We have assembled these Frequently Asked Questions for your convenience. If you do not find what you are looking for or have additional questions, please contact us
1. Do you do Real Estate?
2. What is the difference between paying points and fees, no points and no point, no fees?
3. Isn’t it cheaper to go directly to my bank for my loan?
4. Where are rates heading?
5. Are property values going to plunge?
6. Should I wait to buy my new house?
7. The developer is giving me $10,000 if I use his lender, how can that not be a good deal?
8. What does “Caveat Emptor” mean?
9. Some TV ads say I can buy an investment property with no money down. What’s the catch?
1. Do you do Real Estate?
Heaven’s no! There are many Realtors who do loans occasionally, and loan consultants who also do some real estate transactions. In California, Realtors and Mortgage Brokers share the same licensing, but in my view they are two very different disciplines. My job is to obtain the best financing I can for you – financing that suits your budget, your time frame and your specific requirements. I work with many outstanding Realtors and am pleased to refer my clients to them.
2. What is the difference between paying points and fees, no points and no point, no fees?
Paying points and fees should provide you a better loan than if you don’t pay points and fees. But there is a trade off; it costs you more money at the close. If you are going to pay more then you should realize the full benefit of paying more. It usually doesn’t make sense to pay points for a loan you expect to have for only a few years. If you obtain a no cost loan that carries with it a prepayment penalty for some period of time and then you decide to sell or refinance – the penalty that you have to pay will cost far more than what you saved. Your loan consultant should work this out for you and fully explain both the good and the bad about the different loan options.
3. Isn’t it cheaper to go directly to my bank for my loan?
It could be, but it could also be much more expensive. Your bank will offer you the loan programs that it has available at the rates that it has at the time. It is possible that those rates will be the best available. What is more likely is that I will have better rates available somewhere – since I can shop rates from many different lenders.
4. Where are rates heading?
Rates are heading lower AND higher, but not before being flat for a while. The daunting task of the Federal Reserve Board is to keep the economy moving along but not moving too fast. Inflation must be kept in check, but the same action that retards inflation can also promote recession. The Fed has raised the fed funds rate 17 times for 4 ¼ percent increase in that rate. It stood at 1% about 2 and ½ years ago. The Fed took a breather in June and hasn’t raised since that time. If the economic numbers begin to show that growth is being retarded too much, or that growth is speeding up again – the fed will act. Rates, looking at longer-term averages, are actually quite good.
5. Are property values going to plunge?
Answer I don’t think so - Although we did have a huge run up in prices in San Diego County starting in 1996, we still have greater demand for housing than most other areas. Prices should come down some, and that would be healthy for the economy longer term. It hurts a little if you currently own property, but it corrects imbalances in certain areas.
6. Should I wait to buy my new house?
Answer - Good Question. I don’t know – the market is now offering better deals from sellers who need or want to get their houses sold. Once thing I can guarantee is that you won’t be buying at the top if you buy now- the top was passed some time ago. Prices might move lower - but remember - this is your new home not the lottery. Determine what you can afford, and if it is the right house for you we can help you afford it. But don’t go crazy…the worst thing is to buy beyond your means and later lose the house.
7. The developer is giving me $10,000 if I use his lender, how can that not be a good deal?
Answer - It may very well be a good deal, BUT often the deal is not as good as it appears – So don’t assume that it is a great deal – check it out!! Check on the rates the developer’s lender is offering and compare them with an outside lender.
8. What does “Caveat Emptor” mean?
Let the buyer beware!
You, as a consumer, need to realize that it is up to you to make sure you are properly treated by the person providing you service. It’s not about being smooth, it’s not about being slick, it is about taking care of you the customer. It is about doing what is right for the customer.
9. Those TV advertisements and infomercials say I can buy an investment property with no money down. What’s the catch?
The only catch is that the property you intend to buy and the deal you are going to do needs to “pencil out” The deal has to make sense. Every property has expenses, every property has a price, and every property has a rental value. If the rental value is less than the amount that it costs to maintain the property, you will have to “pay the kitty” the amount that the rent falls short of the monthly carrying cost. If you think you are going to buy the property at some great discount and then sell for a good profit – then you need to account for the costs to buy and hold the property until you can sell it.