Category: Mortgage Planning

GROUP INVESTMENTS

GROUP INVESTMENTS

You want to purchase rental homes but do not have enough money saved or enough income to afford one, so, you talk to your friend who is also thinking about investing. Can you get financing if you purchase rental homes together? Or, you are part of an investment group looking to purchase rental homes. Can the investment group get financing? Yes, you can. First, each of the investors must complete a loan application to qualify for conventional financing. For example, if you and 4 friends are looking to purchase a rental home, all 5 must complete a loan application. The...

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HALF-YEAR REPORT – MONEY IS CHEAP

This has been an unprecedented first half of the year. An international pandemic, high unemployment, closing of businesses, and a Fed Funds rate near zero. Notwithstanding these global and economic calamities, loans are being made. Rates are the lowest they’ve been and money is cheap. It is a great time to buy and borrow. Programs interrupted due to the pandemic are returning to the market, such as jumbo loans. With rates this low, there is not much reason to put a lot of cash into a home. It’s likely your investment portfolio performs at a higher rate of return than...

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THE BENEFITS OF DELAYED FINANCING

What are the benefits of delayed financing and how does it work? Here’s a great scenario to demonstrate the benefits of delayed financing. Delayed financing may be beneficial if  you are trying to purchase a home with competing offers. You can pay cash for the home, but don’t want to, and would rather finance the home; however, if you presented an offer with financing, you may get beat out for the home. Delayed financing allows you to pay cash for the home, and then take the cash out with a refinance within 6 months of closing. This is an exception...

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BUYING OR REFINANCING A HOME TODAY?

I get asked more so than ever before, “Is now a good time for buying or refinancing a home?” When should you start planning for your mortgage? The answer is as soon as you think you will be buying or refinancing a home. Mortgage planning includes analyzing your credit and income for qualification. It also includes an analysis of the different mortgage programs available and what works best for you. The reason why you should begin planning as soon as possible is that it may take time to qualify. For example, a review of your credit may turn up derogatory...

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BORROWING MONEY

Borrow money at the lowest rate and costs. This is common sense. So, why do many people continue to borrow mortgage loans at higher rates and costs? Because, they do not consult with a mortgage broker. Mortgage brokers work with lenders in the wholesale marketplace and pass on these rates and costs to their customers. Further, mortgage brokers’ compensation is legislated to not exceed 3% of the amount financed, including the wholesale lender’s fees, and is disclosed on every transaction. Mortgage banks, and banks, do not have this restriction. They can make as much as they want on any loan...

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THE IN BETWEEN SELLING AND BUYING

We have received several phone calls from customers lately who own their home free and clear and are looking to purchase a new home. Ideally, they would like to sell their home first and buy the new home with the proceeds from the sale. However, it may be hard to get an offer accepted that is contingent on the sale of their current home. So, they are left with trying to figure out how to get the cash out of their current home before it sells so they can make a non-contingent offer on the new home. Here are some options:...

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BUYING DOWN RATES

Let’s say you are looking to buy a $350,000 home with 20% down for a loan amount of $280,000. You want a 30-year fixed mortgage, and assume the rate is 4.25%; the principal and interest payment would be $1,377.43. If you paid a point, assume the rate would be 3.875% and the payment is $1,316.66. Does it make sense to buy down the rate? The first step is to determine how much it costs. One point is equal to 1% of the loan amount, which is $2,800 in this case. The next step is to determine how much you will...

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ARE YOU LOOKING TO PURCHASE A SMALL BUSINESS OR AN INVESTMENT PROPERTY?

There are SBA and commercial loans available for financing; however, you may want to consider a residential loan. How can you use a residential loan to finance a business? And, why would you? Business loans tend to have higher rates and costs than residential loans, and may be adjustable. The residential loan can be fixed. For instance, if you have equity in your home, or other residential properties, you could refinance and take cash out of one of these properties to purchase the business or investment. The lien would be on your residential property, but the loan terms may be...

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MORTGAGE PLANNING: 30-YEAR FIXED V. 15-YEAR FIXED

The shorter the term of the loan, the less interest you pay, and the sooner you pay it off. So, why not apply for and obtain the shortest-term loan possible? This makes good sense if you are comfortable with the payment. Let’s take a look at the following 3 scenarios, a 30-year fixed, 15-year fixed, and a 30-year fixed paid over 15 years. TYPE OF MORTGAGE INTEREST RATE LOAN AMOUNT MONTHLY PAYMENT INTEREST PAID OVER LIFE OF LOAN 30-year fixed 4.0% $300,000 $1,432.25 $215,607.20 15-year fixed 3.5% $300,000 $2,144.65 $86,036.45 30-year paid over 15 yrs 4.0% $300,000 $2,219.06 $99,431.74  ...

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NEW YEAR’S RESOLUTIONS

Now is the time that we reflect on 2018 and make resolutions for 2019. Many people will review their financial picture to see where they can improve on their finances for the upcoming year. The mortgage is as much a part of your financial picture as your investments. How best to finance the mortgage and control this expense can help your overall financial picture. To refinance to a 15-year fixed for a lower interest rate, or double up on your 30-year fixed payments, or consider a lower adjustable rate mortgage if you will be selling your home soon, or a...

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