Austin Real Estate & Mortgage Update
Summer 09
Austin Home Buyers & Sellers Market
Austin Home Prices & Interest Rates Going Up?
Austin First Time & Move Up Homebuyers
"First Time Home Buying Secrets" Kenn's New Book
The Urgency to Buy a Home in Austin
Advantages of FHA Financing
Spring 09
Transcript of Austin Mortgage Update – Spring 09
Kenn Renner: Hi, this is Kenn Renner, real estate broker, and I’m sitting here today with Kenton Brown of Sente Mortgage. We’ve both been in the business for over 25 years and what we’re going to be talking about today is the mortgage market, first time home buying, and renting vs. owning. We’d like to also let you know that we’d like to invite you to our First Time Home buying Seminar that will be coming up on Thursday, April 16th at 6:30 PM. This will be part of an on-going series of seminars that we’ll be putting on in conjunction with Sente Mortgage. Once again, my name is Kenn Renner, real estate broker and national speaker. My website is www.buyaustin.com. We’re here today to ask a few questions of Kenton Brown, vice president of Sente Mortgage.
Kenn Renner: How are you doing Kenton?
Kenton Brown: Great! Thanks Kenn.
Kenn Renner: So Kenton, I have a couple of questions here that I’d like to ask you. I know we’re going to be covering these in detail at the Renaissance Hotel seminar that we’re having on April 16th and during our series that we’re going to be continuing on, but the national media would have you think that it would be really difficult for people to get mortgages right now. We’ve heard from Donald Trump and Katie Couric who have said that you just can’t get a mortgage right now. And that’s simply not true as you know. Is it really difficult to get a mortgage?
Kenton Brown: Well Kenn, that’s an excellent question because we hear that a lot from our customers that speak to us about how difficult it is to get a mortgage or what their perception is. The reality is that it is not that difficult to get a mortgage. Now, understand that we have to be much more prudent in lending these days. It’s not that long ago that we acted in a prudent way. That means that some one needs to have a job and verifiable income, they need to pay their bills in a timely manner, not perfect credit, but to pay their bills in a timely manner, and then lastly, they need to have a minimum down payment. And it’s a small amount. It’s not necessarily 20%, it’s a lot less than that. We’ll go into much greater detail in our seminar, but there are some programs where people can put zero down or as little as 3.5% total into a transaction.
Kenn Renner: That’s really interesting. What opportunities exist right now for first time homebuyers in the mortgage market?
Kenton Brown: Kenn, actually this is the perfect opportunity for first time homebuyers right now. There’s three major factors that we look at for that. Number one is that rates are at historic lows right now. We haven’t seen rates like this ever in this country. The second thing to look at is that there’s an $8000 tax credit that’s available. Now this is a true tax credit. It’s not a write off. It’s actually a refund to the consumer that comes in the form of their tax return. The third thing that I’d look at is that we’re in a buyer’s market right now. That means that there are some great markets out there for people buying real estate.
Kenn Renner: OK. So how long do these opportunities last? How long do they typically last, these windows of opportunity?
Kenton Brown: The thing to bear in mind is that these historic low rates usually don’t stay low. When rates come down this low, they typically go back up pretty sharply, pretty fast. The second thing to consider here is this tax credit, this gift from the government. And we’ll go into much more detail on this in our seminar, but it is expiring in November at the end of this year. So you actually have to purchase the home prior to the end of November of 2009. The third thing to look at is buyer’s markets turn into seller’s markets pretty quickly. Now when the demand for real estate goes up, simple fundamental economics tell us that the price of homes are going to go up. And that will happen. It’s absolutely impossible to catch the very bottom of the market. People always try to do that but nobody can ever do that.
Kenn Renner: Kenton, you know that in Austin we have one of the strongest rental markets in the nation. That’s partly because of all the people moving to town, coming from other parts of the country. We know that we don’t have a national real estate market, in other words, the people that are moving out of the coasts and are coming here to take jobs are moving into rentals. And that’s been driving up our rental occupancy. Last time I checked, we were at 97% rental occupancy for both housing and apartments. That tends to lead that the rates for rentals are going to be going up. Can you speak a little bit about the difference between a rental payment and a home payment financially for our first time homebuyers?
Kenton Brown: Kenn, I’ve been thinking about that and I’ve been curious about that, so I ran some scenarios here and one thing that you would look at is that a mortgage payment of about $1250 is a little bit over $900 per month after tax benefits. A lot of first time homebuyers don’t really realize that. As a comparison, on a $200,000 house after tax benefits, that’s equivalent to about a $1,275 to $1,300 per month payment. Understand that some one buying a home in their early 20s, and we can show people how to do this, but there’s a way to accelerate the payments to have the mortgage completely paid off. Some one could pay their mortgage off by the time they’re 40 without paying a whole lot extra. Then they’d have their single largest expenditure that they’d have in their entire life paid off at that time. It’s an excellent strategy for their long-term financial health. On April 16th at the Renaissance, we’re going to speak in pretty specific detail about these things. And understand that even if you already own a home, there could be some one that you care about, it could be your child or anyone else that you know who is in the marketplace, but this could benefit them. I would encourage anyone that’s looking for some information from some true professionals to come out. I’ve been in the business 26 years. Kenn, you’ve been in the business over 25 years. This isn’t a sales seminar, we come to actually show and educate people about some really concrete facts about things they can do and actions they can take to own a home.
Kenn Renner: Alright, thank you Kenton Brown. I appreciate that. That’s a lot of great insight about renting vs. owning as well as the insight about what’s going on with the mortgage market. I appreciate that. Now remember, we are having a first time homebuyer seminar on Thursday, April 16th at 6:30 PM at the Renaissance Hotel. You can register for that at www.buyaustin.com. Kenton Brown will be speaking as well as myself in regards to the Austin market. Once again this is series of seminars that we’re doing. If you’re not able to attend the April 16th seminar, keep in touch. We have other seminars going on through out the year. Alright, thank you very much Kenton for you time and have a great day.
Kenton Brown: Thank you Kenn.
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