Tehachapi's Online Community News & Entertainment Guide
Tehachapi's Online Community News & Entertainment Guide
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It's common for buyers to refer to the cash needed to close on a home as "closing costs" or think it is limited to just the down payment amount. The cash needed to close is actually made up of three different categories of expenses. Closing costs, prepaid costs and down payment. In general, closing costs can range from 2% to 5% of the total loan amount. According to analyzed data from the Home Mortgage Disclosure Act (HMDA), comparing the top 10 mortgage lenders in the U.S., using a Mortgage...
With more than 60% of first mortgages at a rate less than 4%, and more than 80% with rates of less than 5%, it seems like no one would refinance at today's rates in order to gain access to their homes equity, right? The decision to access your home equity is as unique to your situation as your fingerprint, as well as whether to do that with a second loan, or refinance to a potentially higher interest rate. Home equity refers to the portion of a home's value that is owned by the homeowner. It is...
A reverse mortgage is a term you may or may not be familiar with. The formal name is a Home Equity Conversion Mortgage (HECM). Simply put, it reverses the equity in your home to cover expenses. To understand how it works, it is easiest to compare to a standard mortgage which would be considered a "forward mortgage." In a forward mortgage you make a payment every month. Part of the payment covers the interest charges and part of the payment reduces the balance of your loan, increasing your home e...
Ring. Ring. DING: New text message, RING RING: Email Notification. DING. DING. RING. TEXT. What in the world!? You literally just finished a consultation and loan planning with your trusted professional and now your phone is sounding alarms and ringing like crazy with scripted text and call center reps trying to convince you that they have a better deal, or sometimes they are sneaky and make you think they are working with your trusted professional. How do you avoid this? With a projected $1.64...
If you have not heard of the term "2-1 buydown," you likely will soon. Like a 1980's fashion trend coming back full circle, loan programs can do the same. This is not at all a new concept, or program but a time in the market that makes, for many, a very smart loan strategy. So what exactly is a 2-1 buydown and is it a good option for your potential loan strategy as a buyer? In reality, a 2-1 buydown is a temporary interest buyout, not a buydown at all. This special temporary reduction in the...
Buy down your rate The most well known and common way is a permanent buydown by paying discount points for a lower rate. Paying one point is the equivalent cost of 1% of your loan amount. Do not mistake this with a 1% reduction in rate. Your loan officer will be able to tell you what the costs and options are specific to your scenario. Pre-Pay Mortgage Insurance Or pay a split MI. If you are purchasing with conventional financing and not putting at least 20% down, you will have mortgage insuranc...
I remember several years ago during a panel discussion between loan officers and real estate agents, the question got asked about whether we would ever see conditions like the early 2000s again. Many people chimed in with "no way," "it's unlikely" and simply "no, too many things have changed for that to ever happen"... but there was one opposite answer "we all have pretty short memories, so probably." Differing options on whether or not this is possible is at the forefront of people's minds....
The limited time offer For the fall season: "Limited Edition Pumpkin Spice Mortgage!" It smells like vanilla pumpkin hot cocoa with just a hint of apple pie, feels like the crisp crackle of the fireplace and looks like the picturesque color of changing leaves making a fall colored rainbow. If fall is your favorite season, this will be your favorite mortgage program ever! Celebrate move-in day with a fall worthy celebration sooner than you can get to Kamenz Kafe for a pumpkin spice latte! Don't F...
Sometimes what seems like a good idea in order to prepare for home buying may not actually be the best plan. Given each person's unique needs, up front planning is truly the key. As consumers we are often conditioned to shop first, buy second and then figure out how to pay for it. When we try to prepare for buying a home and yet are not used to planning as a consumer, it is easy to make mistakes when we are making well-intentioned efforts. Here are five common things people think they should...
You are likely hearing a lot of people talk about a shifting real estate market, price reductions, higher rates, inflations, etc. All of these terms relate to what is happening economically and in the real estate market. Many experts are giving the advice that it is still a great time to buy and sell. It's true, this current climate is the perfect opportunity to create a win/win for both the buyer and the seller. The National Association of Real Estate (NAR) is still reporting many areas in the...
If you didn't know before, you know now... I am a fan of "The Wizard of Oz." For many reasons, but also because I am a fan of knowing that many of those scary things ended up not being so scary. So, what does this have to do with rates, recession and inflation? Well just like lions, tigers and bears... (oh my!) they may not be as scary as they seem if you are aware of the potential impacts, prepare yourself properly and make wise decisions with your money. Let's review some actions commonly...
Summer is here and once again many potential sellers are watching rates rise, thinking prices are dropping and wondering if this is the right time to stay or go. Selling smart is as much about knowing what you need to do as it is what you do not. Part two is focused on exactly that. Don't sell in fear! I have seen many people over the past year panic sell. Selling because of potential regulations, housing bubble fears, forbearance ending and more. Many sales people use fear as a tactic to get...
Are you one of the many homeowners trying to decide if this is a smart time to sell a property you own? If so, you are not alone. Many homeowners across the country are having the same debate over whether this is the right time to cash in and buy something else, or just cash in. Here are four things you need to consider to sell smart!... (hint: There will be 4 more in my next article). What do you qualify for? Honestly, the MOST important step one. Meet with a Mortgage Professional and find out...
Most people who need a mortgage loan would prefer to get the lowest and best rate. All too often getting the lowest rate comes at the highest costs. This is referred to as a discounted rate or paying points. When a borrower pays a point, they are paying one percent of the loan amount in a fee to reduce the rate. Other fees some lenders charge to quote a lower rate may be titled origination fees, document fees, processing fees or administrative fees. These fees determine what the discount is...
Don't let rising rates catch you off guard. Here is what you need to know and how to avoid costly unknowns. Yes, rates have been steeply rising since mid-January this year. This was not a surprise for educated mortgage professionals, but may have caught many by surprise that are newer to the industry, as well as home shoppers or homeowners considering refinance. What does this mean and what do you do? 1. Don't make the mistake of just shopping for the lowest rate, especially online. Most often...
Is contacting a real estate agent really the first step? Or a lender? Just today I saw a social media post from a first–time homebuyer looking for a realtor – who would typically refer them right over to a lender – who should ask them a series of important questions, that they may not know the answer to. It might surprise you to learn that neither of these are really the correct first steps. The very first step to buying or selling a house should be getting your financial house in order. What...
The holiday season is a common time for potential buyers to take a step back from home shopping and wait until the new year because inventory is lower. Many potential sellers also begin thinking that it is best to hold off until after the holiday season, which can also keep inventory low. So, does that mean it is a bad idea to buy or sell over the holidays? In fact, just the opposite. Buying now may even allow you to spend the holidays in your new home, or be ready to move in right after to...
If you have been around real estate at all, you have likely heard the terms "buyer's market" and "seller's market." Lately I hear it even more and often by discouraged buyers wondering if they should buy in a seller's market or wait for it to become a buyer's market. It is important to understand what these terms really mean to determine what action to take as a buyer or seller. I personally believe that it will come down to personal pros and cons of each market and not simply buying in a buyer'...
With how quickly houses are selling, is there anyone waiting to buy? I hear people comment they are waiting to buy "until the market crashes, until rates drop more, less competition" and more. Yes, all these thoughts are floating around in future buyers' minds and maybe even yours. How do you know if waiting is the right choice, or going to cost you more money while you wait? Just about any online search for housing value data will show you that the long-term trend in housing value is up. In a...
You have done everything right up to this point. You checked your credit, kept inquiries and new accounts to a minimum. You saved money for the down payment and closing costs, you have had consistent employment and are making sufficient income compared to your debt. You have diligently kept your paperwork and acceptable explanations for anything unique, you have found the mortgage advisor you want to partner with and have an accepted offer on a home of your dreams. What could go wrong? Ask any p...
As we near the celebration of America's Independence, it got me thinking about American's efforts to gain independence from their mortgage. You have heard me say it before, "no one actually wants a 'mortgage.'" They want a home and generally by default they have to have a mortgage to get one. We then spend the next 30 plus years working hard to become free and independent of owning a home and of having a mortgage. With this in mind, I thought I would navigate through some strategies that can...
If you read my last article that focused on where to start as a homebuyer, you knew this topic was coming. Almost daily I talk with people who have found a lender, are looking for a lender or just finished purchasing with a lender. What I find interesting is how most of the time they are randomly found online, or in some other disconnected way. Sometimes people are lucky and end up with someone amazing, other times they are missing out on the true nature of mortgage guidance and end up just...
With over 33% of homebuyers being first timers, and that number projected to increase in the next several years, perhaps a great place to start with "Navigating Lending" is at the beginning. So, you want to buy a house but don't have a rich uncle willing to give you the cash, or multiple zeros to go with the numbers in your bank account. That means you will likely need a Mortgage Loan. A Mortgage Loan is a type of debt that is secured by the home or real estate property you are purchasing, with...
What to do when you are told "no" because of credit challenges, or loan program guidelines. How do you know as a potential consumer of a mortgage loan that you are getting the information you need to make an informed decision moving forward? Online searches and blogs that may or may not be providing you with accurate or complete information and .com mortgage companies that fill their call center with newly licensed call center "headset jockeys" can often lead to inaccurate information when...
It is a common mistake that many who want to be home buyers think they cannot purchase a home unless they have a 20 percent down payment. This is not the case, but what happens when someone does not have 20 percent down? That is where mortgage insurance comes in. Mortgage insurance is not protection for the homeowner and is not to be confused with a homeowners insurance policy. It is a policy that protects the mortgage lender and is required if you do not have 20 percent down or utilize certain...
