Month: June 2017

Buying Down The Rate

Lower Interest Rate:

Years ago someone came up with the idea that a borrower could pay a fee to lower the interest rate. In the mortgage industry this has become known as “buying down the rate”. So what does that mean and how is it figured out? For starters buying down the rate on a new mortgage generally means you are going to pay a percentage Spacious Family Room In Homeof the loan amount to get a lower mortgage rate however is some cases a loan officer may offer a lower rate based on the borrower paying the basic closing costs of underwriting, title and escrow fees.

The Actual Buy Down:

Generally the buy down is 1% of the loan amount however it can be less or more than that. And when you pay that you’ll receive a lower mortgage rate than if you didn’t pay that amount. To figure out your cost associated with the buying down of the rate simply times the loan amount by 1% (or whatever the percent of the buy down is). When you buy down the rate it’s usually a costs in addition to regular closing fees. So for example; if you were getting a new mortgage with a 1% buy down plus closing costs and your loan amount was $300,000.00 then you would pay $3,000.00 plus the regular closing costs associated with the loan. On a refinance you usually can roll these costs into the loan however on a purchase they must be paid up front by either the buyer or with a seller credit towards closing costs.

Two Scenarios:Low Mortgage Rates At JBMC

Getting the best mortgage rate does not always mean getting the lowest mortgage rate. What do I mean by that? Let’s say you have two options when getting a new mortgage; option one is at 4.00% and your only costs are the regular closing costs fees and option 2 is with a 1% buy down plus closing costs with a rate of 3.75%. Now if you stick with the loan for a long time it usually makes sense however if you refinance or move too soon that that “lower rate” just cost you more money. Every situation is different but generally it’s questionable as to whether there is a benefit to buying down the rate based on current mortgage spreads. With some loan scenarios it does make sense so you certainly don’t want to be completely opposed to the idea. If you do buy down the rate make sure you’re clear on how long it will take for you to see the actual savings of the lower rate. For our company it’s probably less than 20% of the transactions actually have a buy down point.

A+ RatingWondering who has the best mortgage rates in California? If you would like a quote on a new mortgage please contact us directly via the sidebar quote request or you can call us directly at 1-800-550-5538.  We’re a top rated company with the Better Business Bureau and have industry low rates.

Current Mortgage Rates:

If you are looking for current mortgage rates we have you covered on our current mortgage rates page. We’ll not only keep you up-to-date with where mortgage rates are at but also cover important bond market information and general economic news that may influence mortgage rates.

Mortgage Pre-Approval

Buying A Home:

If you are looking to buy your first home, looking to upgrade from your current home or buying a new rental property it’s always a great idea to get a pre-approval done by a knowledgeable loan officer with years of experience. In fact most sellers require that a prospective buyer have a pre-approval completed prior to making an offer. Below is Home For Saleinformation that will help you navigate the process to ensure you have the knowledge needed to make it a more smooth and efficient process.

The Pre-Approval Process:

So what does is mean to get a pre-approval done and what is the process? Both excellent questions with fairly simple answers. Getting a pre-approval done means a loan officer has reviewed your credit report, income and assets to see if you qualify for a loan. At that time the loan officer will provide a detailed quote however it’s important to know that it could change since the terms are not locked in. Especially if you go weeks or months after the initial pre-approval before finding a home. The reason is mortgage rates and terms change daily until you find a home and lock in your rate/terms.

The Necessary Documentation:Home Buyers

What is the process like? First step is to gather your income and asset documentation. If you are a W-2 employee that means getting your two most recent W-2’s and your two most recent pay stubs (if you are paid weekly then it’s your four most recent pay stubs). If you are self employed it means gathering your two most recent years of tax returns (personal and business). In addition to your asset documentation you also need your asset documentation (the account in which your down payment will come from). If you’re down payment is being gifted to you; you still may need to show some liquid assets so you should still gather those statements (covering the two most recent months).

Starting The Process:

Second step is to call a loan officer and let them know you’d like to pre-approved. You’ll complete an application (over the phone it generally takes 10 minutes) and send over your documentation. From there it’s up to he loan officer to review everything and determine if you Mortgage Pre-qualifyqualify for a loan and how much house you can afford.

“How Long Does It Take?”:

Generally it takes a loan officer 24-48 hours to review everything and determine if he/she can issue a pre-approval letter. Once that is completed you’re ready to go find a property!  One thing that is very important during the process is that it’s essential you ask questions to make sure you understand everything; especially if you are first time home buyer.

JB Mortgage Capital, Inc.

If you would like to get pre-approved with us you can contact us by way of the sidebar “contact us here” request or call us directly at 1-800-550-5538.  We offer industry low mortgage rates, top notch customer service and we’ll beA+ Rating happy to answer any questions you have. Loan Officer Kevin O’Connor has 14 years of experience, a five star rating on Zillow and we have an A+ Rating with the Better Business Bureau.

Loan Estimate

If you’ve purchased or refinanced a home years ago you’ll remember a document called the Good Faith Estimate (GFE).  However that was changed a few years back and now mortgage lenders issue the Loan Estimate (LE). Why the change?  Regulators decided that the disclosure needed an overall and they also were trying to find a way to reduce the number of disclosures a loan officer had to provide to a borrower. They Loan Estimatecame up with the Loan Estimate and it’s a combination of the Good Faith Estimate and the Truth-In-Lending disclosure. The Loan Estimate was welcome change by the industry in general as it made it a bit easier to explain the details of the loan to a borrower.

Everything You Need To Know:

The Loan Estimate has everything you need to know in terms of your mortgage rate, fees associated with the loan, your name and property information, the APR and on Page 3 it has some general disclosure information. The general disclosure information on Page 3 includes information about the appraisal, if someone can assume your mortgage, Homeowner’s insurance information, Late Payment, Loan Acceptance, Refinancing and Servicing of the loan disclosure information.  Sounds like a lot but it’s actually simple to read and fairly easy to understand. What doesn’t it have? We’ll it doesn’t answer general questions like “Who has the best mortgage rates in California?” or “Am I getting a good deal?” ….that you’ll have to figure out on your own.  The Loan Estimate only has information that pertains to the quote the loan officer provided to you.

More Details About Page 3:

What else does page 3 of the Loan Estimate have? The A.P.R. which is your interest rate plus the costs of the loan expressed as a rate.  Some people get confused by the interest rate and the APR and that is understandable. Just remember that your interest rate is what your mortgage payment is based on and your APR is your interest rate plus the fees you’re paying to do the loan.  One of the most important areas of the Loan Estimate is the on page 1; top right corner. It clearly spells out your loan term, purpose, loan product, type and if the interest rate is locked.Low Mortgage Rates At JBMC

When Is the Loan Estimate Sent?:

A Loan Estimate is issued after a homeowner or potential homeowner applies for a new mortgage (within three days of completing an application). It’s very important to know that if you call a lender for a quote and don’t complete an application they will not send you a Loan Estimate. To get a Loan Estimate you actually have to apply for a loan.

JB Mortgage Capital, Inc.:

If you are looking to refinance your current mortgage or purchase a new home please be sure to give us a call at 1-800-550-5538. We offer industry low mortgage rates, fast closings and top notch customer service. And we’ll always take the time to answer questions you may have. Loan Officer Kevin O’Connor has over 14 years of experience in the mortgage industry and has a “five star” rating on Zillow. He believes in listening to the client first and then finding solutions.

First Time Home Buyer Down Payment

Good News For First Time Home Buyers:

Are you a first time home buyer trying to figure out how much you need to put down towards the purchase of a new home? Well the good news is not much at all under some Mortgage Home Informationloan programs. The idea of the traditional 20% down payment for a first time home buyer went away years ago as home prices moved higher in the early 2000’s.  Even after home prices declined after 2008 it was still very difficult for first time home buyers to come up with the traditional 20% in most urban cities.  Currently there are many different options for first time home buyers when it comes to down payments including gift’s from family members, local city or county assistance and in some cases there are gifts of equity.

As Little As 3.5% Down:

But lets say you don’t have access to one of those options and you need to plan on saving for a down payment. Currently we offer a 3.5% down payment program and this is available to first time home buyers. The great thing is that we also offer a low mortgage rate with the 3.5% down payment program and along with our other loan programs we never charge any junk fees.  Also you have the option of paying no points in you prefer or if you do want to “buy down” the interest rate you have that option as well.

Mortgage Insurance:Home Buyers In California

The 3.5% down loan program does has a Mortgage Insurance (MI) policy which is added to the actual mortgage payment made each month. This insurance is paid by the homeowner to the mortgage company each month in case you default on the mortgage. It does not cover damage to your home; that insurance policy is called your Homeowner’s Insurance (which covers damages to the home). There are additional details to the loan program and we would be happy to discuss with you all the aspects of the program.  We’ll also take the time to answer any questions you have about getting how much house you can afford, getting pre-qualified, the loan program and/or the loan process.

BBB A+ AccreditedJB Mortgage Capital, Inc.:

We offer industry low mortgage rates and a high level of customer service. We also have a top rating with the Better Business Bureau and and the Business Consumers Alliance. Loan Officer Kevin O’Connor has over 14 years of experience and can help first time home buyers with their first purchase. From loan application to closing you’ll work with one person rather than 2 or 3 like most mortgage companies. This allows for a much more efficient process, you’ll always have a direct contact with the Loan Officer and your realtor will thank you for it. Contact us today at 1-800-550-5538.

San Diego Home Prices Continue To Move Up

Case-Shiller:

According to the recently released Case-Shiller index, San Diego county home prices have continued to move up as mortgage rates remain near historic lows.  In the report released Tuesday, San Diego county saw a 0.9% increase in home prices during the April and they are 6.6% higher than April 2016.  This trend higher is found San Diegoin 19 of the 20 markets the Case-Shiller index follows as homes across the country continue to increase in value.  Along with low mortgage rates in San Diego there is also a low supply of homes and fairly strong and diverse local economy.

Real Estate Bubble:

Some are starting to get a bit concerned that we are in the early stages of another Real Estate Bubble. The difference between the current market and the Real Estate Bubble from 2003-2007 are the mortgages being issued by lenders.  Back then zero down, interest only, option arms, subprime dominated the market.  It was not uncommon for someone to own 5-10 rental properties as some markets were seeing double digit growth in 6 months.  Today’s market is not dominated by high risk mortgage; gone are the days of the average person owning 10 homes with option arm loans hoping to flip them in 12 months.  Mortgage rates are actually lower now than the pre-2008 and that is big part of why home values have pushed up over the last few years.

CoreLogic Report:San Diego Zoo

Another recent report, this one from CoreLogic said that the median home price for San Diego county hit $530,000 in May which is an 8.2% increase compared to a year ago.  Is a nearly 10% growth rate sustainable? No and current homeowners should not expect to see another 8% growth this time next year.  The most likely scenario is the market will level out over the next one to two years and pause for a while as incomes catch up to the higher home prices.  If the economy experiences a downtown and San Diego struggles in creating new high paying jobs than you’ll likely see a decline in home values until the economy picks up.  However a 2008 mortgage meltdown is unlikely since the market no longer offers high risk loans to homeowners.

Low Mortgage Rates at JBMCCurrent Mortgage Rates:

If you are looking for current mortgage rates we have you covered on our current mortgage rates page. We’ll not only keep you up-to-date with where mortgage rates are at but also cover important bond market information and general economic news that may influence mortgage rates.

Los Angeles Median Home Price Record High May 2017

Median Home Price:

Los Angeles County, California median home price hit a record high in May 2017 as mortgage rates remain near historic lows.  The median home price in Los Angeles County hit $560,500.00 as inventory remains low and along with low mortgage rates.  At the height of the mortgage bubble in 2008, Los Angeles county’s median home price hit an all-time high of $550,000.00 and shortly thereafter fell over the following years.  According CoreLogic’s report released Wednesday Los Angeles Mortgage Home Informationcounty’s median price in May rose 6.8% from a year earlier to reach just over $560,000.00 as sales jumped nearly 5.00%.

Multiple Offers:

Many homeowner’s are receiving multiple offers above asking as demand continues to surge.  The greatest demand appears to be in the $500,000 to  $1,000,000 range.  Higher priced homes are not seeing the same surge in demand however it continues to be a sellers market even above the $1,000,000.00 mark.  Los Angeles mortgage companies are having to be extremely competitive with their mortgage rates as more and more companies try to attract purchase loan volume.

Possible Bubble?

Will this surge in home prices continue and is it a bubble?  Great question without an easy answer.  If mortgage rates remain low and the economy remains strong (in terms of low unemployment) the demand for housing will continue to be strong in the Los Angeles County area.  However incomes need to grow as well since a homeowner can only afford so much when it comes to buying a new home.

JB Mortgage Capital, Inc.A+ Rating

If you are considering a new purchase in the Los Angeles County area (or refinancing your current mortgage) please be sure to give us a call at 1-800-550-5538.  We offer industry low mortgage rates, a high level of customer service and we have a top rating with the Better Business Bureau and the Business Consumers Alliance.  We have mortgage programs with as little as 3.5% down along with both fixed rate mortgage programs and adjustable rate mortgage programs.

Current Mortgage Rates:

If you are looking for current mortgage rates we have you covered on our current mortgage rates page. We’ll not only keep you up-to-date with where mortgage rates are at but also cover important bond market information and general economic news that may influence mortgage rates.

Pending Home Sales May 2017

Sales Fell But Market Solid:

Pending home sales for May 2017 fell for the third month in a row as tight supply and high prices seem to be slowing things down according to the National Association of Realtors (NAR). The Pending Home Sales Index is based on contract sales (not closed sales) and fell 0.8% to an index value of 108.5 (April the reading came in at 109.4). The decrease is a 1.7% decline from the same period last year however the market remains solid. The West saw the biggest decline in pending home Mortgage Home Informationsales at a decrease of 4.5% which is not surprising since home values in the Western part of the country have seen significant increases in the last 6-12 months. With the high home values and limited supply you’re seeing potential homeowners re-looking at the important question of “How much house can I afford?” Understanding exactly what a home buyer can afford is essential.

Entry Level Homes:

Entry level homes have seen a significant decline. Pending Homes Sales under $100,000.00 declined 7.2% compared to last year. Homes between $100,000.00 – $200,000.00 only increased 2.00% compared to last year. Mortgage rates entering the summer are at 2017 lows so that should help support the market but it may continue at these levels until more supply becomes available.

NAR Economist Yin:Home Brown

According to the NAR Chief Economist Lawrence Yin; “Monthly closings have recently been oscillating back and forth, but this third consecutive decline in contract activity implies a possible topping off in sales. Buyer interest is solid, but there is just not enough supply to satisfy demand,” Yun said. “Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast. The lack of listings in the affordable price range are creating lopsided conditions in many areas where investors and repeat buyers with larger down payments are making up a bulk of the sales activity,” Yun said. “Meanwhile, many prospective first-time buyers can’t catch a break,” he said. “Prices are going up and there’s intense competition for the A+ Ratinghomes they’re financially able to purchase.”

Current Mortgage Rates:

If you are looking for current mortgage rates we have you covered on our current mortgage rates page. We’ll not only keep you up-to-date with where mortgage rates are at but also cover important bond market information and general economic news that may influence mortgage rates.

Homeowners Missing Out On Lower Mortgage Rates-Study

Black Night Financial Services:

According to a new study from Black Night Financial Services there are currently 4.5 million homeowner’s eligible and have a financial incentive to refinance their current mortgage into a lower rate mortgage. That is a very high number and it amounts to a $1 billion savings that millions of homeowners are missing out on.  With Home Kitchenmortgage rates near their 2017 lows and home values at or near all time highs it’s an attractive time to consider a refinance.

Refinance Applications:

However mortgage refinance applications are down 30% as lenders see a dramatic drop in loan volume for the first 6 months of 2017. Heading into the summer, lenders are offering their best mortgage rates of the year but many homeowners are simply not motivated to move forward with refinancing their current mortgage.  Furthermore many FHA loans that come with Mortgage Insurance (MI) or Conforming loans with Private Mortgage Insurance (PMI) could refinance to get rid of that added extra expense due to the strong increase in home values for the first half of 2017.

Ben Graboske, Senior VP at BKFS:Mortgage Pre-qualify

Why are millions of homeowner’s not moving forward even though they could save thousands of dollars per year? According to Ben Graboske, senior vice president of data and analytics at BKFS: “Our data doesn’t tell us about motivation, it leaves us to surmise that the reason is apathy, lack of awareness and education.” As time goes on many of these homeowner’s will start to look into a refinance if mortgage rates hold these levels.  Also, July 1 the credit bureau’s will adjust how the handle certain negative items on a credit report and many people believe credit scores will see a boost once the adjustment is in place.

Current Mortgage Rates:

If you are looking for current mortgage rates we have you covered on our current mortgage rates page. We’ll not only keep you up-to-date with where mortgage rates are at but also cover important bond market information and general economic news that may influence mortgage rates.

Millennials want their own homes – TransUnion

Per a study by TransUnion:

55% of people shopping for mortgages in the first quarter of 2017 were non-homeowners (renters).  This is a 50% jump compared to last year and a 45% jump compared to 2015.  Digging deeper in to the study you’ll find that 29% of renters who shopped for a mortgage were millennials, up slightly from the 28% in 2016 and 27% in 2015.

Official TransUnion Statement:

“This new uptick in mortgage shopping could be a precursor to further declines in occupancy, which would impact rent growth—and ultimately revenue—for multifamily property owners. In anticipation of the potential shift, owners and property managers should be offering the right amenities and programs designed to attract renters,” TransUnion said in a statement.  A surge in Millennial home buyers is essential to a health housing market.  Without Millennial home buyers the housing and mortgage industry will decline as transaction volume will diminish.  It will also prevent established homeowners from moving up to larger more expensive homes if Millennials are not active in the purchase market.  The best mortgage lenders are eager to attract new First Time Home Buyers (FTHB) with incentives to jump into the market.  This means FTHB receive slightly better terms than those looking to refinance their current mortgage.

Management Companies:Low Mortgage Rates At JBMC

Michael Doherty, senior vice president of TransUnion’s rental screening solutions group, added, “Property management companies should consider new services such as rental payment reporting to credit bureaus to entice renters into their multifamily properties. In many cases, renters are more likely to choose a unit if their property manager reports their rental payments. Our survey data show that most renter prioritize their rental payments and want their payments reported.”

Current Mortgage Rates:

If you are looking for current mortgage rates we have you covered on our current mortgage rates page. We’ll not only keep you up-to-date with where mortgage rates are at but also cover important bond market information and general economic news that may influence mortgage rates.

Fannie Mae, Freddie Mac And A Possible Breakup

A Possible Breakup:

Fannie Mae and Freddie Mac have long been rumored for a breakup with the Federal Government ever since being taken over in 2008.  However breakups are hard; especially when it comes to trillions of dollars in mortgages.  It’s not as easy as just saying “Your on your own Fannie and Freddie!”.  In the latest revival of ending the Home Loan Programrelationship close relationship with Federal government and the large mortgage corporations we’re seeing some unity between the two parties.  A Democrat, Mark Warner from Virginia and a Republican, Bob Corker from Tennessee are leading the charge to reform the relationship between the Federal government and the mortgage giants.

Headlines:

The headlines seem to usually read how much money the government has put into the two companies however it fails to include that not only has this money been paid back but the government is actually making a profit off it’s investment.  What’s a bit different is it appears they are looking at dividing the companies into two categories of business, and not necessarily ending the close Federal government relationship immediately.   Per various news reports the initial stage would be to split the business into Single Family Residential mortgage loans and Multi-Family Residential mortgage loans.  From there they would explore further splits and a possible move to private ownership. Will this plan affect borrowers getting a mortgage or will it affect mortgage rates?  Probably not so there should not be too much concern at the consumer level at this point until we see the details.  That being said I wouldn’t hold my breathLow Mortgage Rates at JBMC waiting for any meaningful reform of the relationship between the Federal government and the two mortgage giants.  This is Washington we’re talking about and if one thing is clear – gridlock remains supreme.

Current Mortgage Rates:

If you are looking for current mortgage rates we have you covered on our current mortgage rates page. We’ll not only keep you up-to-date with where mortgage rates are at but also cover important bond market information and general economic news that may influence mortgage rates.