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PMI versus MIP PMI (private mortgage insurance) is what you pay to a lender to avoid loan failure on a conventional loan. If you put down less than 20% on your home, you will pay PMI until you meet 20% of your conventional loan. MIP (mortgage insurance premium) is the FHA mortgage insurance premium. This premium is paid in two ways: upfront (1.75% of the loan amount) and annually through monthly installments (1.25% of the loan amount). These funds are utilized to insure your loan. If you put down less than 20% on an FHA loan, you will pay MIP [&hellip

Renting Versus Owning Renters Have Much to Gain by Pursuing Home Ownership Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages. Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage [&hellip

Qualified Mortgages The win for Lenders What is the big win for lenders making a Qualified Mortgage (QM)? A lender that fellows the rules of a QM loan have greater protection from law suits. This provision of QM is called “safe harbor”. In theory, under the Consumer Financial Protection Bureau’s final mortgage rules, low-priced loans that meet all the criteria of QM are supposed to be largely immune from consumer lawsuits. Lenders that make Qualified Mortgages get certain legal protections even if the loans default. For QMs that are not “higher-priced,” lenders get a “safe harbor.” This means that the [&hellip

  New Mortgage rules: Debt to Income Ratio The new mortgage rules called Qualified Mortgage or QM impact many parts of the real estate loan process. A major new rule is the maximum Debt to Income Ratio (DTI) or some times called the back end ratio. QM sets the new maximum DTI to 43%. This is lower than current standards. The clear impact of the new rule is less people will qualify for a QM loan. Is this a good thing, or bad thing only time will tell? What is a Debt to Income Ratio? The Debt to Income Ratio [&hellip

New Mortgage rules: Ability to Repay   The eight factors Ability to Repay creates in underwriting a new mortgage.   These eight Ability to Repay factors a lender must consider when reviewing a new mortgage loan application will cause a number of people not to be able to get a mortgage, and therefore not buy a home. Is that a good thing or bad thing only time will tell? Here is the list of the eight elements the new rule Ability to Repay (ATR) creates in mortgage lending. One. The current or reasonably expected income or assets that the consumer [&hellip

Loan Preapproval: Why You Need to be Preapproved Do you feel ready to start looking for your first house?  Well, the first step of any home-buying experience is to get prequalified for a loan. Most people are going to need a loan in order to purchase a house.  If you are one of the many people who fall into this category, then there are some things you need to know. The seller wants to get the best deal they can and they want to get it fast. If you fall in love with a home and put in an offer, [&hellip

Sacramento Housing Numbers November  2013 Charts are good for viewing what the data of the Sacramento housing marketing is doing. This chart of the number of Homes for Sale and Homes that Sold shows that there are many more homes for sale than are being sold.  This is a change from what we saw for the first half of the year.  The chart shows that homes were being bought as fast as they could be put on the market, but that has changed now.  The past several months have had many more homes for sale, but the number of buyers [&hellip

Who Holds the Lien on Your California Property? A lien is a right to a property granted by the owner to secure a debt. Essentially, the property acts as collateral for the loan. This means the lienholder has a right to take possession of the property if the debt is not repaid or the terms of the debt are violated, just like when collateral is forfeited if a loan is not repaid. Sometimes, property owners will attempt to sell a property without knowing or disclosing that there is a lien on the property. Liens can make themselves known at inopportune [&hellip

“Show me the Money” Solving distressed home owners’ problems I was introduced to Mary (not real name) at a very difficult point in her life. One major problem she had was her house was severely damaged and left abandon by a family member. She was unable to pay the mortgage for many months and the lender started foreclosures proceedings. I took on the project property to hopefully do a short sale before it was sold at foreclosure. When I inspected the house and did market research of real estate values I thought I could sell the house to an investor [&hellip

Opportunity lost? Interest rates are moving higher. The days of the lowest mortgage rates in history are no longer. It’s an opportunity lost to refinance or get the lowest possible mortgage. Real estate prices in California are on the move upward. The days of cheap housing prices are gone. The time to buy property at the lowest prices in a decade is gone. That is one way of looking at it. Two questions beg to be asked. Was that really the bottom? Is it a bad strategy to buy after the bottom has formed? If that was the bottom of [&hellip