Posts

Low Rates & Early Pay Off Penalties; Six Months Is All We Ask

Rates have fallen about 1/4 percent over the last few weeks and they are almost 1% lower than their peak only a few months back. As a result, everyone is rushing to refinance again, as I mentioned in yesterday’s blog. Mortgage lenders love the onslaught of business even though it fosters some major risks. One […]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

Cash-Out Refinance in California

House values are continuing to increase across the state of California, and homeowners are now finding themselves with more equity in their homes. Many homeowners utilize a cash-out refinance to convert some of their equity into cash. What is a Cash-Out Refinance? A cash-out refinance loan refers to the refinancing of an existing mortgage into […]Read More

Can Trump’s Deregulation Bring Back Sub-Prime Craziness? Heck No

Refinance volume is at its lowest level since June of 2009. With lenders desperate to increase volume and President Trump showing a strong desire to deregulate financial markets, people are wondering if we could return to the wild sub-prime lending days of pre-2008. The answer is: No way. Would you buy a bond that was […]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

Must Be On Title to Be On Loan; Must Refi to Get “Off” Loan

We sometimes have borrowers who want to be “on the loan,” but not “on title” (for tax reasons usually). This is impossible, however, as lenders require all borrowers qualifying for a loan to also be on title. Conversely, we often have borrowers who want to be on title, but not on the loan, and that […]Read More

Why We Hate Paying Points (Or Think Buyers Shouldn’t)

Borrowers constantly ask if they should pay points or origination fees to buy down a loan. Our constant refrain is no, and here are the reasons why: 1. Borrowers get too little bang for their buck. In the current market, paying a point will often only improve the rate by as little as 1/8 percent, […]Read More

When Does It Make Sense to Refi? Rule of Thumb; VA LOANS

Quick Reminder: JVM does VA loans (often in fact). The drawbacks to VA, however, include the restriction that we can only use VA appraisers, and that all section I work needs to be complete. We are often asked when it makes sense to refinance? No Cost Loans: If a loan is “no cost” (the lender […]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

Can Use 75% of Rents for Income; 85% for FHA

We discussed rental income in previous blogs and had questions in regard to how much of the rental income we can use. For a refinance, we use the income from the Schedule E on a borrower’s tax returns, irrespective of market rents. We can add back “non-cash” expenses like depreciation. For conventional purchases, we use […]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

Rates Way Up; Almost 1% higher than Nov.; Equity Line = Seasoned Funds

Troubles still abound in Europe, however, and all is not rosy here in the U.S. Hence, we could see rates come back somewhat if significant negative news surfaces. Note to borrowers locking in rates now: If rates come back, you can always refinance in a few months (usually at “no cost”). Many borrowers seem to […]Read More

Benefits of Smart/Friendly/Motivated Realtor: Higher Appraisal

The appraisals associated with our refinance loans come in lower than those associated with our purchases. This is partially because of our current hot market and because most appraisers really do make a good faith effort to support the contract price in their appraisal report. But it is also largely because our top agents do […]Read More

Lender-Credits Instead of Seller-Credits = Stronger Offers

We had a cash-strapped but otherwise strong borrower making offers to buy a home. Because he only had enough funds for a small down payment, he requested a large seller-credit for closing costs with every offer. His request for a seller-credit made his offers weaker, and less likely that the appraisal would come in at […]Read More

Refi Appraisals do NOT affect Property Taxes; Refi out of PMI

Many of our borrowers who are putting down less than 20% hope to refinance out of PMI (or out of their purchase-money-2nd) in 4 to 6 months. These borrowers hope to be able to take advantage of the many high-priced pending sales that cannot be used in appraisals now b/c appraisers only correlate to closed […]Read More

No Such Thing As “Streamline” Financing; Borrower/CPA Pushback

Despite ads on the radio saying otherwise, there is no such thing as a “streamline” mortgage financing process. FHA offers streamline refi’s but purchases and all types of conventional and jumbo financing always require “full documentation.” We beat this dead horse often, but we are doing so again because we get so much pushback from […]Read More

“Streamline” Refinances for FHA Loans – No Appraisal Required

An FHA Streamline Refinance is a refinance of an FHA loan that requires NO appraisal. Many borrowers with FHA financing and limited or no equity believe they are unable to refinance. This is not the case because Streamline Refi’s do not require equity. We are locking in no cost, FHA Streamline refi’s in the low […]Read More

How Does a No Cost Refi Work? Why Do “No Cost”?

When rates fall, we usually offer our borrowers the option to refinance at “no cost” (JVM pays for all non-recurring closing costs). Our borrowers then wonder how we can do this and still get paid. We do no cost refinances by locking borrowers in at a rate that is about 1/4 percent higher than the […]Read More

“Buy Now; Lock Now”, and “No Cost Refi’s”

We have been imploring people to buy homes “now” and to lock in interest rates “now” for several years. We have been saying this b/c rates have been at historical lows for years, and b/c housing prices have also been extraordinarily low. We said it so much, that some readers made fun of our comments. […]Read More

Lock Now While “Getting is Good” & Refi Again in 120 Days

As the world economies all continue to soften and rates continue to fall, many borrowers are reluctant to lock hoping for a lower rate tomorrow or next week, or next month. There are several things such borrowers need to consider. First, for borrowers purchasing a home, a reluctance to lock is a problem because we […]Read More

80% of Mortgages = Refi’s, But NOT at JVM; Purchase Experts

Industry-wide, mortgage refinances comprise almost 80% of all volume. That is most definitely not the case at JVM. Refinance transactions are much simpler to perform, requiring far less expertise than purchase transactions. There are many firms that focus almost entirely on refinances and those firms will make a lot of money in the near-term. But […]Read More

Investor Options for Buying Real Estate; Pay Cash and Refi; 75% LTV Refi

Because we get so many repeat questions from investors, we thought we would address investor options again. Investors can pay cash for properties, and refinance immediately afterwards for up to 90 days. If they wait until after 90 days, they miss “the refi window,” and have to wait a full six months from close. There […]Read More

Lock In Rate Now; Can Always Lock In Lower Rate And Refi In 60 Days

Borrowers are frequently reluctant to lock in a rate because they think rates may fall further in the near future. We like to remind these borrowers that they can easily refinance in the near future if rates fall, and usually at no cost. Our lending sources only ask that our borrowers hold their loans for […]Read More

Rates Hold; 70 Days to Close at Major Banks, Per WSJ Cover Story

The Wall Street Journal had a cover story today about how backed up the major banks are with mortgage business. Bank of America actually told a customer to come back in 60 to 90 days to just start the process. The average time it takes to close a transaction at a major bank is 70 […]Read More

Refi’s vs Purchases; Purchases Require Far More Skill!

The “refi boom” now appears to be over, as mortgage applications have plummeted in recent weeks in the face of sharp rate increases. We have friends at numerous retail bank centers and at other mortgage companies where they close as many as 1,000 loan applications per month, but ALL of them are refinances. These operations […]Read More

Pay Cash – Must Wait Six Months to Refinance; Solution?

No matter how strong a borrower may be, lenders beat them to death with conditions. Hence, we have borrowers with millions in the bank and super low debt ratios trying to get loans (simply to take advantage of the low rates) who throw their hands up and just pay cash for their property. They intend […]Read More

Refinancing

Refinancing Is Refinancing the best option for you? It is true that refinancing has the potential to improve your overall financial picture, it is not necessarily a strategy that makes sense for every individual in every situation. So before you make a commitment to refinance your mortgage, it’s important to determine whether such a move […]Read More

Per Diem Charges Do Not Hold Up in CA Courts; Can’t Walk Away from Non-Purchase Money 2nd

We listened to Gov Hutchinson, Assistant General Counsel for the California Association of Realtors, speak yesterday, and he was very interesting. We highly recommend listening to him if any of you get the chance. Here is just some of the interesting information he conveyed. California courts frown on Per Diem charges. If your client incurs […]Read More