Posts Tagged: ‘loan programs’

3 THINGS TO KEEP IN MIND WHEN SHOPPING FOR A MORTGAGE LOAN

June 5, 2012 Posted by Andre Hemmersbach

To get the best mortgage deal:

 1.      Compare apples to apples.

·        Shop loans on the same day comparing the term, rate, points and the total fees as rates are like stock prices….they change by the  hour. Always get a written GFE “Good Faith Estimate.” Remember even though your GFE it is in writing your terms are not set in stone until you are locked and approved (See bullet #3).  Receiving a GFE as part of your quote is the law!

·        Compare the APR. The APR or “Annual Percentage Rate” was devised by federal regulators as a way for consumers to shop terms of financing. It is an adequate method of comparing loans but know that it can be manipulated. For instance, even loans with the same start rate, same points and fees can have different APR’s. On an
Adjustable Rate Mortgage (ARM) or intermediate ARM an APR can fluctuate as much as 1.5% depending on the margin and index of the loan. On fixed rates mortgages, APR’s can be manipulated because by law, only certain fees have to be included. Loan Officers can legally quote small or no prepaid interest which would falsely lower the APR and your real closing costs (See bullet #3.) Receiving an APR as part of your loan quote is the law!

2.      Make sure the program you pick meets your short and long term financial goals. Even within the same program families (Fixed verses Fixed or ARM verses ARM) there are other considerations. No Cost, No Cost / No Fee or interest only payment programs can save you upfront closing costs, payments or give you security but may cost you thousands of dollars in the long run. Some of following questions should be asked by a good loan officer to determine whether the product fits your financial goals and situation:

§  Holding term

§  Tax bracket

§  Financial goals as they relates to retirement, college funding or risk philosophy

§  Principle reduction pay-downs

§  Alternative investment options including 401K, stocks and bonds.

3.      Use a DRE “Department of Real Estate” Licensed Loan Officer that has been seasoned, comes highly recommended and you trust implicitly. For Licensee information you can check using the Department of California web site at: https://ui.constantcontact.com/rnavmap/em/ecampaign/www.dre.ca.gov (click on the yellow link in the middle of the page titled “Real Estate License Lookup”, you will have to enter the loan officer in the following manner: last name, first name. Try my name: “hemmersbach” and “andre”. It will give you information on how long your loan officer has been licensed and if they are in good standing) Some institutions, Federally Chartered Banks and Savings & Loans for instance, do not require their employees to be licensed, this means you could be dealing with someone who is inexperienced, could not pass the exam or just does not feel that educating or licensing himself is important.

4.      PLEASE use me as an unbiased third party opinion to review any Good Faith Estimates, Lender Approvals or Loan Documents even if you have decided not to use my services on your current transaction. I offer this service free of charge and as method for improving the reputation and goodwill in the Lending Industry. I would be honored to assist you!

The reasons I feel that my services, programs and rates are better than anyone else out there on any given day:

 §  My Degree in Finance makes me qualified to look at, explain and help you understand your choices of lending programs and how they will affect your financial goals.

§  My 21 years of experience in the Mortgage Banking industry means I have the experience and knowledge to get you approved and funded with the least amount of hassle possible.

§   I am licensed through the California Department of Real Estate since 1988 and am in good standing.

§  American California Financial is one of the most respected and oldest brokerages in the Los Angeles area, guaranteeing you that we will be here for your questions, advice and future transactions.  

§  We are approved with over 60 different institutions, which means you will get the most competitive rate and program available.

In deciding to buy a home you are making one of the smartest long term financial decisions a person can make. You will also, in all likelihood, be creating the largest debt of your life. The above items are a short list of things to consider when researching your financing options. Make sure you are seeking the guidance of a trusted advisor!

New Law To Help Los Angeles and Orange County Real Estate?

November 19, 2011 Posted by Andre Hemmersbach

On Friday morning November 18th, President Barack Obama signed a bill that among other things will specifically aid real estate sales in high cost areas of Los Angeles and Orange Counties. In fact this is quite a surprising move by the administration and congress seeing all the rhetoric coming from Washington about the federal government getting out of the mortgage business.

The last two years  have seen the mortgage industry get very conservative as a whole. There have been a barrage of “take-a-ways” from Fannie Mae (FNMA), Freddie Mac (FHLMC) and the Federal Housing Administration (FHA), the institutions that are guaranteed by the US Government and purchase the majority of all mortgages today. These changes have made getting a home mortgage more difficult. One such recent change that just took effect on October 1, 2011 was the decrease in the temporary loan limits from $729,750 to $625,500. The law that went into effect today, returned the maximum loan limit for FHA to $729,750 for single family residences and condos until the end of 2013. No changes were made to the maximum loan limits of FNMA or FHLMC.

After the drop in the maximum loan limits sales of properties in Orange and Los Angeles counties with loans between $625,500 from $729,750 fell sharply, to 102 last month, according to San Diego real estate firm DataQuick. That was a 71% decline from 350 in September and down 71.5% from 358 sales in October 2010

How successful this move will be in stabilizing the real estate market will have to be seen. FHA is predominately used by first time homebuyers because it is less restrictive in income qualification and credit requirements, only requires a minimal 3.5% down payment (all of which can be a gift) and allows for non occupant borrowers such as parents trying to help their children qualify for a home. One of the few draw backs of FHA financing is that all FHA loans regardless of down payment require mortgage insurance. Besides how many first time homebuyers purchase a home in the $675,000 range?

 These institions are backed by guarantees made by the US government. As financial losses from the real estate implosion have mounted and regulations from the financial reform acts have become constrictive  other sources for mortgage money has become very scarce.

 . . Currently the Federal Government guarantees loans purchased by FNMA, FHLMC and FHA and over the last 3 years other sources for mortgage money has become very scares.

This is something that will help buyers using using FHA ) financing. F

Creative Financing

February 14, 2011 Posted by Andre Hemmersbach

Home buyers and sellers are turning back to creative financing methods in today’s competitive real estate markets. One of the “old standbys” in tough markets has been a lease with an option to buy or “Lease Option” for short.
A standard lease option allows a buyer to rent a sellers home with an option to buy that home at a set price sometime in the future. Typically an option price or down payment is given at the opening of an escrow which will be forfeited to the seller in the event that the purchaser/renter does not consummate the transaction at the end of the lease period. A monthly rent payment is paid by the purchaser/renter to the seller of the house during the option period.
The beauty of a lease option is that it can be written in any combination of creative ways. The amount of the upfront option payment, final sales price, length of the option contract, rent amount and the amount of monthly rent that will go towards the eventual purchase can be negotiated, which could create a win-win for both parties.
Take for example, a borrower who has issues securing a home loan due to the fact that he is just starting his own business and a seller who has had his property on the market for several months at a price that may be a little unreasonable at this time, could both be aided by a lease option. The buyer may be willing to pay the extra premium in price if he can lock in that price for a period of two years while real estate values correct and his business get established. He additionally negotiates for 25% of the monthly rent to go towards the eventual purchase price of the home. The seller accepts the offer of the higher than market sales price for a 7% option fee that will go towards the sales price if the option to purchase is exercised or forfeited to the seller if the deal falls through. He agrees to the buyers request to credit 25% of the rent toward the purchase price but negotiates to have the rent be $150 higher a month than previously requested.
As you can see, a lease option is extremely flexible and be the financing tool to make your real estate deal come together. It is extremely important to discuss all of the variables with an experienced real estate agent, mortgage professional, tax accountant and your attorney.