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PMI is private mortgage insurance. If you’re getting a conventional loan and are making of down payment of less than 20% of the purchase price, you generally need to purchase PMI.
This insurance is designed to protect the lender in case of default on the loan and it also allows the borrower to buy a house when they can’t afford to make the traditional 20% down payment.
PMI is provided by a third party, requirements and rates will be provided before the closing. Once you reach 20% equity in the home – either through mortgage payments or rising home values, the PMI will be terminated.
PMI rates are generally between 0.5 percent and 1.8 percent of the original loan amount. According to Freddie Mac, it estimates that most borrowers pay between $30 and $70 each month for every $100,000 borrowed.
The key factors in determining the PMI rate are the loan to value ratio. If you put down 5% you are typically going to have a higher PMI rate than if you put down 15%. The other key factor is the borrower’s credit score.
There are different types of mortgage insurance and borrowers normally make an annual lump sum payment or pay in monthly installments.
Of course we can give you a more detailed explanation of what to expect and your options based on your borrowing needs.

We are seeing refinancing potentially get a little cheaper, as Fannie Mae and Freddie Mac dropped a 50 basis point fee instituted to protect against projected losses during the Pandemic.
The fee was as much as one eighth of a point when refinancing. This means borrowers could potentially save $20 a month on a $300,000 loan refinance. With the pandemic fee waived, we are seeing rates again near record low territory.
So fill out our one minute refinance consultation on our website and we see how much you can lower your monthly payment or get cash out or both.

Many people know the traditional formula of mortgage down payments – 20% of the purchase price of the home is required to get your mortgage.
A down payment is a lump sum payment used to make a large payment, like a house. In the traditional formula if you buy a $500,000 home you would pay a $100,000 down payment and you would get a loan for the remaining $400,000.
With today’s hot housing market, the 20% down may be a substantial obstacle, however there are many loan programs that require as little as 3% down. There are pluses and minuses to making the 20% down payment. With the traditional $20 down, you can often qualify for a lower rate, you won’t need to have mortgage insurance and you’ll have lower monthly rates.
The benefits of making a smaller down payment obviously is you won’t have to get the money for a large lump sum payment, so you can move in to a new home sooner and you’ll have money left for home improvements.
Contact us to see what programs you can qualify for and how much you’ll need to put down.

If you thought you missed the opportunity to refinance and lock in low rates, you didn’t!
We’ve seen a wave of refinance activity in the last week as rates dropped to an average of 2.78% for 30 year fixed mortgages according to a survey from Freddie Mac, which is not far from the all-time record low of 2.65%.
Fannie Mae estimates that there are millions of home owners that can benefit from refinancing in today’s rates, with either lower monthly, cash-out or both. Getting the best rates, will depend on a number of factors, including credit scores, debt to income and how much is currently owed on your house. Call us or fill out a quick refi analysis on our website and we can see how much savings you are eligible for!

If you’re in the market for a new house, you’ve probably heard that you want to get pre… qualified or pre-approved? What’s the difference anyways?
There’s actually a big difference. Pre-qualified is more of a preliminary step. It gives you a general idea of much home you can afford. We will examine your credit, income, assets, and debts and you’ll have a general idea of the price range you’re looking for. You may also see that you need to increase your savings or lower debts before you buy.
While pre-qualifying is an initial step, pre-approval is a deeper dive and being pre-approved carries more weight with sellers. To get pre-approved we will verify you income, assets, etc. and you will be more official (of course you still have to apply for a mortgage). Being pre-approved is almost a necessity in competitive housing markets, as realtors do not want to waste time and you will have a better chance of having your bid accepted.
Now that we know the difference you may wonder what’s the point of getting pre-qualified – why not just get pre-approved? Good question – basically its much faster and it gives you a good starting point to start your home search. Pre-qualify or pre-approve we can help you with both – apply on our website or call us to get started.

In the last year many people worked remotely and interest in second homes has skyrocketed. Here is a primer for those considering a second home.
The first step is where – do you want a vacation home by the beach or mountains, do you want to be near relatives. Do your research and use a local real estate for help with choosing the right area or neighborhood.
Second is why – do you want a vacation house, a second residence if you spend a lot of time in an area for work or family or do you want an investment property? You can actually combine these and use a second home for vacations and AirBNB it while you’re not there (of course check local rules regarding this).
Third and perhaps most importantly is how – as in how are you going to finance it 🤓. You will often need a higher down payment for a second home, as default rates tend to be higher. And with an additional mortgage, you’ll need to make sure your DTI (Debt to Income) ratio is not too high. You’ll also want to make sure a second home doesn’t stretch your budget to much, you should factor in maintenance, property taxes in addition to mortgage payments. If you are planning on renting make sure you factor in the property not being rented immediately and plan to set aside ten percent of rental income towards maintenance.
If you are ready to start looking – apply online and we can let you know how much you can pre-qualify!

As the housing market remains hot with low inventory, many home owners are adding ADUs (which stands for Accessory Dwelling Units). ADUs often called granny flats, are guest houses or rooms added to garages to create rental income for home owners. Home owners typically add ADUs to increase cash flow, as well as looking for their property value to appreciate. Whether ADUs are right for you, depends on a number of factors. ADUs often costs at least $100,000 to build so being in a high rent market helps to offset the initial investment. You’ll also need to make sure local ordinances allow them and what the regulations are. The old real estate adage about location stays true for ADUs as well. If you are in an area where rents are high or a popular vacation destination, then ADUs can make sense. Again you’ll need to check the local zoning and if you build one you will also need to have updated insurance to cover the ADU. Check with us to learn more and to see what financing terms you qualify for.

We wish you and your family a happy 4th of July. We hope you enjoy celebrating and have a safe fun time with your friends and family.
Here’s a few tips to make the most of it!
If you’re travelling double check your reservations and even call to confirm to avoid unwelcome surprises. Also get an early start as we are just getting back to the swing of things there can be more delays than usual.
Be careful with the fireworks especially around children. If you are using them always do so safely remember to make sure people aren’t too close or in the path of them.
Check the grill! If you’re using propane make sure you have enough fuel and always light the match before turning on the gas.
Be water safe – always have a designated adult watch swimmers whether its in the pool, lake or ocean.
Enjoy!

In today’s hot real estate market, you may ask if you should make renovations to help the house sell for more?
The answer is it depends. Major renovations usually don’t recoup their cost in terms of higher sales price, however if the house is in excellent shape except a kitchen or bathroom, you may consider doing it for a higher sales price. Minor updates are a good approach to help the house look better without a major investment. Some examples are painting the house, new cabinets, flooring (if in bad shape), even minor things like updating the faucets can make a big difference. If you have potential turn-offs like water damage, it’s something to consider fixing. A water stain on a ceiling can scare off buyers, so replastering or sheetrock over stains is probably a good idea.
If you do decide to do a major reno, keep in mind you are doing this to sell and not to your style, so avoid bold choices and go with more neutral options. Overall, in today’s hot market its probably better to focus on little things rather big updates.

The average American has nearly $40,000 in debt not including home loans so today we ask if you consider a cash-out refinance to pay off other debts like credit card debt.
Credit card interest rates are normally much higher than mortgage interest rates and if you are carrying high credit card debt while making minimum payments, there is an opportunity to save a lot in monthly credit card payments that are primarily going to pay high interest rates on the debt.
First you will need enough equity in your home to get a cash-out refinance. With real estate values rising many people have seen their home value rise so they may qualify for cash-out. You’ll still need to maintain equity in the home at 80-90% to avoid paying mortgage insurance and you will have to get an appraisal and pay closing costs which will be subtracted from the cash out amount.
Contact us to see if a cashing out to pay off your debt makes sense for you. And remember you’re not actually eliminating the debt you’re just saving on high interest payments so be careful not to start spending again on the credit cards and getting caught in a debt cycle loop.