Tehachapi's Online Community News & Entertainment Guide
Tehachapi's Online Community News & Entertainment Guide
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Do you plan to participate in the real estate market this year? Have you not yet made your appointment with your tax man? Your delay may be to your advantage if you are self-employed and have choices about how much to write off in expenses for your year 2014 returns. Before you try to beat Uncle Sam by showing as little income as possible, consider that if you want to invest in real estate that tactic may work against you. Know that your mortgage advisor takes the bottom line (net) figure from...
Take time now to review your financial health. Investigate some of these ways you might re-arrange your financing to save money this year and beyond. Refinance your home loan for a lower interest rate or lower monthly payment. Change your adjustable rate mortgage to a fixed rate, or combine your first and second mortgages into one loan. Move credit card debt into your mortgage payment. Take a new shorter-term loan and pay off your home sooner. Address family matters, whether you need to buy a...
Every year the agencies update their lending limits, based on the prior year’s housing activity. We’re hearing from Fannie Mae and Freddie Mac that the conforming loan limit remains at $417,000. Loans below this amount get the best pricing and guidelines for purchase and refinance loans. For Veterans wanting to use their no-down loan benefit, the cap remains at $417,000 for 2015. VA loans are available at higher loan amounts, but a down payment is required. The cap for using FHA financing for...
Once the holidays are over many people look around and decide they need to clean up their clutter for the new year. Here are two ways to do just that. If you find you’re receiving unwanted credit card pre-approval offers, there is a way to stop them. The website www.OptOutPrescreen.com is the official consumer credit reporting site to accept and process requests from consumers to opt-in or opt-out of firm offers of credit or insurance. Under the Fair Credit Reporting Act (FCRA), the Consumer C...
A chance encounter lead to today’s topic. Would it be smart to refi a 30-year mortgage to a 15-year term? This family bought their home within the past few years and currently has a 3.875% fixed rate on a 30-year loan. They don’t like their loan servicer and don’t want to have a house payment forever, so they wondered if doing a refi would be smart. I also heard about what a pain in the neck the whole loan process was. Before we begin, note that it’s hugely important to know the “why” o...
If you’re a typical consumer, the holiday season means you’ll be using your credit cards to buy gifts for those you love. Be smart about your FICO score while you’re doing your shopping. Of the five components that make a credit score, the one that weights the most is your payment history. It should go without saying that you need to make all your payments on time to keep a good credit score. How much you owe on credit accounts makes up the next 30% of your score. History shows that once you c...
It’s pretty easy to go on-line and get figures about your next home loan. Does what you see on the screen actually end up being what you get? It’s not always a matter of bait and switch; it’s a matter of the intricacies of loan pricing. Here’s what to consider when you are comparing loan offers. Right off the bat, I can think of at least 19 factors that affect your home loan interest rate. For a more complete discussion, see the article on my web site. Point being, if all 19 things are not bro...
Three Veteran buyers have recently used their Certificate of Eligibility to relocate to Tehachapi. Using a VA loan is a nifty way to use maximum financing to buy your primary residence. Here’s how it worked out for them. Buyer M owns a house elsewhere but was moving here to be closer to his job. Since he had not used his VA loan entitlement to buy his current home, we could use it here. His price exceeded $250,000, but with proper planning he only spent $1,200 in cash at closing. The P Family s...
FHA mortgage loans can be pretty great because of the low down-payment requirement and relaxed qualifying guidelines. But for everyone who has taken an FHA loan before January 2015, these loans come with a hidden catch. For most loans, when you pay the balance in full you’re charged interest through the day of payoff. It’s only fair – you’re paying for every day you have use of the investor’s money. With current FHA loans, when you go to pay it off, you’re being charged interest through the...
When you buy a car or a house, you expect the quality of your credit will be an issue in getting the corresponding loan. Are you aware that your insurance company and prospective employer may also want to access your credit file? More and more, the information reported by Experian, TransUnion, and Equifax plays a big part in your business dealings. Each credit bureau is required to provide the consumer with one free credit report per year. There is only one web service to use in requesting your...
She was very surprised when I told her the monthly payment would be $1127 per month. “But my Realtor told me the payment would be only $925!” The Realtor was using a mortgage calculator to estimate the payment based on the price, but the answer you get is only as good as the data you put in. It’s pretty easy to find a loan payment using a web calculator. Most loans are fully amortizing, so if you have 30 equal payments at 4.0% on $193,751, the only correct answer is $925 in monthly princ...
Lately we’ve been seeing appraisals come back with commentary requiring repairs be made before the close of escrow. What triggers this situation? Generally houses need to be free of “health and safety” issues in order to be finance-able. And, a reasonable buyer wants a house that is safe and secure and free of major defects. There are two stages in a normal purchase. During the course of buying a home, the buyer usually hires a home inspector to comment on the condition of the home. This entai...
Hooray that you finally know you should talk to your lender before shopping for a home with your chosen Realtor. You’ve got a piece of paper that says you’ve done your homework first, but what should the seller make of it? Lots has been written about home loan pre-qualification versus home loan pre-approval. You could split hairs about what each term means, and every expert has an opinion. But all a prudent seller wants to know is that once you are under contract you can close the deal. So wha...
It’s less prevalent than it was before, but sometimes you still see listings where the seller has an established relationship with their own title and escrow company. Oftentimes this would be a bank or an investor who might do lots of deals so they like to use “their own team”. Usually these companies are outside of Kern County. Here’s why you should care. Sellers aren’t allowed to force you to use their chosen companies, so there is always disclaimer language somewhere. It might say something a...
Why are Realtors and sellers wary of buyers using a VA loan? They shouldn’t be. Let’s bust some myths about this great loan program. The VA home loan entitlement allows Veteran home buyers access to a loan program requiring no down payment. Way back in the day, VA loans had extra requirements about the condition of the property, and made the seller pay some of the buyer’s loan fees. Not any more. MYTH: VA home loans require a 10% down payment. TRUTH: Veterans can apply for 100% financing for m...
Time for a quick snapshot of our market’s affordability. Interest rates are still under 5% at the time of this writing, and homebuyers will be pleasantly surprised at how that affects a monthly house payment. The usual disclaimers all apply: Not everyone who wants a home loan will qualify, and terms and conditions vary per program and per lender. Having said that, here is a rundown of how much home you might buy for a monthly house payment around $1,500. For those using the FHA or USDA loan p...
Really, he was trying to help. Knowing that he needed a clean paper trail for the money they’d use to buy a house, he opened a new account. Since the bank puts holds on checks for the first month, he cashed his paychecks at the old bank to put cash in the new account. Then he met me and the fun began. These days when you’re buying a house, we get super nosy about where your down payment is coming from. When your bank statement shows deposits that aren’t payroll, we want to know where those...
Life happens, and sometimes it means your finances take a hit. Mortgage guidelines would seem to offer condolences, but are they real? What you see in headlines doesn’t always translate into real-life help, and here’s why. Let’s consider FHA loans. The Federal Housing Administration, generally known as “FHA”, provides mortgage insurance on loans made by FHA-approved lenders. FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their...
Home ownership happens when a willing buyer and a willing seller agree to the terms of sale. Want to know a secret strategy that allows both sides to win? The usual common sense stuff has to be in place: An asking price that reflects current market conditions, a property free of health and safety issues, and a pre-approved buyer whose loan is ready to go. That said, consider the seller’s side first. If they are selling their home for $200,000 it’s not like they’ll walk away with $200,000, even i...
My client was adamant that she wanted to buy her next home with 20% down on a 20-year loan. After an hour’s consultation, we didn’t end up anywhere near that. Why? She told me what was important to her, so we arranged her financing to match what matters most. For context, she’ll be buying a home for $140,000 and may move in the next three years. With 20% down on a 20-year loan, she’d be spending about $32,000 cash to acquire the property with a monthly expense of around $913. When I ran an amor...
When you bought your first car, mom or dad was probably there to help you qualify for the car loan by being your co-signer. That made them jointly obligated for repayment of the loan, since you likely had no credit history on file at that time. Their established credit stood in to “prop up” your lack of loan experience. Does it work the same way when you are buying a home? It depends on which loan you choose, and how many of the applicants will be living in the new home after close of esc...
Yep, interest rates are higher than they were this time last year, and those who have already refinanced might have caught the market at a good time. It’s about more than just a rate. The structure of your loan merits attention, too. Does your current loan have mortgage insurance? That’s the monthly amount you pay on behalf of the lender in case of your future foreclosure. If you had less than 20% equity at the time of your loan, or if you took an FHA loan, you are probably paying MI. Check you...
She was trying to be funny when she said it, but hearing this underscores the need for clarity about financing. If you had a million dollars, maybe you wouldn’t need leverage. For the rest of us, the path to owning real estate has to do with making informed decisions about how to borrow money. When you’re considering getting into the market, you should start with a good understanding of your financial health. Can you comfortably afford your current expenses? Is your job stable? Do you have some...
When something happens repeatedly at my desk, you get to hear about it. Twice in the past few weeks we’re running into problems about federal tax returns and being able to independently verify their validity. In applying for a home loan, your lender is tasked with finding an outside source to verify everything you tell us. With regard to income, that means we want the IRS to confirm that the numbers you’re showing us on copies of your federal tax returns match what is in their system. This is ac...
It struck me as funny when a caller asked me, “So just who is this ‘underwriter’ person, anyway?!” He and his family are in the process of buying their first home and have run into delays in closing, due to the “underwriter.” Your loan officer is probably the person you have initial contact with when asking about a home loan. Their job is to screen you for what you want to accomplish and to suggest loan programs that might work. The loan processor comes next and works with you to gather all...
