CALLER: I have a $ 400,000 loan with 6.125% rate and my credit is above 680. Can I sill get a better rate? I really don’t want to pay fees because I just refinanced last year.
Ken: 6/22/11 - What we can offer you today is a 4.50% rate 30 years fixed without paying loan fees, escrow fees nor title fees. Your credit is OK, don’t need to be above 700. You are at 70% LTV, therefore, there is no additional cost to refinance. With your savings and good credit standing, we actually don’t need an appraisal. This is a no-brainer -- your savings is $259 a month and best is you don’t have any fees going into this loan.
Recommendation: DO IT NOW!
Caller: I have a good job with my husband and I was lucky that I did not buy a home 2-3 years ago. Now, I want to buy a house, but still cannot save up money because I have a son I am helping go through college. My rental payments are about $1,900 a month and I have no taxable deduction. Should I continue to rent or should I consider buying a house?
Ken: 5/26/11 - I believe that if you are making close to six figures a year and paying a high rent, buying a house will help you write off interest on taxes (consult a CPA). I suggest that you look into many different options that you might have, in terms of getting First Time Buyers Assistance for downpayments. There is CHFA, STRS and some local city assistance program that you should look into. Some cities might even do a silent second where you won’t need to pay back until you sell your house or refinance your loan.
Just be conservative and don’t go overextending your debts. Stay under 40% on the DTI (debt to income) ratio because once you buy your house, you might incur more debts. Always try and set up some kind of a savings plan with your job, to help you build up reserves. With your income, you should be saving money, so you might want to review your budgeting also.
Caller: What do you think about a 5-year ARM rate, if I want to lower my payments?
Ken: 6/12/2011 - I actually have very smart clients choosing 5- to 7-year ARM rates over 30-year mortgages. If you know that, you will probably refinance your home within 5-7 years. Then you should consider these much lower rates. For example, if the 30-year mortgages are going for 4.25%, the 5-7 year ARM rates are going for about 3.125%. For larger loan balances, that extra .375% could be tens of thousands of dollars for the next 5 years.
Recommendation: IF YOU CAN GUARANTEE YOURSELF REFINANCING OR LEAVING THIS LOAN WITHIN THOSE YEARS, DO IT.
Caller: I have a 1st mortgage of $350,000 at 5.75% 30-years fixed and I just took out a second loan close to one year ago at 8% for $60,000. I would like to see my payments become lower, I have good credit and I have a good job.
Ken: 6/9/11 - Your property value is right around $ 490,000. You’re paying a combination of $2482.77 for both. Your rate on the first mortgage is good, but your second is kind of high at 7%. The problem is you are under 80% loan to value which means you will be required to pay PMI insurance. If you were to refinance now and pay PMI insurance, you will only save by about $30, even without any fees. I suggest that you wait until the property value increases to around $510,000. Fortunately, you are in a great location and in due time it should go back up.
Recommendation: Look into a 105% maximum refinance with Fannie Mae. This will allow you to refinance over an 80% Loan without having to pay Mortgage insurance. This refi program will not allow combo loans. Call now for the Fannie refi program!
Caller: I currently have a 30-year loan that I have been paying on for about 9 years at 6.5% interest rate. I have a lot of equity and would like to know if it is worthwhile for me to refinance the loan. I took out some funds for home improvements from my credit card with 0% interest for 10 months.
Ken Go: 6/15/11 - You’re in a sweet situation now, having yourself a lot of equity, I am sure a lot of people will love to trade places with you. You’re at an age where you probably want to think about retiring and would be opposed to starting your loan over again for 30 years. So, I will suggest a 20-year fixed loan for you. I also suggest that you pay off the credit card balance of 25,000, I don’t care if that is zero interest. You will still need to pay it off when the time comes. Because you will stay in this house for the long-term and you want a lower payment, I suggest a no points loan and for you to pick up your own escrow and title cost. You will save about $200 and not have to start a 30-year mortgage again.
Recommendation: DO IT NOW!
Rates are at an all-time low, specially for loan amounts under $417,000. If you have an adjustable rate, this is the time to consider to turn it into a fixed rate mortgage. If you have rates above 5%, you should consider calling me to see if it’s worth it for you to refinance your loan. If you have two mortgages and have equity, you have to talk to me to discuss getting both loans into one.
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Rates are down. I recommend that you start inquiring about refinancing. I could be reached at (562) 508-7048 anytime or at the office (562)697-7028 or write me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Don’t delay. CALL NOW.
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