The Stonebrook Letter
Vol. 24, No. 2
How’s Real Estate
Low mortgage rates, rising home prices, a shortage of home inventory … it’s the new normal in residential real estate! Entering February, there’s not much on the horizon that would change this outlook.
If you or someone you know bought a home in recent years and financed the purchase on a conventional loan with less than 20% down, it would be wise to check your present home value. Increasing values may put your loan balance below 80% LTV and allow you to discontinue paying the monthly mortgage insurance. Check with your mortgage lender for details. This could save you thousands of dollars $$! (See the article in this letter.)
If you have a home to sell, call me in advance. I can help you prioritize improvements that give you the best return on your investment.
Get Monthly PMI Waived?
Rising home values mean some homeowners, currently paying private mortgage insurance with their monthly conventional loan payment, may request their lender discontinue this requirement. If you have a conventional loan and the mortgage balance is 80% or less than market value, you can request the private mortgage insurance be discontinued. This occurs automatically when the loan balance is paid below 78% of its original amount. But, when values rise, reaching the 80% threshold is accelerated.
For example, a buyer purchased a $200,000 home in 2018 and obtained a 90% conventional loan of $180,000. Without contacting the lender, the buyer will pay monthly mortgage insurance until the loan balance reaches $156,000 (78% of $200,000 when the lender is required to waive.) At 3.75% interest on a 30-year loan, it will take 6.5 years.
However, if after 18 months the price of the home rises to $225,000, the $180,000 loan balance meets the 80% rule (225,000 x 80% = 180,000) and the buyer may request the mortgage insurance be waived.
Buyers should contact their lender to receive guidelines on the process and expect to pay for an appraisal. If the appraisal process were $500 and it eliminated a $75/month pmi, after 18 payments instead of 78 payments, the buyer would save approximately $4,000 by requesting the waiver of pmi. See example:
1011 W. Poplar, Suite 8
Mary and I enjoyed a February sports weekend in Huntsville, AL, watching my niece, Anne Wright’s children compete in 3 Saturday basketball games and a regional swim meet on Sunday. We were very impressed with 9-year old Carter and 10-year old Lillie, both swimming 100 yard heats in freestyle and backstroke events. Representing the MSA swim team, the events reminded me of the Olympics, complete with micro-second time clocks, etc. Huntsville has an outstanding program for youth swimmers. This week they head to Birmingham for another regional!
Pay $75/mo. pmi x 78 payments =
Pay $75/mo. pmi x 18 months =
Less pmi paid
Cost of appraisal
Lillie and Carter Wright
Coming soon in Bartlett … 2,000’ on one level
5981 S. Pamela Ann Drive
Lots of space on one level. Formal living and dining rooms, 18 x 16 den with fireplace. Spacious 17 x 13 tiled breakfast room leads to covered patio with glass enclosure. All 3 bedrooms have walk-in closets! Quiet street with single access. $200,000.
Memphis Airport Update
Exciting changes are underway at Memphis International Airport! The $245 million renovation is scheduled for completion Spring, 2021. Airport CEO, Scott Brockman, shared these updates on a 1/24/20 Daily Memphian podcast:
# aircraft gates
What our Clients Say
“Terry was recommended by a family member when I took on the task to sell my in-laws’ house with 6 acres. He was easy to work with and great at choosing the right strategies in the selling process and providing insight in negotiations. Terry sold this unique property in a short time. Job well done! “
- Terry Day
Thought for the Month
“The six best doctors in the world are sunlight, rest, exercise, diet, self-confidence and friends. Maintain them in all stages and enjoy a healthy life.”
New jet bridges are coming that will fit larger planes and be owned and maintained by the airport, not the airlines. With fewer gates, a Concourse Manager will direct planes parking overnight. All new restaurants and shops will target passengers who largely live or do business in Memphis versus passengers who mostly transferred to other flights when the airport served as a Northwest Hub.
Recipe: Cherry-Pineapple Dump Cake (oldie but a goodie!)
21 oz. can cherry pie filling
Preheat oven to 350˚ and butter a 9 x 13 baking dish.
Add the cherries to the bottom of the pan, then add the crushed pineapple on top.
Pour cake mix over the top then pour butter over the mix evenly and sprinkle on the pecans.
Bake for 30-35 minutes or until golden brown.
Serve with a dollop of whipped topping or ice cream.