California Refinance - Its still not to late for California home owners to refinance. A home refinance loan now may assist homeowners in lowering their current rate (and payments) as well as getting the cash out they need for debt consolidation, home improvement, or any other purpose.With the recent escalation of home values in most parts of California, homeowners are finding that the equity in their home is the best way to access needed cash. Many California homeowners even leverage equity for investment purposes.
In many ways, there's never been a better time to refinance in CA, especially if you have an adjustable rate mortgage which is going to begin adjusting outside of the fixed period within the next 3months or longer than that. Low fixed rates are still available for borrowers of all credit types.
Rent-Versus-Buy - Its important to know whats deductible. In most cases, homeowners are able to deduct the amount of mortgage interest paid in the tax year from their income. They are also able to deduct the amount of real estate taxes paid on the property.
The advantages of both renting and buying are quite compelling and depend largely on lifestyle.
Renting a home allows the occupant to move quite easily without much complication. The renter also is not responsible for property taxes, repairs on the home and hazard insurance. The renter can choose to negotiate a month to month arrangement or a lease of a set term.
On the other hand, many people view home ownership the most rewarding investment they can make. The homeowner builds equity in the property in several ways. By appreciation on the property due to market conditions. By years of paying down the lien on the property. Another way is making additions and/or improvments to the home.
As well as being a long term investment, the homeowner may very well also live at the residence -eliminating the need to rent a living space. Or , the residence may be a 'rental' property where the renter ends up paying a large portion or all of the costs associated with home ownership for the owner.
With the different varieties in today’s mortgage market, many renters are finding out that it is more financially feasible to buy. With 40-year mortgages, Interest-Only loans, and Option ARM mortgages being offered by more and more banks, and with tax laws favoring homeowners, many renters find that it costs little to no more to own a house than to rent.
The old adage is that the money you pay in rent is just making your landlord a millionaire. In the final analsysis of the rent vs buy argument, it is very hard to argue for rent in all but the most transient of circumstances. Even if you are not going to be somewhere too long, think about purchasing the property and determine whether you could rent it out at a later date for enough to cover the mortgage payment. In most cities, rents only go up over the long term, so a low rate fixed mortgage or alternatively a deferred interest prduct like an option ARM should keep you well ahead of the rental curve. Just remember, longer term is generally better when planning a property for rental. Also ask about balloon options.
If you are unsure of your ability to qualify to purchase a home, please contact me to discuss your unique situation.
Owning a home is and probably will always be the quintessence of the "American Dream". Home ownership not only provides a great sense of pride and accomplishment, but can provide significant tax savings and even reduction in monthly payments depending on your interest rate and loan type. When you are deciding on whether to rent or own your home, one of the first decisions you need to make is whether buying instead of renting is the right financial decision for you. And to be fair, sometimes renting is better for some people in some circumstances. However, in most cases, for most people, owning a home, as opposed to renting, is clearly the most prudent decision.
Second mortgages and Home Equity Line of Credit's (HELOC) are also tax deductible up to 100% of your homes value. With the HELOC you may also purchase big ticket items, use it for home improvement & even consolidate your debt.
Low Fixed Rate Mortgage - As short term interest rates rises, fixed rate mortgages are become more popular. Fixed rate mortgages are more stable, the payment does not change throughout the life of the loan.
Low fixed rate mortgages in the past have been the highest interest rate of any loan product. However as adjustable rate mortgages (ARM) have been increasing the relative increase in fixed rate mortgages has been small. The past popularity of ARMs was that for a small risk you were taking advantage of a huge difference in interest rate. It is just not the case any more. Fixed rate mortgages are becoming more popular because ARMs still have the same possible risks but little or no difference in rate.
While ARMs generally still have lower rates that may not always be true, and has not always been true. It is possible and has happened in the past that fixed rates were lower than some ARMs.
A low fixed rate mortgage is great for borrowers who plan on staying the home for a longer length of time.
Low Fixed Rate Mortgage Loans are loans that are eligible to be delivered to FNMA/FHLMC, which in turn are sold to investors as low risk, income producing investments. Since low fixed rate mortgages can be sold on the secondary market immediately and banks can recoup their capital investments shortly after making the loans, and do not have to take 30 years to collect on their investments, all lender banks, regardless of their market capitalizations, offer this type of mortgages, thereby making the Prime Loan (Low Fixed Rate mortgages) market highly competitive. The underwriting guidelines of Low Fixed Rate mortgages are more stringent than other types of loans.
In order for a loan applicant to qualify for the lowest fixed rate mortgage available, he should have a very good credit profile, preferably with credit scores of over 720 and without any adverse credit history. He should also be able to prove that his gross income is at least 2.5 times the total debt, including the proposed mortgage payments. He must also prove that he has enough money to put at least 20% of the house value as down payment, cover all closing costs, and left-over reserves equaling 3 to 6 months housing expenses after settlement. For homebuyers and homeowners who do not meet one or more of these criteria, many banks offer alternative loan programs.
If your current loan program is ARM (Adjustable rate mortgage) it might be a good idea to take advantage of the current low fixed rate mortgage and stop worrying about ever increasing rates.
A low fixed rate mortgage is nearly an oxymoron. Borrowers should realize than a 30 year fixed mortgage offers protection against rate increases, however this protection comes with a price.
A 30 year fixed will have the highest interest rate of any loan product on the market.
Low fixed rate mortgages are best suited for the long term borrower. Although it seems most borrowers want a low interest rate for a long term, it is more likely to get a lower rate with an ARM (adjustable rate mortgage) product as the lender will tend to raise the rates for longer term loans.
Low fixed rate mortgages with the lowest rates are usually only offered to borrowers with excellent credit and who have a 20% or more
down payment.
