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See Refinance OptionsCredit and the basics · 36 topics
Short, plain answers Pete recorded for clients over the years, each with a two-minute video. Start with the question you have; the rest are here when you need them. For a personal answer, message Pete or call (530) 221-7700.
Most buyers when they get their first mortgage they have the mindset of having the mortgage for the next 30 years. Its important especially because of the amount you are borrowing to consider the real life of how long you will be borrower this money for.
There are many ways to pay off a mortgage. You can sell the home and you can refinance the home. The chances of you selling the home or refinancing with in 5-7 years of getting your mortgage is about 95%. Yes. This is a real statistic. Less than 5% of Americans keep their mortgage longer than 7 years. This becomes important when you start looking at the cost of a mortgage when you pick your lender.
If you know you will only have a mortgage for 2-3 years then it would be better to do a NO COST loan and pay a higher interest rate for those 2 years. Closing costs only make sense when you know you will have this mortgage for at least the next 5 years. The numbers are different based on the amount you finance.
If you have more questions please message me below. I am happy to answer them ASAP.
If you are wanting to take more than $2,000 out of the equity of your home this is considered a cash out refinance. The bank will allow you to go up to 80-85% of the value of the home. The VA loan allows you to take up to 100% of the value of the home for a cash out refinance. There are lots of reason to utilize your equity for a cash out refinance. You can use this money to consolidate debt, do home improvements, purchase other property etc.
If you have questions about a cash out refinance message me below. I am happy to answer your question asap.
Did you know that a Chapter 13 bankruptcy can wipe away a 2dn mortgage.
Yes. Thats correct. There are 2 different types of personal bankruptcies.
The first is a Chapter 7 BK. In a chapter 7 BK the debt that is included is completely wiped out. There are a few debts that can NOT be included in Chapter 7. Its important to know that Student Loan debt is not allowed to be included in a chapter 7 bk.
The 2nd type of bankruptcy is the Chapter 13 BK. This option is for those that do NOT qualify for the chapter 7. The chapter 7 bk has income limits on how much money you make in a year. The Chapter 13 bk does not have an income limit.
However, the Chapter 13 bk is a debt restructure. The trustee will negotiate the debt and creat a monthly payment plan that will pay off the debt in a set amount of time. This is normally 5 years. There can be no more interest accruing on the liabilities. The payments will settle the debt once all payments have been made. With a Chapter 13 the bank allows someone to purchase after 12 months of the filing date. The buyer will need to get the trustee's approval and have at least 12 months of on time payments made. The chapter 7 bk has a longer waiting period of 2-4 years depending on the loan type.
If you have more questions please message me below. I am happy to answer you questions ASAP. Peter J. Metz The Mortgage Genius.
The only way you can utilize a co-signer on a mortgage is for income purposes only.
On a mortgage the lender can use the co-borrowers income to qualify the occupant borrower. This is called a non occupant co-signer. It is NOT possible to get a co-signer because of bad credit. The only way a co-signer works is if a person needs more income to qualify for the home they want.
If you have more questions please message me below. I am happy to answer them ASAP.
Using your homes equity to consolidate debt is sometimes a great strategy to help relieve monthly cash flow.
There are a few ways you can access your equity of your home for a debt consolidation loan.
The first is a cash out refinance. Depending on the loan type you can they limit the amount you can borrower on a cash out refinance. If you are wanting to get more than $2,000 cash back from your equity this is considered a cash out refinance. A conventional loan allows you to go up to 80% of the value of the home on a primary residence. An FHA loan allows you to go up to 85% of the value of the home for a cash out refinance. The VA loan allows you to get up to 100% for a cash out refinance.
An Equity Line of Credit (ELC) is a great tool to access your homes equity in your home. You can use the ELC for home upgrades, debt consolidation, cash reserves, and you can even use the ELC to purchase more real estate.
If you are thinking about getting an equity line of credit reach out to me below. I am happy to answer all your questions asap.
This is a program for teachers that is okay but not great. The teacher is able to get a loan to cover not just the down payment but also the closing costs. The loan is at a reduced interest rate of 2.5% instead of the higher 4-5% you would pay if you were not a teacher.
This program though is uses the FHA loan or the conventional loan. The interest rate will be higher than normal on the fha or conventional loan. There is no such thing as a free lunch. The monthly payments are higher and the only benefit is to be able to purchase the home with no down payment.
I did a full video tutorial on this loan program here.
Message me below with any of your questions. I am happy to respond ASAP.
Did you know you can get really good financing on manufactured homes that are on a permanent foundation.
You want to make sure the home is newer than 1976. You also want to make sure the home has never been moved from its original location. If the home has been moved from its first location this disqualifies the home to be financed by FHA and also conventional.
You can purchase manufactured homes normally at a discounted with some property and sometimes can be a great deal.
If you have more questions please message me below. I am happy to respon ASAP.
Mortgage interest may or may not be a deduction from your income.
The standard deduction now is larger than the standard deduction that is allowed. Depending on the price of the home, the interest may be deducted for higher loan amounts up over $400k.
Make sure you talk with you tax professional for more questions.
If you have more questions please message me below. I am happy to answer them ASAP.
We're talking about capital gains when you sell your primary residence.
If you purchase your primary residence and you live in your primary residence for at least two out of the last five years before you sell it, the government allows you to not pay taxes on the gain that you had of that home when you sell.
So that allows you to take that equity, and you could keep it without having to pay taxes on it. So it's per spouse, so the government allows up to 250,000 per spouse or 500,000 for a couple that you can take out of the home and not have to pay taxes as long as you've lived in the home at least two out of the last five years.
I hope this mortgage safety tip is helpful for you guys. If you guys have any questions, feel free to reach out to me any time. Thank you so much.
Construction Loans allow you to get a loan to purchase the land and also the cost to build the new home.
There are different options for your down payment. You can use your land if owned free and clear as the down payment of the construction loan.
This is an amazing strategy that I am currently utilizing myself with my current mortgage. How it works, is very simple.
Most of us will have some savings in our bank account that is not earning us any interest at all. This money could be used to pay down our mortgage but only if we could access it if we needed to. That is where an equity line of credit comes in. The equity line of credit is used to pay off or pay down your first mortgage. Then the money in your bank account is deposited to the equity line of credit. As long as you can continue to save at least 10% of your money this strategy will work to pay off the mortgage in 7 - 10 years with out changing your monthly expenses.
Here is a full tutorial on this strategy that I found was very helpful.
If you had a bankruptcy, don't worry, its not the end of the world.
Bankruptcies are very beneficial and will help you get back on your feet. Depending on the reason for the bankruptcy, you may be able to purchase with in 1 year after the date of discharge of the bankruptcy.
If the bankruptcy was due to a circumstance that was out of your control like a medical bill or maybe you were let go from a job and had unexpected loss of income. These are all reasons you may be able to purchase with in 1 year after the bankruptcy.
If the BK was due to mismanagement of debt, then the waiting period is going to be 2 years from the discharge of the bk.
If you have more questions please get in touch with me.
Biweekly payments is a great way to accelerate the mortgage term on your loan.
Using this strategy will allow you to pay off your home 5-7 years faster than normal.
If you are interested in paying your mortgage off faster this is one great way to do it.
If you have questions on how to set this up please message me below. I am happy to answer your questions asap.
If you are ready to purchase a home you are going to want to make sure you maximize your credit score.
Maximizing your credit score will allow you to get the lowest and best interset rate. This will keep your monthly payment lower. Your credit score will go up by having more available credit. Either by paying down your balances or by asking to increase your limits on your credit cards.
If you do not have any credit cards you will want to apply for a secured credit card first if no banks will approve you for a credit limit.
If you have questions regarding your credit please write me below. I am happy to respond asap.
Did you know that you can increase your credit score within two to three days instead of waiting for the full 30 to 60 days that normally happens when you pay down a credit card?
What a rapid rescore is, is that when you pay off your balance, or maybe you pay down your balance, you can give that new statement to us or new balance, we take that balance, and we send it to all three bureaus for you and we instantly within two to three days update your credit score. This allows you to qualify for more, allows you to qualify for a better interest rate, and allows you to qualify for programs. You would have to wait otherwise, 30 to 60 days.
I hope this tip is helpful, and we'll talk to you guys very soon. See you.
CalHFA loan is a great option for first time home buyers.
There are some drawbacks of this loan. Please see my full video tutorial on the CalHFA loan.
See my FHA CalHFA tutorial here and my Conventional CalHFA tutorial here .
I would love to answer your questions. Please ask me any question below. I will respond asap.
There are 3 ways to pay your closing costs when you purchase a home.
Remember. You are borrowing a lot of money, so you want to make sure you know your options.
The first way to pay your closing costs is obviously to pay cash for them. Most will not have the ability to pay cash for their closing costs so you have 2 options.
The first option is to ask the seller to pay your closing costs. This may sound like a brilliant idea right. Yes. The seller can pay them. Well not so much. The seller might be willing to pay your closing costs however this means they are willing to take less than what you are offering.
If they are going to credit you lets say $7,000 for closing costs they are willing to take $7,000 off the purchase price of the home. So really you are paying for them in your loan by paying an extra $7,000 to the seller.
The 3rd way to pay closing costs is to have the lender pay them for you. If you have the lender pay them the lender can give you a higher interest rate, then credit you for the closing costs. Its important to know which strategy to use because this is a large amount of money you are borrowing.
Please message me below with your questions. I will respond asap for you.
Did you know that NO bank will allow you to purchase a home unless you put at least 20% down or if you purchase mortgage insurance.
Before the 1930s there was no such thing in the US as purchase 100% financing or 5%, 10% down home loans. The banks would not lend to anyone unless they put at least 20% of their own money into the deal. Its the same today. Only difference is they created an insurance policy that will cover the bank incase you default on your loan. This insurance does NOT protect you the borrower. It protects the bank that is loaning you the money.
Its very smart however to know all your options with mortgage insurance.
There are 3 ways to pay MI on a conventional loan. The FHA loan requires Mortgage Insurance no matter how much down payment is being put down.
Please ask me your questions about mortgage insurance below. I will be happy to get back to you asap.
This video is about Rehab Loan Types.
What a great program. We help all of our first time buyers qualify for this MCC tax credit.
If you are purchasing your first home, for sure you want to learn about the MCC tax credit. This program has been around for over 30 years. This program also allows you to purchase for a more expensive home and we can use the credit as income on on your loan.
If you would like more informationn I did a tutorial on the MCC tax credit that you can find here.
If you have questions I am happy to answer them. Submit your questions below.
On a conventional loan, you have to pay mortgage insurance if you don't put at least 20% down on the home.
If you choose to pay monthly mortgage insurance, you have to pay this monthly mortgage insurance for a long period of time, and there are a few different ways to get rid of it.
I've done another video for you that explains the two or three different ways you can get rid of mortgage insurance if you pick the monthly mortgage insurance.
Now, if you pick this monthly mortgage insurance, you want to make sure that you pick this strategically because there's a calculation where you could pay a one-time fee and not have to pay monthly.
And we can talk about that, and I can show you the calculation to see if it makes sense for your family to do monthly mortgage insurance.
Hope this mortgage tip is helpful for you guys. If you guys have any questions, feel free to reach out to me any time. Thank you so much.
Before you pay off your collection, save your money and make sure you talk with me before doing this.
The reason is because the credit companies do NOT give you a bump in your credit score for paying off something that should have been paid in the first place.
Lots of times when you pay off a collection this can actually lower your credit score. Yes. Thats right. I said this can lower your credit score. The reason is becuase the collection company that reported will now report the collection balance to $0,00 on your credit. The credit companies look at this as a new collection. They do not take into account the balancne of the collection. They will think you just added a new collection to your credit.
If you want to increase your credit message me below your questions and I wlll answer them ASAP.
The Platinum Grant Program is good but NOT that good. There is no such thing as a FREE LUNCH. Did you ever learn this from your economics teacher?
This program does help 1st time buyers get into a home however its VERY expensive. The loan gives you a 3-4% grant that will cover your down payment on an FHA loan. The banks are NOT dumb. They will give you this grant but the interest rate they will charge is 1-1.5% higher than what you could get if you came up with the 3% down on your ownn. This extra interest will be payed back to the bank. The higher interest is for the life of the loan. The bank will make way more money then they give you in the long run. They do require you to wait at least 3 years before the grant is forgivable.
If you have more questions here is a link to the grant program. Write your questions below.
The Prime interest rate is a shorter term rate that will affect your credit card payments, car loans, and equity lines of credit.
The 30 year fixed rate is what your mortgage rate is based on. The 30 year fixed rate does not directly change with the prime rate. If the federal reserve lowers the prime rate, sometimes this will have an opposite effect on the 30 year fixed rate. If the feds are trying to lower the prime rate, this will speed up the economy and create more inflation. Inflation is the enemy of the 30 year fixed. Most of the time the 30 year fixed rate will increase if the feds are lowering the prime rate.
If you have more questions please give me a call or send me a message.
Did you know you can quickly increase your credit score with in 3 - 4 days?
This is called a rapid rescore. This Rapid Rescore could allow you to get a lower interest rate, lower cost for mortgage insurance, and or lower cost of the loan.
Make sure you ask your lender before locking in your rate to maximize your mortgage insurance.
For more questions regarding your credit please contact me.
These loans are NOT done too often.
If you find a home that needs lots of repairs or maybe you want to finance repairs into the mortgage this is possible through a rehab loan. Both conventional and FHA has a rehab loan program. How the program works is you offer what you want to pay for the home. If they accept, then during the escrow period before we close the loan you will need to get a contractor to give you bids on the exact amount or cost of the rehab. We then use these bids to get an accurate valuation of the home after repairs will be completed.
Its called a subject to appraisal. We then give you the loan to purchase the home and the money for the rehab. There are extra costs involved in these rehab loans and the interest rate is normally a little higher than normal as well.
If you have more questions about a rehab loan please message me below. I will respond ASAP.
These loans are NOT done too often.
If you find a home that needs lots of repairs or maybe you want to finance repairs into the mortgage this is possible through a rehab loan. Both conventional and FHA has a rehab loan program. How the program works is you offer what you want to pay for the home. If they accept, then during the escrow period before we close the loan you will need to get a contractor to give you bids on the exact amount or cost of the rehab. We then use these bids to get an accurate valuation of the home after repairs will be completed.
Its called a subject to appraisal. We then give you the loan to purchase the home and the money for the rehab. There are extra costs involved in these rehab loans and the interest rate is normally a little higher than normal as well.
If you have more questions about a rehab loan please message me below. I will respond ASAP.
If you guys are thinking about getting any kind of mortgage this next year, purchasing an investment property, buying another home and/or selling or buying, it would be a great time before you file your tax returns to give your lender or give me a call and we can definitely help answer all your questions as it relates to filing your tax returns, the incomes that you need to qualify for what you want to do this next year.
Anyways, so feel free to give me a call any time. I'm really here to help and answer all your questions and I want to help you guys out. Thank you so much for all of your support and we'll talk to you guys all very soon. See you.
Each loan type requires a different waiting period depending on the type of bankruptcy that was filed.
Conventioanl loans require a 4 year waiting period after a chapter 13 or a chapter 7 bankruptcy.
FHA loans only require 2 years from discharge for a chapter 7 bk and require only 1 year from filing on a chapter 13 bk.
The USDA loan requires 3 years from either a chapter 7 or chapter 13 bankruptcy. The usda loan, however, does allow extenuating circumstances. They will let you purchase prior to the 3 years if you had a job loss or a major medical circumstance that required you to file for BK.
If you have more questions please message me below. I am happy to answer you questions ASAP.
There are many things that will affect your interest rate on your mortgage.
When you see an interest rate being quoted online there are lots of fine print always that you will want to read.
Here are just a few items that affect the interest rate of your home. Credit Score, Purpose of the loan (Cash Out or No Cash Out), Primary or Investment Property, One Unit or a multi unit, loan amount, equity in the home (or down payment).
There are more items that can affect your rate. Its important to make sure you maximize your rate by having a good credit score.
If you have more questions about interest rates please message me below. I am happy to respond ASAP.
Before you purchase your home or apply for a home loan, you will want to make sure you maximize your credit score before locking in your interest rate.
This What If Simulator will allow you to know exactly what to do to maximize your score and get the best and lowest interest rate available.
Before you lock your rate make sure you are checking this what if simulator. We will be happy to provide this service for free.
Give us a call or send us a message.
What is a Mortgage Impound Account? You will hear this term when you decide to purchase a home.
This is a reserve account that your lender will want to set up so that they can pay for yorur property taxes and home owners insurance when they become due. Property taxes are due twice a year. Once you pay off the mortgage or refinance the home the bank will send you a refund of the amount they have collected in reserve.
If you have more questions ask me below. I am happy to respond asap for you.
The best time to lock in your interest rate is when you go into contract with an accepted offer.
It is possible to lock your rate before getting an accepted offer, however we highly recommend you wait. This will save you money up front and also allow you to get a lower interest rate. The longer you lock your loan the more expensive and the higher the interest rate will cost you.
There is NOT a fixed rule on when to refinance your home. This is a large amount of debt that you carry.
Its very important to pay attention to your home value, current interest rates, mortgage insurance elimination strategies, debt consolidation strategies and much more.
Let me help you manage this debt in a conservative a prudent way. Ask me any questions you have regardingn refinancing below. I will respond ASAP.
Interest Rates will change multiple times per day and can be very volatile at times.
The 30 year fixed rate changes based on how good or how bad our economy is doing. If you think about it this way. Lets say you loaned someone money for a 30 year period. The amount of income you received is the same every single month. You want to make sure this money goes as far as it can possibly go. When our economy is doing very well, this means that money is inflating. Milk, groceries, gas, etc are getting more expensive. Your $1,000 per month can NOT buy as much as it used to. So the 30 year rate will go up when we have high inflation. The 30 year rate will go down when we do not have inflation.
This is exactly why the 30 year loan rates were 10+% in the 70s and 80s.
We watch the rates daily and will always make sure you are getting the best and lowest interset rate possible. Please message me with any of your questions.
We are eager to hear from you
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