Monday, October 20, 2014

30 Year Fixed Mortgage Rates Dance Under 4% Again

Rates at 7:30 October 20, 2014

Demand for Mortgages Slips, Supply Improves, Interest Rates Tumble

You would have to dig deep to find a single prognosticator who would have predicted mortgage interest rates at under 4% again in late 2014. In fact, most would have suggested that the under 4% phenomenon was a once in a lifetime experience that would never repeat again. The pundits got it very, very wrong, and that has created an opportunity for many, many homeowners and those who would like to be. 

You see, the reason mortgage rates are slipping is easy to see. Home buying is down. Inventories are up. Prices are slipping. The Fed is still nervous about the frail so-called recovery, and financial institutions are sitting on piles of cash. Net result is too much money chasing too few mortgage applications. You are the potential winner of the trend.

If you are contemplating purchasing a home or condo for your residence or for investment, the next 5 months are likely to see the coming together of a perfect storm in your favor. If you are considering refinancing because your current loan is at 4.5% or higher, now is the time to get your application started. 


Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Friday, October 10, 2014

Renting Better than Owning? Maybe - If Not for *#!!X#! Landlords

After 50 years of reform, landlords still hold most of the cards

According to a bunch of punditry over the past six months, Millennials are questioning whether they will every buy a home. They've just witnessed their parents and friends get wiped out by the housing crash, prices in many neighborhoods seem beyond the pale, and job insecurity is a major fear. Some even like the idea that they are not going to be surprised by major roofing, plumbing, or other upkeep expenses that come with home ownership.

On the other hand! Try to find any of these folks who really like their landlord. I know one poor soul who seemed to have a great relationship with her 70+ widow landlord. Sure the old gal wasn't quick to make repairs, and was not remotely gracious about late rent, but she seemed sweet and honest.

That all changed when it came time to return the deposit after the move out. The landlord charged $135 to remove a coat rack and curtain rod that had been left as a courtesy to the next tenant, who later decided not to keep them. There was another charge for carpet cleaning, even though the carpet had been meticulously spot cleaned and all that was cleaned would fall under normal wear and tear.

And this was a friendly landlord who was otherwise a decent owner. The point of the story was not to show a horror tale, but to show that the downside of renting is the almost certainty of painful and expensive transactions with the landlord.

Sure, this tenant had the potential to arbitrate or sue in small claims, but most landlords know that the cost in time and money to pursue a few hundred dollars on the deposit is going to keep most tenants from acting.

My suspicion is that most millennials will tire of living under the thumb of difficult owners, and eventually see the benefit of controlling their own destiny. 

Tuesday, September 23, 2014

Los Angeles Real Estate Market - From So So to Fizzle - Except Rents

Fall sees lowered demand, fewer sales, lower prices, fewer mortgages

No one who watches the real estate market will be shocked to see fewer unit sales and overall activity in September than in July. School decisions still drive a lot of buying, and if you haven't moved into your favorite school district by mid August, you are likely to stay put until next summer.

What caught the pundits by surprise was how lackluster the summer turned out to be. Sellers were lowering prices by mid season and still the homes didn't move. While far to early to call a trend, there is plenty of evidence that Los Angeles prices are off by around 10% from highs of Spring 2014.

What are the culprits?
  • Middle class left behind in the Obama Economy
  • Young folks saddled with massive college debt
  • Family formation starting later
  • Millenials choosing to stay flexible in this job market by renting
  • Less interest in home ownership by millenials
  • Fear that economic doldrums may take us back to recession
  • International conflicts
On the other hand:
  • Rents are going higher by 7% or more in 2014
  • Mortgage rates are still at historic lows
  • Mortgages are getting easier to get
  • Home prices after dropping are more affordable
Will the good news outweigh the bad and get a countercyclical buying upturn going before Christmas? Nothing points that way at the moment. However, if the economy stays the course through the winter into Spring, there might be some pent up demand to drive folks into the market. There is also a great likelihood that current expected Fed tightening will result in higher mortgage interest rates. This commonly creates a last chance panic that might help to spur sales. As noted elsewhere, while consumers will work hard to save 1/8th of a point on their mortgage, the monthly increase in the payment for a $500,000 loan is $400 or so per month for a full percent rise in the interest rate. Many, including Goldman Sachs, would say that 5% loans are likely within 12 months.

Could this be the last best chance to purchase a home in LA? Maybe the bottom will come in December or February. Maybe the country will slide into recession again, and prices will go down even further. However, unless there is a long term fundamental change in the American way of thinking about housing, eventually the market will move upward again. If you are thinking about getting a home, playing the real estate market may be less important than finding a solid deal that you can afford. 

Tuesday, September 9, 2014

Mortgage Qualifications Are Getting Easier - But Not the Hoops


The paperwork requirements are still draconian for mortgages

No matter who you believe regarding the economic recovery, no one is claiming that housing has recovered as of this writing. Home prices are up, interest rates remain low, but overall transactions and new home starts remain very depressed. With fewer mortgages for both purchase and refinance being written, the supply demand curve is forcing financial institutions to modify their rules.

While no one thinks we are going back to the crazy Wild West rules of the mid 2000's, regulators and banks who tightened lending standards in reaction to the busted housing bubble, went much to far. Sanity is returning as the pendulum swings back towards the middle. In just the last few months for instance, credit score requirements have dropped from 640 to 600 at FHA, and some lenders are accepting 620 credit scores on conventional loans.

According to
23.9% of banks reported an easing of mortgage loan standards during this year's second quarter -- more than twice the percentage from earlier this year. Banks are reducing FICO requirements, lowering qualification hurdles, and bringing more loans to closing.
That's the good news. What has not changed is that your paperwork needs to be perfect! Underwriters for the banks and for the insurance companies are driving mortgage brokers and consumers nuts with their demands for details. However, if you are willing to live through a bit of frustration, now may be the best time in a decade to apply for a mortgage.

We will do our best to limit your frustrations by anticipating the paperwork and helping you to get it done right. Call today and we will help you with any questions you have, and help you make smart decisions with regard to the mortgage that will be best for you at this time.

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Saturday, September 6, 2014

When Can I Get a Mortgage After a Chapter 7 Bankruptcy?


FHA rules require that you wait two years for a mortgage after Chapter 7

The medical bills piled higher and higher. The credit cards were maxed out, and because we'd missed some payments, they were now charging 24% interest. A consultant explained that we had no chance of paying off our debts within our lifetimes. We decided that circumstances like ours were exactly what bankruptcy was created to solve.

The attorney told us that we would be able to get credit right after the final adjudication, and he was right. Within months we received small credit lines on credit cards. Department store credit cards were also available. By year one, we were able to get a car lease, even though the upfront needed to be higher than average. But what about a mortgage.

The FHA sets the minimum. They have a rule that requires you to wait two years. Most lending institutions and other suppliers of premium mortgage insurance are going to require at least this two year standard.

Your credit report will be the next obstacle. In 2014 the banks and other mortgage lenders are requiring a 620 minimum credit score and FHA loans can go as low as 600. If you have been building up your credit during the years since your bankruptcy is is very likely that your credit score will now be in the mid 600's.

If you are hoping to purchase a new home or refinance your current home, and you've had a bankruptcy, we are ready to guide you through the process. Call Bill Rayman today to get the process started. 

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Monday, August 25, 2014

Avoid These 5 Mistakes and Save Big Money on Your Mortgage

 You can effect the cost of your mortgage!

For most consumers, the largest single financial transaction of their life will be a mortgage. Unfortunately most borrowers approach the process of shopping for a mortgage with less care and analysis than they would for buying a new vacuum cleaner. This is likely because many folks feel that a mortgage is complex and confusing. Thus they allow lenders to control events.

  1. Choices - Like any consumer product or service, you have choices when you want to secure a mortgage. There is plenty of competition for these large dollar transactions. Don't merely use the company you used last time, or the one recommended by your neighbor. You could save on both interest and costs by shopping around.
  2. Broker - One of your choices is whether to deal directly with a bank or use a broker. Don't assume your best deal is with a bank. While it is certainly possible to get the best deal at a bank, you are far more likely to find the lowest cost offer with a broker. The broker will shop your loan with various lending institutions to find the best deal on the market at that moment in time.
  3. Shopping for Brokers - In today's world, you have much more information to go on than just a few years ago. Don't go with the first broker you hear about. In addition to getting recommendations from friends and family, you can now evaluate online reviews offered by Google, Yelp,, and others. This is a huge purchase, check out 5 or 10 different brokers before you make a decision. 
  4. Credit Repair - Your broker should be able to help you make some decisions about fixing your credit in order to improve your score. Unless your credit score is perfect, don't assume you can't make it better. In some cases, it may be worth spending a little money with a reputable credit repair company in order to improve your score. You may save substantial interest and/or costs for premium mortgage insurance over the life of the loan by increasing your score just a few points. 
  5. Lock Your Rate - During the course of your escrow, interest rates will fluctuate, if even just a few basis points. Don't expect to be lucky enough to pick the absolute bottom rate offered while you are in escrow, but do keep track and be willing to spend a little bit of money to lock a rate that could save you a lot of money over the length of the loan. A good broker will help you with this process, but an honest broker will tell you that they are not in the business of guessing the bottom of short term swings in rates. 
If you follow these five directions, you are likely to get the best possible deal on your mortgage. One more thought. Take your time and be wise in the entire decision. Don't overspend for the home, take actions based on emotion or pressure, or figure that anyone else involved in the process has your best interests at heart. The broker is the most likely to be invested in your success. He wants a great review on the internet, and he wants you to tell your friends to call him. Moreover, he only gets paid if you complete a deal.

Bill Rayman has a well deserved reputation for being the kind of broker who cares a huge amount about getting you into the home or condo that you have chosen for your family. His reviews reflect that concern, and he can provide you with dozens of referrals. Call Bill now to discuss your real estate plan.  424-354-5325

Thursday, August 7, 2014

Honest Credit Reports and Scores

Have you ever done an internet search to get your credit score or your credit report? Have you wondered if any of these offers are actually free, or if every one of them has some kind of gimmick to tease you out of your hard earned cash in order to get the information you actually need?

As of August 2014 there are a couple that we can recommend.  If you need your credit score, go to You don't need to leave a credit card, there is no cost, and the process is easy. 

For a good credit report from Experion, try  However, they will charge you for a credit score, and for some reason they only provided Experion, though I asked for all reports.

Please note that we do not receive any compensation from either of these companies for this review.

If you would like to receive a credit score that is specifically created for mortgages, and may be slightly different than those you find online, call Bill Rayman to discuss your mortgage needs.