Gene's Bit of Blogging

Cash Purchases

Teaching Kids Good Money Habits. Sesame Street Can Help ...

Gene Mundt, Sr. Vice President - Chicago Bancorp: Posted on Thursday, July 21, 2011 3:25 PM

Given the recent addition to our family, these days my wife and I are watching Sesame Street once again. Always big fans when our 2 boys were little, we find ourselves renewing our affection for this program and its characters, both old and new.

At only 9 months, our little grand-daughter Marilyn, is fascinated by this wonderful show. It's amazing to see her little face light-up when her favorite characters arrive onscreen. Watch her start to dance when the music starts-up. You can see her little brain just "clicking" as she takes it all in. I know her dad and her uncle were the same way when they watched years ago.

So when I saw that Sesame Street is tackling the topic of financial literacy through its' "Talking Cents" project, I was almost giddy. I'm not sure the saying "Get 'em young, and train 'em right!" was referring to handling money ... but it sure applies here.

It's my belief that if you teach young children good financial habits from the earliest ages on, you most likely won't see financial problems occuring in their lives later. The lessons will be engrained in them and they'll follow those lessons when faced with financial decisions as adults.

Sure wish they had started this Sesame Street "Talking Cents" project years ago! Maybe we wouldn't be facing some of the challenging financial crisis we are today.

The New York Times ran an article/video not too long ago showcasing this important new Sesame Street venture. I'm passing it on here so my readers are aware of its existence. (The link to the video is below. Sorry, downloading had been discontinued. But click and it will bring you to the YouTube/NY Times site to play!)

http://www.youtube.com/watch?v=4htwQTXT5mM

Think about passing this video and exciting information on to all the parents, grandparents, babysitters, pre-schools, etc. you know. It'll be a fun way for them to help little ones learn how to handle money. You'll also be passing on valuable information that will be of great assistance to those tykes financially as they grow to become adults.

And btw ... enjoy the video! I suggest you grab and watch the video with a cookie??

* I have a seminar that I offer to groups, schools, organizations, families regarding financial education and credit information for teens through young adults. Should you wish to arrange for a seminar at your school, meeting, or event ... please contact me. I'd be happy to work with you to present this valuable information.

Direct: 815.277.4036 Cell/Text: 708.921.6331

Skype: 630.219.1316

Email: gene@chicagobancorp.com

Website: http://www.genemundt.com

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Tick ... Tick ... Tick. That's the Sound of Your Opportunity Slipping Away for Lower Interest Rates, Lower-Priced Mortgages, and Cheaper Closing Costs

Gene Mundt, Professional Mortgage Banker - Chicago Bancorp: Posted on Tuesday, March 22, 2011 1:31 PM

Tick ... tick ... tick ...

That's the sound of time slipping away on lower-priced mortgages, smaller-downpayments, lower interest rates, and cheaper closing costs.

Getting worried?

If you're a first-time buyer ... or live in a high-priced region of our country ... maybe you should be.

As of April 1st and after ... there are many things in play that could drive-up the cost of seeking and securing your home loan.

Fees paid for small-down payment loans are rising. This type of loan is typically a launching-pad into homeownership for first-time buyers. There is talk of ending Fannie Mae and FreddieMac. Mortgage program options may dwindle. A rise in costs or availability of mortgage programs hurts this demographic greatly and slows their path to owning homes.

Couple those price increases with lenders' demands for larger downpayments ... and you cull even more first-timers from the home buying market.

Recent articles in a major newspaper (See the ChicagoTribune hint at a property market that is improving. That means some stabilizing of prices and most likely a return to multiple buyers bidding on a home for sale ... something that has been missing as of late.

Competition for homes typically means a more equalized buying and selling transaction. Buyers have had the upper-hand in recent years. If there are more buyers competing for a home, a seller won't be as eager to entertain lower offers. Buyers needing or seeking discounted pricing to enter the market are going to be left behind.

Presently, a large portion of the buyers negotiating for homes are investors. Some have placed that portion of home buyers (in January, 2011) as high as 32% of the market. That means cash buyers are competing with standard buyers for home purchases. Sellers love cash buyers, as cash buyers do not need to navigate the rough waters of lending. That in turn makes transactions much easier for those selling their property.

First-time buyers can still compete against these cash buyers (do not give up hope!), as first-time buyers typically do not have many contingencies in their purchase contracts. But negotiating and hoping for sellers to pay closings costs, or paying for even minor home repairs, may become a thing of the past when there is more competition.

Other media articles offered recently (See the New York Times) reiterate the increasing difficulties that are coming down the road for those seeking mortgages. Again, especially hard hit will be the "more extremes" of lending ... those searching for homes in higher-priced regions ... and first-time buyers.

Loan limits will handcuff the higher-end property region's borrower and limit the programs and outlets they have for securing loans. Jumbo loans may still be a possibility for these borrowers, but securing or even finding available programs of this type may be harder.

First-time buyers will have to save for larger down payments and/or pay higher insurance fees for lower downpayment government-insured mortgages. And it's not chump-change we're talking over the life of a loan. Those increased insurance fees can add-up to tens-of-thousands of dollars.

These articles mentioned, and many more, speak of real changes heading home buyers' way.

These are not scare tactics drummed-up by those within the real estate industry. These increased mortgage costs and obstacles are a fact.

The old saying, "timing is everything" has never been more true than when speaking of home buying. Those thinking of entering the housing market need to be educated and aware of these upcoming mortgage industry changes. They then need to decide what makes the most sense to them financially.

Is it better to wait to buy a home and face the increased costs and new regulations of the near future? Does that route increase and expand your financial security for the future best?

Or does buying now help secure your financial health more effectively down the road?

My suggestion to someone even considering a home purchase right now is this ... talk and work with a professional lender (such as myself)as soon as possible. See where numbers shake out for your personal financial scenario.

After seeking that guidance and assistance, you may find that common sense and your finances dictate that your personal path to homeownership is a longer one. Financial and credit preparations can be made for future home buying.

But you may also find that you are closer to homeownership than you think ... and that the timing is right for you to start your mortgage and home search now.

Tick ... tick ... tick ... are your home buying opportunities ticking away?

Contact me right now to find out ...

* For further information regarding mortgage loans, pre-qualification, information, and assistance, please go to: http://www.genemundt.com/. You can also reach me at: Direct: 815.277.4036, Cell/Text: 708.921.6331, or my email: gene@chicagobancorp.com.

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Temptation at the Cash Register. Ho Ho Ho ... You Just Lost the Chance to Close Your Loan

Gene Mundt, Professional Mortgage Banker - Chicago Bancorp: Posted on Sunday, November 28, 2010 8:53 PM

You're out doing your holiday shopping. It's 11:45 pm .. and you're in that store because they have exactly what you want and have been looking for ... at an unbelievable price, but only if purchased during the hours of 10 pm to midnight. Plus, in your hand you have an additional coupon that you found at an online site. The coupon will give you a whopping and additional 10% off your purchase!

It's your turn up at the register and you're feeling like a California goldminer about to hit the motherlode. The clerk behind the register now utters words that will cause a meltdown in any frugal shopper's heart ...

"Would you like to open up a "fill in the blank" credit card to save an additional 10% on your purchase today"?

You can feel your heart racing. You almost feel faint.

But somewhere in the back of your mind is this faint voice whispering to you. It's your damn and pesky butt-inski mortgage banker's voice. And he's/she's telling you ...

"Don't take out any new credit or run any more credit reports without checking with me first. It could sink your loan's approval. Hinder or stop your loan from closing".

Oh man ... what to do? What to do? An additional 10%!

Let's do some simple math. Let's say what you're going to buy is a fairly high ticket item like a television. It's a big one and typically well over a $1000 dollars.

It's on sale for $768.00, with another $100.00 off if you purchase it during the special late-night hours. You've got that covered and have whittled the cost to $668.00. Your internet discount coupon takes another 10% off the price, leaving a cost of $601.20. Tack the additional credit card offer ... another 10% off ... and you're now buying the TV for $541.08! $541.08!!! You can feel the sweat pouring down your back.

But you hear that obnoxious little voice again ... whispering "Don't do it"! Do Not Do It!! Seems you might need some common sense smack talk right about now.

Do you really want to risk your beautiful home's closing ... lose the perfect home at the unbelievable price you negotiated? Do you want to throw away all the hard work and saving you have done for your home? Is forfeiting the unbelievable amount of paperwork and documentation you had to fork over during processing what you had in mind?

You might be doing exactly that ... and all for a 10% off offer that equals $60.12. Is it really worth it to you?

I am being perfectly honest when I say, "it has happened". Because clients didn't weigh they're options carefully, plan their expenditures, deny themselves, didn't believe or follow their mortgage banker's advice, or just temporarily lost sight of their goals ... the ability to close on the house they wanted and loved so much was lost. LOST!

So think very carefully this holiday shopping season about your credit and financial decisions should you be in the process of closing on a home ... or thinking of buying a home in the near future. That small store credit card and small $60.12 in savings could mean a huge loss to you or your abilities to buy a home.

Don't let this holiday season's temptations bite you. Remember your ultimate goal. Don't save yourself OUT of your new home ...

* Work with a mortgage banker that offers you solid, sound advice based on over 35 years of successful mortgage banking experience and expertise. Contact me if you need mortgage lending advice and service. Cell: 708.921.6331. Email: gene@chicagobancorp.com. Or through my website: http://www.genemundt.com.

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Is Cash Really King

Lisa Schmitt, Coldwell Banker - Honig Bell, Guest Blogger: Posted on Monday, September 27, 2010 6:58 PM

Is Cash Really King?

Submitted by Guest Blogger:

Lisa Schmitt

of "Schmitt Happens"

Coldwell Banker - Honig Bell

5700 W. Caton Farm Rd.

Plainfield, IL 60586

A few days ago I took a call from a past client whose elderly parents are thinking of purchasing a smaller home. As she filled me in on their wants and needs, it was becoming apparent that the price of those wants and needs would exceed the stated budget.

Past Client then said "Well, they will be paying cash. Won't that give them some major flexibility on the price". Hmmmm ...

Would it?

The answer isn't a simple yes or no. It depends on what is most crucial for the seller during the transaction. If the likely sales price is on the generous side, there is the potential for the home not appraising. That's not a problem with a cash buyer (assuming they don't pay for their own appraisal!).

Conversely, if the likely sales price is barely at the break-even point and all parties want to avoid a short sale situation, the seller may have a specific price he/she simply can't dip below, rendering the 'cash is king' argument useless. For many sellers, price is the number one component, with other terms such as method of payment and closing dates secondary. Of course there are other sellers for whom terms have a higher priority than the price, but I'll save that for another day.

Back to the original question: Will paying with cash buy some major flexibility on the price? It's possible, but it all depends on the situation of the seller and how they view it.

As a listing agent, I am not automatically bedazzled by a cash offer. There are some great lenders out there who have never failed my clients. I feel confident about the 'closability' of the sale when I see their pre-approval attached to an offer. I would rather see a fair offer with financing from a trusted lender than a lowball offer with a suitcase full of cash.

If you would like to speak with Lisa Schmitt

please contact her at:

Coldwell Banker - Honig Bell

Office: 815.609.4360 or Cell: 815.715.1399

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Cash Purchases

Teaching Kids Good Money Habits. Sesame Street Can Help ...

Tick ... Tick ... Tick. That's the Sound of Your Opportunity Slipping Away for Lower Interest Rates, Lower-Priced Mortgages, and Cheaper Closing Costs

Temptation at the Cash Register. Ho Ho Ho ... You Just Lost the Chance to Close Your Loan

Is Cash Really King