PARAMOUNT MORTGAGE - LENDER'S BLOG

by Colleen DeBaise - SmartMoney.com

A GOOD CHUNK OF the U.S. population refuses to give up renting. We're not sure how many renters are stubborn hold-outs (the U.S. census doesn't measure in terms of obstinacy, although we do know that the majority of Americans - about 69% - own their own home). For many, the American Dream is simply out of reach for financial reasons.

But, for others, it's not the money, it's the....well, we've come up with five reasons why people don't want to buy real estate. Perhaps you've used these excuses yourself - or know a colleague, a family member or a friend who has.

EXCUSE #1:
"Everyone is way too insane about real estate."

EXCUSE #2:
"Renting is a good deal."

EXCUSE #3:
"Buy a house on my own? Then I'll really never get married. What do I do next - buy a cat?"

EXCUSE #4:
"I'm afraid of commitment."

EXCUSE #5:
"I'm worried about disaster striking."

Read the full story here

By Bill Bischoff - Smart Money

THINKING ABOUT PURCHASING your first home? Then you're probably well aware of the potential tax breaks coming your way.

In case you're not, let's review. While the cost of renting is generally a nondeductible expense (except for when part of the home is used for business purposes), homeowners can claim an itemized deduction for interest on up to $1 million worth of mortgage debt used to acquire or improve their principal residence. Ditto for interest on up to $100,000 of home-equity debt secured by their principal residence. Real-estate property taxes can be claimed as an itemized deduction, too. You also can generally deduct any points you paid (or the seller paid on your behalf) to take out the mortgage.

But you probably knew all that, right? Now for the tax-law catches your realtor probably never told you about. Don't worry: What's detailed below probably won't have you running back into the arms of your landlord. But it just might give you a more realistic expectation of how homeownership will affect your future tax bills.

To read the full story, click here.

By Ellen Hoffman - Business Week

It may be smarter to invest the extra money instead of eliminating your mortgage

If you ask yourself whether you should pay off the mortgage before you retire, your first impulse may be to say: "Why not?" Many people have an instinctive desire to own the house free and clear before they stop working, figuring the absence of a monthly mortgage payment will help relieve the pressure of living on a reduced income.

But prepaying your mortgage may not be the savviest move, particularly from a tax standpoint. This is especially true when faced with the choice between fully funding a tax-deferred 401(k) or adding to your mortgage payment each month. It even applies when the alternative is to invest more in a taxable account.

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By Anne T. Makeever - St. Louis Post-Dispatch

2007 Most Affordable Places to Live Well 1. Minneapolis 2. Indianapolis 3. Cincinnati 4. St. Louis 5. Houston 6. Milwaukee 7. Dallas 8. Pittsburgh 9. Columbus 10. Atlanta Information from Forbes magazine, www.forbes.com

We St. Louisans know our city well and know we have it pretty good, especially yen we read about gas prices exceeding the $3 mark on one coast or the other while it costs consistently less to fill our own tanks. We hear about the real estate market’s downward spiral, which causes us to look around and comment, "Really? Where?" That’s because we are watching with anticipation our city’s downtown district rumble to life in a clouds of construction dust. And because we know in St. Louis it’s still possible to sell a house in a matter of days. We have neighbors who have done just that.

Nevertheless, its’ nice when a voice of authority, someone with statistics rather than instinct, conforms what we feel to be true. That happened this week with Forbes magazine released its "Most Affordable Places to Live Well" list an d placed St. Louis in the top five - actually, we’re No. 4, to be precise (just after Minneapolis, Indianapolis and Cincinnati and just before Houston).

In explaining St. Louis’ ranking, Forbes writer Matt Woolsey said of our city. "What makes St. Louis a desirable housing market [is] its relative stability." In other words, the St. Louis real estate market holds steady even when other markets are wobbling.

Woolsey addressed St. Louis’ tendency to remain insulated from such volatility when he wrote, "The area isn’t as bogged down in risky loans and defaults as other Midwestern cities."

St. Louis finds itself on such lists all the time. We are a "smartest place to live" (Kiplinger’s Personal Finance magazine). a "best place to live" (Money magazine), on of the "best cities for singles" (Forbes again) and the "second most affordable" large metropolitan are in the country (National Association of Home Builders).

These superlatives come our way because our real estate market is, indeed strong and sturdy. We consistently do well in these top-ten or top-100 lists thanks to that very stability. In short, St. Louis is a good place to live because St. Louisans can afford to buy homes. According to Forbes, the median home price here is a reasonable $134,400. In St. Louis, 77 percent of the houses for sale are within the reach of the median income-earning household (per the National Association of Home Builders and Wells Fargo’s affordability index).

Thanks to the Forbes list, and all the others, reality is pretty easy to see. Houses are selling, the local mortgage industry is sold an St. Louis is a very good place to "live well."

by Jerri Stroud of the St. Louis Post Dispatch

Remember that property tax bill you got? Was it signficantly higher than last year's bill?

What about your homeowners' insurance? Did it go up, too?

Ruth Battle, senior vice president of Paramount Mortgage Co. in Creve Coeur, already has done the math on her tax bill. "For me personally, this is going to cost another $200 a month in mortgage payments," she said.

Battle said taxpayers with adjustable mortgages could face a higher escrow payment in addition to any adjustment in the mortgage. However, the date for adjusting the mortgage depends on when you took out the loan, not on the annual escrow review.

One way to reduce the pain is to call the mortgage company now, find out how much is in the escrow account and how much the shortage would be after the taxes and insurance are paid. If you have enough money to cover the shortage, you could add money to your escrow account before Dec. 31. That way, next year's payments only need to cover next year's bills.

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St. Louis Business Journal - by Diana Barr

While mortgage interest rates are not at the record lows seen a few years ago, it still pays to shop around. But local lenders say the interest rate isn't the only question to ask of a mortgage lender.

"Rates are important, but if you stick with a reputable lender, they'll get a good rate for you," said H. John Frank Jr., president of mortgage banking firm Paramount Mortgage. A lender's reputation is probably the most important factor, he said, although "Aunt Suzie's friend" may not be the best choice.

"It's a technical business," Frank said, suggesting that borrowers get referrals from builders and real estate agents in addition to relatives and friends. "If a borrower gets into some funky loan program, and that program goes away overnight, the borrower could be left at closing saying, 'What do I do now?'"

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(St. Louis Business Journal subscription required)