Posts

What Every Homebuyer Must Know About Hazard Insurance & Mortgages

Here are a few tidbits about Hazard Insurance, something that is required with every mortgage. Hazard insurance is also known as fire insurance and homeowners insurance, and it should not be confused with mortgage insurance, which only covers the mortgage and not the dwelling. Lenders require the “Dwelling Coverage” to match or exceed the lower of the loan amount, or the replacement cost estimate.Read More

“Private” Mortgage Insurance vs. FHA Mortgage Insurance – Huge Difference!

I recently blogged about three options to eliminate Private Mortgage Insurance (PMI), and I received several notes asking why I did not mention FHA Mortgage Insurance. By the way, I love reader-feedback, so please keep it coming – as it often makes for great blog fodder! I didn’t cover FHA Mortgage Insurance because I was […]Read More

How To Estimate PMI (Private Mortgage Insurance)

An agent asked for this blog in December, and I am finally getting to it but should have done so much sooner because it was a great request! As an aside, if any readers would like to see me blog about something in particular, please feel free to email your requests, as I greatly appreciate […]Read More

When “Big Bank” Purchases Die And Come To JVM; What We Learn

A listing agent we know well called us recently b/c one of his listings died at Chase at the 11th hour – and he wanted us to salvage the deal. I am not trying to beat up on Chase either, as we sell a ton of our jumbo production to them and we also know […]Read More

Private Mortgage Insurance (PMI) – When & Why It Is Pretty Awesome

Private Mortgage Insurance (PMI) earned an unjustified bad rap back in the 1990s. Investopedia, in fact, lists “six reasons to avoid PMI,” including: (1) Cost; (2) No Longer Tax Deductible; (3) Heirs Get Nothing Because It Is Not Benefits Insurance; (4) Hard To Cancel; and (5) Payment Is Permanent. But – many of those “reasons” […]Read More

PMI Can Help Homebuyers In California

Every year, tens of thousands of homebuyers are helped by private mortgage insurance (PMI). Without PMI, many of those folks would not have been able to move forward with their home purchases because of their insufficient funds for a down payment. Private mortgage insurance allows buyers to bridge this gap and purchase a home sooner […]Read More

How to Get a Low Down Payment: A Guide for Borrowers

For many homebuyers, the down payment is the most significant obstacle on the road to homeownership. This is why so many homebuyers are looking for mortgage loans with low down payment options when purchasing a home. We’ve outlined a few of the ways borrowers can get a low down payment and how they may be […]Read More

10% Down With No PMI; Overrated?

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The Loan-to-Value (LTV) Ratio: A Guide for Borrowers in Texas

The Loan-to-Value Ratio (LTV) is a key mortgage term for homebuyers and homeowners to know and understand. We mention LTV a lot when breaking down other mortgage topics and products. Today we’re giving a crash course in LTV and explaining the impact LTV has on purchasing and owning a home. Loan-to-Value Ratio Defined The loan-to-value […]Read More

“PMI” or “Private Mortgage Insurance” Explained (Briefly)

PMI remains a great option for high-LTV financing in 2019, and all too many borrowers and agents do not fully understand how it works. First of all, PMI protects lenders (not borrowers) in the event of default. So borrowers with PMI will still be on the hook or liable for their mortgage debt even after […]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

Study Shows Mortgage Insurance Lessens Difficulty In Obtaining Down Payment

In California’s increasingly competitive market, a study has found that mortgage insurance significantly helps California buyers with their down payment. 18 years of saving for a California 20% down payment. California’s increasingly competitive market has made property prices soar. With the high price tag associated with California real estate, many homebuyers are increasingly concerned about […]Read More

52% of Homebuyers In California & Nationwide Have Down Payments Less Than 20%

Zillow recently published their Consumer Housing Trends Report 2018, which included in-depth reporting surveys on 20% down payments in California and across the nation. The comprehensive report found that nearly 52% of homebuyers across the nation are making down payments on home purchases with less than 20% down. This should come as a welcome surprise […]Read More

First-Time Homebuyers Should Consider FHA Loans in California

Federal Housing Administration (FHA) loans are an excellent option for California first-time homebuyers looking to buy in the competitive California market. FHA loans in California have low down-payment financing options with flexible underwriting guidelines that are great for homebuyers with liquidity or credit issues. FHA loans are growing increasingly popular among the California first-time homebuyer […]Read More

Insurance & Mortgages; What Is Required? What’s It For?

There is often confusion in regard to all of the insurance that borrowers either should have, or are required to have, when they finance a home. Here is a brief outline that will hopefully alleviate some of the confusion. I. Fire, Hazard, or Homeowner’s Insurance. These terms are used interchangeably even though they are not […]Read More

The Loan-to-Value (LTV) Ratio: A Guide for Borrowers in California

The Loan-to-Value Ratio (LTV) is a mortgage term homebuyer and homeowners should become familiar with if they plan to apply for a home loan. Mortgage lenders will mention LTV often while explaining the mortgage qualification process and different loan products. Today we’re giving a crash course in LTV and explaining the impact LTV has on […]Read More

Why Lender-Paid Mortgage Insurance Isn’t Such a Good Deal

We are seeing borrowers come to us with quotes from online lenders for conventional loans with LTV > 80% but NO mortgage insurance. What the borrowers don’t realize is they are being quoted for a Lender-Paid Mortgage Insurance product (LPMI). With LPMI, a lender simply waives PMI requirements in exchange for a higher interest rate. […]Read More

How to Eliminate Private Mortgage Insurance or PMI

Here are three options for eliminating the private mortgage insurance (PMI) obligation associated with a conventional loan (FHA MI is permanent). Option #1 – Refinancing: If your property appreciates to the point where we can garner a new appraisal to support a value high enough to reduce your loan-to-value (LTV) ratio to 80% or less, […]Read More

The Case for Private Mortgage Insurance; PMI Is a Great Option Now

Private Mortgage Insurance (PMI) for buyers with less than 20% down has been much maligned for all too long. PMI is now, however, so much more competitive that it is often a far better option than the two highly touted alternatives: Lender Paid Mortgage Insurance (LPMI), and 80/10/10 (1st and 2nd mortgage) financing. PMI is […]Read More

Arch Mtg Ins; MUCH Cheaper; Algorithms

Today’s Blog is about Private Mortgage Insurance, normally a boring subject, but now fascinating for a few reasons. First, Arch MI is now available for strong borrowers as a fantastic alternative to traditional PMI, FHA financing, and 80/10/10 (1st/2nd Combo) financing. Arch MI is much, much cheaper b/c they use algorithms to calculate risk and […]Read More

95% LTV With No PMI? LPMI Not A Good Deal.

Many lenders are again touting their 5% or 10% down loans with no private mortgage insurance (PMI). Almost all lenders (including JVM) offer this through a product called Lender Paid Mortgage Insurance (LPMI). With LPMI, borrowers take a higher rate in exchange for no PMI. Lenders get more yield premium or commission with the higher […]Read More

Jan. 26: Big Day – FHA MI Drops; CU Appraisal Rule In Effect

January 26th, 2015 is a big day in the mortgage industry. 1. FHA “monthly” MI is lower (down to 0.85% for most loans) for all case numbers ordered from today on. Per HUD, expect delays in getting case numbers. 2. Fannie’s much feared new Collateral Underwriting (CU) Rule is now in effect. This is a […]Read More

FHA to Reduce Annual MI by 0.50% – 0.85% in Most Cases

President Obama is announcing a proposed reduction in FHA Mortgage Insurance today. Currently, most FHA Loans (with 3.5% down) have Annual Mortgage Insurance Premiums of 1.35%. The Obama Administration wants to reduce annual MI premiums by 50 basis points down to 0.85%. FHA (Federal Housing Administration) and Congress still have to buy off on the […]Read More

Lender Credits For Closing Costs Again – Effect on Payment?

Yesterday, we recommended Lender Credits for closing costs for borrowers who are tight on cash. We pointed out how such credits result in higher rates, but we failed to mention the effect on a mortgage payment. Our borrower yesterday had a loan of approximately $400,000. If she locked in a rate of 3.75%, with a […]Read More

Dow Hit Record High; Getting Out of PMI

A borrower recently called us to discuss his refi options. He had a 30 year fixed rate loan at 3.5%. He also had PMI that he wanted to eliminate b/c he now has substantial equity in his Bay Area home. As much as we wanted the refinance business, we told him not to refinance but […]Read More

Lender-Paid-Mortgage-Insurance – Overrated?

Many lenders tout Lender-Paid-Mortgage-Insurance (LPMI) as a way to avoid mortgage insurance. In fact, one of our lending sources (Quicken) has extremely good LPMI rates. With LPMI, borrowers can avoid mortgage insurance altogether by taking a slightly higher interest rate (3/8 to 1/2 percent higher for a 90% LTV for example). There is no free […]Read More

We Push 5% Down Conventional Over FHA, If Loan Is Under $417,000

We had a buyer come to us this weekend who had been approved for FHA financing by an online lender. The buyer, however, was very well qualified and should have been encouraged to take 5% down Conventional financing over 3.5% down FHA financing. Conventional financing is better than FHA financing, when buyers qualify, for the following reasons: 1.) […]Read More

No Cost Refi = No Risk = No Prepay Penalty = Savings for Free

We have many borrowers with Mortgage Insurance who qualify for “no cost” refinances that would save them as much as $500 per month in some cases. These borrowers are “ripe” for refinancing b/c their homes have appreciated rapidly since their purchase date. We of course contacted these borrowers and explained the benefits of a refinance, […]Read More