http://www.trulia.com/voices/profile/Real_Estate_Pro-92075-54500/The latest answers submitted by California Mortgage Broker to questions asked on Trulia Voicesen-ushttp://www.trulia.com/voices/Home_Buying/can_i_get_a_condo_complex_added_to_the_VA_approved-145305Answer by California Mortgage Broker: I've probably funded 40 VA home loans in 2009, many of them for unapproved condominium complexes. In Southern California, it's quite common along the coastal communities for buyers to look at condos, townhomes, or PUDs as lower-cost alternatives to single-family homes. Declining prices, along with higher VA loan limits have afforded many active duty and former service members the opportunity to scoop up a piece of the California coastal lifestyle by purchasing one of those properties. Sellers often cringe when they receive an offer using VA home loan financing. The general thought is that the VA condominum complex approval process is time-consuming, onerous, and difficult... Nothing could be further from the truth. All loan types, including FHA and conventional vet the condominium association's organizational documents, finances, and residency mix. In fact, the VA guidelines tend to be the least restrictive of all three loan types. Three tips for real estate agents when presenting an offer, on an unapproved complex, with a VA mortgage: 1- Use a VA lender who has been through the VA approval process MANY times. 2-Review the required documents' checklist: The document checklist is available in Chapter 16 of the VA Lender’s Handbook. Specifically, the table of required documents is available on page 16A.03. I suggest that the loan originator AND both real estate agents AND the escrow officer review this table as soon as an agreement of sale is executed. At first glance, the list appears to be ominous (lots of dead trees). Upon more careful scrutiny, it is plain to see that only 5-6 documents are required; the other 20 or so are only required IF AVAILABLE. 3- Consider the time saved by using an attorney's opinion letter: The key component to the VA condominium complex approval is the Attorney’s Opinion Letter. Essentially, the VA relies on the expertise of an independent attorney to evaluate the condominium documents and offer an opinion as to whether or not those documents comply with the VA regulations. An attorney opinion letter is NOT a requirement for the submission package but attempting this without one is not recommended. While it adds another layer of cost to the approval process, the result is a greatly reduced examination time at the VA. VA condo approvals are quite easy if you know what to do. Follow these three tips to guarantee a smooth transaction or contact me with any questions you might have.Sat, 19 Dec 2009 18:04:59 PSThttp://www.trulia.com/voices/Financing/Can_a_VA_mortgage_underwriter_override_the_DTI_l-101435Answer by California Mortgage Broker: The VA also uses residual income analysis for determining "capacity". From the VA website: The primary method of evaluating a veteran's income is the residual income method. Under this method, the underwriter determines that a veteran has sufficient income to cover day-to-day living expenses after paying housing expenses, taxes, and other debts such as car payments and credit card payments. For example, if an 0-2 (with three years service) were receiving a base pay of $3484, a BAH of $2000 and BAS of $300, her total monthly income would be $5784. We would deduct her taxes (on the base pay), of about $800. She's single, without dependents so there are no childcare expenses. This gives her contributory income of $5084. If she had $1200 in monthly expenses (credit cards, car loans, etc), her contributory income is reduced to $3884. The VA requires a residual income of $491. In order to "trump" the debt-to-income ratio analysis, we would need residual income of 120% of that, or about $600; this would allow for a maximum housing expense of $3,200. Using the "eight dollars per thousand" estimate, Lt (jg) Smith would be approved for a $400,000 VA home loan.Sat, 18 Apr 2009 00:46:52 PDThttp://www.trulia.com/voices/Market_Conditions/If_President_Barack_Obama_could_change_or_fix_anyt-81933Answer by California Mortgage Broker: Let’s start with the premise that lenders are taking 20-30% hits on short sales. Then, let’s have the US Treasury loan 30% of the balance, of the aggregate debt, to homeowners whom request it, in order to pay down the first mortgage (or second mortgage). If I have $200,000, in aggregate liens against the property, the US Treasury will lend me $60,000, to pay down those aggregate liens, to $140,000. This reduces the lenders exposure. What type of loan will the Treasury make to homeowners? The term can be for the lesser of: 1- the remaining term of the first mortgage 2- 65 less the age of the primary borrower. The interest rate can be the corresponding term treasury rate, plus .5% (for administrative costs). Maybe we can use some of that “yield spread” to coerce a few mortgage brokers to “originate” this government debt (okay, that was completely self-serving). For a 42 year old, with a 27 year term on his first mortgage, the term of this new government loan (in second position) would be 23 years (65-42=23). If a 23 year treasury bond yields 4.1%, than the note rate for the new loan will be 4.6%. The borrowers never have to make a payment on this debt; it accrues like a negative amortization loan. In the aforementioned example, the balance would grow to about $168,000, after 23 years. With a first mortgage paid down to $140,000, we’re banking on the future value of the property growing to $308,000, by the year 2031. When the house is sold or refinanced, the government loan is paid off. We’ve essentially solved the liquidity problem, bottomed the real estate decline, and “helped” real people by using government funds. What if the borrower skates on the loan or short sells the property? Moreover, what if the real estate market NEVER comes back, and the property is never worth $308,000, in the next 23 years? 1- Make the remaining loan balance transferable to new properties. 2- If that lien is NEVER satisfied, deduct the balance from the year 2031 net present value of the borrower’s retirement entitlements’ account (social security and Medicare). The program is completely optional.Wed, 21 Jan 2009 07:08:40 PSThttp://www.trulia.com/voices/Home_Buying/Information_on_using_VA_loans_in_San_Diego-56713Answer by California Mortgage Broker: Hi Cleda, This question was just passed along to me; I left you a voicemail, as well. VA loans offer 100% financing to qualified personnel. Sellers can pay up to 4% of the purchase price towards closing costs. New loan limits, for San Diego County, in 2009, are $593,000. Generally speaking, all active duty service members will qualify. Did you know that one on ten Californians is a veteran? Pretty amazing, huh? Don't overlook this unique financing product when speaking with buyers. It can be used over, and over again.Wed, 24 Dec 2008 14:57:33 PSThttp://www.trulia.com/voices/Market_Conditions/How_is_San_Diego_market_doing_now_Is_it_good_time-40724Answer by California Mortgage Broker: Do a home search for properties in the 92057 Zip code, here on Trulia- keep them to under $225,000- Most of these properties sold north of $400K, in 2005. While that was overblown, you can see that there is a lot of room there. Now, click the link below- Marine Corps NCOs have about $1,500-$1700/month for rent (and they spend it). $20% down on a $200,000 home will have a PITI of about $1,550Tue, 24 Jun 2008 15:29:16 PDThttp://www.trulia.com/voices/Financing/contract_on_a_loft_downtown_with_HOA_delinquincy_i-39910Answer by California Mortgage Broker: There might be a few solutions: 1- FHA is a big maybe- they'll want to "approve" the complex and many of the issues FannieMae dislikes may discourage FHA. 2- Portfolio lenders would fund this deal...with 20% down payment.Sun, 8 Jun 2008 11:23:47 PDThttp://www.trulia.com/voices/Home_Buying/What_s_the_best_short_term_place_to_buy_in_Phoenix-37431Answer by California Mortgage Broker: I've owned property in The Valley for 12 years (both owner-occ and investment). Heed Christoph's advice. While the outer suburbs appear attractive based on price and the price to rent ratio, the areas he specified are in demand from tenants and owners. Your time frame is awfully optimistic; it may take 5-7 years to realize a profit from a leveraged Phx real estate investment equal to a 3 year T-billThu, 22 May 2008 22:41:16 PDThttp://www.trulia.com/voices/Financing/How_do_I_find_the_best_deal_on_a_mortgage_-3295Answer by California Mortgage Broker: The secret is this; organize your documentation BEFORE you call around. If you follow these seven steps and compile a package that you can e-mail to mortgage originators, you can effectively play us off one another and get smoking great terms for a home loan. Click the link for the seven steps:Sun, 14 Oct 2007 08:48:52 PDThttp://www.trulia.com/voices/Foreclosure/Since_Michigan_is_near_or_at_top_of_foreclosures_-10555Answer by California Mortgage Broker: Lending requirements are consistent throughout the nation. Fannie Mae and Freddie Mac are, however, flagging certain "declining areas" for review appraisals which are reducing the loan amounts. That shouldn't be a problem in a purchase transaction.Sun, 7 Oct 2007 10:04:18 PDThttp://www.trulia.com/voices/Financing/What_will_better_help_in_getting_financed_paying-10602Answer by California Mortgage Broker: Mita, I was invited to comment and am pleased to offer some basic advice. I may contradict what some of the real estate agents have told you so I don't mean to sound petty. You do have an excellent credit score, however, the days of great credit scores getting you the best loan terms are gone. Now, more than ever, lenders are returning to old school underwriting and the ability to repay the loan, as measured by a debt to income ratio, are essential. NB- My advice is general because prescribing a specific solution, on a website like Trulia, is like treating a disease on WebMD. The absolute best thing you can do is have a mortgage planner help you with this personally. I'm happy to advise you; click my link for contact information. 1- Pay down but don't pay off the installment debt. If your balance reflects less than 12 payments due, it will not be counted in your ratios by an underwriter. The lower balance, when reflected to the "high limit" will maintain your excellent credit score. 2- The revolving debt can be strategically paid down to reflect lower payments. If you pay an account down do NOT close the line of credit; that will eradicate "available credit", causing the algorithm used by the credit scoring models to think that you are less credit worthy than before. You've done an excellent job managing credit to date. With personalized counseling, you'll position your self for the best home loan available.Sun, 7 Oct 2007 10:01:44 PDThttp://www.trulia.com/voices/Financing/i_have_a_yrs_ARM_mortgage_with_MU_and_have_left_-7176Answer by California Mortgage Broker: Why not wait a few months? This is a tough market to be a non-conforming borrower. The problem is that the investors for these loans are all "waiting" for the other on to price them. It's sort of like the NBA draft; nobody wants to set the market. You have a terrific equity position, can pay to get the loan amount under $417,000 if necessary, and should see lower interest rates in six months.Wed, 22 Aug 2007 08:02:11 PDThttp://www.trulia.com/voices/Financing/If_I_pay_a_lock_fee_and_lock_in_a_loan_then_chang-7346Answer by California Mortgage Broker: If you pay a lock fee, you are paying for the rate commitment from the lender. Often, that fee is used to compensate for the market risk that lender assumes by guaranteeing the rate. Lenders will hedge that market risk by hedging on Wall Street; that costs the lender money. Most lenders won't charge a lock fee for a relatively short rate lock (30 days); they assume that risk as a cost of doing business. The longer term locks may require you, as a consumer, to commit to the lender through a lock-in fee. The lender, in turn, spends money to insure your rate through hedging. My answer would be that the lock-in fee, is non-refundableWed, 15 Aug 2007 08:36:28 PDThttp://www.trulia.com/voices/Financing/Is_a_fixed_rate_better_than_an_ARM_-6616Answer by California Mortgage Broker: These are pat industry arguments: "Depends how long you're in the loan" "Fixed rates are always better if it's an extended period of time" OK...How about we amend the question... Considering the the average holding time of a loan is 3 years, and the average holding time of a property is 6 years, how could ANYBODtY justify the exhorbitant expense of a fixed rate loan ?Mon, 30 Jul 2007 17:50:05 PDThttp://www.trulia.com/voices/Financing/Is_a_fixed_rate_better_than_an_ARM_-6616Answer by California Mortgage Broker: Did you know that over a five year period of time, the one year ARM has always outperformed a 30-year fixed rate loan? That statistic has held true for over 40 years. What that means is that your average interest cost for a five year period was less with a one year ARM, than with a traditional 30 year fixed-rate loan.Mon, 30 Jul 2007 00:36:50 PDThttp://www.trulia.com/voices/Financing/Is_a_fixed_rate_better_than_an_ARM_-6616Answer by California Mortgage Broker: Fixed rate mortgages, for the lion's share of the population, are an inappropriate recommendation. Mortgage advertisers, unschooled in financial planning , are aggressively advertising fixed rate mortgages as a cure to the rising ARM rates. They're encouraging you to sell low and buy high. SAY WHAT? DID THEY FORGET THAT RATES GO DOWN, TOO? You should lock in a fixed rate mortgage at the low end of an interest rate cycle, not the high end of it. It is easier to sell fear than to properly counsel you so these loan hacks will try to baffle you with slick sounding "Myths". Check them out here:Mon, 30 Jul 2007 00:20:35 PDThttp://www.trulia.com/voices/Financing/How_can_I_find_out_if_my_mortgage_has_a_prepayment-4122Answer by California Mortgage Broker: Look at your note. There should be a prepayment rider attachedMon, 30 Jul 2007 00:49:46 PDThttp://www.trulia.com/voices/Financing/How_can_I_find_out_if_my_mortgage_has_a_prepayment-4122Answer by California Mortgage Broker: Read the note before you sign it. If it has a "prepayment penalty rider" the terms of the penalty are in the note. If the loan is closed, look for the rider in the closing package.Fri, 18 May 2007 23:02:05 PDThttp://www.trulia.com/voices/Home_Selling/what_are_the_costs_commissions_of_selling_a_home-6402Answer by California Mortgage Broker: Fees are negotiable. There are no set fees charged by Realtors.Mon, 30 Jul 2007 00:48:47 PDThttp://www.trulia.com/voices/Financing/If_I_have_a_great_credit_score_and_need_a_MM_y-6604Answer by California Mortgage Broker: At the risk of sounding self-gratuitous, how aboot that me?Mon, 30 Jul 2007 00:45:18 PDThttp://www.trulia.com/voices/Quality_of_Life/Pete_Flint_so_how_was_the_birthday_celebration_-6618Answer by California Mortgage Broker: Yes! Inquiring minds want to knowMon, 30 Jul 2007 00:39:16 PDThttp://www.trulia.com/voices/Financing/How_do_large_banks_offer_no_closing_cost_loans_-6617Answer by California Mortgage Broker: Let me give you a raw example. If I wish to earn a mortgage brokerage fee of 1% of the loan amount plus $495 processing fee on a $400,000 loan, here are 3 ways I can do it for a customer who wants to take advantage of YSP (or negative points). Let's assume that the third party (or HARD) costs of this loan are $4,000: 1- The customer gets a rate of 5.875% with no YSP. The customer-paid fees will be my $4,495 PLUS the $4,000 third party fees for a total of $8,495. 2- The customer gets a rate of 6.25% with 1% YSP. The customer-paid fees will be my $495 PLUS the third party $4,000 for a total of $4,495. The lender will pay me (the mortgage broker) the other $4,000 of my fee. the borrower really pays it in the form of a higher interest rate. 3- The customer gets a rate of 6.625% with a 2% YSP. The customer-paid fees are only $495! The lender pays me (the mortgage broker) my $4,495 and I credit the remaining $3505 from the YSP to the borrower for all of the third party fees. That's enough to include the title premium, "lender junk fees", appraisal, etc . Why would a customer want to pay a higher rate if he qualifies for a lower one? They actually receive negative points! Hey! What about their payment? Isn't it going to be higher? Of course it is! In the difference between option one and three , it is $250/month in extra interest or $3,000 year. They receive $8,000 upfront in negative points for that $250/month. Then, it's a matter of simple math. I ask the customer if they intend to keep this mortgage for more than 32 months (the breakeven point). If they say, "No, we'll probably refinance to remodel", then they should take the negative points and higher rate. If they say. "Yep. We expect to be in this loan until we pay it off", then I advise them to pay the third party fees and my mortgage brokerage fee upfront and take the lower rate!Mon, 30 Jul 2007 00:35:09 PDThttp://www.trulia.com/voices/Financing/How_do_large_banks_offer_no_closing_cost_loans_-6617Answer by California Mortgage Broker: I'm going to use an example of points and negative points with you. I have heard many people explain that they don't really understand the whole "YSP thingy" on their settlement statement. I hope to make it easy to explain for you to understand how much your mortgage REALLY costs. Discount Points are upfront interest to the borrower . Along those lines, so are closing costs from third-party providers. This means that we figure in those costs as the true COST of credit to the consumer and measure it as an annual percentage rate (APR). There are 2-3 good arguments about why APR is an antiquated measure but I'll leave them for another article. Borrowers pay points to lower the rate. A common term is to "buy down the rate". Did you know that mortgage brokers get money at a wholesale cost? It's how we make profit. Just like your local Nordstrom's, we buy at wholesale and sell at retail. The only difference is that we, acting as a mortgage broker have to tell the customer three times what we expect to profit on their mortgage transaction: First, within three days of an application on a good-faith estimate, at the bottom of the itemization (bottom of page 1 of the California MLDS), second, within three days of drawing loan documents (same disclosures), and finally, on the HUD-1 Settlement Statement as a paid outside of closing (POC) item. That profit, paid by the lender to the broker is called yield spread premium or YSP. You can understand it as "negative points". if a consumer "pays points to lower the rate", why can't they "receive points to accept a higher rate". Instead of paying upfront interest in the form of a discount point, they receive upfront interest in the form of a "YSP". That receipt of upfront interest defers the mortgage broker's fee!Mon, 30 Jul 2007 00:22:56 PDThttp://www.trulia.com/voices/Financing/how_do_I_find_comps_on_local_propertys_so_I_can_ge-4705Answer by California Mortgage Broker: I actually start with Zillow. Now, if you're in Mojave County, the properties are somewhat rural and unique; that will be hard to comp out. I'd go down to the local Realtor and get his/her expert opinionSun, 24 Jun 2007 15:28:22 PDThttp://www.trulia.com/voices/Home_Buying/home_loans-4383Answer by California Mortgage Broker: Ironically, this may actually be doable. The loan may be a good idea. There are a few lenders who finance up to 107% of the property price for the very reason you cite. You must qualify with your verified incomeSun, 24 Jun 2007 15:24:05 PDThttp://www.trulia.com/voices/Financing/Why_can_t_a_lender_really_guarantee_that_he_she_ha-4625Answer by California Mortgage Broker: It is absolutely impossible to advertise that you have the best rates or lowest rates, truthfully. Let me give you an example: 1- Go to google and enter in quotes: "lowest mortgage rates"- 519,000 hits 2- Now enter in quotes: "lowest mortgage rates"+california- only 243,000 hits...that's better. 3- Finally, enter in quotes: "lowest mortgage rates"+san diego down to 109,000 hits..wunderbar! Now let's shop for the lowest rate and call every one of the 109,000 entries and verify the terms of the mortgage. Each call should last 3 minutes and I'll be dialing straight for 10 hours a day. I can talk to 200 mortgage companies in that time. It will take me 545 days to get through all of the entries for "best mortgage rate"+san diego. Do you think that the best rate might have changed in a year and a half?Tue, 29 May 2007 12:05:54 PDThttp://www.trulia.com/voices/Financing/Just_how_much_ARM_money_is_resetting_this_year_-4624Answer by California Mortgage Broker: Here's the really scary (or opportunistic) statistic. There were $330 million in ARMs that reset in 2006 and ONE TRILLION DOLLARS in ARMs resetting in 2007. There are still $2.5 million of resetting ARMs over 2008 and 2009Tue, 29 May 2007 12:03:57 PDThttp://www.trulia.com/voices/Using_Trulia/How_does_someone_get_a_founding_member_badge_on_-4565Answer by California Mortgage Broker: I want one!Sun, 27 May 2007 13:15:47 PDThttp://www.trulia.com/voices/Financing/Is_there_ayone_having_a_hard_time_finding_financin-4576Answer by California Mortgage Broker: Rose, that's a great question. the answer is yes. Many people ARE having problems because of the recent changes. Most of our industry (over 50%) has less than five years experience so they won't understand the "new" guidelines for lending (it's like being reset to 2001). Look for someone who has been around since 2000; we can make it easy.Sun, 27 May 2007 13:00:36 PDThttp://www.trulia.com/voices/Financing/Should_a_buyer_pay_PMI_or_do_piggy_back_financing_-4313Answer by California Mortgage Broker: I hate to sound like a cheerleader for the industry but...it depends. Each situation is different. Now that PMI can be tax-deductible, an experienced mortgage professional's advice is needed.Wed, 23 May 2007 19:25:25 PDT