South Orange County Real Estate

by Nick Bublik & Irina Bond

Mortgage Tips

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Types of Mortgages

There are many types of mortgage loans available to homebuyers, and within each of these types there are many options:

  • Fixed-rate: A fixed-rate loan offers a monthly payment that is known and does not change. Most fixed-rate mortgages are for loan terms of 15 or 30 years.
  • Adjustable-rate or ARM: After a predetermined initial term, the interest rate on an adjustable-rate mortgage loan is re-set periodically. This ensures that the rate reflects current market interest rates. For example, a 3/1 ARM loan offers a fixed rate for the first three years, adjusting once a year thereafter. A 5/1 ARM loan offers a fixed rate for the first five years, adjusting yearly thereafter.
  • Convertible: This is an ARM loan that allows you to convert to a fixed-rate loan at or before a specified time. The conversion privilege lets you start off with a low variable rate, then “lock” the rate at a fixed amount depending on market conditions.
  • Balloon: These loans often have interest-only payments, in which case the loan principal is not reduced and the entire loan amount is due at the end of the loan term.

Also, be sure to consider the programs that are available to first-time buyers through city, county, state and Federal entities. You may qualify for counseling services and/or down payment and closing cost assistance.

Once you’ve decided on a loan type, take the next important step. Getting pre-qualified and pre-approved for your loan is critical for many reasons. It can help you narrow your home search to save time, and help you get a clearer picture financially.

 

Daily Rates

Equally important to knowing your credit score is staying familiar with current mortgage rates. These rates change on a daily basis, so it’s important to check them often during your home search.Below are several links to financial institutions that publish their rates daily as well as the different types of mortgages which you should familiarize yourself with.

www.bankrate.com

www.bankofamerica.com

www.wellsfargo.com

 

Send us a message to nickbublik [at] cox.net for personal referrals to lenders we have worked with in the past!

Filed under: First-Time Home Buyers, Mortgage Rates, , , , , , , , , ,

Keep Your Home California Program Launched

The so-called “Keep Your Home California program” launched today, aimed at keeping, you guessed it, more Californians in their homes.

The program offers four types of assistance:

Unemployment Mortgage Assistance Program (UMA) – For unemployed homeowners who wish to stay in their homes, this program can provide up to six months of benefits with a monthly benefit of up to $3,000 or 100 percent of the existing total monthly mortgage payment, whichever is less.

Mortgage Reinstatement Assistance Program (MRAP) – This program will provide up to $15,000 per household to reinstate mortgage loans that are in arrears due to a temporary change in household circumstance, such as active military duty.

Principal Reduction Program (PRP) – This program aims to reduce avoidable foreclosures by providing principal reductions to those who have experienced economic hardship while also being in a negative equity position. Servicers can match funds allocated through the program.

Transition Assistance Program (TAP) – The final option provides funding to those where foreclosure is unavoidable to pay for relocation fees, used in conjuction with a servicer-approved short sale or deed-in-lieu of foreclosure.

Eligiblity is as follows:

– Home must be in California

– You can only own a single property, a primary residence

– First mortgage must be less than or equal to $729,750 (conforming jumbo limit)

– No cash out received on a refinance or home equity line of credit

– Mortgage must have been originated on or before January 1, 2009

Call 888-954-KEEP or visit their website to see if you qualify.

Filed under: Keep Your Home, Mortgage Rates,

Beware of a Mortgage Rate Spike This April

Last year the Treasury department announced that they would stop buying mortgage backed securities as 2009 wound down.  This year the Feds will continue the $1.25 trillion purchase program of mortgage-backed securities, which has decreased the 30-year conforming fixed-rate mortgage to all-time lows in the past year, until March 31, 2010.  But what happens after March 31st?

Foreign investors have already shied away from purchasing mortgage backed securities for obvious reasons.  There really is no security in this investment anymore.  Few, if any investors actually service the loans, and with the housing industry still very weak, and loan servicers holding almost all the power over the loans, investors are no longer flocking to purchase the loans from the original lenders.  The lenders control modifications, payment forebearance rights, foreclosure proceedings decisions, etc.

It is predicted that in order to entice investors, mortgage rates will have to rise dramatically in the near future.  We are hearing rates numbers in the mid 5% range up to “the sky’s the limit” types of rates.

Historically, mortgage rates moved in tandem with the yield and pricing on the 10 year Treasury bond.  Currently, investors are dumping their holdings in this bond with new inventory due to be released shortly.

The rise in mortgage rates WILL impact buying power for those who have been reluctant to make that move recently.  As an example, the interest only payment on a $200,000 mortgage at 4.5% is $750.00 for the first payment.  At 5.25% that interest only payment rises to $875.00 for the first payment.  That is a substantial difference in monthly payment.  If rates rise to 6%, that interest only payment will rise to $1,000.00.  A buyer loses $50,000 in purchasing power with that 1.5% increase in rate!

Analysts are suggesting that IF rates should rise as high as 6%, we could see another 10% drop in home values by the end of 2010.

In some areas, housing is again starting to sell, and sellers are holding the line on pricing at least until the home buyer tax credits run out.  If you are one of the people contemplating buying a house to cash in on that tax credit, you might seriously think about getting off the fence now.  Even if prices drop, who knows when or if we will see mortgage rates as low as they are now. Granted, rates have already risen, but they are still very low historically.

Modified from http://www.examiner.com/x-21893-Mortgage-and-Housing-Examiner~y2009m12d28-Lack-of-buyers-for-mortgage-backed-securities-could-cause-mortgage-rates-to-rise-a-LOT-in-2010?cid=exrss-Mortgage-and-Housing-Examiner.

Filed under: Mortgage Rates, ,

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About Us

As a Russian-speaking South Orange County team and residents of 20 years, Nick Bublik, REALTOR®, & his assistant, Irina Bond, are qualified and committed to guiding their clients through the real estate buying and selling processes with utmost loyalty and a wide range of experience.

Committed to providing exceptional service in each of their endeavors, Nick & Irina are passionate about helping each client reach their real estate goals. Through organization, dedication and perseverance, they deliver on their promises and facilitate results, no matter how complex the circumstances.

Together, Nick & Irina promise real estate transactions that exceed expectations.

Nick Bublik, REALTOR®
(949) 233-9304
Irina Bublik, Assistant
(949) 939-7831