Adding Eggs & Why Agents Should Let Sellers Help Sell Their Home

  When General Mills introduced Betty Crocker boxed cake mixes in the 1950s, they included dried eggs. Aspiring cooks just had to add water to the mix in order to get a perfect cake. But, the cakes were so easy and so good that women felt guilty about deceiving people and sales lagged. So, General […]Read More

Home Sales Fall Despite Falling Rates; Is the End Finally Here? We Can Only Hope :)

TULIP MANIA In the 1630s, the Dutch experienced one of the world’s first major financial bubbles – Tulip Mania. They were all convinced that the price of the exotic (at the time) tulip bulbs would increase forever, not taking into account how easy it was to reproduce them and how the ridiculously high prices were […]Read More

Life Events That Influence Decisions to Move; Big Data

Zillow, with all of its faults, often publishes interesting articles. A recent example is Behind Every Move Is a Story (Life Events That Influence Decisions to Move). It is of course no surprise that major life events influence decisions to move – almost 70% of all movers surveyed experienced one or more major “life events” […]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

Why Lenders Have to “Beat Up” Borrowers

Our well-heeled borrowers often get extremely frustrated when we ask them to chase down seemingly inane conditions. They will say: “I can just pay cash for the entire house… WHY do I need to provide this?” This happens so often that it prompted me to repeat this blog from a few years ago. BEATING UP […]Read More

Buying Out Spouse/Partner = Refi; Not Cash Out or Purchase

We recently received the below email from a borrower who left us for what he thought was a lower rate.  “Hi Casey, The other lending company fell through and couldn’t get us a loan in time. Their customer support was horrible and wouldn’t provide me with a direct answer. We would like to see if […]Read More

Seller & Lender Credit Guidelines

Here are a few quick reminders/guidelines for Seller and Lender Credits. If a credit is specified to be for a repair anywhere in a purchase contract, the repairs will have to be completed PRIOR to close of escrow. We will need to show proof they are complete with either an appraiser’s or a licensed contractor’s […]Read More

Income Continuance – Three Years Is All We Ask

When my dog Kevin was issuing pre-approvals based on Desktop Underwriting (DU) findings only, one of his biggest mistakes was not verifying “Income Continuance.” Lenders cannot use Child Support, Alimony, Disability, or Retirement income unless they have proof that it will continue for a minimum of three years after close of escrow. For example, if […]Read More

How Long Is a Pre-Approval Letter Valid? Forever, as long as…

We have over 800 pre-approved borrowers in our database – all closely tied to their respective referral sources I might add. As an aside, each pre-approval requires about two to four hours of labor, depending on complexity, with additional hours often required for scenarios, questions, advice, calling agents, etc. Our historic conversion rate for pre-approved […]Read More

Three Important Tax Filing Tips for Homebuyers

With Tax Season upon us, I want to share a few reminders: If income is lower this year, self-employed borrowers might want to file an extension instead of filing tax returns. This is b/c lenders will often correlate to the most recent year only if income is declining, and that will of course adversely impact […]Read More

Asset Loans; Qualifying With Assets Instead of Income

I touched on Asset Loans in December but I wanted to elaborate on them b/c they are such a great alternative for borrowers with substantial assets but limited documentable income. There are three basic types of Non-QM Asset Loans that we offer. Asset Depletion Loan: We simply divide total liquid assets by 120 months and […]Read More

What Homebuyers Really Want In A Lender

The lender you refer your clients to is a reflection on you. I repeat that often because it is true and because we meet so many agents who are having issues with their lenders. In light of this, JD Power’s recent survey of borrowers should be of particular interest, as it illuminates what borrowers look […]Read More

8 Ways To Lower Debt Ratios & Qualify for More

I repeat this topic from time to time b/c “Debt Ratios” weigh so heavily in our pre-approval process and b/c tight debt ratios so often prevent borrowers from buying the property they want. I explain what debt ratios are and how we calculate them in this past blog. 8 Ways to Lower Debt Ratios: Put less money […]Read More

Five Misleading Closing Cost Tricks the Big Banks Play

We sent out this blog right after the New Year and feel it is worth repeating now, as we’ve seen the below scenarios play out more and more recently. We have been stealing a lot of loans lately from the big banks b/c our service is better and our rates are lower. As a result, […]Read More

When Renovation (203k) Loans Are Not Practicable

Renovation loans, also known as “203k” or “Homestyle” loans, are an awesome resource for properties that are badly in need of major repairs or updating. These loans allow buyers to finance major home improvements with their initial purchase money mortgage by increasing the mortgage to cover the cost of improvements. For major repairs required by flood, […]Read More

Five Misleading Closing Cost Tricks the Big Banks Play

We have been stealing a lot of loans lately from the big banks b/c our service is better and our rates are lower. As a result, the big banks are using some very aggressive and often misleading tactics to win borrowers back. These tactics include massively understating closing costs and then implying that their closing […]Read More

Cracking the Perfect Credit Score? Don’t Bother…

200 MILLION AMERICANS NOW HAVE FICO SCORES About 200 million Americans now have FICO Scores, and about 3 million have perfect scores of 850, according to this Bloomberg article – “How More Americans Are Getting a Perfect Credit Score.” America may be approaching “peak credit score” with average scores now above where they were at […]Read More

Seller 2nds/Carrybacks Are Kosher; See Our Winter Seller’s Guide

SELLER CARRYBACKS In yesterday’s blog about how sellers can help buyers, I failed to mention an important avenue – Seller Carrybacks or Seller 2nds. Almost all conforming loans allow for seller carrybacks as long as: (1) buyers still meet the minimum down payment requirements – usually 5% of purchase price or more; (2) the note’s […]Read More

How Sellers Can Help Cash-Strapped Buyers (They Can’t Gift Funds)

SELLER CAN’T GIFT FUNDS An agent recently asked us if a seller could gift funds to a cash-strapped buyer to help the buyer get into the home. The answer unfortunately is no. This is what sellers can do to help cash-strapped buyers. 1. Closing Cost Credits. Sellers can give credits up to 6% of the […]Read More

5 Reasons Why This Winter Is The Best Time To Buy

Most of our agent-readers well know why winter can be a great time to buy from a real estate perspective. I am nonetheless repeating a few of the obvious reasons while also illuminating a few less-obvious mortgage-related reasons. 1. Rates Hit Six Week Low! While rates have been climbing for most of the year, they […]Read More

Calling Listing Agents With Every Offer

This is another reminder that we love to call listing agents when offers are made simply b/c it is so effective. Listing agents have in fact told us on numerous occasions that it was our phone calls that pushed our buyers to the top. When we call, we follow the same script every time and […]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

The Dispute Over Disputing Disputes (On Credit Reports)

One of our most frequent credit issues involves reported “disputes.” Borrowers report an account in “dispute” whenever they believe some credit data (usually late payments) is reported in error. We usually need to remove the “disputes” from the credit report altogether with an expensive “rapid rescore” and borrowers often do not like this. We must […]Read More

Funding Process Explained; Why Wet/Table Funding Isn’t Favorable

We have had a string of buyers relocating to California from the East Coast lately, and they are confused about the closing process out here. For most purchases in California, the loan is not immediately ready to fund after a borrower signs their loan documents. The “funding package” (signed loan documents and escrow conditions) needs […]Read More

How To Buy Before Selling Current House

We often have buyers who want to buy a new house before selling their current house. They often want more time to move, more time to fix up their current house before selling, or more time to fix up the new house before moving in. They also sometimes want to make offers on a house […]Read More

What Will $75,000 and $100,000 In Income Buy?

Many renters don’t realize how much house their income will buy in this environment, when rates are so low. We often maximize buyer’s qualification by having them use their savings to pay off consumer debt and put less down. For example, paying off debts that total $700 in monthly payments can increase a borrower’s purchasing […]Read More

Rapid Re-Scores Revisited

We often do a “rapid re-score” to repair a borrower’s credit for a variety of reasons: (1) to raise a borrower’s score above a minimum requirement, such as 700 for a HELOC; (2) to improve a borrower’s interest rate, as rates are significantly affected by credit scores; (3) to update tradelines to reflect lower balances […]Read More

Seller & Lender Credits; Can’t Exceed Closing Costs; Repairs; Rules

We thought it was time to repeat a few basic, but very important, guidelines in regard to seller and lender credits. We’ve had numerous delays in recent weeks b/c of mistakes. 1. If a credit is specified to be for a repair either in the contract or addendum, the repairs will have to be completed […]Read More

You’re Invited To Our Homebuyer’s Seminar on April 12th. Save Your Seat!

I’m going to guess you know someone just like Kim. Kim was a nurse making good money and renting in Pleasant Hill. Kim was working with one of our Realtors for over a year but had been too apprehensive to pull the trigger and buy a home. And it seemed as though that was how […]Read More

Unison – 10% Down Payment Assistance For Small Share of Appreciation

Unison contributes 10% of the purchase price or more to help buyers increase purchasing power, to save cash for other uses, to avoid PMI, or to reduce payments in order to lower debt ratios or just save money. Unison does not charge interest or any payments, but only takes a small percentage of the appreciation […]Read More

Occupying Properties w/i 60 Days; Notice to Vacate; Proof; Calling Loan

“Owner occupied” financing is more favorable than investment property financing b/c the risk of default is much less. B/c of this lenders need to make sure properties are actually owner-occupied. “Owner occupant” buyers must take possession within 60 days of close of escrow (this is why “rent-backs” can’t exceed 60 days too). Problems arise if […]Read More

Rate Shopping Concerns; Avoiding Pain for All

We sometimes lose pre-approved “rate shopping” borrowers long before they are even in contract. This is frustrating for us b/c our full pre-approvals take two to three hours of time, and b/c we have not even formally quoted rates yet (we only estimate rates when we send out payment scenarios). In any case, we like […]Read More

Fascinating “Buy Now” Story; Ignoring Friends; Broker Opens

We told a few stories in Monday’s blog about clients who got into the market when they were young and built over $1 million in equity. A friend of ours responded to that blog with a much more extreme story that is worth repeating, both b/c it is fascinating and it imparts a great lesson. […]Read More

Benefits of Buying Now – Again; Fence-sitters

One of the most effective elements of our Homebuyers Seminars is explaining the benefits of buying now. We are repeating some of our reasons again, as we continue to see a lot of apprehension and b/c rates are rising. Benefits from buying: 1. Inflation Hedge; 2. Building Equity; 3. Feels Good to Own; and 4. […]Read More

Schools and Housing; Exodus After Graduation

There was a great article in the WSJ a few weeks ago about schools and housing. WSJ – Homeowners Quest For Best Schools It is well known that the quality of local schools often drives the value of nearby homes. This was especially noticeable after the 2008 meltdown when we watched the areas with poor […]Read More

Multiple Credit Inquiries; New Home Checklist; Doormat

Borrowers often come to us from other lenders and are overly concerned about credit inquires. Two reminders: (1) Multiple inquiries from mortgage lenders within a 30 day period only count as one inquiry; and (2) for borrowers with good credit, inquiries only have a very marginal effect on a credit score even if they are […]Read More

15 “Calendar” Day Close; How We Do It Every Time

Nicholas, from our office, was at a large Realtor event yesterday that was sponsored by a loan officer who got up and touted her “21 Day Close.” So Nicholas ran on to the stage and let everyone know that we can close in 15 days, all day long, anytime… OK – kidding. Nicholas is very […]Read More

Lender Credits for Closing Costs; Save Deals For Cash-Tight Buyers

When we have buyers who are very tight on cash, we usually recommend a lender credit for closing costs. This is especially the case in competitive markets where seller-credits are non-existent. B/c non-recurring and recurring closing costs can exceed $10,000 or $15,000, lender credits can often save deals for cash-starved borrowers. Buyers need to understand, […]Read More

Why Buy A House Now?

There are many reasons to buy a home, and here are a few reasons for buying now: 1. To lock in historically low interest rates. Even though rates have climbed a bit in recent months, they remain extremely low by historical standards. Rates were in the 10%+ range for most of the 1980s, in the […]Read More

Divorce Season? Things to Know About Divorces and Loans

A friend just told me to blog about divorces b/c “Divorce Season” has begun. But, the internet just told me that March and August are the two busiest months for divorce filings. Either way, here are some things to know about divorces and mortgages. Spouse can quit-claim off title, but NOT off the loan. The only way […]Read More

If a Buyer Is “On” The Loan, He Must Also Be “On” Title; “Title Only” Always OK

We often get questions about whether buyers can be on a loan, but not on title and vice versa (on title but not on loan). If a borrower is on the loan, he or she must also be on title. This does not mean the borrower cannot quitclaim off title after close of escrow, however. […]Read More

Rent vs. Buy Calculators; A “Must” for Renters Nervous About Payments

Below is a repeat of a blog from September of 2014. It is still applicable today. Interesting aside: the rate quote was 1/8% higher than today’s rate, so rates are not as “bad” as we think. We have a borrower paying $1,800 in rent who is very nervous about her potential payment increase after she […]Read More

Supplemental Tax Bills Often Blind Side Borrowers

Homebuyers are often caught off-guard by Supplemental Property Tax Bills. To avoid this, we recently added the below section to our website, and we have made “Supplemental Taxes” a more prominent part of our buyer-education process. This is information every mortgage and real estate professional should know. Supplemental property taxes often create significant confusion for […]Read More

JVM Now Has 15 Day Close; Same As Cash; We’re For Real

We are pleased to announce our “Fast 15!” We are shortening our fast escrows from 17 days to 15 days. We are able to do this b/c we have learned how to navigate TRID, and we can get CDs out early. We love offering fast closings, even in slower markets, b/c they make JVM-financed offers […]Read More

Perspective for Fence Sitters Concerned About Rates & Presidents

We have had a few fence sitters lately, not wanting to get into the market now because they are concerned about rising rates and our new President. In regard to rates, we remind borrowers that rates remain amazingly low overall. The average rate over the last 45 years has been 8.26%, per the WSJ today. […]Read More

Rates May Fall per Forbes; Should Buyers Wait? No! No Cost Refis

Gary Shilling in a recent Forbes column (Dec. 6 issue) said that he thinks the markets massively over-reacted to Mr. Trump’s election. He points out that the root causes of weak economic growth (that have kept rates low) will remain. He also says that Trump’s proposed tax cuts and stimulus programs will be watered down […]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

Realtors Can Refer Buyers to Only One Lender; Not Steering If No Comp.

Rates would actually be a bit higher but for supply and demand. There is a strong market for mortgage backed securities (MBS), and as rates climb the volume of mortgages decreases. As volume decreases, demand starts to exceed supply so the price of MBS goes up, and this keeps rates lower than they otherwise would […]Read More

JVM’s “Don’t List”; Things Not To Do After Getting Pre-Approved

With every pre-approval letter, we also include what we call our “Don’t List.” These are suggested actions to avoid to ensure borrowers remain qualified. These actions do not always kill deals, but they definitely have the potential. 1. Do NOT make large deposits that cannot be explained. All “large deposits” must be explained and/or “paper-trailed.” […]Read More

Credit Info to Know; Mortgage 101 Seminar on Tues, Oct 25th

Here is some credit information everyone in real estate should know. Mortgage companies pull credit from three bureaus and correlate to the middle of the three scores. For multiple borrowers, lenders always correlate to the borrower with the lowest middle score. Mortgage credit scores are usually lower than consumer credit scores (found online) b/c mortgage […]Read More