Mortgage Update Los Angeles

Mortgage Interest Rates Hit New Lows Again in Los Angeles

2012-02-04T10:58:00.000-08:00

The Fed says that they plan to keep mortgage interest rates low for another year or longer, and it is clear that the interest rate that they care the most about is residential real estate mortgage loans. However, please don't count too much on the ability of the Fed to keep these mortgage loan rates down. They are the biggest player on the court, but not the only player.

A lending institution needs to borrow money from others in order to lend it to you. They may borrow the money from institutions or individuals, but they have to borrow it from someone. In most cases, the lender only wants to own "part" of the loan, so they also must be able to sell the final loan to someone else in part or in whole. And this all has to be done at a profit.

Those institutions and individuals who are loaning the money to the mortgage lenders and buying up the final loans want to make a return on their investment, just like you do when you put money in a savings account or into a stock or bond. As you know, putting money into a savings account today offers NO real return on investment as the interest rates on those savings accounts are less than even core inflation. This is true for the institutions, too.

At some point, the institutions are no longer going to be happy with the interest rates they are getting for mortgage instruments. They will have other places where the risk reward potential is greater. When that happens mortgage interest rates will increase, and they may increase dramatically. And the Fed will not be able to stop it.

Now is the time to act. You might get lucky and hit the bottom of the market. You might save another 1/8th of a percent. But you might also lose 1/2% by waiting. Call me today at 310-295-2900 ext 113 and we can get the refinancing done at historic low rates.

How to Get the Best Mortgage Rates: LA Mortgage Broker Bill Rayman Gives Tips

2012-01-24T12:25:00.000-08:00

First, make sure you are comparing current mortgage rates for the same type of mortgage. Mortgage rates and closing costs can change significantly from one day to another, so if you are comparing offers from multiple lenders it must be done on the same day. For example, if you are shopping mortgage rates and have a quote for a 30 year fixed at 5.75%, only compare it to other 30 year fixed quotes at 5.75%.

Next, compare the total of all points and lender fees for each mortgage (from section 800 to 813 on the Good Faith Estimate), that is the price of the mortgage. The lender with the lowest cost has the best mortgage rates.

If you are refinancing, you will also need to review the cost of title insurance, closing/attorney, and appraisal. Some large national companies have negotiated excellent rates for these services on your behalf. The company with the lowest combination of points, fees and third party costs for the same rate and product has the best mortgage rates.

Things to Watch Out For

APR is not always accurate, so it should not be used. To get the best mortgage rates, compare current mortgage rates and closing costs.

Good Faith Estimates are just estimates. Many brokers and lenders will give you a low ball estimate, and then after you have paid for your appraisal, they will inform you that the mortgage rate or closing cost have gone up. Look for lenders that guarantee their closing costs up front.

There is nothing wrong with No/Zero Closing Cost Loans. Just be aware that you will be looking at higher mortgage rates in exchange or if you are refinancing, the closing costs could be included in your principal.

Paying higher points and fees will result in lower mortgage rates. For example, at 7% you may have zero points and fees, while at 6% you may have points and fees of $3000. To get the best mortgage rates, you must estimate how long you will have the mortgage. Also, make sure you are comparing current mortgage rates when doing your comparison.

Home Loan Types Broken Down by Mortgage Expert Bill Rayman

2012-01-21T12:24:00.000-08:00

Fixed Rate Home Mortgage Loans

If you would like the security of never having your monthly payment change, this is the mortgage that you will prefer. Your mortgage rate and payment are fixed for the life of your home loan, whether the loan is 10, 15, 30 or 40 years. With current low rates on fixed rate home mortgages, this is an ideal solution for most borrowers. When rates are high, it sometimes makes sense to use an adjustable rate in hopes of lowering future interest costs.

FHA Home Mortgage Loans

FHA home mortages are loans insured by the Federal Housing Administration. Sometimes FHA mortgage rates may be higher than conventional mortgage loans, FHA home mortgage loans offer benefits such as down payments as low as 3.5%, easier qualification guidelines, and easier access to lenders, especially in tough mortgage markets as we are seeing in 2009-10.

Cash Out Home Mortgage Loans

If you are faced with needing or wanting to make a substantial purchase or investment, using your home's equity can be the least expensive option. Whether for college costs, unexpected medical expenses, the vacation of a lifetime, or a room addition, you can obtain a refinance home mortgage loan to get cash for these purposes. You may find it more cost effective to use a Home Equity Line of Credit (HELOC), a traditional second trust deed, or refinance the first trust deed. We can help you with that decision.

Debt Consolidation Home Mortgage Loans

You may be paying very high interest on auto, personal lines, second trust deeds, credit cards or other financing. Any interest rate you are paying above 7 or 8% is substantially higher than what you would be paying using a mortgage. Refinancing your home mortgage loan to consolidate other debt under one low mortgage rate can save you money and lower your monthly payments.

Adjustable Rate Home Mortgage Loans

In some markets it may make sense to lower your monthly mortgage loan payment during the early years of your mortgage. Mortgage rates for ARMs are usually lower in the early years than traditional fixed rate prorams. This can be especially true if you plan on selling or refinancing your home in less than 10 years. However, most adjustable rate home mortgage loans do not amortize fully or may even include reverse amortization. This means that you are not increasing the equity in your home as fast as you will in a conventional loan. Unless you lock in rates for several years, you are also risking interest rates increasing, which will result in your cost of interest and your monthly payment going up.

Interest Only Home Mortgage Loans

Interest only home mortgage loans allow you to lower your initial mortgage rate and monthly payment, which may allow you to qualify for a larger loan amount than loans that include payments on the principle. This eliminates the potential for generating equity on your home through paying down the principle.

VA Home Mortgage Loans

VA home mortgages are loans guaranteed by the US Department of Veteran Affairs. These mortgages are offered only to eligible veterans They can be used for home purchases, cash-out mortgage refinances or rate & term mortgage refinances. If you are a veteran, these guaranteed loans are typically an excellent vehicle for you to use.

Divorce Buyout Home Mortgage Loans

Divorce Buyout Mortgage are designed to provide a vehicle for one spouse to keep the house, get cash out if needed for any purpose, including paying off the other spouse, and remove the other spouse’s name from the current home loan.

Home Mortgage Loan Refinance Uses & Benefits

2012-01-19T12:21:00.000-08:00

Mortgage Refinance To Lower Your Mortgage Rate and/or Payment
Even a small reduction in your mortgage interest rate can make the decision to refinance worth the cost and time. When you refinance to lower your monthly payment you free up money for other uses. If you plan to stay in your home for five years or more you may want to mortgage refinance and consider buying down your rate to further reduce your monthly payment.

Mortgage Refinance for Cash Out Of Your Home
Home loan mortgage refinancing can allow you to get cash out of your home equity for a variety of purposes: You may need to help pay for education expenses, medical expenses, a vacation home, or home improvements. Mortgage refinancing provides an inexpensive way to accomplish these goals, and the interest you pay is tax deductible.

Mortgage Refinance for Debt Consolidation
If you have debt outside of your mortgage and you have equity in your home, it’s time to consider refinancing your home loan. You are likely paying a much higher interest rate on credit cards, consumer finance loans, and auto loans. Through mortgage refinancing you can consolidate all of these debts into one loan. Not only will your monthly outlay be greatly reduced and most of the savings be due to paying far less in interest, but the bulk of the payment will be tax deductible. Refinancing your home to pay off and consolidate debt under one low mortgage rate is commonly a great choice.

Mortgage Refinance To Change To A Fixed Rate From An ARM
Adjustable Rate Mortgages (ARMs) seem like a great way to go when mortgage rates are low. At the end of 2009 rates are historically low, and unlikely to stay this low over the long term. As the likelihood grows that rates will increase that ARM quickly becomes a significant burden. Your payments and interest costs could even double. Now is the time to consider mortgage refinancing into a fixed rate loan. If you plan on staying in your home for at least 3 years refinancing your mortgage into a fixed rate will likely result in major savings and the peace of mind of knowing that your payments will not be increasing.

Mortgage Refinance To Pay off Your Home Loan Faster
You can structure a mortgage refinance to pay off your home sooner than under your current mortgage. By refinancing into a 20, 15, or even 10 year fixed mortgage, you will receive a lower interest rate. In this case your payments may go up, but each month you are dramatically increasing your equity in the home.

Mortgage Broker Bill Rayman Answers: What is PMI and do I need it?

2012-01-19T12:18:00.000-08:00

Mortgage insurance allows consumers to purchase a home with a small down payment. Some buyers don't 20% of the value of the home they can otherwise afford. Most lenders require at least 20% down in order to insure themselves against a future foreclosure should the property lose value. They also know that borrowers who have at least a 20% equity in their homes default less often than borrowers with less equity.

Mortgage insurance takes on the lenders risk for the loan amount above 80% of the home value. Like all insurance PMI or MI has a cost that must be paid by the borrower. The payment is included in your mortgage payment if your loan requires PMI or MI so that the lender knows that it is being paid on time.

You can cancel mortgage insurance without refinancing. In most cases, when you have established a 20% equity in your home and you haven't missed a payment in the past 12 months, you can get your mortgage insurance requirement removed by the lender.

Mortgage Expert Bill Rayman Answers: What is an interest rate lock and how does it work?

2012-01-17T12:17:00.000-08:00

A typical interest rate lock guarantees your interest rate for 30 days from the date your application is received unless otherwise stated. The lock does not obligate you to the loan nor does it obligate the lender to fund. It merely eliminates the risk of interest rates increasing while final negotiations are in process. If interest rates fall, we may or may not be able to re-lock with the same lender at the lower rate
.
Since the lender is absorbing the risk of a potential increase in rates, there is a cost for taking on this risk. Therefore, when you shop for mortgages, a 7% interest rate with a 60 day lock is a better deal for you than a 7% interest rate with a 30 day lock.

Once you submit and the lender receives your application, a lock for that interest rate is established. You will receive a confirmation in your loan approval package. At this point your interest rate will be guaranteed as long as you are approved, and assuming you submit all information prior to the deadlines in the lock.

What is a Mortgage Broker? Bill Rayman of Los Angeles Weighs In

2012-01-14T12:14:00.000-08:00

What are the benefits of using a mortgage broker?

A mortgage broker is a company that has relationships with lenders and their products in much the same way that an independent insurance agent has access to many different insurance providers. Through these relationships mortgage brokers are offered mortgages at wholesale prices. As a result the broker can now offer the lowest rates on the market by using the lender offering the best interest rates and other costs on that particular day that fit the needs of their client.

The broker can also choose to operate on lower margins or profit than other banks or lenders. Good brokers and their agents keep up on a vast array of products from their providers. Direct lenders have only a limited number of loan products available.

The broker does all of the processing of the loan, but does not actually service the loan once it is completed or closed. Experience brokers will almost always find ways to get difficult loans placed where direct lenders are more likely to say they just can't do it.

Mortgage Broker Bill Rayman Explains His Mortgage Loan Programs

2012-01-13T12:11:00.000-08:00

Conventional Home Loans

Refinance up to 105% of appraised value with the new Fannie Mae DU Plus Program
$417,000 mortgage loan limit
Secured by government sponsored entities
Purchase or refinance 1 to 4 family units

FHA Home Loans

Insured by the Federal Housing Administration
Low down payment on a new purchase 3.5 %
Refinance up to 95% of your appraised value
$100 down HUD home purchase program
Streamline with no appraisal if you have an existing FHA loan

VA Home Loans

ZERO down payment purchase program
Forgiving credit requirements
Administered by the Department of Veterans Affairs

USDA Mortgage Loans

100% Financing up to the appraised value
NO private mortgage insurance
NO limit on seller concessions and gifts
Flexible credit qualifications
No loan amount limitations
Purchase Money Program

Credit Repair

Learn the true cost of having a low credit score
Expert advice on resolving outstanding credit issues
No monthly fee

Steps to Buying A Home: Mortgage Broker Bill Rayman Explains

2012-01-12T12:10:00.000-08:00

1. Prequalify

Most sellers and real estate agents today prefer to have you become prequalified for a loan of a certain amount. This means that your loan agent or broker reviews your income, debt service, credit score, and other relevant information and provides with you the amount that a lender will loan you in the current market. By getting this information before you begin the search for your new home, you strengthen your bargaining position with the seller. They know that if they accept your offer you can get the loan.

2. Applying For Your Mortgage

Applying for a home loan with Bill Rayman and Mortgage Capital Partners could not be easier. Bill can take your application in person, over the phone, or you may complete the secure online application on this site. You can also choose to fax your completed application to 310-481-4859.
3. Processing Your Loan Application

This step is simply the process of verifying the information you provided during the prequalification process (although commonly we have you send these documents at the time of prequalification.) Typically, we will ask for 3 items to verify these facts:
1. Your last 2 pay check stubs (a year-to-date P & L if self employed)
2. Your last 2 W-2 forms (personal and/or corporate returns will only be requested if needed)
3. You last 2 bank statements (checking, savings, investment, 401k, etc...)
We will also order your credit report, the appraisal on the property being financed. and a copy of your purchase contract.

4. Appraising Your Home

The appraiser will contact your Real Estate Agent if you are purchasing a new home or call you directly if you are refinancing, to set a time to view the inside of the property being financed. The appraiser will research the comparable homes that have sold recently in your area to determine the current market value of the property. This information is then used by the bank's underwriter as an assurance that the amount they are lending is appropriate to the value of the property.

5. Underwriting your loan

The bank must now make a final determination to pprove or reject the loan, and if approved, under what terms. If for any reason they are unable to approve your loan under the terms for which you have applied, they may counter offer with other terms. . For example, if you applied for a 15 year fixed rate mortgage, but the Underwriter felt the larger payment would be overly taxing based on your other debts and as a function of your income, then they may offer a 30 year fixed rate mortgage instead.

6. Closing Your Mortgage

Your closing will commonly take place at the title company of your choice or at an location convenient to all parties. Bill will usually call you 24 hours prior to your closing to make certain everything has been properly coordinated between you, your Home Owners Insurance Agent, your Real Estate Agent (if applicable) and your title company

Can I do a Loan if my Properties Are in an LLC? Mortgage Broker Bill Rayman Answers

2012-01-11T12:08:00.000-08:00

Very simple question, very simple direct answer, can I do a loan if my properties in an LLC? And the answer is no. Even though by law and taxes, an LLC is considered a individual, from a lending stand point it is not. The lenders want individually real flesh and blood individual to be responsible for the loan and the payments. So you’re gonna sign for that individually. Can you put it into an LLC afterward? Absolutely. You do that with your accountant, your attorney, it’s a relatively easy process. But it’s not the LLC signing that document. You can only do that for commercial properties.

What Can I Afford? Mortgage Broker Bill Rayman Weighs In

2012-01-09T12:03:00.000-08:00

In some ways determining the amount that you can afford to pay for a new home may seem like a simple process. You figure out your net income after taxes (the amount of your paycheck), and you subtract all of your other payments and expenses other than housing. The answer is how much pr month you can afford for your new home. You would be right, of course, but it isn't quite that simple.

First of all, banks and other lending institutions, have standards that you must meet in order to get a mortgage from them. While these vary from company to company, there are some rules of thumb that you can use. The total mortgage payment plus property tax and homeowners insurance AND any association dues, should not exceed 28% of your net income.

Now add all other debt payments for cars, credit cards, installment debt, and the like. The total of your your cost of homeownership above plus your cost of paying these debts should not exceed 36% of your net income.

Because homes cost more in the Southern California area than they do in say, Detroit, and because the cost of heating and air conditioning is much lower here, many lenders will allow slightly higher ratios than above. The 28% and 36% are still excellent standards to use in your own planning.

Another way to look at your personal ability to pay is to compare all cost of homeownership with cost of renting. This is fairly complicated and cannot be determined by seat-of-the-pants methods. Calculators set up for this are useful. Here are things that are commonly overlooked. Mortgage interest and property taxes are deductible for purposes of IRS personal income tax. If you are in the 20% tax bracket, you can roughly assume that you will save 20% of your total interest and property tax expense on your federal taxes. In California, you will also have tax savings on state taxes.

On the expense side, many underestimate the cost of utilities, new furniture, repairs, and upkeep. Most apartment dwellers do not have high air conditioning bills, landscape expense, or need to replace the roof. Pay special attention to estimated costs of water, trash, electricity, gas, and sewage. Add to your budget a reasonable amount for repairs and improvements.

Some Stated Income Loans Being Processed Says Los Angeles Mortgage Broker

2012-01-06T12:48:00.000-08:00

When the mortgage market collapsed, the banks pulled in all of the easy lending practices that had so characterized the housing boom. One of the first to go was the stated income loan. According to Los Angeles based mortgage broker, Bill Rayman, some banks are loosening up on the stated income mortage.

When you apply for a home loan, especially in the current mortgage environment,
most banks require that you provide full documentation of your income. You provide W-2 income statements from any payroll employment, 1099's from any income derived from contracted work, recent pay stubs, tax returns and bank statements. All of this provides the lender with proof of your income.

A stated income mortgage loan, on the other hand, allows the buyer to qualify based on the borrower statement of what he or she earns on the application form. With a stated income loan, the lender does not verify the income. No tax returns, pay stubs, bank deposits, W-2's or 1099's are required.

Bill Rayman notes: "Recently, I have become aware of a couple of banks who are venturing out into the stated income market again. The overall loan market is still very tight, even as interest rates remain at historical lows. My ability to find banks that have special rates, products, or underwriting requirements is what separates my mortgage brokerage from others. Here is the scoop on state income loans."

Stated income loans are designed for the many borrowers who have the income
to afford a mortgage and have acceptable credit, but who don't meet
traditional underwriting standards - called full documentation or "full-doc"
that requires applicants show that the income they claim was actually earned
in each of the two prior years.

Self-employed borrowers usually have the most trouble meeting this
requirement, and stated income loans were originally designed for them. But
many applicants with incomes from salaries also have trouble meeting the full-doc
requirements. For example, the income they claim might incorporate their
latest increase in salary, which is not yet reflected in documents covering
past income."

Stated income loans are popular with many people, but here are just a few of
the types of borrowers who may consider getting a stated income loan:
✓   Self-employed people who own a small business
✓   Highly commissioned people who may have a low base salary but make
✓   most of their income on commission
✓   People who can't document at least 2 years of income at their
✓   current income levels
✓   People who make plenty of money but don't want to disclose their
✓   income for one reason or another

Lenders do try to determine the reasonableness of the income and generally
employ 3 methods. 1) They consider a borrower's liquid assets - which must
be verified - as a way to "authenticate" the amount of income stated. If a
borrower says they make $X per month, the lender expects to see at least 12
times X in the bank. 2) Another test is that the income stated must be
roughly consistent with incomes earned in the type of business or line of
work in which the applicant is involved. 3) Lenders often require a
self-employed borrower to prove they've been self-employed in the same business
for two years as verified by a CPA letter or business license.

Be aware that some lenders require that the stated income borrower execute
an IRS Form 4506-T which authorizes the lender to request IRS verification
of the figures in the borrower's tax returns. Lenders don't ordinarily check
the returns, but the possibility that they might is an inducement to report
income truthfully.

Rayman concludes, "As a mortgage broker I actively seek out all the possible methods for getting you the perfect loan to meet your needs.

Mortgage Broker Bill Rayman: What is APR and how does it effect me?

2012-01-06T12:00:00.000-08:00

Very simple question, very simple direct answer. APR stands for Annual Percentage Rate. So what is APR, what does it mean, and why is it different than the note rate? The note rate is the actual rate that you will pay on your loan. APR is a mathematical formula that is meant to even the playing field. If you go to six brokers (from my point of view, I hope you don’t) the first broker might say “Well, I can get you this rate if you pay three points and $500.” The second broker might say “I’ll get you this rate, but you pay one point and $4000” and yet another broker might say “I’ll give you this rate, no point, no cost.” Now you’re going to be at a loss trying to figure out which really is the best deal for you. The best deal isn’t necessarily the lowest rate, and it isn’t necessarily the lowest APR. For instance, if you don’t have a lot of cash you might choose a rate which is higher, because you are not obligated to bring the cash in. So there’s always going to be personal choices.

What APR does: it’s a way of computing the cost of doing the transaction, the escrow fees, all the things you need to have to do a loan, and it adds them to the loan amount (so you’re technically borrowing more than the loan amount) and when you do the math, you get a slightly different interest rate than the actual note rate. So let’s say your note rate is 5%. By the time you add up these other costs and add them in, your APR might be 5.13%. So now if you look at those six brokers, forget what their offers are because those points they’re charging get added to the costs or if they’re not charging any points and fees, there’s nothing to add in but they’re probably at a higher interest rate. The net result is that you’ll have an APR from each broker, and you can see who’s the most expensive versus who’s the least expensive.

Just because one’s the least expensive doesn’t mean that’s the best choice. If it turns out the least expensive rate is the one you have to pay the most cash to get that rate, or if your circumstances are as such that you’d rather not lay out another $10,000 or $15,000, then maybe for you the right choice is such that the APR is a little bit higher. I’m saving my cash. The APR has nothing to do with what your actual monthly payment is. That’s going to be the rate on your note to which you’re locking in with your broker and negotiating with the borrower.

Mortgage Resolutions for 2012 - L A Mortgage Broker

2012-01-01T12:10:00.000-08:00

Here is a possible set of resolutions for your home mortgage in 2012 from a Los Angeles Mortgage Broker.

Everybody does it, or so it seems. Creating a list of resolutions for the new year is part of our tradition, and probably a very good one. Most of those resolutions are forgotten about soon after the last football game is played and the last bit of pizza devoured. However, here are possible resolutions that won't require 100's of push ups a day or depriving yourself of ice cream.

1. Take a serious look at your overall situation regarding your housing and any mortgage you have now. Home mortgage rates are at historic lows, and very unlikely to either stay this low or go lower. Don't wait until mortgage interest rates have gone back over 5% start wondering if you should have bought property or refinanced. NOW is the time to act. The sooner the better.

As of 12/22/2011 Not Reflecting Current Rates

2. If you are currently renting, be aware that rents are headed back up. Recent statistics show that some markets have shortages of rental units. Low supply means increasing rents. Housing prices are very, very low right now. While there is still an overhang of supply, it is very likely that housing prices are not going even lower. They may not go up very much in the short term, but this is a great time to buy. Low prices. Low Mortgage Rates.

3. If you have an existing mortgage with an interest rate over 4.5%, or if you have an adjustable rate mortgage, this is a fantastic time to refinance as some 30 year fixed loans are hovering around 4%.

4. If you own a business, buying your own building will never be more affordable in your lifetime (barring a huge catastrophe.)

5. If you have been contemplating buying a vacation home, this is the ideal time to act.

6. If you have ever thought of owning homes, duplexes, triplexes, or other multi family dwellings for rental income, the market is prime.

7. Should any of these have even a slight potential to make you money or save you money, pick up the phone and call me. There is absolutely no obligation for my advice and direction regarding any of these issues. Call 310-295-2900 ext. 113 or ask for Bill Rayman.

Need Advice? Mortgage Loan Consultant Helps with Home Loan Mortgage FAQs

2011-12-30T16:16:00.000-08:00

A huge part of my business is advising folks for free about the decision process related to getting a mortgage on their home, business property, or investment properties. Please feel free to call me anytime to discuss your needs or just walk through options regarding refinancing, a new mortgage, fha mortgages, down payments, or any other aspect of the process. There is no cost or obligation associated with my providing you consulting.

If you are a real estate professional such as a real estate agent or broker, property manager, investment manager, I am here to help you be more successful at working with your clients. Similarly, CPA's and Estate Lawyers commonly find my services helpful.

Call Me Today!!

310-295-6213

Billrayman@gmail.com

http://www.MortageHelpLosAngeles.com

Mortgage Cash Requirements For Getting A Home Loan

2011-12-28T12:32:00.000-08:00

When you are buying a house, business property, second home, or residential investment property, you need an outstanding mortgage broker who has access to multiple markets for your loan. The cash you need to complete a transaction depends on the lending institution and many other factors. We can help you through the details and find the right loan for your needs.

This video explains many of the issues. If you need more, call me for a free consult at 310-295-2900 ext 113

Los Angeles Mortgage Broker - Should You Pay Off Your Mortgage ASAP?

2011-12-23T12:29:00.000-08:00

Los Angeles based Mortgage Broker, Bill Rayman of Mortgage Capital Partners, addresses a number of myths and misunderstandings about the mortgage business and in particular how it can affect you in refinancing and even whether or not you should consider refinancing.

Myth #3: Should I pay off my Home Loan as Soon as Possible or Interest-Only Loans are Bad!

Myth number three is that it makes sense to pay off the home as quickly as possible. A corollary of that myth is that interest-only loans are bad. The fact is, it is not necessarily bad to pay off your home, and often it is simply not a good choice what so ever. There are several components to this answer.

The first is, not all debt is bad debt. Considering that you might be borrowing potentially hundreds of thousands of dollars for ten, twenty or thirty years, and you can lock that interest rate in today at under 5%. Plus, the interest on that money is very likely tax deductible, so if you’re in a 25% tax bracket which is close to the national average, a 5% interest rate means your effectively borrowing 3.75%. Where else can you get debt like that, certainly not from your credit cards?

The second reason to consider not paying off your mortgage is this; think about the use of the funds. Paying down the principle, which is to say increasing your equity in the house, feels like a good thing and I respect that’s a really good reason to do it if it feels good. From a strict financial point of view, your house is an asset and if you put money into any asset you want to see that the asset appreciates in value; that it grows. It sounds somewhat counter intuitive until you realize no matter how much you put in to your house in terms of the equity, whether you put down 100%, or you borrow 100%, the price of your home is established by the market. Therefore, paying money into your mortgage is technically a zero rate of return. With that in mind, the issue that comes up is if you didn’t put it into your home, what else could you do with it? Right now, the investments in the market are very poor. CDs are paying on average 1.6% in the country, but that’s today. Looking further down the road, we’ve been accustomed to five, six, seven, eight percent returns on investments. So if you can borrow from the bank at three, four, or five percent and put it in stocks or even just very secure treasury bonds; treasury bonds so much as there are secure bonds that you can probably be getting five, or six percent on, and ideally you probably will down the road. You are doing what a bank does, you’re borrowing low, and you’re investing high at a secure rate.

Another reason that makes sense and is something that I’ve experience greatly for these last two years, with a number of people around the country that I’ve been helping, is people have been dutifully paying down their mortgage and then all of a sudden for a variety of reasons they can no longer refinance. Then they are in a situation where they don’t have cash in the bank, which they might need for anything from school, or typically a big medical debt, and other expenses that came along. Whereas, if they had had the money and kept it in a separate account, yes they would owe more on their home but they’d have that extra cash in a bank. Again, arguably that cash is going to be earning interest so it’s worth more, and the key words that you should be thinking about are net worth. When you add up your home and all your other liquid assets, less your liabilities, that’s what your worth is. So whether you own a $100,000 home of which you owe $90,000 and therefore you have a net worth of $10,000; or you have a $100,000 home of which you owe $100,000 but you have $10,000 in the bank, you still have a net worth of $10,000. They are the same, except from these last 2 years I couldn’t count the number of people that would have been better off having the cash outside the house.

A third reason to consider not paying off your mortgage is to recognize that the more you own of your home, the greater your equity share, and arguably the more viable that asset is to a potential creditor who is going to be looking to claim it. There is a wonderful story from the 1930s, where Walt Disney owed Bank of America $7million dollars that he had borrowed to finance Snow White. And they started laughing he and his brother because they realized that the last thing Bank of America was going to do was foreclose on them; and in fact the bank wound up giving them more money because they couldn’t afford to take the studio from them. And then luckily Snow White was a hit and they were able to resuscitate. The same thing, just imagine if you own a home that is completely paid off versus your neighbor who has the exact same home but owes the bank 90% of the money and you both have some kind of financial problem. I can’t promise you, but hypothetically I’ll promise you, if the bank has to choose who to go after, they’re coming after you because your house they could put on the market and sell and get their money back. The person who owes the bank a lot of money, that house isn’t worth anything and they are more likely to keep the house.

The fourth reason to give some consideration about not paying down your mortgage is to not be fooled by how the amortization schedule works with the bank. Most people never look at the amortization schedule, that is, the payments that are made every month for lets say a 30-year fixed 360 months. The payment amount itself might be static. It will never change. However, the proportion of principle to interest each month will change. In the first five to ten years almost all you are paying to the bank is principle and interest but its about 80% interest and the first five years in fact it averages about 86% interest. The banks are front-loading the loans so that they make a ton of interest because they know on average, people refinance every four to five years; and they move every eight to ten years so you are paying a lot interest anyway. So it doesn’t necessarily make sense to be taking that approach where your committing yourself to making these extra payments if you are not really getting the value and the equity you might otherwise. One reason interest only loans have always been attractive to some people is it obligates you simply to make a low payment. Any time you want you can voluntarily make extra payments that will go directly to the principle. If you made the exact same payment of principle and interest voluntarily that the 30-year fixed commands, you’d be exactly on that schedule but now you have control of your funds. If something comes up one month that you need the money, you don’t make that payment and you make the interest only payment that’s fine. There are 30-year fixed loans that include an interest only component for ten years, so having an interest only loan doesn’t mean your going to have an adjustable rate mortgage, or something happening five years down the road that’s going to put you in trouble with the bank. It’s a fixed rate; it simply gives you the option to pay interest for those couple of years.

Lastly here is the solution if the goal is that you want to pay off the house as quickly as possible; there are several ways of doing it. One is to make extra payments. That’s one way. Two, there are home accelerator loans that give you a lot of flexibility on how to do that. Another is to get a loan that has a shorter term to it. Now the shorter the term means your going to make a larger payment, but that payment is going to be largely equity. The shorter-term loans and here I’m talking about a fifteen, or twenty-year loan as apposed to a thirty-year or forty year; not only will you pay it off quicker because the timing is shorter, but the interest rates on the shorter-term loans are generally anywhere from a quarter to three-quarters of a point less than a thirty year fixed. So I’m using a $500,000 mortgage at a 30-year fixed rate; over 30 years you will pay $466,000 in interest. If instead you did a 15-year loan, the interest rate is a little bit lower. At the end of 15 years you will have paid $176,000 in interest. The difference is roughly a little short of $300,000 in interest. Well if you figure the interest you don’t pay over 15 years you’re really saving legitimately, out of pocket, roughly $20,000 a year. So if you can afford the higher payment and the goal is to pay down the house quickly, save yourself a lot of interest and do a shorter term loan.

Lowest Mortgage Rates Ever - What Should You Do?

2011-12-22T16:03:00.000-08:00

By: DEREK KRAVITZ is the AP Business Writer. He posted an article today outlining a Guide to Mortgage Refinancing that spoke to the current circumstances of record low rates. Here is a summation: See the enitre article here.http://washingtonexaminer.com/news/2011/12/guide-mortgage-refinancing-rates-hit-lows/2027651

Rates are lowest ever: 3.91 percent for a 30-year home loan and 3.21 for a 15-year loan.
Rates have been around 4.0 percent for 8 weeks
Low Rates and low housing prices create a perfect storm for buying.
However, refinancing is not increasing. This is due to

lack of home equity
low credit scores
no cash to refinance or buy.

Why should you refinance if you can? If you rate is over 4.5, you can save money. If it is over 5%, you can save a lot of money.

What are the consequences of refinancing
You pay less interest on their loans and thus end up with more money to spend, save or invest. A homeowner with a $200,000 mortgage at 6 percent who refinances down to 4.5 percent, saves $3,000 a year.

Read more at the Washington Examiner: http://washingtonexaminer.com/news/2011/12/guide-mortgage-refinancing-rates-hit-lows/2027651#ixzz1hJJj0dEY

Home Mortgage Rates and Home Refinance Rates Hit Record Lows in Los Angeles

2011-12-22T13:07:00.000-08:00

How low will they go. Not much lower, but the upside potential on home mortgage rates in Los Angeles is huge. First let's look at a 5 year chart so you can get some perspective on how low rates ar now.

Then let's look at the 6 month chart to see the unbelievable short term fall in mortgage rates this year!

Now, any smart statistician will tell you that when you see this kind of drop, there is far more upside potential than down. To be clear, there are some who say that if the Fed does another huge stimulus, we could see some additional downside. However, going back to 4.5% or even 5% is far more statistically likely than a drop to 3.5%.

As of a little while ago on December 22, 2011, the quoted national average rates were these.

For up to the minute quotes, give me, Bill Rayman, a call at 310-295-2900 ext 113

Major Change in Mortgage Loans: Banks Offer Stated Income Loans Again

2011-12-07T17:26:00.000-08:00

What is a Stated Income loan? What does it take to qualify for a Stated Income loan? How does a Stated Income Loan Compare to a Full Documentation loan?
Who is most likely to need a State Income loan?

Recently, I have found a few banks who are venturing into the Stated Income market again. Overall, the loan market is still very tight even as interest rates remain at historical lows. My ability to find banks with special rates, products, or underwriting requirements is one of the features that distinguishes my mortgage brokerage. Here is the scoop on Stated Income loans.

When you apply for a home loan, especially in the current mortgage environment, most banks require you to provide full documentation of your income. You provide W-2 income statements and pay stubs from any payroll employment, 1099's from any income derived from contract work, tax returns and bank statements. All of this provides the lender with proof of your income.

In contrast, a Stated Income loan allows a borrower to qualify based on the income a borrower states on the application form that he or she earns. With a Stated Income loan, the lender does not verify the income. No tax returns, no pay stubs, no bank deposits, no W-2's or 1099's are required.

Stated Income loans are designed for the many borrowers who have the income to afford a mortgage and who have acceptable credit, but who don't meet traditional underwriting standards - called full documentation or "full-doc" loan - which requires them to prove that the income they claim was actually earned in each of the two prior years.

Self-employed borrowers usually have the most trouble meeting this requirement, and Stated Income loans were originally designed for them. But many applicants with incomes from salaries also have trouble meeting the full-doc requirements. For example, their income might incorporate an increase in salary which is not reflected in documents covering prior periods.

Stated Income loans are popular with many people. Here are some of the borrowers who may consider getting a Stated Income loan:
✓              Self-employed people who own a small business
✓              Highly commissioned people who may have a low base salary but make most of their income on commission
✓              People who can't document at least 2 years of income at their current income levels
✓              People who make plenty of money but don't want to disclose their income

Lenders do try to determine the reasonableness of the amount of income stated and generally employ three methods to do so. 1) They consider a borrower's liquid assets - which must be verified - as a way to "authenticate" the amount of income stated. If a borrower says they make $X per month, the lender expects to see at least 12 times X in the bank. 2) Another test is that the income stated must be consistent with incomes earned in the type of business or line of work in which the applicant is involved. 3) Lenders often require a self-employed borrower to prove they've been self-employed in the same business for two years as verified by a CPA letter or business license.

Be aware that some lenders require that the stated income borrower execute an IRS Form 4506-T which authorizes the lender to request IRS verification of the figures in the borrower's tax returns. Lenders don't ordinarily check the returns, but the possibility that they might is an inducement to report income truthfully.

As a mortgage broker I actively seek out all the possible methods for getting you the perfect loan to meet your needs. I have identified at least four lenders who are currently offering Stated Income mortgages. If you fit into this category or have a friend who does, please give me a call. There is no cost or obligation for the consultation.

Oh, For the Love of Cat

Every month I will try to outdo the previous month with a great cat
video! Please send me your favorite (from the Internet or homemade) for consideration.

Click Here To View!
http://www.youtube.com/watch?v=7YQ1PhOnM3I

Cheerio, Matey!

2011-12-07T17:24:00.001-08:00

My earliest exposure to it was innocent enough. I was young. An adult offered me some with sugar-coated words. "Try it. You'll like it." And it was free! Who wouldn't pop the proffered goody into their mouth? It was a little bland at first, no "nose" to speak of, but it had a pleasant chewiness. Even better, it became sweeter the longer it remained on my tongue. You know the rest: no sooner had I swallowed it down then my eager fist reached out for more. I've been using the stuff ever since. You probably know it by its street name: Cheerios.

Hi. My name is Bill and I love cold cereal. I didn't know Cheerios was a gateway cereal. More than 70% of adults who eat cold cereal started with Cheerios. This is not something the folks at General Mills will talk about (especially after their recent run in with the FDA who wanted to declare Cheerios an "unapproved new drug" because of its health claims.) In hindsight, my path to ever more types of cereal was entirely predictable. From Cheerios, I turned to harder stuff, like Grape Nuts, and to those with hypnotically alluring names (Quisp, Chocolate Chip Cookie Crunch, Bananellos), a path made smoother by the many 'friends" who ushered me in, personalities so familiar you know them by just their first name: Cap'n, Tony, or Crackle (the middle child, just like me!)

My early infatuation blossomed through the years. I've tried them all. There are so many that I regard cereal like a biological taxonomy. Under the Phylum, "Food", I subdivide the supermarket aisle into Families based on a cereal's construction: Flake, Puffed, Crunch (Hollow and Solid), Shredded. Their Genus is their particular building blocks, a cereal's DNA as it were: Wheat v Oat v Rice v Corn v Bran. There's a type I call Novelty because I'm really unsure just what they are made of. French Toast or S'Mores, anyone?

They become Species from their diverse additives: nuts, fruit, marshmallow, chocolate, vanilla, maple etc. Finally, the peculiar experience from eating each parses them into individual Breeds: Milk Absorbent vs. Floater? Chewy vs. Sticky? Sugared vs. Well,-Not-Quite-As-Much-Sugar? Sorry, but the confines of this article prohibit exhibiting the full cold cereal pyramid.

Much as I enjoy contemplating cereal, let's face it, it's all about eating the stuff. I like to mix. The dozen varieties that rotate in my cabinet always contain a cross-section of Breeds. No bowl ever has less than five components and how they are layered can make all the difference. Fiber, crunch, bran, flake, novelty works better than bran, novelty, crunch, fiber, flake. Trust me. Flakes on top can splatter the milk. Putting chocolate on the bottom is a dud because it just lays there, aloof and inert. Always, a soupcon of Novelty on top is the butter on the steak; it makes the eating enchanting.

Keep in the mind, the right mix also depends on when you're eating. Late at night I stress Puffed and Hollows. They take up space in the bowl without adding density.

Here are some cold Cereals I'd like or expect to see in the near future:

Bourbon flavored, with the pieces die-cut to look like NY Taxis
Bacon Bits sounds awful, but so does steamed foie gras and prairie oysters
Really really cold cereal, kept in the freezer, packed and eaten in cups
Flavor changing cereal, like some chewing gum
Chewing gum cereal
Pre-Milked cereal. Milk is embedded yet the cereal is dry to the touch. Great for travelers.

Will any of the above hook the next generation of children? Don't know. But for sure, I want some of them to keep at it so they can tell me why I used to love Trix and hate Froot Loops, but feel the opposite now. What changed: the cereal or me?

GETTING AROUND GETTING LOST

2011-08-30T17:27:00.000-07:00

I'm in the camp of the eternally lost. If having mental maps is a state of mind, for me that just means one more state to get lost in. My maps seem constructed from DNA that hasn't been updated since a couple of Cro-Magnons ran from predators and managed not to fall into a tar pit. My maps have the staying power of an Etch-a-Sketch.

Getting lost is expected. My checklist of dunderhead moves include: getting lost on numbered streets; mistaking one avenue for another; and, missing San Diego entirely on a straight southern shot from LA and winding up at the Mexican border. Sherman McCoy in "The Bonfires of the Vanities" has nothing on me; I've left rubber in parts of towns that I never ever EVER should have been in. I regularly go to the wrong car, street, house, city, airport, and, once, country. That last one may be some kind of record. It also provided a unique ethical dilemma.

Paris. I'm with my French girlfriend before I head for a business meeting in Barcelona. I know her, and know her sense of direction is 12 levels below common sense. So when she puts me on the metro to the airport, I'm sure - and soon confirm - that it's the wrong train. No problem. When you get lost as a matter of course you learn to leave spare time. I switch trains and get to DeGaulle airport an hour before my flight. Perfect. Or would be - except I'm at the wrong airport.

I've exhausted my spare time. The clock is ticking. I hop into a taxi, shout "Orly airport. Vite!" and we're off. Zipping on the highway, half-way there I can tell I'll make it with, oh, at least 10 seconds to spare! Yikes, but phew! To save time I get my wallet out, and realize I'm broke. I gave all my money to my girlfriend. I didn't need money. I'm being met by a delegation in Spain.

Now, it should be noted that the French have a reputation for being unfriendly, particularly the waiters and cab drivers. Understandable since they don't get tips. "Uh-oh" is the same in French as in English.

Time to choose. Say nothing, get to Orly then dash out and run like mad. Or, confess and pray to the travel gods my driver doesn't deposit me in the middle of nowhere (a place I've been many times!)

I opt for honesty. I tell the driver, "Je n'ai pas any money." He glares. I cringe. He declares, "Pas probleme," and floors it. I could kiss him. But really don't want to be left in the middle of the highway.

We make it to Orly. My flight to Spain leaves in minutes. I dash thru the Iberian Airlines counter trailed by their laughter at my plight, race down the corridor - suffering the airport rule that the less time you have the further your departure gate is - and hurl myself through the closing door and onto the plane's floor. I made it!!!

And that's how I got to Rome, Italy.

__________________________________________________________________________________________

Its A Buyer's Market

In 1937, the nation seemed on the verge of economic growth after years of the Great Depression. Politicians decided it was time to impose fiscal order on the economy, making broad cuts to governmental spending. This resulted in a severe slowing of the economy, and we hastily fell into a recap of the Great Depression. It stayed there until the government initiated a massive spending surge, also known as World War II.

Does this mean that enacting spending cuts today will throw us back into the Great Recession? While you can find an authority to back whatever you believe, there are reasons to be fearful that severe cuts to governmental spending now will result in an economy that has no fuel for further growth.

We cannot avoid a sense that the rules are changing, that the ground is shifting under our feet. Even before we see Treasury securities lose more value - the 10-year note fell to 2.80% - there is an unavoidable feeling that Treasury securities just ain't what they used to be.

One of the rare silver linings in this dour prediction is that interest rates tumbled. As investors flee the stock market because they foresee slow or negative growth, their funds flow to bonds (e.g. mortgages) which push their prices up and the rates down.

Refinancing for many can be a winning trifecta: low rate, no points, no costs. With home prices still declining, it's a buyer's market for homes, whether it's a primary residence, 2nd home or investment.

We need economic growth, especially job growth. Without it, hiring won't increase since businesses see no evidence that their sales will prosper. Manufacturing is currently under-utilized. Until consumers can and do start buying, they have no incentive to invest in their facilities and capacities.

Let's hope we're not repeating one of history's painfully destructive mistakes. But you can protect yourself in the interim by taking advantage of this sorrowful state

Do I need Twenty Percent Down to Buy a Property? Bill Rayman explains.

2011-08-24T12:39:00.000-07:00

Bill Rayman at Mortgage Capital explains the pros and cons of putting twenty percent down on a home purchase and how it could save you money. He can guide you through the confusion to a decision that is right for you and your family.

Do Credit Score Inquiries Demolish Your Good Credit? Bill Rayman explains.

2011-08-22T12:38:00.000-07:00

Bill Rayman at Mortgage Capital explains why checking your credit is an important part of securing a loan and why you shouldn't worry about it harming your good credit. He can guide you through the confusion to a decision that is right for you and your family.

Impounds. Will they save you money? Bill Rayman explains.

2011-08-20T12:37:00.000-07:00

Bill Rayman at Mortgage Capital explains the advantages and disadvantages of impounding your property taxes and your property insurance. He tells us how to save money when it comes to impounds and how the banks make their money. He can guide you through the confusion to a decision that is right for you and your family.

Non US Citizens CAN get home loans! Bill Rayman explains.

2011-08-18T12:36:00.000-07:00

Bill Rayman at Mortgage Capital explains how foreign nationals and non-permanent residents can obtain home loans for primary homes, second homes and investment property. He can guide you through the confusion to a decision that is right for you and your family.

Mortgage Term PITI -- Principal, Interest, Taxes and Insurance!

2011-08-16T12:35:00.000-07:00

Bill Rayman at Mortgage Capital explains that the mortgage term PITI -- Principal Interest, Taxes and Insurance comprise part of the formula to determine your debt-to-income ratio and how the banks use this number to determine how much money in reserves you must have after the home buying transaction is completed. He can guide you through the confusion to a decision that is right for you and your family.

If you need a Mortgage Broker to help you with buying a home, business property, vacation place, or residential investment property, please call me at 310-295-2900 ext 113. I can handle your mortgage in Los Angeles, California, or in many other states.

Buying a Home? Selling a Home? Do I need a Realtor? Bill Rayman explains.

2011-08-14T12:34:00.000-07:00

Bill Rayman at Mortgage Capital explains why he believes that you should use a realtor when purchasing a home. He works with many different realtors who represent different locations throughout Southern California. He can guide you through the confusion to a decision that is right for you and your family.

Bill Rayman Explains How Bankruptcy and Foreclosure Doesn't Mean You Can't Ever Get A Home Loan

2011-08-12T12:33:00.000-07:00

Bill explains how having a bankruptcy or foreclosure does not stop you from getting a home loan forever.

Bill Rayman Explains Adjustable and Fixed Rate Home Loans

2011-08-08T18:31:00.000-07:00

Bill explains adjustable and fixed-rate mortgages.

Bill Rayman Explains Closing a Loan in a Trust

2011-08-06T12:30:00.000-07:00

Bill explains the ins and outs of closing a loan within a trust.

What Is The Waiting Period on My Home Loan in California

2011-08-04T12:29:00.000-07:00

Let Bill answer all of your questions and teach you all you need to know about home mortgages. In this installment, Bill explains the waiting period to close a home loan. 

Bill Rayman Explains "APR" and the "Note Rate"

2011-08-02T12:28:00.000-07:00

In this installment, Bill explains the difference between the "APR" and the "Note Rate." 

Bill Rayman Explains Why A Home Loan Cannot Close Within An LLC

2011-07-30T12:25:00.000-07:00

Let Bill answer all of your questions and teach you all you need to know about home mortgages. In this installment, Bill explains why a home loan cannot close within an LLC

Bill Rayman Explains "Loan to Value" and "Complete Loan To Value"

2011-07-28T12:23:00.000-07:00

Bill explains the terms "Lone to Value," and "Complete Loan to Value."

Bill Rayman with Mortgage Capital Partners Explains and Discusses Interest Rates

2011-07-26T12:22:00.000-07:00

Bill explains Interest rates and their importance in the home mortgage industry.

Bill Rayman with Mortgage Capital Partners Explains: Points.

2011-07-24T12:21:00.000-07:00

Bill explains and discusses "Points" (percentage points of a loan) and their application in the home mortgage industry.

What in the world is a HELOC? Bill Rayman with Mortgage Capital Partners can and will Explain.

2011-07-22T12:56:00.000-07:00

Bill explains what a HELOC is, and how they can be used in the home mortgage industry

SATURNALIA, everyone?

2011-04-04T10:22:00.000-07:00

If the number of quotes people cite reflects an author's stature in our lives, Shakespeare is in a 3-way battle for top honors with the Bible and Woody Allen. For every "To thine own self be true," and "The meek shall inherit the earth," there's a "I'd never join a country club that would allow a person like me to become a member." Allen voiced one of my favorites in "Take the Money and Run." His 12-year old avatar, already over-flowing with angst, bemoans to a psychologist the futility of doing homework.

Woody, "What's the point? The world is going to end."

Psychologist, "In 5 billion years!"

Woody, "See!"

Ok, so the sun is expected to go nova in 5,000,002,011 AD. I suspect it will be on a Saturday which besides destroying the planet will ruin a perfectly good weekend. True to Woody's spirit, if the sun's upcoming incineration excuses my not finishing my college thesis, my high school calculus homework, my junior high school French project, or my elementary school report on the Civil War strategies, then really, how bad can it be?

See! Nothing is all bad. (Excepting the reviews of Julie Taymor's "Spiderman.") In fact, when it comes to the universe, nothing is, well, nothing. Everything connects to and is paired with its opposing twin: creation/destruction, matter/anti-matter, expansion/contraction, positive/negative. To cite Sinatra in the song, "Love and Marriage": "You can't have one without the other."

So a nova obliterating a solar system isn't all bad. It forms a black hole, births a new galaxy and creates conditions for life. Joni Mitchell nailed it when she sang, "We are stardust."

They sky is an unbounded picture window on the most primordial and powerful forces. Sure, no one likes a meteor crash - just ask any dinosaur - but to watch the Perseids meteor shower each August is to witness remnants from the beginnings of our solar system and, with a little imaginative extrapolation, the origin of the universe.

A screen writing mantra is "Show, don't tell." Since I can't say enough about the mind-bending sights in the universe, I offer the most exquisite object in our heavens: Saturn.

Saturn accounts for one of the most thrilling moments in my lifetime. In 1985, mucking about with a small telescope, I chanced upon the planet, framed with its vibrant rings, dead center in the eyepiece. In my eyepiece, the majestic and I paired for that moment.

I'm sure many of you are fascinated by Saturn. If you are, I have a treat for you. For those who aren't, let me invite you into my world. See why I am so passionate in this video, literally out of this world. I think it may prove as wondrous to you as it is to me even after my 20^th viewing.

The Cassini spacecraft, launched in 1997, entered Saturn's orbit in 2004. Recently NASA/JPL condensed several thousand images into a 2 minute movie. Watch it at: http://apod.nasa.gov/apod/ap110315.html You arrive at Saturn, glide through the rings, then slip past the moons. No computer simulations or animation. Real light. Real color. Real, Real, REAL!

And if that doesn't get you to like Saturn, how about because it's named after the Titan who stands for bacchanalia, festivals, parties, revelry and orgies. Really, how bad can it be?

The last word on space belongs to Woody. "According to modern astronomers, space is finite. This is a very comforting thought - particularly for people who can never remember where they have left things."

And the last word on my writing also belongs to Woody. "God is silent. Now if only man would shut up."

SEE!

The Government Doesn't Control the Interest Rate. Find out more!

2011-02-15T12:09:00.000-08:00

Bill Rayman offers practical insights that debunk common misconceptions regarding the mortgage market. He can help you navigate this difficult financial environment and come out ahead. Call Bill at Mortgage Capital Partners and get the help you need to succeed in today's market! 310-295-6213

Predicting the Bottom for Mortgage Interest Rates

2011-02-02T12:16:00.000-08:00

There is a famous attitude among professional investors. It is impossible to buy at the very bottom or sell at the very top. Those who base their investment strategy on such a goal are pretty well doomed to miss opportunities that present themselves near bottoms and tops.

This would certainly be the case in point with regard to buying a home or refinancing and existing mortgage in the current market. Locking in your loan at the very bottom is not likely, but ending up with a rate that will be the envy of all your friends and family three years from now is a no brainer.

With help from a professional mortgage professional, you can use locking provisions to guarantee these historic low rates. We can lock in the loan 15 days before closing or even up to 75 days if you want a longer window. The longer the window, the more the cost of locking in a rate. This is where I can help you make the decision.

Now is the time to call. This rates are not likely to go down and seem to be trending up.

**Graph belongs to http://www.mortgage-x.com/

NEW YEAR’S REVOLUTIONS

2011-01-31T10:28:00.000-08:00

I am a New Year’s baby. Possibly THE New Year’s baby. Typically, companies shower gifts on the state’s first baby of the year. You can imagine how eager I was to claim that new Amana washer/dryer! Because my dad was a doctor at the hospital, however, to avoid any suspicion that he might have induced his wife’s labor in order to win the prizes, I wasn’t accorded the honor. Despite being physically present for the event, I’m unable to report any details.

There are benefits and drawbacks to being born on January 1^st befitting its singularity among holidays. It is an easy to remember date, unconnected to a historical event or notable person, and arbitrarily scheduled. Meteorologically, it ranks below the summer solstice, yet it is celebrated virtually world-wide. And I’ve made it a point to travel to countries famous for their peculiar ways of celebrating it.

If you like iguanas or unusual parties, head to Ecuador. Throughout the cities, giant straw effigies of politicians and international celebrities are set on fire while men dressed either as infants or as old women run around and through the flames. Drinking to excess at the party is expected. As are fireworks.

Appropriately for a country tucked between others - Sicily, Tunisia, Greece and Libya – Malta’s New Year’s eve is party central, a Woodstock fueled by music, abetted by alcohol and with fireworks as hallucinogens. You just have to love the people in a country who have given their name to a small dog.

One October, heading to Mumbai at night, our plane was engulfed by explosions and blinding lights. Panic was averted when the pilot explained that Indians are celebrating Diwali, their New Year (which unhelpfully occurs sometime between mid-October and mid-November.) They set off copious amounts of fireworks, possibly their biggest import from China. We passengers set off for drinking to be followed by more drinking.

As universal as New Year’s is, so, too, is accompanying it with drinking and fireworks, both universal languages.

Speaking of China, I spent one birthday there in a hospital bed, enlivened by a quartet of nurses singing “Happy Birthday.” I think that’s what they were singing. They spoke no English and sang phonetically. I barely recognized the tune amid the cacophony of fireworks and firecrackers outside. I petitioned them to pour Champagne into my IV drip (which was basically sugar water anyway.) I doubt they doused me with alcohol, but whatever concoction they administered made for a memorably enjoyable birthday present.

Put Capetown, South Africa on your New Year’s to-go list. After a night of typical big city revelry (the usual: alcohol and fireworks), people pour into the city squares. Around 7:00am tribesmen from the surrounding areas arrive, each tribe dancing its idiosyncratic dances. Magically, the revelry eradicates any hangover traces. And because it’s summer there, people head to the beaches to unwind in the sun.

Warm weather’s nice. If celebrating outside in the cold is more to your liking, then your best friend is alcohol – a vasodilator that helps your body generate heat. (Remember Saint Bernards carry caskets of brandy, not cocoa.) And if vodka is more to your liking than Champagne, hit Budapest, Hungary. Everybody gets a bottle and swigs liberally while strolling and singing on the Danube, all freezing night. Food-wise, cold pork in aspic is nice, once you scrape off the aspic.

So, I hear you ask, is there any place that doesn’t celebrate alcohol, excuse me, I mean New Year’s? Strangely enough, I’m living in it. Los Angeles. Here the car is a local deity. Taxis are more of a curiosity than convenience and “mass transit” refers to sitting in traffic on the 405 (or the 10, the 101, the 605, the 705, the 105, or just the plain old 5) People rely on cars. Yet to drink and drive is a venal sin. It is the quietest night of the year. Many a midnight passed in an empty restaurant. Luckily, we have 364 nights of jamboree to compensate.

Dry Los Angeles is the opposite from what purportedly is one of the world’s great all-night party towns: the Philippines. Along with the all-night dancing, drinking and fireworks are special dinners consisting of 12 different fruits signifying the 12 months. I wish I could attest to the festivities. When I was there two American women were kidnapped from my hotel and bombs were detonated in shopping malls across the street. Now, one common sense travel rule if you’re going off the beaten path is: have an exit strategy. Since kidnappers split their take with the police, venturing out was out of the question.

So I don’t know whether reports of Philippine bacchanalia are true. Please don’t disabuse my notion that they are. After all, I live in LA where if the fiction is better than the truth…

Luca Brasi Sleeps with the Fishes

2010-12-08T12:02:00.000-08:00

When it comes to relationships, there are few proven ways to determine compatibility. Issues alone aren’t pre-determining. What draws some people together splits others apart. And the allure of character traits isn’t necessarily consistent over time. That which initially made a person appealing can wind up being exactly what drives a lover to study the contraindications of every pill in the medicine cabinet before making that special someone that special dinner. (See, boyish/immature, attentive/clinging, mysterious/uncommunicative, etc.)

Religion, ethnicity, economics, geography, age, appearance, intelligence, politics – none are prohibitive; none are guarantees. Where there’s a will, there’s a way. Astrologers proclaim that certain signs don’t mesh, but they don’t rule it out. Shakespeare nailed it: It is not in the stars to hold our destiny but in ourselves.

But science has found a black swan; one insurmountable hurdle between lovers. No matter how strong the heart or head, neither organ is as strong as the nose. Simply put, if you don’t like the way your lover smells, wave good-bye. Typically unconscious, nose-crinkling reaction penetrates any layers of perfumes, soaps and eau de toilette (far from the most appealing scent name in any event.) It’s said, “The way to a man’s heart is through his stomach” – and the sense of taste is controlled by sense of smell. Hmm, about that special dinner…

That it? Smell? That’s all? Well, no, not really. I found a gray swan. The animal simile is appropriate because there’s a sure-fire way to foretell whether a prospective date will be a strike or gutter-ball: pets. People that like pets don’t click with people who don’t. And before you argue (or get your own blog), I’m going to address an issue that’s a subset in relationships among pet lovers. Sleeping with your pets.

This being Hollywood, I turn to the movies to illustrate life. In the rare film where a pet sleeps with adults, it’s almost always for comedic effect and usually the bigger the animal the funnier the bit (i.e., “Beethoven”.) One great exception is for one great movie. The “Godfather” inhabitants lived topsy-turvy to normal society where crime was good, and police, bad. Conforming to this inside-out perspective, sleeping with animals had in their world a Grand Guignol twist. Bedding down with critters was decidedly unhealthy. Luca Brasi slept with the fishes while a Hollywood producer awoke with his favorite horse’s head, each providing a suitably twisted meaning to “bed wetting.”

Pet lovers can encounter rocky roads over who’s sleeping with whom. The argument can be so torrid you almost wish the battle was over something simpler, like adultery. Kicking a date’s treasured pooch from the bed will be your quick ticket to the dog house. It’s not just newcomers who are fed to the dogs. One friend articulates her bedroom rules to each prospective boyfriend: if it ever comes down to her two Siamese cats or him… Another lovingly allowed her cockatiel to sleep under the covers. This may be great if a damaged L4 spinal disc requires you to sleep rigidly on your back, but is hell on the relationship should the guy inadvertently roll over in his sleep. Not so good for the cockatiel, either.

There’s more than love and loyalty involved. Mass counts. One couple let their 215 pound bull mastiff sleep between them. Whether this was their idea or the mastiff’s, they’re not saying. But they do have a harmonious marriage. Whether it’s because of the mastiff, they’re not saying. The mass problem can be as tricky with small dogs – as when it’s a lot of small dogs. A friend once tried dating a woman who heads an animal rescue group and whose bed was a nightly repository for anywhere from five to eight dogs. He reported that finding space among them banished any Kama Sutra-like thoughts. All that came to mind were the instructions inside the box cover of the game “Twister.” To this day he recalls the various contortions and stacking arrangements – and remains uncertain whose legs were under his.

So, to choose someone for a relationship, find someone like-minded about pets. If you don’t like them, find someone who also doesn’t. But if you both like critters, go to step two. And remember the adage: those who lie down with dogs wake up with fleas.

Subject for subsequent disquisition: how in my particular case, fleas resulted in me being hospitalized. It was comedic. Just like the movies.

Refinance Your 30 Year Mortgage with a 15 Year Mortgage - Save Thousands of Dollars!

2010-11-23T14:20:00.000-08:00

Get a much lower interest rate and save thousands of dollars in interest every year on your mortgage.
Current Interest rates for mortgages are at historic lows, but families are not taking advantage of the opportunity. There are many myths that might be contributing to this reluctance. Los Angeles Mortgage Broker, Bill Rayman explains how to judge whether you should be in the market for a refinance of your home or investment property.

Call Bill for a free analysis at310-295-2900 ext 113

Secrets Your Mortgage Broker Doesn't Want You to Know - Interest Only Loans

2010-11-21T14:14:00.000-08:00

This is Bill Rayman of Mortgage Capital Partners. I am here to address a number of myths and misunderstandings about the mortgage business and in particular how it can affect you in refinancing and even whether or not you should consider refinancing.

Myth #3: It makes sense to pay off my Home Loan as Soon as Possible or Interest-Only Loans are Bad!

Myth number three is that it makes sense to pay off the home as quickly as possible. A corollary of that myth is that interest-only loans are bad. The fact is, it is not necessarily bad to pay off your home, and often it is simply not a good choice what so ever. There are several components to this answer.

The first is, not all debt is bad debt. Considering that you might be borrowing potentially hundreds of thousands of dollars for ten, twenty or thirty years, and you can lock that interest rate in today at under 5%. Plus, the interest on that money is very likely tax deductible, so if you're in a 25% tax bracket which is close to the national average, a 5% interest rate means your effectively borrowing 3.75%. Where else can you get debt like that, certainly not from your credit cards?

The second reason to consider not paying off your mortgage is this; think about the use of the funds. Paying down the principle, which is to say increasing your equity in the house, feels like a good thing and I respect that's a really good reason to do it if it feels good. From a strict financial point of view, your house is an asset and if you put money into any asset you want to see that the asset appreciates in value; that it grows. It sounds somewhat counter intuitive until you realize no matter how much you put in to your house in terms of the equity, whether you put down 100%, or you borrow 100%, the price of your home is established by the market. Therefore, paying money into your mortgage is technically a zero rate of return. With that in mind, the issue that comes up is if you didn't put it into your home, what else could you do with it? Right now, the investments in the market are very poor. CDs are paying on average 1.6% in the country, but that's today. Looking further down the road, we've been accustomed to five, six, seven, eight percent returns on investments. So if you can borrow from the bank at three, four, or five percent and put it in stocks or even just very secure treasury bonds; treasury bonds so much as there are secure bonds that you can probably be getting five, or six percent on, and ideally you probably will down the road. You are doing what a bank does, you're borrowing low, and you're investing high at a secure rate.

Fixed Interest Mortgage or Adjustable Rate Mortgage? Shocking Revelation!!

2010-11-19T14:11:00.000-08:00

Bill Rayman, mortgage expert with Mortgage Capital Partners, takes on the volatile question of whether Fixed Rate Mortgages are better than Adjustable Rate Mortgages and comes up with some pretty startling answers.

This fourth in Bill's myth-busting series about navigating the tricky business of home mortgages explores the high emotions surrounding adjustable rate mortgages, or ARMs, and explains why they are actually a better choice for your bottom line than fixed rate mortgages.

More of the BIG Myths of Personal Real Estate Finance

2010-07-13T10:09:00.000-07:00

In a recent talk before a local business group, I exposed 10 myths about mortgages. One of those rises to the level of being a myth about personal finance in general: "It is always better to pay off a mortgage early." A related misassumption might be "Don't refinance."

These ideas, while emotionally comforting, are financially questionable. In fact, there are persuasive arguments show they are unsound.

Refinancing rather than paying off a mortgage trigger numerous fears and frustrations: that refinancing means starting over; that you've thrown money away; that you'll never get to the finish line; or that you've handicapped yourself by becoming more indebted to a bank.

For the purpose of this brief email, I'll offer three examples that illustrate some of the dangers of paying off a mortgage.

1) I recently tried to help a client who over the years had accumulated more than $400,000 in equity in her home. She diligently paid her mortgage, including occasional extra payments to principal. However, when faced with a medical emergency for one of her children, she had no ready cash or other liquid assets. And because of a drop in her income the prior year, she couldn't qualify to refinance her loan. Her equity was trapped. She was only able to tap it by selling her home. If she had taken the money that she paid to her mortgage and used it to build a balanced portfolio of stocks, bonds and other securities, she would have been in a much stronger financial position. She would have kept her home.”

2) There is a constant stream of clients who have $20,000 or more in credit card debt at rates at 14% - 28% while their mortgages are in the 5%- 6% range. They’re convinced they will pay off the credit cards without touching the equity in their homes. Unfortunately, in my experience that’s rarely the case. Credit card interest payments sap their cash and because they typically continue to use the cards they never catch up. Increasing a mortgage doesn’t increase total debt if the money is used to pay off credit card debt. The immediate gain is the lower interest payment, an advantage magnified since the mortgage interest is tax deductible. Plus there is a huge emotional benefit beyond saving money: it feels great to get that horrid burden off your back.

3) I often hear from clients who are reluctant to refinance that they refinanced during the past few years and believe refinancing means they wasted money. Here's the simple truth: what's done is done. All that matters in the analysis is this: would you be better off today with a better loan? If so, then take advantage.

Mortgage rates are at historic lows (see the attached graph). The consensus among economists, bankers and politicians is that they are unlikely to remain low for long. So lock in a new rate today, save money – then invest the proceeds to buy gold or stock in Apple.   For more myths, subscribe to my blog and get regular posts on all things related to the world of real estate finance.

Mortgage Interest Rates Down - Mortage Refinance Interest Up

2010-05-29T10:36:00.000-07:00

All last week mortgage interest rates were fluctuating lows not seen since the '50's. Here is an article that summarizes the most recent week:

In yet another report designed to help determine the state of the U.S. economy, the Mortgage Bankers Association has released their weekly mortgage report. The results are out on home purchase rates, mortgage interest rates, and refinance rates, and the news is not very positive.
While applications from homeowners who are trying to refinance their mortgages escalated for the seventh time in as many months, new loans for purchases of new or existing homes remained deeply slumped, decreasing 3.3% in a third consecutive drop.
Even as interest rates reached their lowest level this year — at 4.8% for a 30-year mortgage, 4.25% for a 15-year mortgage, and 6.8% for an adjustable rate — the expiration of the mortgage tax credit, which provided major incentive to get people to purchase homes, has impacted the purchase rate considerably, bringing the purchase rate to its lowest point since 1997.

Mortgage Interest Rates Plus Low Home Prices Equals Great Affordability

2010-05-17T13:30:00.000-07:00

From Bankrate.com comes this article about the current state of the housing market, especially in light of the ending of the Federal housing stimulus homebuyer tax credit. Basically, now is the time to refinance your home or get a mortgage on a new one.

Post-credit progress report
Nearly two weeks after the homebuyer tax credit expired, what is the state of housing activity across the nation?Surprisingly good, according to Jim Sahnger, mortgage consultant at Palm Beach Financial Network in Stuart, Fla.
"People still recognize that the combination of great rates and lower home prices represent a great opportunity," Sangher says.
Lazerson says activity is "on fire" in his California community, particularly on lower-end properties.
"The sales activity -- at least in my part of the country -- is pretty brisk except on the very high end, except well over a million dollars," he says.
Sipe says Maryland shoppers who failed to find a home in time to qualify for the tax credit nonetheless remain "in the market" for now. But he frets that a combination of widespread foreclosures, rising mortgage rates and stricter lending guidelines could yet derail sales activity.

Clearly, there is still a lot of unsold inventory nationwide, but in California there are some places, like the West Los Angeles area that are seeing lots of offers on well priced properties. As interest rates rise, and at some point they will, affordability drops if prices stay the same. More likely is that both prices and interest rates will rise, resulting in much higher overall costs of ownership. The time to buy is right now!!

Housing Prices Have Best Improvement Within Last Three Years

2010-02-23T23:42:00.000-08:00

From CNNMoney.com- After 2009, housing prices are no longer on the decline. Could be the best time to purchase your first home now! To read the rest of the article, click here.

NEW YORK (CNNMoney.com) -- Home prices fell just 2.5% during the last three months of 2009 compared with the fourth quarter of 2008, according to a closely watched gauge of home price movement. That was a big improvement over the past three years.

National prices peaked during the second quarter of 2006, according to the S&P/Case-Shiller Home Price Index, then dropped a total of 32% before bottoming out during the first quarter of 2009.

Home Purchase Within Reach for 64 Percent in California

2010-02-16T18:55:00.000-08:00

Given the very low mortgage rates and the buyers market in real estate, almost 2/3 of California residents can afford an entry level home. Here is a short article from CA Real Estate Journal. It is time to purchase your home and start building equity! Don"t settle for renting any more!

LOS ANGELES - During the fourth quarter of 2009, 64 percent of California households could afford to buy an entry-level home. This affordability rate is only slightly higher than the 61 percent for the same period in 2008, according to the California Association of Realtors.

The minimum household income needed by first-time buyers to purchase an entry-level home of about $257,940 was $44,100. The average monthly payment including taxes and insurance was $1,470.

Property Investment upbeat for 2010- A Great Time to Invest in Your First Home, or Many Homes in the Los Angeles Area

2010-02-08T16:50:00.000-08:00

A very positive outlook for the housing industry. There is a great demand due to market conditions- a great time to give Bill Rayman a call at 310-295-2900 ext 113 to capitalize on and purchase your first home or several investment properties! To read the full story to this very informative article, simply click here.

"Managers at property investment companies are optimistic that the upturn in property seen at the end of last year will continue."

"A spokeswoman for the AIC says: “It is encouraging to see property investment companies experiencing a rebound after the lows from 2007 to mid-2009."

“The unprecedented growth in the past six months clearly cannot be maintained but for investors that take a long-term view, property is an important asset to hold as part of a diversified portfolio.”

Los Angeles Mortgage Broker, Bill Rayman Explains FHA Financing

2010-02-04T21:45:00.000-08:00

Bill Rayman at Mortgage Capital Partners, the largest mortgage lender in Los Angeles discusses the First Time Home Buyers tax rebate that ends April 31. This is a great opportunity to get into the housing market with 3.5% down, a super low interest rate, and housing prices that will never be seen again. Here is a video about the FHA mortgage loan opportunity.

Learn more about Bill Rayman and fill out an instant mortgage application at http://www.MortgageHelpLosAngeles.com or call Bill (direct) at 310-295-6213.

Los Angeles Mortgage - Top 10 Tips on Mortgages Loans for 2010

2010-02-02T19:53:00.000-08:00

I found this article. Thought you might find it useful.

10 tips on mortgages for 2010

Give me a call if you have further questions. Remember, I am here to help you. There is no cost for your first 99 questions. Seriously, call me about your own mortgage needs or if you have a friend or relative who needs help. Bill Rayman at 310-295-2900 x 113 or email directly to BRayman@Mortgcap.com. To read this full article, simply click here.

The article discusses the following ten mortgage areas and tips:

Lending Standards

Down Payments

Credit Scores

FHA-backed Mortgages

FHA Requirements

Mortgage Rates

Jumbo Mortgages

Fed Rate Hike

Economic Recovery

Future of Fannie and Freddie

By U.S. News & World Report

More than three years into a painful housing crash, the real-estate market has sent recent -- albeit tentative -- signs of stabilization. Home sales have increased, inventory levels are down, and price declines have become less precipitous.

Along with more-affordable home prices and a tax perk from Uncle Sam, attractive mortgage rates -- which remained near 5% as of late December -- have been a driving force behind this development. The availability of low mortgage rates will play a decisive role in the performance of the 2010 housing market as well.

Information on the Extended Home-Buyer Tax Credits for Los Angeles

2010-01-27T16:11:00.000-08:00

President Barack Obama signed a law that extends through next spring a temporary tax credit of up to $8,000 for some first-time home buyers, which was due to expire Nov. 30. The law also adds a new tax credit of up to $6,500 for certain repeat home buyers. The package, which the government estimates will cost a total of $11 billion, is intended to help spur housing sales, a critical part of the economy.

There are some great questions and answers within this informative article that will definitely clear up any confusion. To read the entire article click here.

Any other further questions, make sure you give Bill Rayman a call at 310-295-2900 ext 113 or email to Brayman@Mortgcap.com.

Great Article Covering the Mortgage Protection Program extension through 2010 for Los Angeles

2010-01-25T16:28:00.000-08:00

The Mortgage Protection Program has been extended through December 31, 2010. The Mortgage Protection Program is to help alleviate some of the anxiety home buyers feel when purchasing a home by providing a layer of security. The funds are intended to help consumers meet their mortgage payment obligations. It provides up to $1,500 per month for eligible new home buyers, and up to six months for co-buyers who can participate in the program, and receive monthly benefits of $750. To read the full article, click here.

What Just a few Clients are Saying About Bill Rayman Home Mortgages in Los Angeles

2010-01-25T15:31:00.000-08:00

Compelling Testimonials on why Bill Rayman Home Mortgages is the Man to call for all Your Mortgage needs. His Professionalism, Passion, and Personal Commitment is a Standard for all of his clients. To find out what Bill Rayman Home Mortages can do for you, click here.

Government Backed Loan Modifications Not Working - May Have Made Things Worse

2010-01-02T13:15:00.000-08:00

Did Mortgage Relief Program Make Housing Crisis Worse?

Published: Saturday, 2 Jan 2010 | 11:46 AM ET

Text Size

By: Peter S. Goodman
The New York Times

The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.

Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief.

Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences.

For the rest of the story

Mortgage Holders in California That Are Upside-Down on Their Homes Can Try SHORT-PAY Refinance

2009-10-04T18:07:00.000-07:00

In a completely new turn on dealing with the housing mortgage crisis, Los Angeles based mortgage consultant Bill Rayman has been helping mortgage holders who owe more on their homes than they are worth, but who are current on their payments. He is helping these homeowners to refinance their homes at 90% of the CURRENT MARKET VALUE of the home. This video which is 8 minutes long, explains the details of how this works.

Short Pay Refi Mortgage Loans Using FHA in Los Angeles Saving Homes

2009-09-10T15:50:00.000-07:00

If you are upside down on your current home mortgage loan, there is a new option for you that could save your home, your credit rating, and smooth out your financial life. Santa Monica based Mortgage Broker Bill Rayman is suggesting the use of Short Payoff Refinance Loans or Short Pay Refi.

"Our Standard FHA Mortgage Loan Programs now offer you the option of a Short Payoff Refinance loan," says Rayman. "You may have been thinking of using a Short Sale as a solution to avoid foreclosure by selling your home for less than what is owed. However, now the Short Payoff Refinance loan option is becoming a popular tool for borrowers to retain their home, while at the same time lowering the principle balance. With a lower principle, you will lower your monthly payment. And all of this is under a fixed rate FHA insured loan with the easier qualification requirements."

What's a Short Pay Refinance?

Here are the simple steps.

1. First we must establish the current value of the home. The value must be less than you owe.

2. We then apply for the FHA insurance to get you approved at the maximum loan to value for that new lower value.

3. Now, armed with our comps at current market value and our FHA approval, we enter into equity re-negotiations with your bank for a discount on the current mortgage.

4. Once the bank accepts the offer we can complete the new loan transaction at the lower amount.

How do you qualify for a Short Pay Refi?

1. You must still have decent credit, ficos, income, and no mortgage lates. If you have been late once, it makes it harder, but not always impossible.

2. The current value of the home must be less than the amount owed.

Why would your current lender agree to such a thing?
Foreclosing on a property costs the lender money. Realtor commissions, legal fees and highly paid management staff salaries add up fast. The Short-Pay Refi results in much lower costs in legal fees, commissions, and home maintenance.

Short-Pay Refi puts you in a better position than standard loan modifications because you not only lower your payment, you also lower the principle balance with an FHA insured loan.

Mortgage Broker YouTube Video on FHA Mortgages - Los Angeles

2009-09-10T14:56:00.000-07:00

Sub Prime Mortgages may be dead, but the FHA really invented the concept of low interest, easy qualifying home loans. Bill Rayman explains how FHA is back in the driver's seat now that the banks are out of the sub prime business. 10% down. 5% down is still possible. Check out the details on this video.

Home Loans At Huge Discounts in Santa Monica - Mortgages Slashed 40%

2009-09-10T10:24:00.000-07:00

Most mortgage loan agents don't advertise with a headline like the above. But I'm not sure why. An email from MacMall today offered 20% off on an IPod Touch, and this was a big headline. A 2009 Lamborghini Spyder is supposed to sell for $200,000. You can have it for $120,000 – a 60% discount. Want to hear more?

A plane ticket to Europe is $800. Would you jump at $480 – a 40% discount?

A 50” plasma TV is $2,500. Would you jump at 40% off – to pay only $1,500?

Too good to be true?

Taking your kids to dinner and a movie costs $66. Might you be more likely to sit through Transformers 2 if it only set you back $39? Ok, you still might not.

Since 1963, the 30yr fixed mortgage rate averaged 8.60%. Today, it’s 5.14%. Would you jump to buy or refinance? That is a 40% discount

Pundits and politicians, bankers and brokers, Democrats and Republicans, cats and dogs, Han and Uighers, Yankees and Red Sox – everyone, it seems, is hawking the news that interest rates are at a historical low.

When you couple the 30% discount on the cost of homes, vacation homes, rental property, and commercial investment grade property, with the 40% discounts in mortgage rates, you should seriously consider buying your dream right now.

I'd love to help you. Call or email today.

The Housing and Mortgage Crisis Explained

2009-04-02T14:59:00.000-07:00

In the US, a person's home is their castle. Home ownership is high up on the list of goals for almost every American. We have the highest per capita home ownership in the world. As a result, in most cases, a family which owns their home, has the largest portion of their net worth tied up in that home.

The US government, and the political class that runs the government, understand the voter's interest in home ownership, and recognize that home ownership creates wealth and stability. Therefore there have been, since the founding of our nation, many and varied incentives to own a home such as: a clear inclusion of property rights in our earliest laws: homestead provisions: land rushes: tax benefits: special mortgage opportunities for veterans: and more recently, direct intervention to stimulate home ownership.

Supply Demand Curve

All commodity bubbles and busts have a few things in common. And at the base of these common factors are two algebraic curves. The first of these is the Supply Demand Curve. Hopefully you will not mind a simplistic example.

On a really hot day in July, we open a lemonade stand in a neighborhood which is 6 blocks from the closest retail store or any other place where cold drinks are available. We sell our lemonade for $1 a cup and sell out the first day. We are now faced with a choice. Buy more lemonade and potentially hire friends to help with the crowds, or buy the same amount and raise the price. We choose to do a bit of both. We increase supply and raise the price to $1.25. We sell out again, whereupon we repeat our strategy. We also note that our patrons are coming from further and further away, so we assume that our quality story is being passed along by our customers.

Week two, we have raised our price to $2 and have a couple of friends manning the stand while we keep the stand supplied with batches of fresh cold lemonade. However, halfway through week two, we note a slight fall off in sales. Asking around, we determine that a competitor has opened up 4 blocks away and is selling the same size glass as we are for only $1.75. Later that day when we go to the store to buy more lemons, we find that the bin is almost empty and the price has doubled. We go to another store 2 miles away (increased cost), and buy all they have at this new higher cost. We are now invested in a commodity that has a shelf life (might go bad before we can use it), and our costs and overhead have gone up, while our sales are dropping.

We can lower our sales price to draw our customers back from the competition, raise our prices to take into consideration higher costs, and hope to hold our loyal customers, and/or look for better prices on our raw materials. Then the mercury does some work for us. The temperatures sore over 100 with 95% humidity, and there seems no limit to how much we can sell. We raise the price to $3.00 and have no problem getting it. A third stand opens 4 block away, but it doesn't slow us down. We are having to drive all over town to find lemons, and the price is soaring, but our profits are still ok. A fourth stand opens 2 blocks away. Then Mama Nature throws a curve, and a cold front moves in.

You guessed it. Nobody wants any lemonade. The lemons are rotting. We are laying off our friends. The grocery stores have ordered lots of extra lemons, and they are now discounting. We lower our price to 50¢ hoping to at least break even on our remaining lemons, but there are no takers.

The Fear/Greed Curve

You may also have noticed another curve at work in the above example. As the demand was strong, we became greedy and raised the price as high as the market would allow. As raw materials became scarce we became fearful, and we bought up all the supply, even at the much higher price. As the market plunged, we became fearful again, dropping our price to avoid massive losses, and laying of people to lower our overhead.

These two curves operate in EVERY market. Oil, steel, t-shirts, cars, advertising space, and yes, housing units. And one more - mortgages.

Put It All Together

In the late '90's and early new millennium a few things all came together.

Dot com bust. Those who got burned in the market, saw real estate as undervalued, so shifted some of their portfolios here.
Government. Both the Clinton and Bush administrations pursued policies of making home ownership easier. This came in large measure from reducing interest rates and making mortgages easier to get.
Massive Capital Influx. Money managers saw a bonanza and huge amounts of risk capital flooded into mortgages. Banks and other lending institutions leveraged these loans at much higher levels than in the past.

Dot com bust. Those who got burned in the stock market, saw real estate as undervalued, so shifted some of their portfolios here.
Government. Both the Clinton and Bush administrations pursued policies of making home ownership easier. This came in large measure from reducing interest rates and making mortgages easier to get.
Massive Capital Influx. Money managers saw a bonanza, and huge amounts of risk capital flooded into mortgages. Banks and other lending institutions leveraged these loans at much higher levels than in the past.
Demand. Initially demand was increased from three sectors. Family formation by late blooming baby boomers, huge increases in legal and illegal immigration, and prosperity from low unemployment.
Demand part 2. Speculators hit the market from two directions. Existing homes were purchased by flippers, who fixed them up (or not) for flipping. Home builders built homes as fast as they could.

The Concept of Marginal Demand

An illustration: I am an illegal immigrant. I have just arrived in the country and have enough money for one month's rent if I can share a room in the worst part of town. I find just such a room, but it is because I can afford $10 more than the guy whom I replace. He is out and homeless for a week, but comes back into the market offering $20 more. In the meantime I have found permanent work with a good steady income, so I want a place of my own.

I find a place and end up paying $20 a month more than I wanted to in order to beat the competition of 5 other dudes who are trying for the same space. They all look for ways to add to their income or pair up in order to get housing. Finally, 3 of them get together and buy a 2 bedroom.

When you are checking out the West Side of Los Angeles, looking to stay under $1,000,000 for a 3 bedroom tear down, you may not be thinking about the effect that this illegal immigrant had on the price you are paying. But each incremental family unit puts pressure on the entire system, causing folks to make decisions based on their own demand, the available supply, their fear, and the greed of buyers and sellers.

Now then, business slows down and the local ICE agents get more aggressive. I decide not to help get my brother into the country, because there isn't enough work to take the risk. The other two guys who were fighting me over that apartment, are now totally broke, so they head back to Mexico. I start seeing empty apartments in my building months before there are any vacancies in Santa Monica. The demand is decreasing at the margin. As the economy slows down, the out of work bookkeeper moves back in with his mom, and the divorcing couple decide to keep living together.

The Speculators

Another Illustration: My cousin owns 5 houses. He has used all of his savings, his credit cards, borrowed money from our grandpa, and he can't make the mortgage payments. He needs to sell one of these houses. But there are no takers. He lowers the price, still nobody comes. He finally has an offer below what he paid. The buyer can't get financing. FIVE houses sit vacant. He tries to rent them, but the rent he can get is not enough to pay the mortgage, property tax, insurance, and other costs.

One more illustration: The builder used to see 100 folks every weekend coming through his models. Now no one comes. 70 homes sit vacant. He lowers the price and gets two offers. The customers can't get financing.

The Bankers

Under the old rules, bankers could lend out 10 to 15 times the amount of their net assets. Not so different than the homeowner. During the craziness of the recent bubble, many mortgage institutions were only putting up 3%.

Under the old rules, homeowners put up at least 10% cash (more commonly 20%) to buy a home, and the bank wanted to be darn sure that this money wasn't borrowed. The homeowner had a stake, and a hedge against the value of the home going down. During the craziness of the recent bubble, the homeowner could potentially put nothing down, and the money lenders didn't care where the client got the down payment, or if they could pay the money back.

Do the math. The leverage used to be 10 X for the home owner and around 10 X for the bank. Together, they were leveraged 100 X. This historic amount of leverage served the customer and banker very well for a long time. But in 2005, it was not uncommon for the home owner to be leveraged at 20 X or more and the lender to be leveraged at 30 X. Combined leverage of 600X.

You may be reminded of the 1929 stock market crash where folks could leverage stock purchases 10X. Today that limit is 2X, and that limit has done well for the market for 60+ years. With leverage of 600X on homes, a very small crack in the value of those homes created chaos.

The Securitizers

To make matters much worse, these highly leveraged assets were now bundled and sold to 3rd parties. In other words, your broker might suggest that you buy 10% of a bundle of 100 mortgages. These 100 mortgages would be made up of old mortgages, new mortgages, at various interest rates, that were made to customers offering various amounts of truth about their ability to repay, etc.

How in the world would your broker know if this was a good deal for you. He wouldn't. But both of you might assume that it was a really good deal when the underlying assets were going up and up and up, and therefore creating ever more security for you. And you would be right.

Unfortunately, when the value of the homes (assets) in these bundles started going down at a steep rate, it became almost impossible for anyone, even the smart guys who were paid huge amounts to do so, to place a realistic value on these assets. When your broker called you now and wanted you to buy 10% of one of these bundles, he wasn't quite so sure about the value today, or in the future. Since you had no assurance and no optimism, you said no. And on the margins, everyone said no. And the value of these products sunk to almost -0-.

Nobody Left

The homeowner who bought a home between 2006 and 2007 was quickly underwater. This was especially true if the down payment was -0- or 5% or if the income wasn't really there to support the payments.

The speculator was in even bigger trouble. The banker who was lending at 30 X assets was forced to revalue those assets. If home prices were down 20%, the banks assets dropped 20%, and now the leverage on those was getting close to 40X. First of all the bank regulators were not ok with that. Second of all the investors in those lenders were not happy with that. In fact, while the banks and other mortgage institutions were having to add assets to bring that number back to 30X (adding assets in this case meant raising outside investment in the banks), the investors in these companies demanded a return to safer leverage levels of about half those levels or 15X. Lending stopped. These institutions could not lend more until they raised more capital.

The banks would like to sell these mortgages to the securitizers, but since it was impossible to value the underlying assets, and no real hope of the assets increasing in value, there were no buyers. The banks and other mortgage backers had no where to turn for money to rebuild their asset base. They needed either more deposits (if they were banks), or they needed to raise capital in the form of stocks, bonds, or sell of parts of themselves.

Depositors were not too keen on putting their money in institutions that were looking shaky. Investors not only weren't going to buy more stock, but were bailing out of the stocks they did own. Selling off other parts of the business at a good value takes months or years. Fire sales reduce value dramatically.

Full Circle

Now the entire problem comes about full circle. Housing demand is down due to all the reasons stated above PLUS incomes are dropping and unemployment is high. Housing supply is huge because speculator homes are vacant, and foreclosed homes are coming onto the market in record numbers. The prospective home buyers who would like to buy a home are less likely to find a mortgage due to more stringent requirements for down payments and income verification, further reducing the available demand. This then causes additional downward pressure on home pricing, which exacerbates the problem for recent home purchasers or refinancers, lenders, and securitizers.

To be honest, I've left out a few layers here and there to keep the subject under control. But the description is somewhere between simplistic and grad school. Understanding the nature of this bubble and the unexpected consequences is good for the soul and all that. It might even help in making a future judgment about say, the price of gold right now.

Now What?

We will assume for the moment that if you have read this far, you are primarily interested in getting a mortgage for your first or next home, or you want to take advantage of these odd ball times to refinance. Your goal might be lower payments, shorter payback, reduced principle, cash out, or even how your mortgage plays out in a bankruptcy.

You are very likely interested in what the new administration in Washington is doing that could effect your decision making process on all of these matters. Future articles will be answering those very questions. If you would like to subscribe to this blog, you may do so here.

Santa Monica Based Mortgage Agent Offers Special Service

2009-02-18T10:08:00.000-08:00

Bill Rayman spent much of his early career on the set of the original Saturday Night Live. He has not lost any of his comedic wit now that he's helping folks with home mortgages in good times and not so good. Bill explains: "Refinancing a home or getting a mortgage for a new home may not be a laughing matter, especially in these times, but we all gain if we can keep a positive and happy outlook."

 Besides keeping the mood light, Bill wants to be sure that he offers much more than the average mortgage broker. "My goal is to keep my clients well informed – certainly about rates, but also about all of the factors that effect their choices, opportunities, and decisions. In these crazy times, many homeowners and first time home-buyers have absorbed from the media a critical misunderstanding. The news seems to be giving folks the impression that there aren't any loans to be had, or that you have to have a huge credit score to get a good rate. This just isn't true.  "Many banks are lending agGressively with excellent rates to qualified buyers. But not all of my competitors are EVEN aware which banks are making what kinds of loans – in large part because few of them have access to all the lenders. Banks have drastically reduced the number of brokers they work with. To be effective today, you need to have correspondent relations with conventional Fannie Mae lenders, broker loans with portfolio lenders, have access to hard money, and be able to fund your own loans."

" By carefully analyzing my client's wants, determining the right type of loan, then pairing them up with the exact bank that is seeking that kind of customer, we create outstanding deals. The net result: We meet people's needs. We make people happy!"

 Bill Rayman is Senior Vice President of Mortgage Capital located in Santa Monica. The majority of Bill's friends and clients are clustered in West Los Angeles, but he is capable of handling loans anywhere in the U.S. mainland and Hawaii. "I do regret that I never get to meet face-to-face with 90% of my clients. On the plus side, that means that only 10% know I'm not the spitting image of Brad Pitt, and that I can't walk on walls. Give me a call."