5 Key Credit Reminders & Misconceptions

#1 – Consumer credit scores are not the same as mortgage credit scores. Borrowers often share their credit scores with us, as if those scores are set in stone. Those scores, however, are often generated by online “consumer” oriented scoring models that are much less stringent than the scoring models mortgage lenders employ. As a […]Read More

House Hacking: Using Rent from Units to Offset Mortgage Payments

We cohosted a “House Hacking” seminar earlier in the year where we illuminated the many advantages of buying multiple units with rental income, as opposed to buying a single family residence. I was one speaker along with a seasoned agent, a property manager, a tax planner, and a financial planner. The advantages of buying units […]Read More

Charles Schwab No Longer Charges Commissions for Trades

Charles Schwab started to offer discount brokerage services (low commission trades) way back in 1975. Much of the financial industry paid little attention to the upstart firm but it nonetheless continued to grow and capture more and more market share. And then finally, 44 years later, Schwab announced that they would charge no commissions at […]Read More

Why Cash-Heavy Buyers Should Put LESS Down – Liquidity and Investment Returns!

We have had so many “cash-rich” borrowers ask us if they should put more money down lately, that we thought we should repeat this popular blog. Long-story-short:  borrowers usually should not put more money down as long as they have optimal financing and are not paying mortgage insurance. Borrowers also should not be so gung-ho […]Read More

First-Time Homebuyers Hunt for Financing Before Houses

A new housing report by the Washington Post shows that first-time homebuyers get pre-approved before house hunting. First-Time Homebuyers Look for Financing First In the Washington Post’s latest housing report, they found that 74% of homebuyers start their house hunt by researching financing options and getting pre-approved. For first-time homebuyers, that percentage increases to 85%. […]Read More

Why Even Cash-Rich Borrowers Need 30-Year Mortgages; LIQUIDITY!

Borrowers often underestimate the importance of liquidity. Especially when times are good. When rates are relatively low (under 8%), we always recommend using financing (obtaining a mortgage) to buy real estate, even if borrowers have ample cash. Similarly, we usually advise borrowers (who want lower 15-year rates) to take 30-year mortgages over 15-year mortgages. Even […]Read More

Mortgage Banks vs. Commercial Banks; What’s the Difference? What’s Better?

The Wall Street Journal featured an article recently that stressed that buyers in a competitive market need a lender with a stellar reputation, an ability to close quickly, great communication skills, and local appraisers. Big bank/commercial bank corporations are just that: they’re big. Large corporations tend to have huge amounts of clientele. As a result, […]Read More

Bank Statements – Why They Are SO Important!

STRONG BORROWER DENIED FINANCING – WHY? We once had a borrower who qualified for financing in every way (income, assets, credit, etc.) but she was denied financing. The reason? She had five unexplainable overdraft charges on her bank statements that indicated she could not manage cash. Every borrower has to provide bank statements for every […]Read More

Refi’s Die; Mortgage Industry Shakeout; Cheese Moving

In 2012, 72% of mortgage industry volume consisted of refinancings, or”refi’s” for short. In 2017, refi’s dropped to only 37% of total volume – the lowest percentage in two decades. This is from a recent WSJ article that we will reprint below this blog. 70% of Quicken’s 2017 business was from Refi’s, and that percentage […]Read More

Bitcoins, Bubbles, Burning Bankers; Beanie Babies

In 1307, King Philip IV of France couldn’t pay his massive debts to the Knights Templar. So naturally he accused them of false crimes and burned them at the stake. I stole that story from a recent WSJ article called Hooray for Bitcoin. It illustrates two things: (1) it’s an excellent way to eliminate your […]Read More

FHA Financing Is Fast, “As Is,” & Easy; 15 Day Close

Heejin and I did a presentation yesterday on marketing for real estate agents, based on everything we have seen work and not work with the hundreds of agents we have worked with. It went really well, and if anyone would like to see it, please let us know. But, this blog topic surfaced after the […]Read More

Income Taxes Owed Is OK; Tax Liens Must Be Paid Though

This is a quick reminder that borrowers can still obtain mortgage financing even if they owe income taxes.  But, a payment plan with the IRS must be in place. For FHA, we need proof of three payments, and for conventional, we need proof of one payment (and it can be made in escrow). Borrowers cannot obtain […]Read More

Converting “Cash” to Down Payment Funds – Gifts

We frequently have borrowers with substantial sums of cash that they want to use for a down payment. They cannot simply deposit the funds in escrow or into their bank accounts b/c lenders will want to know where the money came from. Lenders prohibit the use of un-sourced and unseasoned funds in all transactions. Buyers […]Read More

22 Habits Of Wealthy People – Avoiding Gossip?

22 Habits of People Who Accumulate Wealth. Tom Corley is a CPA and Financial Planner who spent four years interviewing “Wealth Accumulators” (WAs) and “Non-Wealth-Accumulators (NWAs) about their various habits. He compiled his statistics and made many fascinating observations, including those listed below. Many of the habits are just common sense practices that obviously work, […]Read More