Lowest Rates Ever! by Nicholas Ballard

I generally avoid writing about interest rates as they tend to be even more transitory than the constantly shifting lending guidelines we’re forced to deal with. Whereas investor guidelines may change on a weekly basis, mortgage interest rates can make dramatic shifts on any given day. My focus when building a file is therefore directed toward the more tangible elements that support a loan – qualifying income, credit scores, likely loan-to-value ratios, and matching the borrower to the best-suited lender. While there is no sure way to guess when and where the lowest rate will be found, especially with a purchase transaction’s compressed timeline, careful positioning of a loan package is the best way to insure a favorable...

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A Unique Mortgage Offers Flexibi... by Nicholas Ballard

A unique mortgage type that came to the U.S. market just a few years ago is gaining popularity and can offer significant advantages for borrowers with good cash flow and savings. Sometimes referred to as an “offset account” it operates as a first lien, equity line of credit that is joined to a full service checking account. Variations of this loan have been some of the more popular home financing options in the UK and Australia for many years, so it has a proven track record. However, don’t expect major U.S. banks to follow suit anytime soon as it would cut into their profits. For now, they offer offset loans only to their largest depositors. This mortgage, marketed by just a few banks (including CMG as the Homeowner Accelerator or...

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Lender Niches Provide More Borro... by Nicholas Ballard

As most prospective borrowers in search of mortgage financing quickly discover, a standard set of loan requirements dictates the items you’ll be expected to provide. These include tax returns for the two most recent years as well as verification of employment and assets to meet with the “investor’s guidelines.” For most loans, the “investor” is either Fannie Mae or Freddie Mac and even loans channeled through other investor conduits tend to conform to the guidelines or rules these two giants of the mortgage world lay out. Although Fannie Mae and Freddie Mac’s guideline requirements are similar, subtle differences do exist allowing certain borrowers whose application may be blocked by one to win approval through the other. Most...

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Better Loan Options as Lenders E... by Nicholas Ballard

The recent influx of improved financing options for those with limited down payment funds suggests an increasing investor consensus that the housing market continues to stabilize. As an added -and necessary -vote of confidence, private mortgage insurance providers have also relaxed their requirements over the past few weeks. Although getting a loan is still challenging and income requirements remain stringent, the growing pool of lenders competing over expanded offerings will improve financing options for millions of borrowers.

Here are some loan products that were tough to secure just a few weeks ago and are now more solidly supported: 95% Purchase Money for Loans to $417,000 that Compete with FHA. Although this product has been...

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90% Financing to $729,750 is Now... by Nicholas Ballard

Private mortgage insurance providers have recently relaxed guideline requirements to allow 90% financing up to the high-balance conforming product’s limit of $729,750. The expanded offering is currently limited to purchase money for the acquisition of owner-occupied, single-family homes. The willingness of mortgage insurance companies to augment their coverage to 90% suggests there is increasing stability within California’s housing market and will likely foster greater competition for properties in the low $800,000 purchase range. Buyers with limited down payment funds can now secure excellent 30-year fixed rates to a purchase price just shy of $811,000 with only 10% down. Any conventional loan that finances more than 80% of a...

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Comparing Interest-Only and Amor... by Nicholas Ballard

When exploring loan options with new clients, a common statement I hear from them is, “I don’t want an ARM (Adjustable Rate Mortgage) or interest-only loan.” In turn, the question I ask is, “how long do you plan to keep this mortgage or stay in this home?” Although today’s historically low, 30-year fixed rates offer cheap insurance over the long run, those buying for the shorter term will likely have overpaid for peace of mind. Remember that security comes at a cost: at 5.0%, the interest payments on a $500,000 30-year mortgage are roughly 93%, or $466,278!   Following the housing market’s recent setbacks and years of press lambasting “bad, interest-only mortgages,” there is now a general presumption that these mortgages were somehow...

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Great $1 Million VA Loans for Ma... by Nicholas Ballard

Is 100% financing still available and, if so, is it possible to get favorable loan terms with no money down? For veterans of the U.S. military, the National Guard or U.S. Reserve the answer is a definitive “yes” and the rates and terms do not get any better! Qualified veterans seeking financing in high cost Bay Area counties like Alameda, San Francisco, San Mateo, and Marin may be eligible for the lowest rates available on 30-year fixed mortgages up to $1,094,625. 100% financing is available for other Bay Area counties to lower maximum limits. VA loans are mortgages guaranteed by the U.S. Department of Veterans Affairs and offered to the public through program-approved lenders. It is important to keep this in mind when shopping for a...

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New Tax Credit Rewards Buyers on... by Nicholas Ballard

Bay Area homebuyers will be pleased to learn of the new income tax credit signed into law by Governor Schwarzenegger on March 25, 2010. Assembly Bill 183 offers a tax credit of up to $10,000 for approved first-time homebuyers or buyers interested in purchasing a home that has never been occupied. The new credit’s implementation coincides with the existing $8,000 federal tax credit’s pending expiration. The new AB 183 credit is offered to qualified purchases closing between May 1, 2010 and August 1, 2011, on contracts fully ratified no later than December 31, 2010. The expiring federal tax credit applies to contracts signed by April 30 that close no later than June 30, 2010. Lucky buyers with contracts ratified by April 30 and whose...

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