Tuesday, January 24, 2012

How to Get the Best Mortgage Rates: LA Mortgage Broker Bill Rayman Gives Tips

First, make sure you are comparing current mortgage rates for the same type of mortgage. Mortgage rates and closing costs can change significantly from one day to another, so if you are comparing offers from multiple lenders it must be done on the same day. For example, if you are shopping mortgage rates and have a quote for a 30 year fixed at 5.75%, only compare it to other 30 year fixed quotes at 5.75%.

Next, compare the total of all points and lender fees for each mortgage (from section 800 to 813 on the Good Faith Estimate), that is the price of the mortgage. The lender with the lowest cost has the best mortgage rates.

If you are refinancing, you will also need to review the cost of title insurance, closing/attorney, and appraisal. Some large national companies have negotiated excellent rates for these services on your behalf. The company with the lowest combination of points, fees and third party costs for the same rate and product has the best mortgage rates.

Things to Watch Out For


APR is not always accurate, so it should not be used. To get the best mortgage rates, compare current mortgage rates and closing costs.

Good Faith Estimates are just estimates. Many brokers and lenders will give you a low ball estimate, and then after you have paid for your appraisal, they will inform you that the mortgage rate or closing cost have gone up. Look for lenders that guarantee their closing costs up front.

There is nothing wrong with No/Zero Closing Cost Loans. Just be aware that you will be looking at higher mortgage rates in exchange or if you are refinancing, the closing costs could be included in your principal.

Paying higher points and fees will result in lower mortgage rates. For example, at 7% you may have zero points and fees, while at 6% you may have points and fees of $3000. To get the best mortgage rates, you must estimate how long you will have the mortgage. Also, make sure you are comparing current mortgage rates when doing your comparison.

Saturday, January 21, 2012

Home Loan Types Broken Down by Mortgage Expert Bill Rayman


Fixed Rate Home Mortgage Loans

If you would like the security of never having your monthly payment change, this is the mortgage that you will prefer.  Your mortgage rate and payment are fixed for the life of your home loan, whether the loan is 10, 15, 30 or 40 years.  With current low rates on fixed rate home mortgages, this is an ideal solution for most borrowers.  When rates are high, it sometimes makes sense to use an adjustable rate in hopes of lowering future interest costs.

FHA Home Mortgage Loans

FHA home mortages are loans insured by the Federal Housing Administration.  Sometimes FHA mortgage rates may be higher than conventional mortgage loans, FHA home mortgage loans offer benefits such as down payments as low as 3.5%, easier qualification guidelines, and easier access to lenders, especially in tough mortgage markets as we are seeing in 2009-10.

Cash Out Home Mortgage Loans

If you are faced with needing or wanting to make a substantial purchase or investment, using your home's equity can be the least expensive option.  Whether for college costs, unexpected medical expenses, the vacation of a lifetime, or a room addition, you can obtain a refinance home mortgage loan to get cash for these purposes.  You may find it more cost effective to use a Home Equity Line of Credit (HELOC), a traditional second trust deed, or refinance the first trust deed.  We can help you with that decision.

Debt Consolidation Home Mortgage Loans

You may be paying very high interest on auto, personal lines, second trust deeds, credit cards or other financing.  Any interest rate you are paying above 7 or 8% is substantially higher than what you would be paying using a mortgage.  Refinancing your home mortgage loan to consolidate other debt under one low mortgage rate can save you money and lower your monthly payments.

Adjustable Rate Home Mortgage Loans

In some markets it may make sense to lower your monthly mortgage loan payment during the early years of your mortgage.  Mortgage rates for ARMs are usually lower in the early years than traditional fixed rate prorams. This can be especially true if you plan on selling or refinancing your home in less than 10 years.  However, most adjustable rate home mortgage loans do not amortize fully or may even include reverse amortization.  This means that you are not increasing the equity in your home as fast as you will in a conventional loan.  Unless you lock in rates for several years, you are also risking interest rates increasing, which will result in your cost of interest and your monthly payment going up.

Interest Only Home Mortgage Loans

Interest only home mortgage loans allow you to lower your initial mortgage rate and monthly payment, which may allow you to qualify for a larger loan amount than loans that include payments on the principle.  This eliminates the potential for generating equity on your home through paying down the principle.

VA Home Mortgage Loans

VA home mortgages are loans guaranteed by the US Department of Veteran Affairs. These mortgages are offered only to eligible veterans  They can be used for home purchases, cash-out mortgage refinances or rate & term mortgage refinances. If you are a veteran, these guaranteed loans are typically an excellent vehicle for you to use.

Divorce Buyout Home Mortgage Loans

Divorce Buyout Mortgage are designed to provide a vehicle for one spouse to keep the house, get cash out if needed for any purpose, including paying off the other spouse, and remove the other spouse’s name from the current home loan.

Thursday, January 19, 2012

Home Mortgage Loan Refinance Uses & Benefits

Mortgage Refinance To Lower Your Mortgage Rate and/or Payment
Even a small reduction in your mortgage interest rate can make the decision to refinance worth the cost and time. When you refinance to lower your monthly payment you free up money for other uses. If you plan to stay in your home for five years or more you may want to mortgage refinance and consider buying down your rate to further reduce your monthly payment.

Mortgage Refinance for Cash Out Of Your Home
Home loan mortgage refinancing can allow you to get cash out of your home equity for a variety of purposes:  You may need to help pay for  education expenses, medical expenses, a vacation home, or home improvements. Mortgage refinancing provides an inexpensive way to accomplish these goals, and the interest you pay is tax deductible.

Mortgage Refinance for Debt Consolidation
If you have debt outside of your mortgage and you have equity in your home, it’s time to consider refinancing your home loan. You are likely paying a much higher interest rate on credit cards, consumer finance loans, and auto loans.  Through mortgage refinancing you can consolidate all of these debts into one loan. Not only will your monthly outlay be greatly reduced and most of the savings be due to paying far less in interest, but the bulk of the payment will be tax deductible.  Refinancing your home to pay off and consolidate debt under one low mortgage rate is commonly a great choice.

Mortgage Refinance To Change To A Fixed Rate From An ARM
Adjustable Rate Mortgages (ARMs) seem like a great way to go when mortgage rates are low. At the end of 2009 rates are historically low, and unlikely to stay this low over the long term.  As the likelihood grows that rates will increase that ARM quickly becomes a significant burden. Your payments and interest costs could even double.  Now is the time to consider mortgage refinancing into a fixed rate loan. If you plan on staying in your home for at least 3 years refinancing your mortgage into a fixed rate will likely result in major savings and the peace of mind of knowing that your payments will not be increasing.

Mortgage Refinance To Pay off Your Home Loan Faster
You can structure a mortgage refinance to pay off your home sooner than under your current mortgage.  By refinancing into a 20, 15, or even 10 year fixed mortgage, you will receive a lower interest rate. In this case your payments may go up, but each month you are dramatically increasing your equity in the home.  

Mortgage Broker Bill Rayman Answers: What is PMI and do I need it?


 Mortgage insurance allows consumers to purchase a home with a small down payment. Some buyers don't  20% of the value of the home they can otherwise afford. Most lenders require at least 20% down in order to insure themselves against a future foreclosure should the property lose value. They also know that borrowers who have at least a 20% equity in their homes default less often than borrowers with less equity.


Mortgage insurance takes on the lenders risk for the loan amount above 80% of the home value. Like all insurance PMI or MI has a cost that must be paid by the borrower.  The payment is included in your mortgage payment if your loan requires PMI or MI so that the lender knows that it is being paid on time.

You can cancel mortgage insurance without refinancing. In most cases, when you have established a 20% equity in your home and you haven't missed a payment in the past 12 months, you can get your mortgage insurance requirement removed by the lender. 

Saturday, January 14, 2012

What is a Mortgage Broker? Bill Rayman of Los Angeles Weighs In

 What are the benefits of using a mortgage broker?



 A mortgage broker is a company that has relationships with lenders and their products in much the same way that an independent insurance agent has access to many different insurance providers. Through these relationships mortgage brokers are offered mortgages at wholesale prices. As a result the broker can now offer the lowest rates on the market by using the lender offering the best interest rates and other costs on  that particular day that fit the needs of their client.


The broker can also choose to operate on lower margins or profit than other banks or lenders. Good brokers and their agents keep up on a vast array of products from their providers.  Direct lenders have only a limited number of loan products available.


The broker does all of the processing of the loan, but does not actually service the loan once it is completed or closed. Experience brokers will almost always find ways to get difficult loans placed where direct lenders are more likely to say they just can't do it.  

Friday, January 13, 2012

Mortgage Broker Bill Rayman Explains His Mortgage Loan Programs


Conventional Home Loans
  • Refinance up to 105% of appraised value with the new Fannie Mae DU Plus Program
  • $417,000 mortgage loan limit
  • Secured by government sponsored entities
  • Purchase or refinance 1 to 4 family units
FHA Home Loans
  • Insured by the Federal Housing Administration
  • Low down payment on a new purchase 3.5 %
  • Refinance up to 95% of your appraised value
  • $100 down HUD home purchase program
  • Streamline with no appraisal if you have an existing FHA loan
VA Home Loans
  • ZERO down payment purchase program
  • Forgiving credit requirements
  • Administered by the Department of Veterans Affairs
USDA Mortgage Loans
  • 100% Financing up to the appraised value
  • NO private mortgage insurance
  • NO limit on seller concessions and gifts
  • Flexible credit qualifications
  • No loan amount limitations
  • Purchase Money Program
Credit Repair
  • Learn the true cost of having a low credit score
  • Expert advice on resolving outstanding credit issues
  • No monthly fee

Thursday, January 12, 2012

Steps to Buying A Home: Mortgage Broker Bill Rayman Explains


1. Prequalify


Most sellers and real estate agents today prefer to have you become prequalified for a loan of a certain amount.  This means that your loan agent or broker reviews your income, debt service, credit score, and other relevant information and provides with you the amount that a lender will loan you in the current market.  By getting this information before you begin the search for your new home, you strengthen your bargaining position with the seller.  They know that if they accept your offer you can get the loan.


2. Applying For Your Mortgage


Applying for a home loan with Bill Rayman and Mortgage Capital Partners could not be easier.  Bill can take your application in person, over the phone, or you may complete the secure online application on this site.  You can also choose to fax  your completed application to 310-481-4859.
3. Processing Your Loan Application


This step is simply the process of verifying the information you provided during the prequalification process (although commonly we have you send these documents at the time of prequalification.)  Typically, we will ask for 3 items to verify these facts:
1. Your last 2 pay check stubs (a year-to-date P & L if self employed)
2. Your last 2 W-2 forms (personal and/or corporate returns will only be requested if needed)
3. You last 2 bank statements (checking, savings, investment, 401k, etc...)
We will also order your credit report, the appraisal on the property being financed. and a copy of your purchase contract.


4. Appraising Your Home


The appraiser will contact your Real Estate Agent if you are purchasing a new home or call you directly if you are refinancing, to set a time to view the inside of the property being financed. The appraiser will research the comparable homes that have sold recently in your area to determine the current market value of the property.  This information is then used by the bank's underwriter as an assurance that the amount they are lending is appropriate to the value of the property. 


5. Underwriting your loan


The bank must now make a final determination to pprove or reject the loan, and if approved, under what terms. If for any reason they are unable to approve your loan under the terms for which you have applied, they may counter offer with other terms.  . For example, if you applied for a 15 year fixed rate mortgage, but the Underwriter felt the larger payment would be overly taxing based on your other debts and as a function of your income, then they may offer a 30 year fixed rate mortgage instead.


6. Closing Your Mortgage


Your closing will commonly take place at the title company of your choice or at an location convenient to all parties.  Bill will  usually call you 24 hours prior to your closing to make certain everything has been properly coordinated between you, your Home Owners Insurance Agent, your Real Estate Agent (if applicable) and your title company

Wednesday, January 11, 2012

Can I do a Loan if my Properties Are in an LLC? Mortgage Broker Bill Rayman Answers

Very simple question, very simple direct answer, can I do a loan if my properties in an LLC?  And the answer is no.  Even though by law and taxes, an LLC is considered a individual, from a lending stand point it is not.  The lenders want individually real flesh and blood individual to be responsible for the loan and the payments.  So you’re gonna sign for that individually.  Can you put it into an LLC afterward?  Absolutely.  You do that with your accountant, your attorney, it’s a relatively easy process.  But it’s not the LLC signing that document.  You can only do that for commercial properties.  

Friday, January 6, 2012

Some Stated Income Loans Being Processed Says Los Angeles Mortgage Broker

When the mortgage market collapsed, the banks pulled in all of the easy lending practices that had so characterized the housing boom.  One of the first to go was the stated income loan.  According to Los Angeles based mortgage broker, Bill Rayman, some banks are loosening up on the stated income mortage.

When you apply for a home loan, especially in the current mortgage environment, 
most banks require that you provide full documentation of your income.  You provide W-2 income statements from any payroll employment, 1099's from any income derived from contracted work, recent pay stubs, tax returns and bank statements.  All of this provides the lender with proof of your income.



A stated income mortgage loan, on the other hand, allows the buyer to qualify based on the borrower statement of what he or she earns on the application form. With a stated income loan, the lender does not verify the income.  No tax returns, pay stubs, bank deposits, W-2's or 1099's are required.

Bill Rayman notes:  "Recently, I have become aware of a couple of banks who are venturing out into the stated income market again.  The overall loan market is still very tight, even as interest rates remain at historical lows.  My ability to find banks that have special rates, products, or underwriting requirements is what separates my mortgage brokerage from others.  Here is the scoop on state income loans."

Stated income loans are designed for the many borrowers who have the income
to afford a mortgage and have acceptable credit, but who don't meet
traditional underwriting standards - called full documentation or "full-doc"
that requires applicants show that the income they claim was actually earned
in each of the two prior years. 

Self-employed borrowers usually have the most trouble meeting this
requirement, and stated income loans were originally designed for them.  But
many applicants with incomes from salaries also have trouble meeting the full-doc
requirements. For example, the income they claim might incorporate their
latest increase in salary, which is not yet reflected in documents covering
past income."

Stated income loans are popular with many people, but here are just a few of
the types of borrowers who may consider getting a stated income loan:
   ✓   Self-employed people who own a small business
   ✓   Highly commissioned people who may have a low base salary but make
   ✓   most of their income on commission
   ✓   People who can't document at least 2 years of income at their
   ✓   current income levels
   ✓   People who make plenty of money but don't want to disclose their
   ✓   income for one reason or another

Lenders do try to determine the reasonableness of the income and generally
employ 3 methods.  1) They consider a borrower's liquid assets - which must
be verified - as a way to "authenticate" the amount of income stated.  If a
borrower says they make $X per month, the lender expects to see at least 12
times X in the bank.  2) Another test is that the income stated must be
roughly consistent with incomes earned in the type of business or line of
work in which the applicant is involved.  3) Lenders often require a
self-employed borrower to prove they've been self-employed in the same business
for two years as verified by a CPA letter or business license.

Be aware that some lenders require that the stated income borrower execute
an IRS Form 4506-T which authorizes the lender to request IRS verification
of the figures in the borrower's tax returns. Lenders don't ordinarily check
the returns, but the possibility that they might is an inducement to report
income truthfully.

Rayman concludes, "As a mortgage broker I actively seek out all the possible methods for getting you the perfect loan to meet your needs. 

Mortgage Broker Bill Rayman: What is APR and how does it effect me?


Very simple question, very simple direct answer.  APR stands for Annual Percentage Rate.  So what is APR, what does it mean, and why is it different than the note rate?  The note rate is the actual rate that you will pay on your loan.  APR is a mathematical formula that is meant to even the playing field.  If you go to six brokers (from my point of view, I hope you don’t) the first broker might say “Well, I can get you this rate if you pay three points and $500.”  The second broker might say “I’ll get you this rate, but you pay one point and $4000” and yet another broker might say “I’ll give you this rate, no point, no cost.”  Now you’re going to be at a loss trying to figure out which really is the best deal for you. The best deal isn’t necessarily the lowest rate, and it isn’t necessarily the lowest APR.  For instance, if you don’t have a lot of cash you might choose a rate which is higher, because you are not obligated to bring the cash in.  So there’s always going to be personal choices.  

What APR does: it’s a way of computing the cost of doing the transaction, the escrow fees, all the things you need to have to do a loan, and it adds them to the loan amount (so you’re technically borrowing more than the loan amount) and when you do the math, you get a slightly different interest rate than the actual note rate.  So let’s say your note rate is 5%.  By the time you add up these other costs and add them in, your APR might be 5.13%.  So now if you look at those six brokers, forget what their offers are because those points they’re charging get added to the costs or if they’re not charging any points and fees, there’s nothing to add in but they’re probably at a higher interest rate.  The net result is that you’ll have an APR from each broker, and you can see who’s the most expensive versus who’s the least expensive.  

Just because one’s the least expensive doesn’t mean that’s the best choice.  If it turns out the least expensive rate is the one you have to pay the most cash to get that rate, or if your circumstances are as such that you’d rather not lay out another $10,000 or $15,000, then maybe for you the right choice is such that the APR is a little bit higher.  I’m saving my cash.  The APR has nothing to do with what your actual monthly payment is.  That’s going to be the rate on your note to which you’re locking in with your broker and negotiating with the borrower.

Sunday, January 1, 2012

Mortgage Resolutions for 2012 - L A Mortgage Broker

Here is a possible set of resolutions for your home mortgage in 2012 from a Los Angeles Mortgage Broker. 

Everybody does it, or so it seems.  Creating a list of resolutions for the new year is part of our tradition, and probably a very good one.  Most of those resolutions are forgotten about soon after the last football game is played and the last bit of pizza devoured.  However, here are possible resolutions that won't require 100's of push ups a day or depriving yourself of ice cream. 

1.  Take a serious look at your overall situation regarding your housing and any mortgage you have now.  Home mortgage rates are at historic lows, and very unlikely to either stay this low or go lower.  Don't wait until mortgage interest rates have gone back over 5% start wondering if you should have bought property or refinanced.  NOW is the time to act.  The sooner the better.
As of 12/22/2011 Not Reflecting Current Rates

2.  If you are currently renting, be aware that rents are headed back up.  Recent statistics show that some markets have shortages of rental units.  Low supply means increasing rents.  Housing prices are very, very low right now.  While there is still an overhang of supply, it is very likely that housing prices are not going even lower.  They may not go up very much in the short term, but this is a great time to buy.  Low prices.  Low Mortgage Rates.

3.  If you have an existing mortgage with an interest rate over 4.5%, or if you have an adjustable rate mortgage, this is a fantastic time to refinance as some 30 year fixed loans are hovering around 4%. 

4.  If you own a business, buying your own building will never be more affordable in your lifetime (barring a huge catastrophe.) 

5.  If you have been contemplating buying a vacation home, this is the ideal time to act.

6.  If you have ever thought of owning homes, duplexes, triplexes, or other multi family dwellings for rental income, the market is prime.

7. Should any of these have even a slight potential to make you money or save you money, pick up the phone and call me.  There is absolutely no obligation for my advice and direction regarding any of these issues.  Call 310-295-2900 ext. 113 or ask for Bill Rayman.