One of the questions we ask all the time is whether to do your financing as one loan or two loans. Until comparatively recently, one loan was the default option, but people have been learning that splitting their home financing up into two loans can save them significant amounts of money. There is significant resistance …
Category Archives: Mortgages
Relocation Issues and Some Developer Issues
From an e-mail: I live in (City 1) and recently signed a work order on a semi-custom new contruction house in (City 2). My wife and I make a combined 120K income and still can’t afford a decent place in City 1. It was preapproved rather quickly from both the builder’s mortgage company and a …
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Games Lenders Play (Part II)
Here’s another advertisement that I’ve gotten in the mail within the last few days: “Pick a Pay, Any Pay!’ The Revolutionary Option ARM!” “Start rates as low as 1%!” Loan amount $100,000 Payment $321.64$200,000 $643.28$300,000 $964.92$400,000 $1286.56 Could this help save you money? Let’s see, given the real rate on these, there is negative amortization …
Debt Consolidation Refinance: Right and Wrong
There’s a lot that gets written on this subject, mostly by loan officers looking for business. Well, don’t think I’m not looking for business, but not with this post. Or if anybody calls me because of this, at least I’ll know they understand how to do it right. The basic come-on is this: Your home …
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When You Can’t Make Your Real Estate Mortgage Payment
I’ve written a lot here about how to manage your mortgage so that you control it instead of it controlling you. Let’s consider what happens when that project fails. If you don’t pay your mortgage, on time, no big deal at first. Fifteen days later, the first consequence is that you owe the lender a …
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Time in Line of Work for Home Loans
From an email: Anyway, my wife and I are about to purchase a place here in the X area and we’ve been hearing that “a tough loan” line due to the fact that I’m only 10 months into my new small business although I’ve been profitable the entire time. We’re stuck doing No Doc/Stated Income …
Racial Gap in Home Loans
Racial Gap in Loans Is High in California. I can give a variety of reasons for this. First off, especially in Los Angeles but to a lesser extent throughout the state, there is a huge “Spanish speaking only” community. When you limit yourself to speakers of a language which isn’t the nation’s primary business tongue, …
Stealth “Cash Out” Loans
One of the things I hear a lot is that people are getting cash in their pocket from a refinance rate where there is no rebate. “I’m not paying any closing costs!” they proudly tell me, “The bank is putting money in my pocket.” Chances are that’s not what’s going on. In fact, when the …
Pre-payment Penalties and Alternate Payment Schemes
From an email: I was wondering if you could tell me whether the following ways to save on interest are actually possible. If they are what are the penalties typically associated with these suggestions. I know you have mentioned a pre-payment penalty but what amount is reasonable? 1) Pay a certain amount over your monthly …
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Payment, Interest Rate and Up Front Costs: Choosing a loan intelligently
Most people tend to shop for a mortgage based upon the payment. They figure the lowest payment will be the cheapest loan. This is the way most people make banks rich. Because they are looking for the loan with the lowest rate and the lowest payment, they choose the loan with two or three points …
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