Real Estate and Mortgage News in San Diego, California

4 Tips to Understanding the Mortgage Process

2009-08-07T12:21:00.000-07:00

The tricky piece to buying a home these days definitely lies in mortgage financing. Credit scores, income, employment history and assets are all crucial parts of the lending game which underwriters are scrutinizing more carefully in a cash strapped market place. If you are purchasing your first home, refinancing or looking to pull out some equity, take a look at these tips below to help streamline your process:

1) Credit Scores: Your credit score determines your interest rate, bottom line. Those that carry 720+ have a greater advantage at obtaining the most competitive rates. That's not to say if the score is lower you won't still save $ from your current rate. Rule of thumb is typically 1% lower interest rate and it's worth it to refinance based on cost recovery. Do the math before you commit and make sure the loan program and corresponding rate are right for you.
2) Income: With unemployment at record highs, you are fortunate if you have 2 years employment history in the same line of work. As many self-employed borrowers have encountered, the underwriter reviews "declining income" as a negative and may judge your entire picture on this item. If you have lost income or not reported as much income over the past year and it has declined, this can be a reason to decline the loan. Your best bet is to discuss this with your mortgage professional at the beginning to verify if there are compensating factors that would assist the underwriter in understanding your business financials. Such as a current P/L that reflects more income this year than last year. Higher expenses such as purchasing computer equipment or larger marketing expenses may be justified.
3) Employment History: Lenders want to see a minimum of 2 years in the same line of work. If you have gone from W-2 employee to self-employed, be prepared for lenders to request 2 years of self-employment before considering your application. Most lenders are verifying employment and obtaining your hire date to confirm eligibility.
4) Assets: Lenders typically look for 2-6 mos. in reserves depending on the loan program and the down payment. They can include your 401k or Retirement, however, they usually only use 70% of the principal balance for reserves. If any part of your down payment is gifted, they will want a letter or form completed verifying who the down payment is from and that it is truly a gift and does not need to be repaid.

Most listing agents require a pre-approval prior to submitting an offer to insure you are qualified to purchase and verify your credit scores and/or assets. There have been many a sales that have fallen out based on lending changes mid-transaction. It's good to shop lenders and when using a mortgage broker, ask who their top lenders are and if they have had any issues that may jeopardize your transaction. A good lender and/or mortgage broker will know the pitfalls and work to avoid them insuring you a smoother process.

Until next time, "No one can make you feel inferior without your consent," Eleanor Roosevelt.

5 Tips for Foreclosure Properties

2009-07-30T09:03:00.000-07:00

Foreclosures are still on the rise in certain areas of San Diego County. As a buyer, the enticing price of a foreclosure on paper can sometimes lead to more than bargained for once the property is viewed. Here are some helpful tips to researching foreclosed property before your loan documents are signed, sealed and delivered:

1) Home Inspection-Don't by-pass this important element based on cost alone. The average cost of a Home Inspection in San Diego ranges from $300-500 depending on the size, structure, age and other factors. Be present when the home inspector is navigating through the home to catch any items you may have missed on an initial walk-through. Request repairs from the seller or a credit if their is extensive damage. The lender may or may not oblige but it never hurts to ask and with the knowledge ahead of time you can find a contractor for an estimate to survey the cost of repair.
2) Termite Report-If the seller has not already obtained the termite report make sure your agent includes this in the purchase offer. Assess the damage. California is notorious for termite damage and most banks provide only Section 1 clearance. Check with your loan officer on the type of loan program you qualify for and if it mandates both Section 1 and Section 2 clearance. This will delay your loan transaction if not determined ahead of time.
3) Hire a Professional-If you're not sure about the foundation, easement access, or encroachment from a neighbor on your new property, hire a professional to survey this information and report back to you. This can save time and money in future expenses and headache.
4) Loan Program-There are specific parameters that must be followed depending on the loan program. FHA/VA lending may have more requirements for the condition of the home than conventional financing. Check with your lender ahead of time and obtain a list of these conditions before submitting your offer.
5) Bidding Wars-It is very likely you will not be the 1st and last offer on the property. Several home buyers including investors are shopping for great deals along with you. Be prepared to compete with others as you may be requested to submit your "highest and best" offer. It is often wise to have more than one property your eyeing. This way if you don't win on one, you have another you can submit on.

Although there are so many great deals on the market right now, patience and perseverance are key to obtaining the property you desire. You can shop foreclosure listings in San Diego for FREE on our website at http://www.westcoastlivingrealestategroup.com

Until next time, "The future depends on what we do in the present," Mahatma Gandhi.

It's a Buyer's Game

2009-07-21T15:03:00.000-07:00

Where are you in the buyer's game that continues to play out in today's real estate market? How do we know we've reached the bottom until it begins to rise? San Diego real estate continues to remain a hot commodity. With foreclosures and short sales dominating the market place, bidding wars are ensuing and although cash is still king, FHA financing which allows a purchase for an owner-occupied property up to 96.5% is available and winning bids. With the availability of CalHFA financing, to cover 3% of the Down Payment (it needs to be repaid but at a lower interest rate), that leaves .50% for a buyer to place as a down payment. It is a great time to buy! If you're still perched on the fence, your friends, colleagues and many investors are taking advantage of lower interest rates and in some cases are seeing homes at half the price of just a few years ago. A few things to remember when purchasing a Short Sale or Foreclosure:

1) Bidding Wars Happen! When an agent prices a property at or below market value this drives up the competition and multiple offers are received assisting the bank with obtaining a higher price for the property. Patience and persistence are key! If your agent is well versed in handling and closing both short sales and foreclosed property, stick with them. It is in their best interest to get you the home and close.
2) INSPECTIONS! Do your due diligence as a buyer and pay for a home inspection. This may assist you in catching any future problems, i.e. roof leakes, plumbing issues, etc. You can also hire additional specialists for property lines, mold and many other reasons to insure your new purchase doesn't have unforeseen damage or future issues.
3) Loans-Many sellers still want a 30-day offer when purchasing a foreclosed home. The sooner they get paid and get the property off their books, the more room they have for financing or replacing it with another foreclosure. Discuss reasonable time frames with your loan officer. Get all documentation in quickly and efficiently to avoid have to delay closing. Lending is still a challenge and is better tackled with a well versed loan officer in the mortgage product that suits your needs. FHA can be tough with loan conditions and time frames. Be prepared to be on call to both your lender and your agent for any last minute requested items.
4) Work with an agent that understands Short Sales and Foreclosures. Has the agent closed a Short Sale or Foreclosure? When was the last time they handled a transaction? Do they have any designations that may assist you in handling a Short Sale or Foreclosure?

Tackle these items up front and you will feel more prepared to handle the transaction. You can search our website for foreclosures, short sales and everything else on the San Diego Multiple Listing Service at www.westcoastlivingrealestategroup.com

Until next time, "You always pass failure on the way to success," Mickey Rooney.

Fannie and Freddie Refinance Relief

2009-04-20T14:03:00.000-07:00

The long awaited Fannie Mae and Freddie Mac Refinance Relief loan is now available with many participating lenders. A quick overview of the program:

* Primary, Secondary and Investment Single Family Homes are eligible (restrictions apply on 2-4 units)
* Ineligible loans: FHA, VA, High Balance Conforming (exceeds current conforming limits), 2ND mortgages
* Full documentation required to qualify including but not limited to: income and assets
* No MI coverage if the current loan does not require it
* Appraisal determined by system response
* 105% loan-to-value

This loan product offers borrowers who are currently "upside down" to refinance their existing loan balance with closing costs at up to 105% of the current market value of their home. While many San Diegans may exceed this ratio, there may be some who can benefit. A simple check of eligibility includes confirming the loan is currently held by Fannie or Freddie, obtaining a mortgage balance and an estimated appraised value and evaluating income to repay the new loan. Interest rates have dropped considerably and vary between 4.875%-6.50% for conforming loan balances. If you currently have a 2ND mortgage, the lender must re-subordinate their position at the higher Loan-to-Value ratio. You should contact your 2ND mortgage lender to research this possibility. To have your current financial situation evaluated, please contact me at (619) 640-6611 or tiana.uribe@trufinancialservices.com

Until next time, "Positive anything is better than negative nothing" - Elbert Hubbard

2009 Stimulus Package

2009-02-27T14:40:00.000-08:00

I recently read an article from a broker with over 50 years experience in the Real Estate Industry that shared his knowledge and insight through the roller coaster ride of real estate and lending, which he still occasionally dabbles in even though currently retired. His positive and upbeat demeanor really struck a cord with me as my entire industry has and continues to be impacted by the many changes in the market place. Mr. Geary Jones final words of wisdom?

"Have a good attitude. Be positive. During one slow period, people would ask, "How's business? And I'd say "Unbelievable". If you want to think things are bad, then they will be bad. But don't say anything that is untrue. Life is better when you tell the truth. You can sleep at night. If you get a reputation for not telling the truth, you might as well walk out the door."(REALTOR Magazine article by Wendy Cole, Feb. 2009).

Will the truth set us free with Obama's Stimulus Plan? Although this remains to be seen as the plan officially rolls out March 4, 2009, I have highlighted some main points that may affect current homeowners.

President Barack Obama officially announced the Homeowner Affordability and Stability Plan on February 19, 2009 to assist more than 7 million families refinance, restructure or modify their existing home loans to avoid Short Sale or Foreclosure situations. In summary, the complete outline is estimated to become available for lenders and borrowers by March 4, 2009. The major points of the plan include but are not limited to the following:

1) Government Sponsored Enterprise (GSE) refinancing for Homeowners impacted from falling home prices:
* Fannie Mae and Freddie Mac (GSE) will allow refinancing for many homeowners with loans owned or held by GSEs. Streamline refinancing should become available for borrowers with loan-to-value ratio's between 80-105% which have not been allowed to refinance under prior guidelines.
2) "At Risk" Homeowners-$75 Billion Homeowner Stability Initiative:
This program has been designed to assist homeowners reduce their monthly mortgage payments to an affordable payment that will aid their current financial situation. In assisting "At Risk" homeowners from defaulting on their current mortgage loans and curbing the foreclosure ratio, the $75 billion from TARP and GSEs will assist between an estimated 3-4 million homeowners. Additional details of the plan include:
a) Reduction of Interest Rates - The debt-to-income ratio for the monthly mortgage cannot exceed 38%. The federal aid will be used to match dollar-for-dollar further reducing the debt-to-income ratio down to 31%.
b) After 5 years the rate may increase to the loan rate on the applicable promissory note or rate at the time of modification.
c) Lenders may assist in principal reduction with federal assistance to share the cost at up to the $ amount the lender(s) would receive for interest rate reductions.
d) Incentives:
Loan Servicers: Will receive up to $1,000 up front for loan modifications.
Borrowers: Monthly mortgage balance reduction up to $1,000 for 5 years.
Lenders: Under the Obama plan, the Treasury Dept. will discourage lenders from foreclosing by establishing an insurance fund up to $10 billion to limit their loss if home prices decline more than anticipated.

The Stability Initiative will impact only owner-occupied properties and limited to the Freddie/Fannie Mae Conforming Limits. Also the plan focuses on "At Risk" homeowners who are "upside down" or "underwater"and those homeowners who have missed any payments and are not currently delinquent.

I will outline main points for First Time Homebuyers shortly. Please keep posted to the BLOG and until next time, "Every good thought you think is contributing its share to the ultimate result of your life". - Grenville Kleiser

San Diego Ranks #2 on Desired Places to Live!

2009-02-10T16:17:00.000-08:00

Those of us who have the pleasure of soaking in the surf, sand and sun already know how wonderful San Diego really is, however a recent survey by Pew Research Center's Social & Demographics as reported in the REALTOR Daily News on February 4, 2009 states that San Diego ranks #2 on the most desired places to live in the country. We have the mountains, beaches, deserts and the city all within an hour's drive! Not to mention the weather! Although we don't have the traditional four seasons, warm weather boasts so many options for outdoor activities from surfing and wake-boarding to long walks on the Embarcadero or Mission Beach's boardwalk, there's something for everyone here. From hikes up Cowles Mountain with breathtaking views of San Diego County to the Top of the Manchester Grand Hyatt's spectacular views of Coronado and North Island, the beauty and rich cultural history of San Diego keep both locals and tourists alike coming back for more!

Since I'm on my San Diego kick, I thought I would mention some amazing festivals we have including world famous, "Festa" and "Artwalk" in Little Italy. "Gator Festival" and "San Diego Heritage Day Festival and Parade" should also not be missed with lots of activities for children including arts/crafts, music and many booths with local artisans. One of my personal favorites, "The San Diego Bay Wine and Food Festival" held on the North Embarcadero in Downtown San Diego with sweeping views of the water and some of the most fabulous food and wine pairings from both small and large wineries. Music and grass areas provide comfortable and relaxing ambiance to a fun filled day! Farmer's markets in San Diego are local favorites with organic fruits and vegetables, desserts, local artisan crafted jewelery, handbags and so much more! Little Italy, Ocean Beach, North Park, La Mesa to name a few offering interesting and unique treasures for even the most selective buyer. The panini's at Seb's Panini offered during the Little Italy Mercato on Saturday's are so fresh and served nice warm they literally melt in your mouth!

Speaking of food, some of the best local artists/chefs create amazing meals including Deborah Scott/Cohn Restaurants that feature not only desirable food creations but unique ambiance. One of my favorites, "Island Prime/C-Level" on Harbor Island boasts seafood and steak entrees along with sweeping views of the Downtown San Diego Harbor. Another great option, "The Prado" in Balboa Park with the theater and museums at your fingertips, catch a meal before or after a show. Not to mention many local musicians play on selected nights throughout the week. Both restaurants offer Happy Hour with a selected menu offering discounted prices. I think one of the best ways to get a taste of San Diego is to dine during "Restaurant Week" offered for one week during the months of January and again in June. Over 150 of the cities finest dining establishments offer a Prix Fixe Menu that usually includes both an appetizer, entree and dessert for either $20, $30, or $40! This is a great value and allows you to entertain more than one restaurant a week.

Speaking of dining, since Valentine's Day is coming up, how about a "mini cruise" across the bay to Coronado on a water taxi? The water taxi runs at intervals and is around $10 per person each way. It's a great way to impress a friend, date or loved one and offers spectacular water views to Coronado Island and to take in some really great dining and shopping.

OK, so if you haven't figured it out yet, I'm a huge fan of San Diego! I could go on and on about dining, shopping, sightseeing, parks, festivals, spa's and so much more because I really do love where I live and I frequent so many places and events to support local business. I believe in my community and will continue to blog on the many great things about San Diego!

Until next time, "As soon as you start to pursue a dream, your life wakes up and everything has meaning"- Barbara Sher

A Ray of Hope

2009-02-03T14:02:00.000-08:00

Despite the turmoil in our economy, I have been reminded to find a ray of hope in even the smallest things. My business has definitely been feeling the bruises and bumps of a down market and for awhile I began to feel swallowed by one negative impact after another. That is until my husband and business partner John reminded me that there are some things I simply cannot change. What has impacted me is what I can change and still accomplish goals I have set. With some time available I have found brushing up on additional training has helped to keep me focused in leading this company through today's challenges. I'm overhauling my accounting system, revising marketing plans and beginning to recruit. All of the items that had been on the "to do" but never got done are now taking priority. Don't get me wrong the slow down has been awful hard for a workaholic who thoroughly enjoys the art of pairing buyer to home and borrower to loan, however times have changed. From the luxury market of high-end retail to every other industry in some way linked to the real estate market, it's been a real struggle. Some positive news that can really impact homeowners today is the decline of interest rates. Folks looking to refinance and attain a lower interest and payment are seeing a 30 yr. Fixed Loan in the 5-6% range depending on loan amount, credit score, value, etc. For First Time Home-buyer's low interest rates and only 3% down payment can really assist in finding a great "fixer" in the foreclosure market. The City of San Diego First Time Home-buyer still has funds to assist buyers with low-rate, fixed loans to achieve the American Dream of ownership. An enormous surplus of inventory leads to more choices for buyers at substantial discounts. For those unable to sell or refinance, a loan modification may be the route to discuss with your lender or attorney. If we can hang on and make it through these hard times, there may just be a pot of gold at the end of the rainbow.

"Waste no tears over the griefs of yesterday". (Euripides)

Market Update

2008-03-11T13:55:00.000-07:00

In riding the roll-coaster market of real estate and the tumultuous mortgage industry, one thing is certain, everything changes and unless we change with it we may be left behind. For those that receive my Mortgage Bulletin in the mail inside is a really great comic piece that is right on the money, literally! The comic piece poses a couple and a real estate agent whereby the couple states they will consider buying when the agent's $900,000 property drops to $40,000. The comic piece while funny is not far from the truth with the many foreclosure and short sale properties receiving substantially lower offers and requesting everything under the sun including cars, vacations, plasma T.V.'s and a vast array of items to induce potential buyers. Creative agents list their properties well below market value to ignite a "bidding war" between potential buyers to earn the "highest and best" price. The market has become interesting and not without a dull moment!

While we received the much anticipated new FHA conforming limits in San Diego to $697,500, the concern over property value remains. The new loan limits will allow those with existing mortgage balances exceeding the original conforming limit of $417,000 to refinance with conforming loan programs and interest rates that have been around 1% lower than Jumbo loans or those above the $417,000 limit. This may also stimulate potential buyers to submit offers on higher valued property based upon the increased limits and more favorable pricing. Lenders are currently working to update their programs and procedures to accommodate this new increase and handle the anticipated volume. Declining property value in some areas may hinder borrowers in refinancing if their loan-to-value ratio exceeds lender guidelines. We have returned to a more conservative approach of affordability where cash is king and full income documentation is necessary to make a transaction work. In some cases, lenders continue to allow "low income/stated income" documentation for self-employed borrowers with high FICO credit scores and a substantial amount of liquid assets. In addition to the conforming loan amount increase which is only effective through December 31, 2008, there are some new industry items in 2008. They are as follows:

1) Mortgage Debt Forgiveness:

Congress recently passed legislation effective January 1, 2008 assists distressed homeowners with their primary residence whereby they will not be required to pay taxes on mortgage debt affiliated with a bankruptcy, short sale, foreclosure or other renegotiation. The legislation applies to debt discharged between January 1, 2007 through December 31, 2008 (Real Estate Magazine March 2008-Industry News).

2) FICO 08:

FICO 08 is the brainchild of Fair Isaac Corp. which created a system to more accurately predict those at risk for default. The scoring system 300-850 will remain in place, however more points will be given to consumers who carry a variety of credit and penalize those that max out or utilize most of their credit availability. The new system will be available early Spring 2008 but may take lenders further testing before acquiring the system (Real Estate Magazine March 2008-Industry News).

3) PMI Deduction:

The PMI deduction for homeowners with an adjusted gross income of $100,000 or less and a mortgage originated between 2007-2010 will continue to qualify for the PMI deduction on this mortgage insurance tax. Those with an adjusted gross income up to $109,000 can also take advantage of a partial deduction (Real Estate Magazine-March 2008-Industry News).

The above items should be consulted with your tax advisor.

Thank you for reading the TRU Financial Services blog, please look for our blog and a new video clip addition to the website coming in April 2008 at http://www.trufinancialservices.com/. Your mortgage manager for life! Until next time, "Waste no tears over the griefs of yesterday" Euripides

Marketing Your Brand

2007-11-13T09:34:00.000-08:00

My niece has an infatuation with stickers. It doesn't matter what type of stickers, she constantly is peeling and sticking them on her body like a work of art. After a trip to Balboa Park riding the merry-go-round and eating lots of candy and ice cream (lucky I'm the aunt and get to spoil her) we were heading home in the car and I looked back and noticed she had peeled the sticker off a banana and placed it on her forehead. She fell asleep with her mouth hanging open, head collapsed against her car seat and looked absolutely adorable with a banana advertisement posted on her forehead like a billboard.

It got me thinking how we as individuals brand ourselves. Stickers, tattoos, hair color, nails, clothes, coffee, cars and on and on. Walking billboards to advertise product to consumers who love to consume it! My business partner makes it a point to speak with at least 2 people per day about real estate. The "Barista" at the local coffee shop, his mechanic at the car dealership, strangers in the grocery store and anyone else who will listen. He recently dropped coffee mugs with his real estate logo and company information on it to a local neighborhood in which he sells frequently, to gain more exposure. A friend of mine working for a local builder has promoted her company by paying for another patron's coffee and leaving her business card at her coffee shop. These are great ideas to move your brand to the next level. And although I may not be as bold as my niece with my logo placed across my forehead, here are some thoughts to consider when marketing your brand:

1) Provide Value-A really great dining experience will be remembered, cherished and passed on to friends, family and colleagues. Customer Service plays a huge part!
2) Emotional-It's great when my grocer remembers my name, but a friendly smile or greeting can make all the difference not only in mood but how much you may spend!
3) Consistent- It may take several times of repeating yourself before your idea "sticks", but consistency plays an integral piece in consumer confidence.
4) Act- Follow-Up on all referrals and always send "thank-yous". Those that have worked with you in the past or have followed your brand are your best clients.

Until next time, "Do not go where the path may lead, go instead where there is no path and leave a trail"-Ralph Waldo Emerson.

Credit-How Important is my Credit Score?

2007-07-16T15:51:00.000-07:00

With all of the media outlets bombarding consumers with the subprime mortgage market and short sales steadily increasing, it's no wonder credit is a valuable commodity. Many lenders conservative and aggressive have increased their requirements for credit scores especially with products the banks and investors view as "risky". Some of these "risky" parameters may include: Stated Income, Stated Income and Stated Assets, No Income/No Employment, and a credit history that may include collections, judgements, tax liens, rolling 30-60-90 day late payments. Many of us have been there where we did not pay a phone bill on time or missed a credit card payment by a few days. These may not have had quite the impact in a "hot" market where there is less housing inventory and a greater amount of demand from buyers. Nowadays lenders have time to reconcile and review their books and you better believe they have begun tightening their belts among the rash of fall-out in the market.

Some important tips to maintaining the high credit scores banks, lenders and investors reward with both loan products and interest rates are as follows:

1) Check Your Credit Report-When you are applying for a credit card, loan or extension of credit most lenders will pull a credit from one or all three of the major credit bureaus: Experian, Equifax and Transunion. One of the scores or the middle score of all three will be used in the extension amount and corresponding interest rate. Your best bet is to check the report yourself through http://www.annualcreditreport.com/. The site will allow you to view your credit history and current items that may affect your credit score. Keep in mind the credit scores you view on any credit site may not correspond with the lenders scores. Factors such as last payment made, balances at the time of the credit pull, new credit established, new credit reflected and inquiries on the report will impact the score.

2) Correcting Errors on the Credit Report-If you believe there is an error on the credit report, dispute it! You are protected by Federal law to request correction of an item and update your credit report. Items to prepare for the credit bureau: copy of current driver's license, letter with detailed information on the dispute, letter from the credit agency reflecting the item stating they made an error. The credit bureau will review the information and send a response within 30 days. You may expedite the process online if you have pulled the credit report yourself.

3) Eliminating Fraud- More consumers have become victims of fraud and identity theft. Here are a few tips to protecting your credit:

* Follow-Up with agencies asking for your personal information via mail or email. There are secure ways to send your social security number and much more. Ask your lender or credit agency if these use these resources to protect you.
* Place a security alert on your social security number through the credit bureaus. They will alert you of any activity.
* Review your credit report regularly. If you have used up your Free Credit Report, join one of the memberships through individual bureaus that offer the service with an annual fee. This may save you lot of money if you find issues immediately rather than waiting and being declined an extension of credit when it really matters!
* Document your contact if you find you are a victim of fraud or identity theft. Names, dates and a conversation log can prove extremely helpful.

The credit score is a key component in analyzing your financial future for lenders and investors alike. In a tightening market, the score really does matter!

Until next time, "Obstacles are those frightful things you see when you take your eyes off your goal". - Henry Ford

Mortgage Loan Options

2007-07-10T12:52:00.000-07:00

When I first began working with mortgage loans, I was perplexed as to how many components there are to a mortgage loan. My grandparents conveyed a 30 yr. fixed was a solid loan and they assumed adjustable loans were not suitable and had no merit. Being the conservative financial consultant I was at the time, I sold 30 yr. fixed loans night and day.

As I began to peel away the layers of mortgage lending during the recent historically low period for the Prime Rate from late 2001 to present, I started to understand Adjustable Rate Mortgages and Interest-Only Loans and how they contributed to assisting borrowers accomplish the dream of home ownership. Let's break three different types of mortgage loans down and analyze the differences:

1) 30 yr. Fixed Mortgage-This mortgage loan if fully amortized for 30 years. From the monthly payment, a portion is applied to the principal balance and the remainder to interest. This is a common loan for FHA, HUD and many First Time Home buyer Programs. If the loan is 100% financed, Private Mortgage Insurance may be added in addition to the payment or factored in to the interest rate. A solid loan with a rate that does not change. Typically, without making any additional payments to principal it will take several years before more of your monthly payment is applied to principal to assist in paying down the balance. If you do not plan on living in the property 30 years or retaining the property as an investment, an alternative mortgage option may be applicable.

2) 5/1 Fixed-Adjustable Rate Mortgage-This mortgage loan interest rate is fixed for 5 years and may adjust annually thereafter. There is usually a margin and a life time cap associated with this loan. The margin measures how much the rate with change annually and the lifetime cap provides a ceiling or a maximum to the interest rate change. The interest rates for this loan may be lower than a 30 yr. Fixed. If your purchase of real estate is short term this may be a suitable loan. Historically speaking, real estate has continued to generate favorable returns over the long haul.

3) 30 yr. Fixed with 10 year Interest Only Option-This mortgage loan interest rate is fixed for 30 years with the first ten years of optional Interest Only. If a Second Mortgage Loan is in place and the payments are fully amortized, by taking the amount you would have paid on a traditional 30 yr. Fixed and applying that difference to the second mortgage, the second will be paid off significantly faster. Once the second mortgage is paid in full, you can take those payments and apply them to principal on your primary mortgage, this will in turn assist at paying down your mortgage loan in less time. Most mortgage lenders have access to calculating this information based on your scenario. I provide this mortgage calculation to my clients and show them how to save money over the life of their loan.

These three mortgage loan options are offered by several lenders and are not always available to all borrowers. There are specific criteria in place to qualify which may include; credit scores, income documentation, asset documentation, and amount financed to name a few.

I am available for a free consultation and can be reached via my blog, email: tiana.uribe@trufinancialservices.com or 1 (877) TRU-3855 Ext. 401. Thanks for reading and until next time, "Let no feeling of discouragement prey upon you, and in the end you are sure to succeed."-Abraham Lincoln.