Tuesday, March 11, 2014

Why Choose an Interest-Only Loan?

A good argument for choosing an interest only loan: #realestate #loans #Realtor Most people will make a decision to trade up their current house based on equity appreciation through sales prices going up. It is rare that the equity appreciation is based on their amortization of their 30 year fixed rate loan. That takes far longer. Therefore, if you are considering trading up, why not save the monthly outlay of the principle payments? On a $500,000 loan, the difference is over $600 per month!

Friday, November 15, 2013

Loans After All Cash Purchases

Many investors or home buyers are paying all cash to buy a property in order to win multiple offer situations, foreclosures or short sales. Placing a loan on the property after close of escrow may be a good way to recoup funds for use elsewhere. If a loan to pull money out of the property is done within 6 month of acquisition, then standard refinance rules apply. This method avoids the more costly cash-out loans.  Let's talk about this strategy in detail before your time frame is up.

Wednesday, November 6, 2013

Economic Opportunity Program Loans in Los Angeles and Orange County

There are very attractive low down payment loans in Los Angeles and Orange County (and throughout California) if you qualify in Census Tracts or Income Limits.
For a loan with 5% down payment with no Mortgage Insurance, the EOM loans are very attractive. This loan program is available to you if you have gross income below the Los Angeles county cap of $74,280 or in Orange County $100,920 and a FICO score of 620+. The alternate way to qualify is if you are buying a property in the various Census Tracts that qualify in each county. These census tracts qualify if they have 80% of Median County Income averages. Please email me for a detailed list of these tracts.
This loan program is a very attractive alternative to the FHA loans which incur a significant mortgage insurance cost.

Monday, October 21, 2013

Which Bank has the Best Loan Rates?

Today we have 5 different banks which we lend through that have the best rates in different loan categories. If I worked for one specific bank, then I would only be the market leader on 20% of the market. It's good to be well connected!
And why is it that different banks will jockey for the best rates at different times? The answer is usually a balancing of their overall loan portfolio. A bank wants to have a pre-determined spread of loan types to hedge their interest rate risk. So when too many 30 year fixed rate loans are booked into their portfolio, a bank will raise rates on that category to ease demand of that loan type. They may lower rates on a shorter term loan to boost takers on that loan type. This continual price manipulation yields a good overall spread in their loan portfolio. Hopefully this makes the bank's financial stability solid.
What does that mean for a home loan borrower? That the coincidence that your local bank branch lender will have the best rate for you when you need it is just that, coincidence. Find a lender that can shop the market for you and give you the best loan for you now.

Wednesday, October 9, 2013

The Government Shut Down & Home Loans

With the current government shut down, there are effects in the mortgage world.  Some loans require government agency cooperation such as FHA loans, VA loans and SBA (Small Business Administration) loans. The government websites for these agencies are still up and issuing the all important case numbers. We shall see if loans continue to process over the next few days or weeks as this event unfolds.

The majority of traditional financing has not been affected. Most lenders have found solutions to the government cooperation parts of the loan process.  The biggest issue affecting almost every loan is verification with the IRS of tax returns. This is the quality control aspect of underwriting which confirms income stated on the submitted tax returns.  Borrower submitted tax returns to the lender are compared with what data the IRS has for those same tax years.  As of today, that direct verification is being waived by most lenders.  A document is being signed which allows the lender to verify with the IRS in the future at the lender's discretion.  This is the way lending was conducted some 5 years ago.

A final hitch which a few borrowers may incur is the direct verification of Social Security numbers.  For a variety of reasons, the credit reporting agencies may flag a discrepancy with a borrower's SSN. Verification can only occur with the Social Security office functioning.  This small group of borrowers very well may have to wait until our Representatives come to an agreement and open all government services again.