I’m house shopping. What do I need to know about mortgages?

Now that’s a big, big question with 100’s of variations on the answer.

Let’s hit some big ones:

1     The standard mortgage is a 30-year fixed, meaning the interest rate is fixed and can’t go up or down in the future. Commonly, homeowners will provide a 20% cash down payment if the home is to be used as a residence. 25% is common if to be used as a rental. However, it is possible to pay more or less down. If you pay less than 20%, you may need to buy insurance to protect the lender from default. 

      You might buy the insurance from the FHA or from a private insurer.

2    You can get a loan for other lengths of time. 20-year and 15-year are standard, but 40-year and 10-year are available. The longer the term, the higher the interest rate.

3     You can acquire an adjustable rate loan. These loans start out with a fixed interest rate for 5-10 years that is under market for fixed loans, thereby reducing your monthly payment in the first few years. At the end of the fixed period, the interest rate is set based on an index, and your payments are higher. The interest rate and the payment is generally reset every six months or year.

4     You will need to prove your ability to repay the loan. The decision maker is called an underwriter, and he/she will look to your income, credit outstanding, credit rating, and other factors to determine if you would be a good customer for them. 

You might want to talk to Bill Rayman about your plans. He has tons of experience working with folks just like you that are weighing their options and trying to decide which is the smartest way to manage buying a home that makes sense.

Call Bill today at (424) 354-5325  

Check out his website at MortageHelpLosAngeles.com 

or see his reviews at 

https://www.google.com/search?client=firefox-b-1-d&channel=cus&q=bill+rayman#lrd=0x80c2bb44de982149:0x1b6d38585f35e6cb,1,,,

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Should I refinance my mortgage to get cash out for home improvements, travel, or investments?

Many of us have lots of our net worth tied up in our homes. Sometimes we wish it was easier to access that equity for something fun: travel, room addition, starting a business, invest somewhere with higher rate of return or more liquidity. 

You could borrow on a credit card or take a HELOC, but these have higher, even much higher interest rates.

Since the only way you can borrow money at 3.75% interest or less (as of rates when this was written) is through a mortgage, there are plenty of great ways to manage your finances through a new loan. However, there is a cost to taking out a new loan, so the cost of the loan should be considered along with the better interest rate.

You also want to consider that a student loan, car loan, or even credit card can be paid off in a very short time, thereby reducing the overall interest paid compared to paying for something over a 30-year time span. 

You might want to talk to Bill Rayman about your plans. He has tons of experience working with folks just like you that are weighing their options and trying to decide which is the smartest way to manage finances and still have the money to do fun things. 

Call Bill today at (424) 354-5325  

Check out his website at MortageHelpLosAngeles.com or see his reviews at 

https://www.google.com/search?client=firefox-b-1-d&channel=cus&q=bill+rayman#lrd=0x80c2bb44de982149:0x1b6d38585f35e6cb,1,,,