With mortgage interest rates rising, buyers are looking for ways to reduce their payment. One way to do this is with a buydown. There are temporary and permanent buydowns. Temporary buydowns are trending. Temporary buydowns reduce the rate one year at a time, gradually increasing to the negotiated rate. Temporary buydowns can be 3/2/1, 2/1, or 1/0. A 3/2/1 buydown means the rate is reduced by 3% for the first year of the loan, 2% for the second year of the loan, and 1% for the third year of the loan. For example, if today’s rate is 7%, then the...
Blog
REMOVAL OF PRIVATE MORTGAGE INSURANCE (PMI)
If you have a conventional loan with PMI, you may request it to be removed once the principal balance of the loan reaches 80% of the value of the home. According to the Homeowners Protection Act, a borrower may initiate cancelation of PMI coverage by contacting the servicer. PMI will automatically fall off when the balance reaches 78% of the original value of the home. Private mortgage insurance is required on loans with less than 20% equity. PMI protects lenders from the risk of default and foreclosure. It allows the lender to recover costs associated with the resale of foreclosed...
August 18, 2023August 18, 2023
A LOOK AT MORTGAGE RATES OVER TIME
Freddie Mac publishes a weekly Primary Mortgage Market Survey where they survey the 30-year and 15-year fixed mortgage rates. According to the survey, this week’s 30-year fixed rate is 6.96% and the 15-year fixed rate is 6.34%. The survey contains data going back to 1971. Looking at rates over the last 50-years, today’s rate is lower than rates in the ‘70s, ‘80s, and for the better part of the ‘90s. The highest 30-year fixed rate was in October 1981 at 18.63% and the lowest rate was in the beginning of January 2021 at 2.65%. Considering the spectrum of rates over...
August 14, 2023August 14, 2023
MANY LOAN OPTIONS ARE AVAILABLE
The mortgage market has changed since the days of 2-3% rates. Lenders are introducing many new products into the market to try to make up for the loss in volume. Contrary to some recent news reports, it is not harder to get a loan today. Lending is not getting tighter. There are more options for borrowers to get a loan today than we have seen in many years. And, they can close quickly. We just had a loan final approved within 6 days. Here are some examples of the products now available: 1. 40-year fixed/10-year interest only loans 2. For...
August 10, 2023August 14, 2023
MULTI-FAMILY FINANCING – INVESTOR VIDEO SERIES
The type of loan available depends on the number of units you are purchasing. If you are purchasing up to a 4-unit property, you can get a 30-year fixed mortgage. However, if you are looking for an apartment building or multi-family 5+ units, lenders consider this commercial financing. These loans are typically fixed for 5 or 10 years, and then will adjust. The closing costs for commercial loans are typically higher. If you are looking to buy multi-family properties, but are unsure as to what lending options are available, give us a call, we can help. We are mortgage brokers...
August 7, 2023August 7, 2023
APPRAISALS – FIRST-TIME HOMEBUYER VIDEO SERIES
You entered into a contract and agreed to a purchase price with the seller. You are applying for a mortgage, and the lender asks if you are ready to order the appraisal. What is the appraisal and why is it necessary? An appraisal is an independent opinion of value provided by a licensed appraiser. The lender requires an independent appraisal of the property to assure that the agreed-upon contract price is representative of the value of homes in the area. The lender will rely on the appraiser’s opinion when approving the loan. So, if the appraised value is less than...
August 5, 2023August 5, 2023
COUNSEL MORTGAGE CAN LEND IN CALIFORNIA
If you are looking for a residential or commercial loan in California, give us a call. We are mortgage brokers and will shop the loan around to find you the best deal. We Work For You, Not The Lender
August 2, 2023August 2, 2023
CRE FINANCING IS GOING TO GET TOUGH
Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC CRE FINANCING IS GOING TO GET TIGHT Yes, I know, after 16 months of increasing rates and continuing QT to the tune of about $1 billion/mo., things are already tight. But did you know … Over the next 12 months, the U.S. CRE market will wrestle with the reality that three-quarters of a trillion dollars in loans are scheduled to come due. Within the context of $4.5 trillion that is the U.S. commercial real estate debt market, this juncture could be a turning point that...
July 29, 2023July 29, 2023
INVESTOR VIDEO SERIES – CAN I QUALIFY TO PURCHASE AN INVESTMENT PROPERTY?
If you can qualify for a primary residence, you can probably qualify to purchase an investment property. When purchasing an investment property, the appraiser prepares a schedule of market rents. The lender takes 75% of the rents on this schedule and subtracts the proposed mortgage payment. This amount is then added to your income or debts. Thus, if your debt-to-income ratio is sufficient to purchase a primary residence, you can likely pick up an investment property. If you want to invest in real estate and need help determining whether you can qualify, give us a call. We have helped many...
July 25, 2023July 26, 2023
INVESTOR VIDEO SERIES – ROI AND CASH FLOW
Return on investment (ROI) and cash flow are factors to know when purchasing an investment property. For example, let’s assume you put $100,000 down on a property, rent it for $3,000 per month, and your expenses, including mortgage, are $2,400 per month. The cash flow is $600 per month income, which totals $7,200 per year. In order to determine the annual ROI, the annual income is divided by your initial investment, in this case $7,200/$100,000 = 7.2% ROI. Note this calculation does not consider the payment of principal on the loan (which would result in a higher ROI) nor potential...
July 23, 2023July 23, 2023