Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC. The Federal Reserve’s recent interest rate cuts have sent a surge of excitement through the commercial real estate (CRE) market. Fed influenced rates have returned to 2018 lows, however, the Fed’s interest rate reductions have little to do with conventional CRE financing activity because most conventional commercial real estate lending is indexed over the 5 & 10 year Treasuries. The exception being SBA 7(a) loans that are indexed to the Prime rate which is normally set within a fixed spread vs. the Fed Funds Rate....
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DISCLOSURE
Tell us everything before you do anything, tell us your story, then we can get the best loan for you. Over the years, we have told our clients to tell us everything about their scenario. We want to see their income, credit report, assets, bank accounts, investment accounts, retirement accounts, and real estate owned. We want to know what these look like before you do anything: pay down credit cards, pay off collections, get new credit, file tax returns early, get a co-signer, put more/less down. You may find you can apply for the right loan now without doing anything....
December 6, 2019December 6, 2019
RATE ENVIRONMENT: UP OR DOWN?
Right now, we are in a decreasing interest rate environment. Is there somewhere you can look to determine if interest rates are going up or down? We look to the interest rate on the US 10-year Treasury Note as a leading indicator for mortgage rates. As the 10-year rate goes up, mortgage rates tend to go up. Similarly, as the 10-year rate goes down, mortgage rates tend to go down. The rate can change daily, or it can change within the day. We are made aware of impending rate changes by following the intraday trading of the 10-year Note. If...
December 4, 2019December 4, 2019
FIRST-TIME HOMEBUYERS
First time homebuyers will call me asking for a FHA loan. I guess the urban myth is that there is not a low-down payment option for conventional loans. However, this is not true. Conventional loans can be obtained for as little as 3% down. So, what results in a better option for the first-time homebuyer? It depends on the credit score. If you have less than perfect credit, then the FHA loan will likely result in a lower monthly payment. If you have good or excellent credit, the conventional loan may be the better option. The FHA loan...
November 25, 2019November 25, 2019
HOME EQUITY LINE OF CREDIT
HELOC the acronym for a home equity line of credit. A HELOC works like a credit card, but it is secured by your home. You can borrow against it, and then pay it down, just like a credit card. If you have equity in your home, but you need some cash to consolidate debt or make home improvements, then you would consider a HELOC. Many people today consider HELOCs instead of taking cash out and refinancing their home because they do not want to lose the low interest rate they have on their mortgage. You may also want a HELOC...
November 21, 2019November 21, 2019
HOMEOWNERS ASSOCIATIONS AND LENDING
Did you know when you apply for a loan there are actually 2 approvals that take place? The lender reviews the file based on your credit and income, and also reviews the collateral. The collateral must be sufficient in order for a loan to be approved. When the collateral is a condominium, there is increased scrutiny by the lender. This is due to the fact that a condo typically has shared walls, ceilings, or floors, and there is more risk to the lender because the loan is somewhat dependent on the status of the units surrounding the condo. Thus, lenders...
November 14, 2019November 14, 2019
HAPPY VETERANS DAY
We hope everyone is having a great Veterans Day! Thank you to all the men and women who have served in our military to keep us safe and free. Are you a veteran? We support our vets and have many veteran employees. Jim Moore is licensed in Arizona as a Mortgage Loan Originator and an Army Ranger in Viet Nam; a proud veteran. Jim works with veterans with less than perfect credit, and helps them improve their credit for FREE, ask about VetCredit. Contact us to help you qualify for a VA loan. We offer a variety of products and services, ask...
November 11, 2019November 11, 2019
12 YEAR ANNIVERSARY
PRESS RELEASE: Counsel Mortgage Group®, LLC, is proud to announce this month marks our 12 year anniversary as both a residential and commercial brokerage. Counsel Mortgage opened its doors during the depths of the mortgage crisis of 2007 in an effort to offer professional services at competitive rates and costs to meet the needs of homeowners facing the financial impasse. Counsel Mortgage was founded by an experienced attorney/CPA who felt people needed help during a very difficult time in our economy and provided guidance and assistance in choosing the right product and costs for the most important purchase of someone’s...
November 3, 2019November 3, 2019
FULL DOCUMENTATION
Loans today require full documentation. Many times I get asked why certain documents are required. In today’s lending environment, files are scrutinized closely. The following are some items that are being requested, and the rationale for the requests. Unexplained deposits in your bank accounts – lenders will ask for documentation to support deposits in your bank accounts where there is no explanation for the deposit. For example, some deposits appear on bank statements with simply the word(s), “Deposit” or “Counter Credit.” As such, the underwriter does not know the source of this money. The underwriter will inquire as to the...
November 2, 2019November 2, 2019
VARIABLE RATE LOANS AND FED POLICY
Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC. Reminder from our last issue: You’ve heard of ZIRP – zero interest rate policy – from 2008-2015. Now get ready for NIRP – negative interest rate policy. Currently about $16 trillion of sovereign bonds (all countries that issue), or 25% of the total outstanding, trade at negative interest rates. This trend is firmly in place and increasing. The investor is paying the issuing country for the privilege of lending them money, or seen a different way, the investor has locked in a guaranteed...
November 1, 2019November 1, 2019