Cash-out refinancing

Have you been wondering whether you should refinance your Los Angeles home? Now is a great time for refinancing because of historic low mortgage rates.
Cash-out refinancing is when you refinance your home for more than you presently owe on it. The difference between what you refinance at and what you owe is the amount you take as a cash payment. Cash-out refinancing may allow you to get a better interest rate on your loan, and get money to pay for schooling, making home improvements, paying off debts, or other expenses or investments. It may be more cost effective to use a Home Equity Line of Credit (called a HELOC), a traditional second trust deed, or refinance the primary trust deed. We can help you understand your option and make the best decision for your family.

What is an FHA mortgage loan?

WW2 era FHA poster

Bill consults with many clients interested in getting FHA loans in the Los Angeles area. FHA home mortages are loans provided by a private lender, and insured by the Federal Housing Administration. The FHA mortgage rates are often lower than a conventional mortgage loan, and often require a smaller down payment, easier qualification guidelines, and easier access to lenders. For this reason, FHA loans are a good option for people with barriers to accessing conventional mortgage loans. The program began as a response to the recession of the 1930's, and became a self-sustaining government program paid for by buyers through insurance premiums. The program has enabled new buyers to continue buying homes in the current recession from 2008 to 2012.

Three tips for pre-qualification process

In our last post we introduced the pre-qualification process, which is a first (no strings attached) step in the homebuying process. Check out our website for more homebuying information, or to check out the latest mortgage rates in Los Angeles.
Here are some tips on how to use pre-qualification to your advantage.
1. Be honest. You do yourself no favors by getting into a loan you are not financially prepared to take on, so be forthright about your credit, income and other circumstances.
2. Find the right lender. Even though the pre-qualification process is noncommittal, you'll still want to know you are with someone who is experienced and credible. The lender who takes you through this process will be responsible for explaining the homebuying process to you, so choose someone who is a good communicator.
3. Be prepared. Even though you are not getting a loan right now,  have all your documents ready so that you can get the most accurate information. You may not be required to provide complete documents for everything, but you do well to get a precise estimate from the beginning, so your homebuying process starts out right.

Mortgage broker Los Angeles on What to know about Pre-qualification

As a mortgage consulting business in the Los Angeles area, we spend a lot of time answering questions about the homebuying process to people. We hope this blog will help clarify some of the confusing parts of this process. Today we are talking about mortgage pre-qualification, which is a confusing part of the process for many first-time homebuyers. Sometimes people confuse this with loan pre-approval, but it is actually something different. Mortgage pre-qualification is basically a no-strings-attached estimate of what you can afford in a home. This is how you will get your first ballpark price range. Unlike a loan process, where upon approval you are locked into a deal, pre-qualification is completely free of commitment. You may choose to work with the lender who does your pre-qualification (and they will certainly hope to win your business), but it is by no means an obligation. Pre-qualification is simply a part of the research and preparation that goes into making a smart home buying decision.

Mortgage rates begin to climb

After 6 weeks of plummeting mortgage rates Los Angeles and elsewhere, including the lowest rates in history a week ago,  according to Freddie Mac the average rate has begun to climb slightly this week. Rates still remain very low, with only a marginal increase, reflecting the beginning of the rise that has been predicted by housing market experts.
The 30-year mortgage rate average rose from 3.67 percent to 3.71 percent on Thursday, while the 15-year inched up from 2.94 percent to 2.98 percent. Last year's average rates at this time were 4.5 percent for the 30 Year, and 3.67% for the 15 year.
These rates indicate that it is still an optimal time to buy a first home or refinance, and that time may be running out.

History of American Mortgage: part 2- The War Years

Because we often assist people with  FHA loans Los Angeles, we are doing a series of blog posts about the history of the Federal Housing Administration. In a previous post we talked about the FHA's creation as a response to the Great Depression in the 1930's. In the 1940's the FHA continued to operate as an insuring agency for private lenders, enabling more people to qualify for home loans.
Also in the 1940s, soldiers were returning home from the war and seeking new housing for their families. The new GI Bill of Rights included low-cost mortgages as a benefit for America's servicemembers. The FHA provided low-cost mortgages to thousands of returning veterans in  after WW2, enabling many to buy their first homes.

History of American mortgage part 1: Birth of FHA Loans

Ad from Sears Catalog for a common American home kit.

When you look at FHA loans Los Angeles, have you wondered where the Federal Housing Authority came from?
The housing market was not always as complicated as it is today. Before the 1930's, less than half of Americans owned their home. Owning a home was a privilege, and the idea of the American Dream had yet to be born.
Perhaps your grandparents remember a time when houses had to be purchased in one lump sum. Since few people had the ability to save such a large sum of money, most families rented.
Then came the Great Depression, changing the economy drastically, and subsequently the housing market. Many homes were in foreclosure, and the Federal government had to find a way to respond. They responded with the New Deal, radically restructuring the US economy. As part of this, they established the Federal Housing Authority, which insured home loans for banks so that they could make loans with small down payments and monthly mortgage payments. This enabled many Americans to become homeowners for the first time.

Record lows in mortgage rates

Have you been watching mortgage rates Los Angeles? Freddie Mac reported this past week that average U.S. mortgage rates are at an all-time low. This data came in from a survey including 15-year and 30-year fixed mortgages. 

The average rate on 30-year mortgages dropped to an astounding 3.67 percent! This is a big change from last week's 3.75 percent rate. The 15-year mortgage is also at a record low of 2.94 percent. 

There has truly never been a better time to buy or refinance. The prediction from the experts is that these cheap mortgages will boost home sales by making buying and refinancing more desirable. This may be good news for the economy, but of course, it also means that these rates are likely to change for the worse as far as buyers are concerned. We are currently in the time for wise buying and refinancing, so if you have been considering buying or refinancing, now is the time to act.