It’s Ba-aaack: Return of the 100% Mortgag

Buying a Utah Home … With a $0 Down Payment?

Some of Utah area’s wealthiest buyers may be getting a mortgage without putting a single dollar down. And we aren’t talking about single-bedroom fixer-uppers, either!

It's called 100% financing, and, at first blush, it looks suspiciously like a version of the strategy that sent the economy reeling in 2008.  But lenders feel that well-heeled Utah residents who are getting a mortgage through these programs are totally different.  How so? you may ask.

For openers, these loans are offered only to the super-qualified: those with serious investment portfolios they can use as collateral. That means getting a mortgage with zero cash for the down payment. That can carry an additional tax benefit, since the borrower won't have to pay a capital gains tax on investments liquidated to fund a down payment.

Since current mortgage rates can be as low as 2.5%, since even middling investment accounts often return a higher rate, the difference make this strategy what the Wall Street calls an ‘arbitrage play’.

So what would a homebuyer getting a mortgage in Salt Lake City and Beyond need to do to qualify for one of these mind-bending loans?  In addition to the willingness to put up two forms of collateral (the property and a portion of your investment portfolio), the Wall Street Journal offers some relevant details:

• The amount that can be borrowed against any investment account depends on what’s in the portfolio. Usually up to 95% of account cash; up to about 80% for bonds; between 50% and 75% for most stocks. Withdrawing pledged funds is usually restricted.

        • To get the lowest rates, clients who already have significant assets at a particular bank should consider applying for 100% financing there.

        • Borrowers still need to pass regular underwriting requirements. They’ll need--high credit scores, a low level of overall debt, and documentation of substantial income or assets.

Of course, getting a mortgage doesn’t require a seven-figure portfolio.  If you are seriously thinking about buying a home in Salt Lake City and Beyond, call me -- we’ll get started by getting you pre-qualified.

Listing Your Utah Home: Just Do It!

The Best Day for Listing Your Utah Home is…Study Finds Best Listing Day 

 

“Mansion” is the Wall Street Journal’s entry into the high-end real estate magazine world. Well, not quite a magazine -- it’s an extra section they run on Fridays. It’s a nice diversion for those who want to read about really rich people selling their properties. More than that, it could actually be an important source of information if you decide to buy a vineyard in the middle of Los Angeles (Bel-Air, actually -- that one was featured last week).

It was another article that caught my eye on Friday, though; one that dealt with a topic we agents have long debated. The article was headlined “THE BEST DAY TO LIST A HOME IS…”.

It summarized an elaborately executed study by a national brokerage revealing hard statistics on which day of the week is best for launching your Utah listing. The author, Sanette Tanaka, brought up several ways to look at the question. While her focus was, of course, national, the unspoken allure was to zero in on which day will maximize our Utah listing results.
I bet you want to know the answer, so here it is: …(drum roll, please) --

Friday. Houses listed on Friday spent the fewest days on market (2 fewer than Thursday, 7 fewer than the most ho-hum day for listing, Sunday).

But, reading further, there is a problem. Listing on Tuesday brought in the most requests for house tours -- by 8 thousandths of one percent over Thursday. For drawing house tours, Friday faded into the pack…

All of which points to something experienced local Utah agents already know: statistics are helpful, but not to the point where they detract from getting the job done.  The best day to publish a Utah listing is as soon as it’s ready – the instant it’s ready! Buyers are constantly combing the listings, and the ideal prospect may be long gone if we hold off for any reason.

If you are ready to sell your home, let's get your Utah listing ready to go now!

How Utah Real Estate Investors Use Their IRA

The Underpublicised Salt Lake City and Beyond
 Real Estate Option

 

In case you missed it, there is at least one widely overlooked Utah real estate investment possibility that can be available to active IRA holders. Especially if you are among those who look at the current Utah real estate market and find numerous investment possibilities with significant long-term upsides, the Self-Directed IRA option can be worth looking into. 
Here are some of the broad outlines of how it works:

1. The right IRA custodian

Custodians are trustees who hold self-directed IRA assets and file documents with the IRS. Salt Lake City and Beyond real estate purchases are considered ‘non-traded’ assets -- and not every IRA custodian allows for them. You may need to find one who does.  

2. Use only IRA funds 

All costs associated with your real estate investment must be paid using funds from the self-directed IRA. These can include property management expenses (if you use the property as a rental), taxes, repairs, and insurance. Using IRA funds for any personal expenses or personal benefit will lead to penalties.

3. Guard your interests

Be careful to play by the rules. For instance, you cannot involve a spouse, family member, or company in which you have a 50%+ interest; nor may you reimburse yourself for work you do on the property (including the reporting and other administrative requirements).  

According to Fox Business News, many people are using self-directed IRAs to purchase non-traded assets like real estate. Since there are significant limitations as well as advantages, it is all but mandatory to consult a qualified accountant or legal professional before proceeding. If it looks as if the advantages predominate, it will be time to go about finding the right Salt Lake City and Beyond property for your investment…time to contact me!