Archive for 'Uncategorized' Category
How To Increase Your Credit Score – Part 2
Many people are under the impression that closing credit card and other revolving debt accounts helps to improve their credit score. In reality, the opposite is true and by doing so they will create more harm than good. This is because the algorithm used by the credit bureau's to calculate your credit score looks at [...]
Understanding the Final Settlement Statement on Your Next Home Purchase or Refinance
Thanks to the government stepping in and changing what was once a relatively easy form to understand to one that requires a PhD in calculus you'll probably find the Final Settlement Statement very confusing! One of the most difficult parts is that, let's say you go through a mortgage broker and they get paid $5,000 [...]
Before Buying a Condo Be Aware of Financing Challenges
If you are considering buying a condo be aware of three issues: Costs are higher. Standards are stricter making it more difficult to get a loan. The Homeowners Association (HOA) fees can make it more difficult to qualify for a mortgage as they are factored into your debt-to-income (DTI) ratio by the lender. These [...]
How To Increase Your Credit Score – Part 1
The formula used to calculate your credit score is closely guarded by the credit reporting agencies and is constantly changing. Having said that, one of the most important aspects is the amount of debt you have available in comparison to what you owe. One of the worst things you can do is have a high [...]
Should You Apply With a Bank or a Broker For Your Next Mortgage? Part 2
Imagine you are buying your next home and you have a 30 day closing period written into your contract. All is going well and you’re glad you applied through the bank you have your checking and savings accounts with. You remove the loan contingency when the bank (conditionally) approves your loan and all is going [...]
Can Unemployment Insurance be Used to Qualify for a Mortgage?
The short answer as to whether you can use unemployment income to qualify for a mortgage is “no”,. This is because lenders want to know (with as much certainty as there can be about anything) that your income stream will continue for at least 3 years into the future. That is unlikely if not impossible [...]
Should You Apply With a Bank or a Broker For Your Next Mortgage? Part 1
The majority of mortgages at the time of writing are originated through mortgage brokers, not banks. If you are looking for a the lowest rate on your next California refinance / purchase mortgage or home improvement loan (and the same applies for other states) read on. As a starting point you should know that although [...]
How Lenders Calculate Debt-to-Income Ratio When Borrower is Buying or Already Owns Rental Property
If you currently own rental properties or wish to buy an investment property and obtain a mortgage you are going to run into this issue. Lenders guidelines change frequently regarding debt-to-income (DTI) calculations and vary from lender to lender, but generally speaking: 1. If the subject property is for investment then MOST lenders will require [...]
Mortgage Payment Calculator
If you are looking for a mortgage payment calculator look no further. Every day I get asked on the phone where to find one so I’m entering a quick post to let you know there’s one on this site. If you need any help or have questions about the mortgage calculator or California refinance or [...]
Refinancing Issues When You Have a Line of Credit (1)
Question: “I have a Home Equity Line of Credit (HELOC). It has a great interest rate but it’s adjustable and I’m worried that it could go up. I’m considering combining my first mortgage and the HELOC so they’re both at one rate for the next 30 years. My first mortgage rate is higher than the [...]
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Can A Lender ‘Guarantee’ You An Interest Rate For “x” Number of Days?
A client called me yesterday. She’d received a letter from a lender who ‘guaranteed’ her a rate of 4.750% for the next 30 days. If rates change several times per day – how is this possible? Well, that’s a simple one: if the market moves in the wrong direction before her rate is locked the [...]
The Best Mortgage Shopping Strategy
First, you have to decide if you are actually a mortgage shopper at all. If you’re well seasoned you may have already come to the conclusion that mortgage rates and closing costs (lender, title company, appraiser) are a commodity and you may be already using this strategy. If you do describe yourself as a mortgage [...]
What Constitutes a No-Points-Or-Fees Mortgage?”
For as long as I have been originating mortgages there has been one lender who has had the lowest rates, day after day after day. At the time of writing they are number 3 nationwide in terms of volume. They are BIG! In order to make sure I am offering my clients the best deal [...]
What Constitutes a Cash-Out Transaction And How This Can Affect Your Interest Rate
What constitutes a ‘cash-out’ transaction varies in the eyes of each lender but generally speaking, if you are going to walk away with more than $2,000 at the close of escrow it is a cash-out transaction and you will usually end up with a higher interest rate or points cost if that happens. You should [...]
Do You Want The Lowest Price Or The Lowest Overall Costs?
A friend of mine bought a house several years ago. To keep his costs low he hired an ex builder to do a pre-purchase inspection of the property instead of the more expensive property inspection companies. To cut a long story short; this mistake cost him his house, his marriage, hundreds of thousands of dollars, [...]
Why Do The Numbers On The GFE From Your Broker Differ From Those On The Lenders?
If you apply for a mortgage through a broker there is a good chance that the Good Faith Estimate (GFE) from your broker will contain different numbers to the one supplied by the lender. This is because, at the early stages of the application, the lender doesn’t know (or care) what agreement you and the [...]
Maximize Your Savings When Shopping For A Mortgage Online
Many sites give you the option to “Shop 4 Lenders” or similar. The theory is that if you contact 4 different lenders you can get a better deal. If you shop for a mortgage using the same techniques you use for other products you may run into trouble. Mortgage shopping sites which connect you with [...]
What Commitment Are You Making When You APPLY For A Mortgage?
Once you’ve found a mortgage professional ‘employed’ by a California mortgage broker you trust, then the next step is to fill out an application. The broker will then send you the loan application, numerous disclosure documents, and a Good Faith Estimate (GFE) for signing. The first question is usually; “what does this commit me to?” [...]
Put “Bullets In Your Gun” To Get The Best Rate
A referral called me today inquiring about a refinance. The interest rate was 4.750% with zero points and only a rate of 4.5% at zero points made sense to them. They asked me to ‘call them if the rate comes down to 4.5%. I explained to them that this a flawed strategy and is usually [...]