What are mortgage backed securities (MBS)?
Mortgage backed securities are essentially a bundle of home loans purchased from lenders at a discount that come in two varieties. The first is a pass through where interest and principal payments from the borrower pass through to the MBS holder or investor. The second is a CMO or collatarized mortgage obligation. CMOs consist of […]
What are the Homeowner’s Association Documents?
There are essentially five Homeowner’s Association documents that you should be familiar with when looking to buy and finance a home. They are 1) the Articles of Incorporation which details information about the HOA such as name, location and purpose 2) the Bylaws which set out the technical rules and procedures for voting, election of […]
What is the refinancing rule of thumb?
The refinancing rule of thumb says that you should consider refinancing your home when you can get an interest rate that is at least one percentage point lower than your current rate. Another school of thought is if you can get an interest rate at least 2% less than the current rate. However, neither of […]
When is the best time to buy a home?
Is there a best time to buy a home? Well, the answer is yes and no. Seasonality does play a factor in when you might get the best deal on your home purchase. Typically, spring is when inventory is plentiful but there is fierce competition among buyers. While on the contrary, winter months usually yield […]
Does the right of rescission apply to all mortgages?
The right of rescission allows the borrower to completely cancel their mortgage transaction within three business days of signing the promissory note. However, its good to remember that this right does not blanketly apply to all mortgages. Home refinancings, home equity loans, home equity lines of credit and some reverse mortgages must have the rescission […]
What do loan processors do?
A loan processor works with your loan officer to make sure your financial profile fits the lending guidelines of the program you selected. They collect paystubs, W-2s, and bank statements in order to submit an application to underwriting. They also request written verifications, order title work, work with the underwriter to clear conditions and help […]
What is redlining?
Redlining is a term synomous with racial discrimination. It is the practice of outling in red on government maps areas where black residents live to avoid lending in those areas and categorizing them as risky investments. This practice came about in 1933 as a result of President Roosevelt‘s New Deal that intended to provide suburban […]
What is blockbusting?
Blockbusting is a practice in which real estate agents convince white residents in a particular area to sell their homes at below market prices because of the threat of racial minorities moving into those areas. The real estate agent would then purchase the home and sell it at inflated prices to minorities looking for upward […]
What is a Mello-Roos?
The Mello-Roos is a tax assessed against the land, but is not based upon the value of the property that sits on it. Related to California and more specifically the Mello-Roos Community Facilities Act of 1982, it allows a special tax for the purpose of financing certain public improvements and services through the sale of […]
What is a doctor mortgage?
You might not have been aware that there are loan programs specifically desiged for doctors or physicians. These loans usually do not require a down payment and at the same time allow you to not pay private mortgage insurance. In addition, these loans have flexible employment and debt to income requirements. Doctor loans also have […]