Are You Believing the Headlines, the Myths, or the Commercials about Mortgages?
When you are in the market for a mortgage in Los Angeles, a refinance in Santa Monica, a construction loan in Beverly Hills, or an FHA mortgage in Culver City, you are likely to start paying attention to the nutty notions that make their way into the news, internet, commercials, and even advice from friends. Here are nine such ideas that you should carefully evaluate.
Nutty Notion #1 - Mortgage interest rates are skyrocketing and are going to kill the home market. Today, 30 year fixed mortgages are at about 4.6. This is close to a 50% discount of the average 8.6% over the past 30 years. Any mortgage interest rate under 6% is an amazing bargain
Nutty Notion #2 - You have to have 20% down to buy a home today. You can use FHA or PMI (private mortgage insurance) which allow 3.5% and 5% down payments, respectively.
Nutty Notion #3 - You have to have a perfect credit score to get a mortgage. While the government rules and banking regulations have made mortgages tougher in the past few years, the requirements are very much the same as they were in prior to 2000.
Nutty Notion #4 - Credit Repair companies can fix your credit. Be very careful about employing credit repair companies. Many are scams or even straight out cons. You can repair your own credit.
Nutty Notion #5 - Banks are your friends. Banks are in business to make a profit based on a review of the risk of any loan versus the amount of cash flow and interest they can earn. Especially under the new rules from the US government, banks are looking at you as a bunch of numbers.
Nutty Notion #6 - Banks have lower interest rates than you can get through a mortgage broker. Many times a mortgage broker will put your loan through a bank if that is the best overall deal for you.
Nutty Notion #7 - When shopping for a mortgage, go for the one with the lowest interest rate. There are at least 20 basic elements of any loan that may make that loan better or worse for your specific needs. Even the total cost of the loan is not reflected in the interest rate alone.
Nutty Notion #8 - No cost loans are the smartest way to do your mortgage. There is no such thing as a no cost loan. Many of the costs are dictated by federal or state law. Other costs are necessary if the lender is to stay in business. Someone is paying the cost. It may be hidden.
Nutty Notion #9 - Adjustable rate loans are more expensive than fixed rate in the long run. In fact, it can be shown that adjustable rate loans are cheaper in the long run. This is because the risk is shifted to you, and away from the bank. Every situation will be different. That's why it is always better to consider talking to a mortgage broker prior to making any decisions on your loan. Mortgage brokers only make their commission when they have provided you with a great loan. They work for you, not for the lenders.
We will be happy to have a no obligation conversation with you about your specific needs, and can even help you with very specialized loans.
New Contact Information for Bill Rayman
Bill Rayman Home Mortgage12121 Wilshire Blvd
LA CA 90025