A New York Mortgae Planners View:

Hindsight is always 20/02 But the problem is you can only see what you understand. in example looking at struggling businessman coming out shining through a rough market, the person who does not understand business principles does not how he pulled it through. Versus a business knowledgeable person does know and can identify the principles that this struggling business person cling-ed to that help him through the rough market.

I just heard today about a 59 year old executive in the jewelery manufacturing business expressing fear that he will loose his job. He never bought a house because he was always afraid that if he might looses his job, where is he going to pay the mortgage from.

He never invested in real estate due to lack of knowledge of the real estate business.

He never invested in the stock marketdue to his lack of knowledge of the stock market.

You see the theme? He was always holding to his job and being good at what he was doing, but he wasn't growing,which brings us to the following financial principles.

1. Buy assets (Real estate or Stocks Bonds etc)that will go up in value.
2. Educate your self about these assets.
3. Change is inevitable, growth is a choice so the choose to grow and change will be easy!

Rich dad says: the difference between the poor and the rich is, The poor buy liability's, and the rich buy assets.

Owning your House is vital to your total financial picture the time to buy is now!

For Real estate financing advice please call me at 917.660.3630

or send me an email to Joel@joelsilberstein.com

Sincerely

Joel Silberstein
Certified Mortgage Planner, CMPS

The Silberstein Group
Brooklyn NY 11219

Although we are going through unprecedented times the basics financial principles have not changed.

•1.    You actually have to qualify for a mortgage.

•2.    You have to save up some money for a down payment. Lenders want you have a reason to work through hardships and not get dumped along with the house.

•3.    The mortgage has to be properly planned because it does have the ability of robbing your life's savings.

•4.   The mortgage has the ability to provide you with a comfortable retirement. Speak to your Certified mortgage Planner about that.

•5.   Invest invest and keep investing. A down market will only increase your chances of hitting it big. it is called dollar cost averaging here is the technique from about.com

"Instead of investing assets in a lump sum, the investor works his way into a position by slowly buying smaller amounts over a longer period of time. This spreads the cost basis out over several years, providing insulation against changes in market price."

Strongest lesson is to see what the herd is doing and to do just the opposite. When nobody is buying Real Estate you buy.

When everybody is pulling out of the stock market due to fear, you do the opposite and start investing.

The idea is consistency and measured. Avoid fear and greed!

For more information on investing and equity management please contact me at

917.660.3630 or send me an email at joel@joelsilberstein.com.

Sincerely

Joel Silberstein
Certified Mortgage Planner, CMPS
The Silberstein Group

The first Time for me to do the Mortgage pro Week in Review. But who can refuse Jeff Belonger who is devoted to contribute that much information and knowledge to the group and active rain as a whole, I figured let me give it a try.

Here are the Highlights.

Did You know that you can do stuff.

• Christina Ewing  in her Post  FHA Financing on Condos-You really can do it...I Swear! 

Teaches us that you can still do a condo FHA loan even if the development as a whole is not approved with FHA. This is called Spot Approval Very informative!

• Jeff Belonger in his post Kiddie Condo" FHA loans aka Non-Occupant Co-

  Borrower Loans - What are they? In my opinion a amazing college planning tip. In adition it is a great follow up to Christina Ewing's post now that we know we can buy condos with FHA.

A word aboud Taxation.

•    Niman @TReXGlobal.com : TReXGlobal.com in his post   I'm Selling My House to Myself because of Uncle Sam!!! explains a very important Tax planning tool how to depreciate market value despite the fact that you already bought the property 30 Years ago for 30,000. this post reminds us why real estate is such a great investment at all-times.

A word about your marketing. First of all know whom you are after.  

• Steve homer in his blog Are you Missing 39% of the Real Estate Market? makes great point The NAR is doing some significant research on buyers who they are and where they come from. Read it and learn how to look at your target market.

• Misty Lackie in her post Save money, save paper and capture leads  Makes a great point, Capture the leads don't just let the flyer's fly< Know where the fly.

About the Shame Blame Game.

• Mike Mueller
  Walnut Creek, CA
   a real professional in my opinion,  in his article  titled "Lenn Harley is WRONG"in an effort to assign some blame the the real estate agents and brokers states very clearly the challenges we all had when the tide was high and many unqualified Mortgage brokers wrote in on it.
  And when the ethical hard working Loan professional couldn't prequalify a client for the amount the Realtor expected, the Realtor had a few more So called mortgage brokers that he kept in his Rolodex that he turned to, to get the deal done By hook or by crook.

• Janet Guilbault, California Mortgage Expert  in her post Why The Mortgage Ship Sank and The Realtor Ship Sailed Ondelivers a beautiful story of the smooth sailing ship and calm sea we had until late 2007. but then the storm of 2007 hit and only the though and rugged sailors and the strong ships survived,
  makes an excellent read.

New Rules coming down the pike.

Robert Ashby in his post  Federal Reserve Issues Final Rule Amending Regulation Z (Truth in Lending)Covers the few changes we expected coming down for a long time what I like is his commentary.

Have a great week evreyone it was an honor to be part of an elite group like this. I learned allot from you guys and I hope I did contribute at least a percent of what I learned.

Make it a successful one, Think good and it will be good.

Sincerely

Joel Silberstein

Certified Mortgage Planner

Business week had a segment on their video cast how much 1 dollar can buy you today versus how much one dollar was able to buy in 1948.

Back in 1948 one dollar bought you a cup of coffee hamburger ice cream and some other desert.

These days, one dollar can get you a small can of Pringles. Pretty negative huh?

Well they left out one pretty significant piece to the puzzle.

Looking at the US wages history chart on the US labor department website you can clearly see that back in 1948 the minimum wage for an hour was 0.40 cents. That means that if you spend a dollar for lunch which was more then twice the minimum hourly wage then one dollar would have gotten you all these mentioned above.

These days Minimum wage is $7.25,lets have a look on what 1 hour of earnings can buy us today.

Looking just on the McDonald's Dollar menu you can have a

McChicken sandwich $1

Double Cheese Berger $1

2 Pieces of Pie $1

Fruit and yogurt farfait $1

12 once Soft Drink $1

Side Salad, $1

And golden French fries $1 or you can get all of it for just the price of minimum wage!

Pretty similar to 1948 huh or better of?

What does that have to do with real estate?

Great question! and the answer is that people are always hearing how cheep real estate was 20 years ago, how easy it would have been if we where only around then or would have bought then. But people often neglect to look at the income you had back then, See it is relative to your income.

I can bet you that in 20 years from now prices of houses will be allot higher then it is currently and the same chant of shoulda woulda coulda will be repeated..

In Summary

Recession Inflation blah blah blah... if you can afford it now and your current income and future income will be able to support your purchase then buy now and enjoy the upside we are going to enjoy soon once again.

Get in touch with a financial professional , Real estate professional and make things happen

Rates started to level off from its volatile ups and downs we had in the recent few months since they start cutting rates.

This goes to prove a point again to the public that contrary to the popular believe that when the federal board cuts rates the so will happen to the mortgage rates.

NO THIS IS A MISTAKE

Rates go up on a scare of inflation

Rates go down when that scare tames off.

In addition to that, bonds and stocks compete for the same dollars. Therefore, when stocks goes up bonds have to go up and compete since when stocks experience growth and momentum money tends to flow out of bonds which is where money for mortgages are coming from.

Bonds however, have a strength that stocks does not have and that is security. Bonds might offer less momentum then stocks in the overall scheme of things but they offer a consistent leveled long term income for the investor. Therefore when the economy is shaky, bonds tend to pick up with the exception to inflation. inflation will kill the desire to own bonds.

Inflation is caused when the dollar loses its value

part of the value of the dollar is how much interest the fed will pay for its investors when invested in the fed bonds. since it is a global market and the euro also sells bonds and so does china. If the euro is paying 4.2% and tour fed is only paying 2% now you tell me who is more desirable?

In Summary

lower rates then our competitor the euro = weak dollar

Weak dollar= inflation

Inflation= higher mortgage rates

Higher mortgage rates= lower Real Estate market!

I wrote these lines on fathersday, these principles can help you grow to the top.

The following lines are a transcript I wrote down while listening to my mentor (if I can call him that way) Zig Ziglar.

You are at the TOP When you,

Clearly understand the failure is an event and not a person.
That yesterday ended last night and today is your brand new day.

You are at the top, When you made friends with your past, are focused on the present, and optimistic about the future.

When you know that, success a win doesn't make you, and failure doesn't break you.

You are at the top when, you're filled with hope, faith, and love, and live with out anger greed guilt envy or thoughts of revenge.

You're at the top, when, you're mature enough to delay gratification and shift your focus from your rights to your responsibilities.

You are at the top, when you know that faith stands for what is morally right is the prelude for being the victim of what's criminally wrong.

When you are secure in who you are, so you are at piece with god and at fellowship with man.

When you made friends of your adversaries, and have gained the love and respect of those who know you best.

When you understand that others can give you pleasure, but genuine happiness comes when you do things for others.

You are at the top, when you are pleasant to the grouch courteous to the rude and generous to the needy.

When you, love the unlovable, Give hope to the hopeless, friends to the friendless and encouragement to the discouraged
 
When you, can look back into forgiveness, forward in hope down in compassion and up with gratitude

When you know, him who is the greatest among you must become the servant of all.

When you recognize, confess develop and use your god given physical mental and spiritual abilities for the glory god and for the benefit of mankind.

You are at the top, when you stand before the creator of the universe and says to you well done thou good and faithful servant.

After indentifying the top you get to realize, that the top is really the bottom, the foundation on which upon can be build any type of carrier.

READ THEM AND RECITE THEM REGULARLY, SO THAT IT CAN BE BURNED INTO YOUR SUBCONCIOUS MIND.

Yours truly

Joel Silberstein

Cntd

3. Would you advise to take out an Interest only?

Answer. It depends why you want and interest only loan. If you want an interest only loan because otherwise the payment is too high I would say NO way! Rather don't refinance or purchase the house its way to expansive for you.

However if you want an interest only loan because you want more flexibility with your money for example to save the deference in payment, I would say yes please, and tell your friends too. As in matter of fact I advise my clients to get an interest only loan and keep paying the same like a full interest and principle loan. The interest you pay to the bank and the principle part to pay to themselves and deposit it into a side fund that yields at least a rate of 4% and let it sit as an emergency fund.

4. Is it a good time to buy now?

Again let me answer it with a question! Will it be a good time to start saving money now or should I wait a little? Are there seasons when it pays to save and when not to? Ludicrous! Always, start saving right now!

When you buy a house especially to live in it, you are essentially saving money! You are deducting the whole mortgage interest and it is like if you never earned that money when it comes to taxes. You can deduct up to 1,000,000 dollars on mortgage interest and yes you heard me right! So if you are paying taxes and paying rent you seriously need to rethink your financial structure. A person, who earns a $150,000 income and is a renter, will pay an average of 1500 dollars a month rent in the area I live in. That is 18,000 dollars a year spend on rent that is not deductable. That means if you are in a tax bracket of 34% that will be 6,400 dollars to the IRS. If the 1500 would be payment to mortgage interest, there will be no 6,400 to the IRS. Now are you ready to save money?

5. But shouldn't I wait until the market bottoms out!

Oh yeah? What is the bottom? How much should a single family cost for you to see that it is already rock bottom? There is no answer to this. Many times the in markets like this we notice the bottom when it already passed us.

And every house has a different bottom depending what the previous owner paid for it or borrowed against it. The owner doesn't care about the market, he wants to wrap around his debt in the selling price. Which marked bottom will persuade him? So the bottom you should be focused on, is your bottom line

Ask yourself the following question to determine if it is time to buy.

Can I afford this mortgage payment?

Can I save in taxes on this purchase?

Will this property go up in value in the next 5 to 10 years? 

If the Answer is yes then grab it!

Joel Silberstein

The Silberstein Group at Trump Financial

718.732.0383

917.660.3630

www.joelsilberstein.com

 Real estate and financing frequently asked question continued

I will write about the most frequently asked questions by many of my clients with regard to real estate financing, and let this serve as a general guide.

•1.    I have $300,000 cash should I put it all down to get a lower mortgage or better yes to have no mortgage at all?

Answer it depends. If you will buy a more expensive home just because you have $300,000 cash and without putting down more money you will not afford the payments then you should consider putting it down

However if you can afford the mortgage payments, and the only reason you are putting down more money is because you don't want to deal with the mortgage bills let me ask you these questions.

Would you burry money in a tight sealed pot somewhere on community property?

By paying for the house all cash you did just that! You paid for an asset that doesn't belong to you essentially the government can foreclose on your property if you owe them $2500 in water charges or environmental fees, in my book that's community property.

Would you deposit money in a bank account that does not always allow you to withdraw it? Well it's not to say that you will not be able to withdraw your money only to say that you have to qualify before you do. Would you? Or when coming to the bank to withdraw your money a very pleasant person will politely tell you we are very very sorry but the bank is tight in cash now and we cannot give you your money back at the present time. Would you invest in such a place?

That's exactly what you do if you pay off your house, most people go back to their property when they are in need of cash thinking they have enough money in it. But guess what the bank will deny you a loan if the market is though will you put $300,000 in such a position? Staying liquid is key Look at all the banks that survived this crazy market only the ones that remained liquid so you do the same!

But I hate bills what should I do?

By having this money invested you can have money paid to you monthly basis for as long as the money stays invested and that can even help you pay your mortgage.

        2. I am a Senior Citizen and I want to buy a house what type of mortgage should I get?

Answer. You should get a Reverse Mortgage, even if you have money to put down for the house don't use that money, have that money invested and out away for case of emergency. In addition, let it earn for you a rate of return.

A reverse mortgage is a mortgage that is in reverse. Normal mortgage you borrow lump sum and pay it off (exactly what amortization) A reverse mortgage is the bank gives you a lump sum or smaller monthly sums, and you balance slowly grows upward reverse from paying it off. The bank will give you a reverse on either a house you want to buy or on a house you already own to free up some cash. What A great way for freeing up cash for people on a fixed income i.e. retired folks.

But Blame we still assign to the institutions, like the feds and investment banks.

In an article in Bloomberg today UBS a Swiss based investment banker, is to cut 5500 jobs due to clients i.e. investors withdrew 12.2 billion dollars from their accounts Leaving them with significant less capital, leaving them no choice but to cut back o n their expenses.

Let stop and think for a second.  

Question: Why would investors take out money from UBS?

The Answer: Subprime mortgage losses!

Question: Why didn't you take out the money before the investment into sub-prime mortgage loans took place?

Answer:  Because I am an investor and I take risk! I felt that UBS had a strong reason for diving in head first I wanted to see if the UBS Strategy will ultimately pay off

Question: Did you feel comfortable about the newly found underwriting guideline at the time?

Investors answer: At the time I taught that since Home prices are on the rise, a lot of baby boomers are soon to be retiring therefore new second homes will be bought pushing the real estate prices further up, therefore the 100% loans and the no doc loans made sense because even if the loan is a 100% of the value this year, Next year the loan will only amount to 95% and so on year after year.

Question: Have you considered the potential of the need to repossess the house due to foreclosure and in that case your money will not perform even if your principal investment might be protected but it won't bring you a rate of return

Investors Answer: you right I didn't look into that, but I had faith in UBS and in their experience!

Question: so why change of heart now?

Investors Answer: I don't know I don't feel right!

Conclusion: The Investors does not feel right with having money with UBS but he did feel right before. So I have to quote Robert Kiyosaki, "There is no such thing as a risky investment, the investor is risky. By not educating himself correctly about the investment he is risky"  So he will withdraw money  look for a safer place to park it into like bonds (Mortgage bonds included) driving risky stock market down for a day or two and driving the bond market up for a day or two. In the interim, better rates for consumers.

Sincerely

Joel Silberstein

The Silberstein Group Mortgage Team

At Trump financial.

What A magical year!

Just 3 years after the most conservative mortgage client would have paid off their house, reduced their biggest bill so to speak, now they can kick back and retire get 3 years of social security!

Bunk! We are out of money the young polite lady on the other side of the phone says, as in matter of fact we need to put down the phone because the government only printed so much money to pay for the first 3 minutes of the conversation only....

Ouch! what an awful situation. the good news though, there are other ways called non qualified contribution you can save money in for retirement purposes and one way has to do something with the mortgage. as in matter of fact the non qualified label stands for government, They they are not qualified to control it!

Think of it

Don't rely on the goverment for anything, just use the platform they provide know it, and use it well.

Sincerely

Joel Silberstein 2041 The Year That Social Security trust will officially be out of money