HELOC vs. Cash Out; Fed Cuts Fed Funds Rate

Borrowers in need of cash often wonder if they should get a Home Equity Line of Credit (HELOC) or if they should just refinance into a larger first mortgage with “cash out.” The answer is “it depends.” HELOCs are usually tied to Prime Rate, which has been at 5% for several months and will likely […]Read More

Do Borrowers Get to “Skip” a Payment When They Refinance? Purchase?

NO COST DOES NOT MEAN NO “CASH TO CLOSE” Almost all of our refinances are “no cost” loans, meaning that we, as a lender, cover all of the “non-recurring closing costs” (title, escrow, appraisal, underwriting, etc.) with our commission or rebate. Borrowers often get confused though b/c they interpret “no cost” as “no cash to […]Read More

Delayed Financing (Paying Cash & Refinancing After Close)

With so many cash-rich buyers in our California and Texas markets, we want to remind everyone that “Delayed Financing” is sometimes a great option for buyers. Delayed Financing is a conventional financing provision that allows “all-cash” buyers to immediately do a cash-out refinance after an all-cash purchase closes. The advantage for buyers of course is […]Read More

Why Borrowers Should Not Pay Points to Buy Down Interest Rates

EVERYONE WHO PAID POINTS IN 2009 WASTED THEIR MONEY In 2009, when rates fell below 5% we refinanced our entire database and many borrowers wanted to pay points to buy down their rate. As a reminder – a “point” is 1% of the loan amount. Our borrowers wanted to pay points b/c: (1) they thought […]Read More

Cash Out Vs. Rate & Term Refis – What’s The Big Deal?

Prior to the 2008 meltdown, as much 90% of all refinances were “cash out,” meaning borrowers increased their loan amount with almost every refinance. That percentage has since dropped to about 50%, as borrowers are more conservative nowadays and they don’t want to incur the extra cost associated with cash out refinances. Borrowers are allowed […]Read More

Beware of Lending Delays; Layoffs & Unexpected Refi Boom

2018 was an absolutely horrific year for the mortgage business. Interest rates were up significantly, all but wiping out most of the refi business. And overall purchase volume was down to boot. As a result, there was massive over-capacity in the mortgage industry so everyone started to compete with lower interest rates to maintain market […]Read More

When Does It Make Sense to Refinance? Rules of Thumb

When I was researching today’s blog, I came across a December of 2010 blog of mine that said: “The refi boom is officially over.” I found that amusing b/c rates were about 1/2 percent higher than they are today, b/c rates fell almost a full percentage point in 2011, and b/c we have had so […]Read More

More Purchase Tips For Refi Guys; Giving Away JVM’s Playbook

On Friday, we provided tips to help refi guys close purchases now that rates are up. The tips included rush appraisals; reviewing contracts for addenda, reports and condition issues; and hiring a skilled appraisal manager. Several people, however, chastised us for “giving away JVM’s playbook.” We responded by saying: A. We always like to help; […]Read More

Timing The Bottom for Rates? Get While Gettin’ is Good; Refi Again

Borrowers often ask us if we think rates will fall further before they lock, or they want to “time to the market” and lock in their rate at the “bottom.” As a result, they are sometimes reluctant to lock or get us their paperwork. This in turn delays purchase transactions, and sometimes causes borrowers to […]Read More

“Delayed Financing” Option For Refi After Cash Purchase – 90 Days

One of our buyers is having difficulty getting offers accepted so he decided to offer “all cash” and then finance the property immediately after close via “Delayed Financing.” The Realtor’s questions about this reminded me that I had not blogged about it for some time. Delayed Financing is a conventional financing provision that allows “all […]Read More

Must Wait Six Months From Purchase For Higher Appraised Value

We often have borrowers buy under market value or buy in quickly appreciating markets. They always ask how soon they can refinance into a better loan when their loan-to-value ratios improve. Lenders almost always correlate values to the purchase price for six months. This means that buyers need to wait six months before they can […]Read More

Refi Boom; What It Means?

Rates dropped again this morning to shockingly low levels not seen since early 2013. A lack of inflation, falling oil prices, weak economies, stock sell-offs, and other factors are all working together to push rates to amazingly low levels. This will affect turn-times at lenders everywhere as no lender was prepared for a surge in […]Read More

Refi Options Now Better Than Ever; Values Up; Rates Down

With values higher than they were a year ago (especially in certain areas) and with rates shockingly low once again, every buyer who puts down less than 20% should evaluate refinance options. We are of course more than happy to conduct free analyses for everyone. We analyze current estimated property values, current available interest rates […]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