Long Beach Condo Special Mortgage Rules

Time to buy a Long Beach condoA Long Beach condo can be a great option for someone who doesn’t want to deal with some aspects of homeownership, such as yard work and tons of upkeep.  The value of condos took a serious blow during the downturn. and condo prices continue to fall behind single family homes.  As a Long Beach home buyer, this means that you can purchase a Long Beach condo for less than you might have thought.

However, because of special rules governing mortgages for condos, it can be harder to get bank approval.  The bank not only evaluates the buyer’s credit worthiness for a condominium mortgage, it also evaluates the condo association, and having the right mortgage lender to guide you through the process can make all the difference.

When you’re pricing a Long Beach condo, be sure to factor in condominium association fees.  These fees go to keeping up shared areas, such as the grounds and the outsides of buildings.  Sometimes the fees include homeowner’s insurance for the building itself, but not for the inside of the unit.  In that case, you’ll have to buy supplemental insurance and this will be taken into account when the bank calculates your ability to pay and be approved for a loan.

If you’re considering a Long Beach condo, one of the most important things to determine is whether the property is approved for FHA, Fannie Mae, or Freddie Mac mortgages.  If it is, there are still some special rules for condominiums.  For example, no more than 10% of units may be owned by the same entity, like a developer that found buyers for the condos.  Some of the requirements for condos can be waived if you’re willing to buy one that’s been foreclosed, however.

Be sure to educate yourself on the special rules for getting a mortgage for a Long Beach condo, or better yet, call me to get expert advice.  Weigh the pros and cons with your needs and lifestyle.  You can also apply online here in minutes to get pre-approved and start your path towards Long Beach condo ownership.

10 Ways to Reduce Stress and Increase Loan Approval For the House You Can Afford

Increase Loan Approval with Ric DizonWhen it comes to getting a home loan for the house you can afford, we all expect to have some obstacles. However, when you work with me, Ric Dizon, I make it as easy as possible. That’s just part of who I am and how I operate and honestly, I really DO want you to find the perfect rate for a house you can afford, so I do all I can to make it happen and increase your loan approval.

Top 10 Ways I Reduce Stress and Increase Loan Approval Rates?

1.  I ask you to fill out an EASY application (under 5 minutes) once.
2.  I evaluate all loan products and am a one-stop source for funding, whether you are refinancing or buying a new home.
3.  I assess your individual situation and recommend what’s best for you.
4.  I call and email you back (within 12 hours) and will answer your questions accurately.
5.  I am honest with you about your rates, fees, points and options. If I know a better program I will share it with you.
6.  I believe in solid timeframes. When I say your loan will fund, I mean it.
7.  I share my valued network of industry professionals with you if additional counseling is needed.
8.  I respect your comfort level – your security and savings are my goal. I listen to your needs and wants and determine ways to achieve them.
9.  I know the local community and LOVE Long Beach and can even help you in your Long Beach home search!
10.  I can refer you to other resources throughout the community and keep you posted on events even AFTER you have purchased the house you can afford.

Take a few minutes and fill out this home loan application now and you will be on your way to your house you can afford!

Tips for Mortgage: How to Get a Lower Mortgage Rate? Use “Rate Locks”

How to get a lower mortgage rateWays to Reduce Loan Fees

Shopping how to get a lower mortgage rate? Mortgage rates will always be beyond your control no matter what you do. Rates are the function of Wall Street and are usually beyond our control. But you may get the lowest possible rates if you use certain strategies.

Those 4 ways in how to get a lower mortgage rate:

  • Achieving a higher credit score.
  • Creating a bigger down payment.
  • Follow the combination of both the above steps.
  • Or picking a better closing date.

Mortgage Rate Locks: Gambles of a Bank

What are rate lock commitments?

They are the promises of a bank to provide a fixed mortgage rate for a definite time period. It is a sort of contract where the lender says “in case you promise to pay back your loan in a certain time period we will fix a constant mortgage rate for you”.

Banks Treat These Rate Locks as a Gamble

This is because the bank is guaranteeing a fixed interest rate today which might not be prevalent later. The more the difference between the rate lock and delivery date, the greater are the chances of misinterpretation by the banks.

In analogy of sports, this is like trying to pick a winner during the beginning of the season as one cannot determine who will win based on the performance of just day one. The predictions get even weaker as the season progresses.

Rate lock commitments usually need either higher fees or interest rates or both with respect to mortgages. It becomes very dangerous when it comes to guessing future mortgage rates so banks hesitate when it comes to this “time risk”. These costs are usually passed on to you by them.

The Different Ways Banks Play the Rate Lock Game:

It is actually very simple. It is the implementation of the basic concept of incrementing the rate locks at the end of every 15 days. You are given the choices of 15 day rate lock, 30 day lock, 45 day rate lock or 60 day rate locks. You are even provided a few other options that you can choose from.

This is where the concept of “time risk” comes in again. With the increase in the duration, your mortgage rate increases.

The basis for the calculations of rate locks is the 30 day rate lock and for a 15 day rate lock, you get 1/8% lower than the 30 day rate lock. Similarly, for a 45 day rate lock it is 1/8% higher and for a 60 day rate lock, it is ¼% higher than the 30 day rate lock.

For example, if you sign a contract this week and set your closing day for 46 days, you will need a 60 day rate lock with a rise of 1/8% of your mortgage rate.

In case you can move your closing date to the previous day, a 45 day rate lock can be chosen with a drop of $28 from your monthly mortgage payment for a $400,000 home loan in Long Beach CA.

Closing Date Should be Chosen Wisely

How to get a lower mortgage rate depends on choosing a better closing date. Also, consider the effect of “time risk”. You get to save more money by reducing your duration

APR and Mortgage Rates

The Annual Percentage Rate or APR is widely believed to be useful while shopping for mortgages. However, this is not true. Rather than helping you to get the best deals on mortgage, APR only reduces your chances of landing a good mortgage rate. This is because it is very easy to manipulate the APR. Lenders take advantage of the fact that you are not aware of this fact and use it to give you a lesser than good mortgage rate.

Annual Percentage RateAPR and Mortgage Rates

The APR (Annual Percentage Rate) is a mathematical formula prescribed by the government. It serves to calculate the cost of the loan, all the way from the time of closing till the time of payoff.

The approximate calculation of the APR is done by taking the loan size as it was originally. Then, the cost of prepaid items and the closing costs are also added. Then, the final estimate will be made as to how much money will go into the loan to pay it off fully over a period of 30 years.

Basically, APR allows you to calculate the theoretical rate of mortgage if you borrow a fixed amount and spend another known amount in paying it off fully. The APR is visible on the left corner of the top of the Federal Truth-in-Lending Disclosure.

Loan officers need to disclose the APR of a mortgage while making a rate quote. Federal law requires them to do so, as it is a measure meant to protect consumers. The APR is supposed to help customers make informed choices about their mortgage. However, this might not always be the case. If you receive a loan offer with the lowest APR you have ever seen, this might not necessarily be the best loan for you.

Assumptions Made by APR

Mortgage lenders know that their clients will be attracted to loans that are advertised as having a low APR, and they love to sell these loans to their customers, especially on their websites and online advertisements. Even on the marketplace, the mortgage loans are usually sorted according to the APR, from lowest to highest. They are trying to sell you loans with low APR knowing that they hold a high appeal among their clients.

However, you cannot always pick the best loan according to the APR. The APR formula is a flawed calculation. It requires that the lender make assumptions about the future, which is always uncertain.

The three biggest assumptions made by APR calculation are:

  • You will keep your loan for 30 years.
  • Your extra payments of principal will not exceed by even $1.
  • You will not sell your house or refinance your loan.

If these statements fail at any time, your APR calculation will be completely wrong. If you go with a loan that has a low APR, you would basically be picking a loan that has the best payoff in the long term and the highest costs of closing.

Other assumptions made by APR include:

  • Failure to incorporate third party costs, which might bring down the APR artificially.
  • Adjustable-rate mortgages require assumptions of the mortgage market in the next 30 years.

As a result, the assumptions vary from lender to lender, the APR for the same loan will also differ.

To avoid being misdirected, do not choose loans based solely on the APR. Instead, use the mortgage rate as your yardstick for comparing loans.

To get approved for your mortgage loan and to learn more about the procedures involved in processing your loan, click here.

Jumbo Mortgage Rates: Easy to Qualify?

Jumbo Mortgage RatesJumbo Mortgage Rates

If you are looking to purchase a California home in Long Beach,  Rossmoor, Seal Beach or Signal Hill, now is the perfect time to apply for a mortgage. There are a variety of lenders that are offering jumbo mortgage rates, allowing prospective home buyers the opportunity to purchase a quality home. With the slow but sure recovery of the real estate market, both private lenders and banks are assisting qualified borrowers with the best jumbo mortgage rates, allowing for simpler loan guidelines and lower overall rates. By taking advantage of the lowest jumbo mortgage rates available, you will definitely be able to comfortably finance that California dream home that you have always wanted.

Jumbo Mortgage Requirements

There are certain requirements needed in order to qualify for the best jumbo mortgage rates. While jumbo mortgages tend to have easier guidelines and rates, lenders are simply being extra cautious in today’s market, which in turn, is actually very helpful to the borrower, as they have specific criteria they must meet in order to obtain the lowest jumbo mortgage rates. By learning the guidelines beforehand, the borrower will know if they need to repair anything on their credit report as well as if they need to stay at their current job for at least another year before applying. This saves both the borrower as well as the lender time, and the borrower doesn’t have to risk being denied the loan. The specific requirements for obtaining a jumbo mortgage loan are as follows:

  • Creditworthiness – In most cases, a borrower must have a FICO score of 740, but there are exceptions where a lender may approve a borrower with a score as low as 700. It is important to keep in mind that the loan may be reduced if the credit score is lower than the requirement.
  • Verifiable Income – In yesterday’s real estate market, borrowers could often apply for no-doc mortgages, where they were not required to prove their income. These mortgages caused quite a few problems and led to many foreclosures, so it is highly unlikely that you will not have to prove your current income. This can easily be done with pay stubs and W-2′s from your current job, and for self employed individuals, copies of 1099 tax forms and financial statements can be used to verify your income.
  • Down Payment/Cash Reserves – Depending on your particular credit score, your lender may require a down payment as well as proof of 6 months in cash reserves in order to qualify you for the best jumbo mortgage rates available.
  • Employment – Two years employment history is usually required of the borrower in order to qualify, and self employed individuals will need to show two consecutive years’ worth of work history through their tax forms and financial statements. It is important to keep in mind, however, that many lenders will consider the entire borrower profile, especially with many people being unemployed or underemployed in the past five years. If you do not have a full two-year work history, you may still qualify.

Qualify for the Lowest Jumbo Mortgage Rates

Living in a beach city like Long Beach or Seal Beach is a dream shared by many prospective home buyers. By taking the proper steps to ensure that your credit is on track and by working with a mortgage lender that specializes in finding their clients the best jumbo mortgage rates available, you will soon find yourself in an amazing Long Beach CA home.