Understanding Advertised Mortgage Rates in California

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Ads for home loan offerings are everywhere. Online, on TV, driving down the street, or listening to the radio, mortgage loans are probably the most common advertisement.

Lowest Rates Offered...are Lures

Banks and mortgage companies promise that they will do whatever they can to offer homeowners the lowest mortgage payment. It is important to understand the rate market and that it is constantly changing   daily and often hourly.  When you see an ad from a bank or mortgage lender that offers a lower rate, or gives you one solid payment figure based on a certain loan amount, you should be skeptical. In fact, most banks and lenders usually offer rates to just bring you in the door, though you may never actually be offered the advertised rate.

Is a Reverse Mortgage Right For Me?

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Have you asked yourself this question? The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program. This plan enables a homeowner 62 years of age or older to withdraw some of the equity in their home.  The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements or purchase a home with NO monthly payment.

How does a Reverse Mortgage Work?

Basically, the equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing. This usually requires a 35 to 40% down payment but the senior will not have a monthly pinciple and interest payment and will not be tying up as much liquid cash as when they purchase a home for all cash.

10 Credit Do's & Don'ts to Remember Prior to Getting a Mortgage Loan

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How can a fully approved loan get denied for funding after the borrower has signed loan docs? Simple, the underwriter pulls an updated credit report to verify that there hasn't been any new activity since original approval was issued, and the new findings kill the loan.

This generally won't happen in a 30 day time-frame, but borrowers should anticipate a new credit report being pulled if the time from an original credit report to funding is more than 60 days. Purchase transactions involving short sales or foreclosures tend to drag on for several months, so this approval / denial scenario is common.

Why this happens?

It's can be an ugly cycle where by the buyer receives an approval and thinks everything is OK so they make a credit impacting decision (buys new car, furniture, runs up credit card balance).

The lender's Funder pulls new credit report right before they fund the loan to check for changes. The Funder sees the new credit or larger balances and denies the loan.

5 Myths About Home Values in California

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During periods of economic growth, home values typically go up and most homeowners do not question appraisals. Conversely, in times of turmoil when property values are declining, homesellers naturally question appraisal values.

The actual appraisal process has changed very little over the course of the housing boom and bust cycle but since the topic of home values seems to be a hot discussion, let's address the top five appraisal myths/questions.
Appraisal Myths:

Myth #1- Appraisal values are based upon a simple formula that uses dollar per square foot and comparable sales prices.

Reality - There are several factors the affect the value of a property which include comparable sales prices, location, amenities, exterior and interior condition, maintenance, lot size, bed and bath count, traffic and much more.  There is no simple formula.

Loan Options Available for Home Buyers in California

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There are many home loan types to consider when seeking financing to purchase a home.  The loan you choose will have a long term effect on your financial picture so it is important that you understand your options before you commit.

• Fixed Rate Mortgages 

Fixed rate mortgages are probably the most popular loan due to the fact that the payment stays the same throughout the life of the loan. Each monthly payment is comprised of a portion to pay the principle of the loan and the interest on that loan.  Many times the monthly payment can include the payment for the taxes and insurance due on the home.  The payments continue for a pre-determined time after which the home is paid off.  The most common terms are 30 year and 15 year.

Buying After a Short Sale in California

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Good News! Changes in lenders' guidelines have reduced the waiting period for buyers who wish to purchase a home after experiencing a short sale. Maintaining good credit since, paying all bills on time in the last 12 months, saving a down payment (as little as 3.50% to 20% down payment), and of course, having income to qualify for a loan make it possible to buy a house in as little as 12  to 36 months.

10 Credit Card Myths Your Mom Might Have Told You

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The best defense against making a credit blunder is to better educate yourself. These are things that our parents didn't tell us because credit has changed and morphed into something that can limit our "pursuit of happiness."

Myth #1: Avoid Using Credit Cards

FALSE! - This may be a good way to get rid of debt, but it's utter destruction to your credit score. Why? Because of the 5 factors that make up your credit score, one is how you use and manage your credit, a factor that makes up 30% of your score. That's 255 points! Use the cards every month for gas, groceries etc. but pay them off.

Myth #2: Consolidate Debt onto 1, Low-Interest Credit Card

FALSE! - Everyone gets the tempting credit offers to consolidate your debt onto one credit card but when you max out that card, your credit score will drop 60-100 points overnight! Do not consolidate your credit card debt UNLESS, the balance will be under 30% of the available limit.

Myth #3: It's Okay If You Go Over Your Credit Card Limit Because The Bank Authorized the Purchase

FALSE! - Going over limit, even if it's just by one dollar deals you a double penalty a 50 point lower score and usually a $39.00 fee.