, did you know that a $580,000 Condo could cost you more to own per month than a $630,000 Single Family Home? I promise, it’s not a trick question. Let me show you when a condo is costing you more than a single family home.
 

Condo vs Single Family Home

Recently, I had a client who was trying to determine which home to purchase, a condo vs single family home. They wanted to get the best home for their money but not break the bank on their monthly budget. In the end, they narrowed their choices down to two possibilities. 
 
The first choice was a beautiful $580,000 condo and, the second, was a larger, single family home being sold for $630,000. The neighborhood, space and overall design of the single family home matched their needs better than the condo but the home was on the top side of their budget. For that reason, they thought the less expensive condo would make better financial sense. It sounded like a logical conclusion. 
 

Financial Review Is Key

However, a financial review is key for a true analysis. After I conducted a complete financial review of the two possibilities, I found the less expensive Condo would have cost them more money per month than the Single Family Home. You might be asking- “how’s that possible?”

The reason – there are more monthly expenses associated with homeownership than just the loan. Besides the principle and interest that will be due on any loan you will also have to pay some combination of taxes, insurance and possible HOA (Homeowner Association) fees. These are not all created equal. For my clients, I knew that the larger loan required for the single family would cost them an additional $290 per month. However, the combination of the higher tax rate in the condo’s city as well as a higher homeowner association fees would cost them an additional $410 per month. That means the condo would actually cost them an additional $120 more per month to own.

Complimentary Financial Review

By reviewing all the financial facts, my clients not only got the house they really wanted but also saved themselves a $120 a month. So before shopping for your next home, give me a call and I will be happy to conduct a complimentary financial review of your situation. #notallbrokersarecreatedequal