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Archive for the ‘finances’ Category

My first invoice

I mentioned before that I have written for a special issue in the Fort Collins Coloradoan. When it was all said and done, I submitted three stories, and they are going to come out in print this weekend. My editor emailed me that it was time for me to send him an invoice so I could get paid. So I had a little fun making up a simple template and filling in the specific work I did, along with the agreed upon price.

Now I feel like a real freelance writer, sending out my first invoice. Maybe I should frame my copy or something. I’ll feel even more like a real freelancer when the check comes in.

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A wise investment

Nothing like curling up with a good book on finances.  I’ve read quite a few and gleaned interesting information from each of them.  I’ve also been inspired by many wealth building ideas, none of which I’ve felt I had the funds to actually implement.  It really does take at least a bit of money to make money.

Then the phone rang this past Friday and it was a representative from the company that holds my home mortgage checking up on me.  We had a great conversation and he recommended Missed Fortune 101 by Douglas Andrew.

This book stands out from the others I’ve read.  First I didn’t come away from it wishing I’d known all that at age 20.  It turns out that if I do implement the author’s strategies in the next few years, while I’m in my mid to late thirties, I’ll actually be off to a great start.  Second, I actually do have enough money to get going.  It doesn’t require a ton of extra startup money, just some smart redirecting of existing funds.  Third, you don’t have to do anything beyond the ordinary things most people do–work a job, pay taxes, have a mortgage (and even that is optional), invest a bit on the side.  In other words you don’t need to write a book, buy real estate, or start a business.  You just think differently about the money you already have coming in.

The time I spent reading Missed Fortune 101 has the potential to turn into one of the best financial investments I have ever made.

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Refi Revisited

After reading a comment to my previous post from a mortgage broker, I asked Ken Ryan from Ark Funding Group to clarify what I thought I heard him say about Freddie Mac no longer buying mortgages for manufactured housing. It turns out it’s not quite as cut and dry as I implied in the post.

First of all, I’m a customer, not an expert. Any readers who are looking at getting a mortgage of any kind need to consult with knowledgeable people and do their own research to make a decision that’s best for them. I am not one of those knowledgeable people. But with each refinance I’ve been involved in, I’ve picked up a bit more information. Here’s the deal with manufactured housing loans, as I understand it. Fannie Mae and Freddie Mac don’t have a policy to not buy those loans. However, Fannie Mae has been known to refuse to pick up manufactured housing loans at the auction. Perhaps Freddie Mac too, but Ryan said specifically Fannie Mae. So, this means that if you are a bank with a manufactured housing loan, you might bring it to the auction expecting Fannie Mae to buy it. Fannie Mae may have even told you it would buy that loan. But in the back of your mind you know that Fannie Mae might bail out on you and leave you holding that loan. If you needed the cash right then, not being able to sell your loan could spell trouble. For many lenders, that is more risk than they are willing to take, so they won’t touch a manufactured home. Other lenders will take the risk, but they hedge it some by passing on a higher interest rate to the customer or they limit the loan to value ratio for that loan.

My best option at this point is an FHA loan, and despite interest rates having taken yet another jump upward, I have a fixed rate loan locked in at 7%. If all goes well, my husband and I will close at the end of the month. I asked Ryan who buys the FHA loans, and he said FHA does. It’s a completely different program than Freddie Mac or Fannie Mae.

So anyway, that’s the situation with manufactured housing as I understand it so far. Again, I’m not an expert and don’t really want to be. I’m simply hoping to become a satisfied customer.

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Refried refi

After years of hearing the slogan “when banks compete, you win!” on radio commercials, I took the bait and filled out the form on Lendingtree.com. That was Saturday morning.

Tuesday morning I got a call from a very enthusiastic senior broker from Heartland Finance who insisted he was the best and assured me he would do anything to get my business. And he certainly proved himself in getting me a great new mortgage–almost. Everything checked out. Lower, fixed interest rate, lower payments, and a generous cash out at closing. It was absolutely beautiful.

There was just one small problem. I live in a manufactured home–a fancy trailer. Now don’t get me wrong. It’s a really nice little house. But legally, it’s very difficult to finance. Sometime after my husband and I bought this place Freddie Mac decided it was not going to buy mortgages for manufactured homes. Freddie Mac is the federal program that ultimately buys all the mortgages. So, if a bank lends out money on a manufactured home, that bank has to keep the mortgage until the homeowner sells or refinances. Banks do not like to hang onto their mortgages. They would rather sell them off so they can have more money to lend to other homeowners. It’s actually rather interesting how money itself can get bought and sold. Let’s say you have a 100,000 dollar mortgage and you’re making monthly payments. Over 30 years, you will end up paying around 200,000 dollars on that 100,000 dollar loan. So you’d think the bank would want to keep your loan around and gradually soak you, the borrower, over the next thirty years. But actually, the bank would rather have the money right now, and to get some cash, the bank will sell your 100,000 dollar mortgage for 85,000 dollars. The buyer of your loan might keep it around for a year or so, then it sells it off for a little less–naturally the price goes down as the principal gets paid down–and so it goes, until Freddie Mac buys it. And I think Freddie Mac mortgages are then sold to individual investors who buy mortgages, or pieces of mortgages, for a guaranteed interest return similar to buying US Savings bonds.

Freddie Mac doesn’t want my mortgage, so the banks don’t either. Now, it’s back to the drawing board. I spoke to another broker, this one from Ark Companies, and he told me the FHA program is one of the few that does finance manufactured homes and that is where I should be looking. Funny, how only a federal program will rescue distressed manufactured home owners from the ravages of the federal program that has made it so much more difficult to be that type of homeowner. But this is the government, after all. If program A causes problems, why, just fund program B to solve them.

All is certainly not lost. I am still getting calls from mortgage companies all over the place who just can’t wait to put their hat in the ring to get my loan. I wonder what they’ll say when I tell them the dirty little secret that my home is a M— home. Maybe what they’ll be competing over is who can hang up the phone the fastest. I’ve refinanced more than once for various reasons and it seems that each time I inquire the business gets more and more cutthroat and desperate. I knew the tendency to outsource to other countries was getting to be a real problem a couple years ago when I started getting phone calls from India and Sri Lanka about refinancing my home. When it comes to something as major as a mortgage, my policy is to deal with people based in the same country. Also, I prefer to deal with the same individual through the entire refinancing process. There are a lot of people in the mortgage business, and they are all trying hard to woo prospective borrowers. So, in that sense you could say it’s a borrower’s market.

So, just because it didn’t work out the first time doesn’t mean I’m taking no for an answer. I’m going to keep inquiring until I either get the new mortgage I want, or decide to make do with the current one for another six months or so. A lot could change by then. Freddie Mac could have a change of heart. The interest rates could drop again. My home could suddenly appraise sky high. Any of those factors could substantially change the game.

Manufactured or not, my house is still a roof over my head and it sure beats renting. Around here rent costs more than mortgage payments. My next house will be stick-built. And I hope to get to the point where I own it free and clear well before retirement age because quite frankly, I’d rather be the one buying someone’s 100,000 dollar mortgage for 85,000 dollars than the one who’s paying 200,000 dollars for it.

But until then, I’m messed up in Colorado, livin’ on a refried refi.

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