Sunday, June 30, 2013

Pinterest Is An Amazing Kitchen, or Bath or Home Remodeling Resource

Remodeling Is More Fun than Ever With Pinterest

Yep, we have a Pinterest site and we hope you'll go check it out, follow us, and repin some of our content there.  We are going to turn our Pinterest site into the best place online to view all kinds of real estate related information such as:

As much fun as it is to window shop on Pinterest, when you get ready to break ground, break walls, or you about to break your nasty old cabinets and get something pretty and new, give us a call.  We can help you evaluate your plans to buy, tear down, build from scratch, remodel, or do anything else you might want to do with your real estate.  Our part of the job is to get you the mortgage or the refinance you need at the rates that will keep your costs in line.

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Wednesday, June 26, 2013

Will $69 a Month Kill Home Sales? Interest Rates Are Still a HUGE Bargain

Home Sales and Prices Up Again on June 24.  Now Mortgage Interest Is Up.  What Will be the Effect?

The doomsdayers are at it again.  Mortgage interest rates shot up to 4.4% from 3.5% in just a week.  There goes the housing market.  Are they right?  What effect does rising interest rates have compared to rising home prices

The average sale price of a home in the US today is $150,000.  In 2008 that price was $250,000.  The effect on the down payment at 20% would be $20,000 less today than then.  The effect on the mortgage amount per month assuming a 5% interest rate would be $1074 then, and $644 now.  So today I can buy the average house with a monthly cost $430 per month lower than 2008, even at 5%.

The savings per month on the monthly mortgage payment today vs 2008 on the average US home is $430 per month

Let's look at the more luxurious home with a $700,000 price tag and a $560,000 mortgage after $140,000 down.  That same home in 2008 would have cost at least $850,000 and required $170,000 down.  The difference in monthly payment based on a 5% mortgage interest rate $1644.00 per month.

Now let's play the same game with an increase in mortgage interest from 3.5% to 4.5%.

On the $150,000 home, the monthly payment would go up $69 per month.  On the $700,000 home, the monthly would go up $389.00.  For the owner of each type of dwelling this probably represents two nice dinners out per month.

The effect of the mortgage interest rate increase from 3.5% to 4.5% is $69 a month on the average US home.

Therefore as a prudent buyer wanting to keep my out-of-pocket in my pocket and my monthly expenses as low as possible, I should be much more concerned about property values going up than I am about interest rates going up.  The impact is far higher on the former. 

If home prices and mortage rates both go back to 2008 levels, the combination would be pretty effective at killing the housing market.  However, there were folks lined up in 2007 to buy those homes at those prices with those interest rates.

Today is still the best time to buy a home in 30 years or longer based on your overall cost to own.  And it is highly unlikely that the future will provide better or even the same cost of ownership as today.

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Sunday, June 23, 2013

After the Mortgage Approval, Before the Close ... FREEZE!

Don't Apply for or Accept ANY New Loans, Credit Cards, Financing, Car Loans, Anything During the Mortgage Process

You might think that the NSA is spying on you, but you can be sure that the bank or mortgage lender is.  Lenders are super skittish under the new rules from Fanny May and Freddie Mac, not to mention potential additional rules coming from Dodd Frank, and changes in underwriting standards from FHA.  These all add up to a potential disaster for your plan to get into a new home or refinance your current loan.

We highly recommend that you plan for any new mortgage month in advance.  You may want to change the way that you take income or count deductions on your taxes.  You may want to pay off debt or eliminate credit cards.  You will certainly want to clear up any issues on your credit report.

But now you are only weeks away from getting serious about shopping for a mortgage.  From this moment forward until the mortgage is signed, DON'T do anything that might make it appear that you are adding to indebtedness or even potential indebtedness.
  • Don't apply for new credit cards even if the department store will give you 10% off on all your purchases.
  • Don't agree to increases in your credit card available credit
  • Don't make a large purchase on any of your credit lines
  • Don't take a cash advance against any of your credit cards or other lines of credit
  • Don't even set up a no bounce account on your checking account
  • Don't buy a car or refinance a car 
  • Don't cosign for your kids on any loan or property rental
Prior to approval, the lender will be looking for your current debt to income ratio and what that ratio will be after the approval.  They will also be looking at your ability to repay the debt in great detail.  The new rules require lenders to be sure you have the ability to repay.

After loan approval and prior to getting your final signature, the lender will have you under scrutiny.  Just prior to drawing up the documents, there will be a final check to see if there has been any new activity that might throw off all these delicate measures of your credit worthiness and your ability to repay the loan.

So be smart!  Just play freeze for the few weeks leading up to your application for a mortgage, and then for the additional few weeks during the process of closing.  

If you are looking for a mortgage refinance in Santa Monica, please give us a call.

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Thursday, June 20, 2013

Bernanke Says Mortgage Rates Not Up That Much

Los Angeles and Santa Monica Mortgage Rates Are Up, but 4.1% Is Still a Bargain Basement Rate

When Ben Bernanke speaks, he moves markets.  As of this writing, the Dow is down over points since his statement about the Fed's plans in a speech on June 19th.  The market has decided that Big Ben is going to stop easing (printing money and buying assets) at the rate he has been over the last few years.  This, the market senses, will put upward pressure on interest rates on everything from business loans to treasuries, and thus to mortgage interest rates.

While we refrain in this blog from making predictions about the direction of interest rates, there is an excellent formula for almost any investment decision.  You look at the likelihood of any price going up or down, then you look at how far it is likely to go up or down.  If there is a large skew in one direction, it is probably time to act.

Interest rates have not been as low as they are now, except during this post financial crisis climate, EVER!  As you can see from the chart above, the bottom for 30 year fixed was about 3.15.  But anyone who got that rate or even a rate below 3.5% was just plain lucky.  You can never call a bottom exactly.

The real bottom was 3.5% on 30 year fixed mortgages in Los Angeles.  And even that was only for a couple of months.  The current rate is only .6% or .006 above that.  And that has been the lowest rate in over 30 years since it first dropped below that level in early 2011.

What are the odds that you are going to get an interest rate lower than today?  Not very good.  If you did manage to lock a rate lower than 4%, how much lower than today?  Maybe a few basis points.

What are the odds of interest rates going up?  The average interest rate over the past 30 years has been 8.6%.  Therefore you would guess that they will return to this historic average over time.  If interest rates go up, how much might they go up?  The could doubleAn increase of 1% has taken place in the last few weeks, and Ben Bernanke, the Fed Chairman, thinks that is a small increase.  He says the are "not dramatic."

Wednesday, June 19, 2013

Mortgage Terminology All Seems Like Greek To You? Comprehensive Glossary

Los Angeles Mortgage Broker and Mortgage Banker, Bill Rayman, Offers a Complete and Trusted Financial Glossary FREE 24/7.

We live in amazing times.  30 years ago or less, if you wanted to know the definition of a complex legal or financial term, you'd have had to get in your car and go to the library.  And we understand that you can just google a term and get all kinds of definitions.  But the one big negative on the internet is knowing who to trust. 

So if you need to know what a term means, here is a trusted resource:

Now, the internet also has list and lists of places you can get a mortgage.  But you get right down to that word "trust" again.  Why should you trust Bill Rayman anymore than the next guy.  Start by checking out his references here.  Then consider his background here.  If that isn't enough check out his YouTube videos here.  And, of course, you can read this blog.

By the time you are finished with that research, if you need more, just call Bill and have a conversation.  There is no charge or obligation.

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Monday, June 17, 2013

Is It Cheaper to Rent or Buy in Los Angeles?

Picture credit

With Los Angeles Mortgage Rates Still at 4%, and Home Prices Still Depressed, Buying Is Better

So I took a typical Westside home worth $650,000.  According to the rental value of that home is $3150 a month.  The estimated mortgage is $2441 based on 20% down and 3.75% 30 year fixed mortgage.  Property taxes and insurance would add another $730.  Maintenance might be $300.  So total out of pocket around $3500.

The tax advantage in the 25% tax bracket would come in at around $800 month, so the net advantage to buying is around $450 a month.

Do the exercise yourself.  You can see estimated purchase value and rent on  You can see property tax on  Trulia will give you an estimated value also, but their values seem more like assessment values than the market values on  Real Estate friends say that both should be taken with a grain of salt.

On the other hand, Trulia has for some time been compiling the information into statistical surveys that might shed light by city, even if it doesn't give you help on each unique situation.  They claim that the current spread in Los Angeles gives you a 35% advantage in buying over renting.  The unique property that we checked on earlier was around 13% better.

To be honest, Trulia uses a lot more information.  Length of stay in house, comparable move in and move out expenses, etc.  So the example we used was not as sophisticated.  Moreover, a minor change in your personal situation could change the dynamic a lot.  Someone who buys a $650,000 house is very likely to use the IRS long form and deduct the interest and property taxes.  But most who purchase a $200,000 home will not be getting the tax advantage.  This changes the equation.

On the other hand, it would appear that the market has taken that into consideration.  Thus you'll find that lower priced condos and homes have a bigger savings on purchase compared to rent before taking the IRS advantage into consideration.  Here are some of the comparable cities in the US right now, coming from

Where Buying a Home is a Tougher Call
# U.S. Metro
Cost of Buying vs. Renting (%), 2013
Cost of Buying vs. Renting (%), 2012
1 San Francisco, CA
2 Honolulu, HI
3 San Jose, CA
4 New York, NY-NJ
5 Albany, NY
6 Orange County, CA
7 San Diego, CA
8 Los Angeles, CA
9 Long Island, NY
10 Ventura County, CA

Note: Negative numbers indicate that buying costs less than renting. For example, buying a home in San Francisco is 19% cheaper than renting in 2013. Trulia’s rent vs. buy calculation assumes a 3.5% 30-year fixed-rate mortgage, 20% down, itemizing tax deductions at the 25% bracket, and 7 years in the home.

At the other extreme, homeownership is most affordable in Detroit, where buying is 70% cheaper than renting. This means it costs less than one-third as much to buy a unit than to rent a similar unit in a similar neighborhood. In fact, buying is less than half the cost of renting (more than a 50% difference) in 46 of the 100 largest metros.

Where Buying a Home is a No-Brainer
# U.S. Metro
Cost of Buying vs. Renting (%), 2013
Cost of Buying vs. Renting (%), 2012
1 Detroit, MI
2 Dayton, OH
3 Gary, IN
4 Cleveland, OH
5 Warren-Troy-
Farmington Hills, MI
6 Toledo, OH
7 Memphis, TN-MS-AR
8 Kansas City, MO-KS
9 Birmingham, AL
10 Indianapolis, IN

If you would like to look at this issue in much more depth, catch the Trulia write up Buying a Home 44% Cheaper than Renting Despite Rising Home Prices. 

You can even follow their links to get into some of the micro data on how they arrive at the statistics.  Where does that leave you in all this?

With many, many more unanswered questions.
  • Many times the type of residence that you desire is not available for rent anyway
  • If you will or might move in 3 years, renting is almost always better
  • What will happen to home prices?
  • Do you like the idea of managing your property?
A major issue in the current market is whether you can even get a mortgage in Los Angeles.  We can help you with that.  A short complimentary conversation will allow us to give you plenty of direction on your eligibility and what you can afford.  Call Bill Rayman at

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Thursday, June 13, 2013

Los Angeles Real Estate Market Still Red Hot

One Blogger Says LA Is #2 Hottest Housing Market in the US.  Tight Mortgage Market Keeps Prices from Going Even Higher
LA Real Estate Market Boiling Over

Over 80% of all homes place on the market in April and May in Los Angeles had competitive bids.  This put LA 2nd only to San Francisco in terms of competition for homes in the US.  Most of those bids ended up being pretty close to the asking price, but 25% of all contracts were signed over asking.

With severely limited supply and increasing demand from families and speculators alike, there is no reason to believe that the market is peaking or even slowing down.  In fact, the argument can be made that it is only very strict rules on down payments, debt to income ratios, and credit scores that are keeping the lid on this boiling pot.  If mortgages were easier to come by, the likelihood is that many more families would be trying to buy, creating even more competition.

If you would like to read more about the current market and review the statistics for other cities around California or the nation, check out the LA Weekly blog story:  L.A. Has 2nd-Hottest Real Estate Market in America.

On the mortgage front, the good news is that mortgage rates have stopped their upward climb.  As discussed in detail in our post Los Angeles Times: Mortgage Rate Increase Could Push Home Prices Higher, this is still an incredible time to get an historically low mortgage.

If we can be of any help in working with you to evaluate your options in this market, pick up the phone right now and call me, Bill Rayman, at

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Monday, June 10, 2013

Process for Home Mortgage Loan In California

1. Preapproval (link to form)
Most sellers and Real Estate Agents today prefer that you be preapproved for a loan of a specified amount. To get it, your loan agent reviews your income, debt service, credit score and other relevant information, then provides you with a letter detailing what you qualify for. By getting this information before you begin the search for your new home, you accomplish two things. One, you give yourself and realtor a budget to work with. Two, you strengthen your position with the seller. They know that if they accept your offer you have the potential to pay for it.
2. Applying For Your Mortgage (link to form)
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. 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 years tax returns including W-2’s and/or 1099’s.
  3. You last 2 bank statements (checking, savings, investment, 401k, etc...)
We will also order a credit report and arrange for an appraisal on the property being financed. If it’s a purchase, we’ll request a copy of the 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 approve 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 escrow company or at a convenient location. Bill or his team calls you several days in advance of closing to ensure  everything has been 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.
This is the basic process, but as you can imagine, each of these steps has many possible permutations and potential rabbit trails.  A mortgage loan consultant, unlike an employee of a bank, is your advocate to make sure there is a way to make this process as painless as possible, and arrive at the best possible loan for you.

The consultation is complimentary and has no obligation attached.  Call today if there is any way we can help you achieve your goals through getting one of the currently historic low interest rate loans.

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Thursday, June 6, 2013

Zillow Says Climbing Interest Rates to Impact Selling Prices

Spencer Rascoff, Zillow CEO, discusses whether a spike in mortgage rates will likely stall the housing recovery, and reveals why now may be the best time to sell your house.

See the complete video by going here Open House With Zillow's CEO 

Every economy is different.  Every residential real estate market has its oddities.  The current situation is unprecedented in history, so all pundits are making their prognostications against a backdrop of massive unknowns.  Here are a few knowns:

  • Interest rates are as low as they are going to get, give or take a few basis points.  Trying to outwit the market and get a mortgage at the very bottom is a fools errand.  
  • The current residential home shortage will not be solved by building more units, at least not in most markets.  There is no place to build units where there is the most demand.
  • By the estimate of Rascoff, 20% of all homes sold in the last year or so have been purchased by investors, large and small, who are buying for the long term.  This is establishing a floor on prices.  This has never happened before.
  • The effects of new government laws and regulations still to be written under Dodd Frank have reduced the demand on homes and mortgages as many who might buy no longer can get financing.
  • Net immigration is down, therefore reducing demand on both purchases and rentals.  If immigration increases again, demand could spike in an already tight market.
  • The economy is in a very slack recovery with the lowest level of workplace participation in generations.  If the economy picks up and discouraged workers return to the work force, there will be upward pressure on rents and purchase prices.    
  • As Rascoff points out, there are still many homeowners who have negative equity in their homes and are trapped, unable to sell.  This is keeping properties off the market
  • Many homeowners have refinanced to take advantage of sub 4% interest rates and are unlikely to ever sell those properties.  They will either stay in the homes or rent them if they want to move.  It would rarely make good financial sense to lose those mortgages.
Rascoff notes that: "As mortgage rates inevitably come from 3 percent up to 5 or 6 percent, it's going to create problems down the road."

"Imagine yourself buying a $300,000 home today, and in four years you may want to trade up to a $500,000 home," he said. "That home is not just that much more expensive—but because mortgage rates are going to be higher—it's significantly more expensive. So the trade-up market is going to be very troubled in a couple of years."

This is the affordability trap that we pointed out in this post   Los Angeles: Mortgage Interest Rates Soar on Fed Speculations .   At some point consumers just can't afford the payments or the rents. 

For the moment, however, most pundits feel that home prices will continue up for the foreseeable future, though Rascoff feels that the current rate of increase will moderate.  

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025


Tuesday, June 4, 2013

Renovating Your Home? Read This Before You Knock Down Any Walls

Much More to Consider than Whether It’s a Load-bearing Wall

The TV reality shows simply pick up a sledgehammer and start going at the wall with gusto, gaining momentum as they do it. It even looks like fun, sort of like a toddler knocking down a wall of blocks.

Construction Is Booming in Los Angeles

As you likely know, it’s not quite as simple as that. Most of us have heard that the main consideration is whether the wall is a load-bearing wall, basically a wall that supports the floor above or the ceiling. Knock down the wrong wall and the entire house can gradually come crashing down like a house of cards.

Several ways to determine whether it's a load-bearing wall

So, yes, you must first find out whether the wall that you want to remove is a load-bearing wall. There are several ways that you can try to determine on your own whether a certain wall is load-bearing, including consulting the original plans for your house. We suggest you call a structural engineer or a building contractor who can tell you with certainty whether a wall is load-bearing or not. The added benefit of consulting an expert is that they can make other recommendations if the wall turns out to be a load-bearing wall. They can either recommend adding another support system or achieving your remodeling goals a different way.

After determining whether the wall is load-bearing, there are other considerations to keep in mind.

Lifestyle. Is this a renovation that will work for your lifestyle in the long run or do you favor an open home concept plan because this works for you now? It may be helpful now for you to be able to view your young children playing in the family room while you prepare meals in the adjoining kitchen, but will you and your kids be craving more privacy once your kids turn into teen-agers? Do you get easily distracted while cooking or do you crave the company of others while you’re in the kitchen?

Heating and cooling. Keeping a larger room warm in the winter and cool in the summer will be harder. Make sure to factor in whether your home has central air and heating, or whether you will need to factor in alternate heating and cooling resources.

Asbestos. There is a possibility that walls in homes built before 1980 may contain asbestos. If so, you will need to call in a professional asbestos cleaner.

Electricity. If the wall contains any electrical outlets, electrical wiring will likely need to be rerouted, which is work that is best done by an electrician.

Flooring. This may be a minor consideration, especially if you are also planning to add in new flooring. Otherwise, you will need to think about how you’re going to fill in the gap in flooring where the wall used to be for a seamless look on your floor.

You can do all of this yourself.  Don't forget to tell the city, and submit your plans.  You are probably better off to get a licensed general contractor to help.  There are plenty of fine ones in Los Angeles.  We can help you with some that we know to be reputable. 

Have you visited our website to check out current Los Angeles interest rates on 30 year fixed mortgages?  We have some great mortgage calculators available, too.

Did you see our post on using a construction loan for major renovations?

Photo credit:

Monday, June 3, 2013

Los Angeles Times: Mortgage Rate Increase Could Push Home Prices Higher

Mortgage Rates Increased Sharply in the Last Week of May.  Fear of Rates Returning to Normal Could Move Buyers and Borrowers to Act Now!

The Los Angeles Times ran a story on May 31 suggesting that rising home prices and mortgage rates in Los Angeles could ignite a rush to secure real estate and mortgages at historic low levels.  The Times quoted two local real estate professionals:

Syd Leibovitch, president of the real estate firm Rodeo Realty in Beverly Hills, said that the market is already red hot, but that the rise in rates will no doubt have the effect of getting more folks into the market.
"If people aren't motivated by them going up, they should be," Leibovitch said. "These are going to be the lowest rates that they have seen, that their children have seen.... They are never going to believe they were this low."
Steve Goddard, an agent with Re/Max Estate Properties in Manhattan Beach, said it is common for people sitting on the fence to get motivated by rates creeping up.
"When we see an uptick in interest rates, people start to get that feeling that they might have missed the bottom of the market — which they have already. But sometimes fear is an important factor in buying property," he said. "The interest rates are still very, very good, and people who want to buy a property, if they can, should be out there trying to buy."
Los Angeles Mortgage Broker, Bill Rayman has been shouting this tune from the housetops for years  to anyone who would listen.  You can go back and review earlier blog posts here or view his videos from years ago, long before home prices started moving up at the current rapid clip.

If you have any thought to buy a home, move up into a bigger or better residence, or if you are thinking of any type of remodel or rebuild, this is the time to act.  The average mortgage interest rate over the last 30 years has been 8.6%.  With rates at 4%, this is the time to get the mortgage of a lifetime.  

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