Jumbo Mortgage Loan

There are two FHA approved condos in Burlingame. If you want to use FHA financing to purchase a condo, it must be an FHA approved condo.

Parc Newlands is located at 107 El Camino Real. It is on the southwest corner of Newlands Avenue and El Camino Real. There are 17 units in this complex.

Pershing Park is located just west of this complex. It's a nice park for little kids.

Downtown Burlingame is nearby. Burlingame Avenue has many shops and restaurants that are enjoyed by mant residents and visitors.  

The FHA maximum loan amount in San Mateo County is $729,750. The FHA down payment requirement is 3.5%

Before you make an offer on an FHA approved condo, have your Burlingame loan officer double-check to make sure that the condo is still FHA approved. The approval status can change.

The other FHA approved condo complex in Burlingame is located at 777 Morrell Avenue. The cross street is Rollins Road. There are 28 units in this condominium complex. Burlingame High School is very close by.

Broadway Avenue, the other "main" street of Burlingame, is another street that draws many from the local neighborhoods for shopping and dining.

Broadway Avenue is a good walk from 777 Morrell Avenue.

Are you looking for a mortgage for a property in Hillsborough CA? I can help you. I work at RMC Real Estate Loans, located  conveniently to Hillsborough on Burlingame Avenue in downtown Burlingame. Our company is a mortgage brokerage that has been existence since 1976.

A mortgage brokerage is a company that helps people that want to borrow money find the best terms for their needs. Our mortgage brokerage has partnerships with many of the largest lenders in the country, as well as others that are not as well known. Why would you call me to get your next mortgage? I will save you money, time, and hassle.

I will save you money in several ways. First, you will have access to the programs of many mortgage lenders. I can submit your application to the lender with the lowest rates for your needs. If you go directly to a bank, you will only be exposed to their particular mortgage programs. Their rates may not be competitive.

Another way I can save you money is by utilizing my ratewatch service to help you decide when to lock in your mortgage rate. This ratewatch service notifies me when their is a significant turn in the mortgage rate market. It makes no sense to let the rate float if rates are moving up. Conversely, it may not make sense to lock in your rate if rates are going down. By staying on top of the mortgage market, I can help you save money by making an informed decision about the best time to lock in your rate.

I can also save you money after you obtain your mortgage. I keep your mortgage information in my database. When the opportunity to save money with a refinance presents itself, I will let you know ASAP!

Time is money. You could spend your time calling a bunch of different mortgage lenders. How many should you call to get the best rate? Well, by the time you determine the right number of calls to make, guess what? The rates have probably changed any way! You're time is probably better spent delegating this task to your mortgage broker, whether it's me or someone else that you trust.

Getting a mortgage can be a real hassle. Now, more than ever, there is a lot of paperwork required - there is no avoiding it. What can be avoided is limiting the amount of phone calls to you asking for more and more documentation. I minimize these phone calls to you by asking for all of the documentation upfront that I know will be required to obtain your mortgage.

Although I can help you with all types of real estate loans, I specialize in jumbo mortgages. If you live in Hillsborough, you most likely need a jumbo mortgage. A jumbo mortgage is any loan amount above $417,000. Between a loan amount of $417,000 and $729,750, these loan amounts are called agency jumbo mortgages. Loan amounts above $729,750 are jumbo mortgages. Our lending partners offer competitive rates in all three categories.

 Financial Advisors, CPAs, insurance agents, real estate agents, estate planning attorneys, and in-home care providers in California need to know that there is a reverse mortgage alternative available.

The reverse mortgage alternative is called Equity Access. Equity Access provides monthly income to homeowners above the age of 60 (the youngest homeowner must be at least 60) in return for a share of the future value of the home.

Here are some of the features:

• There are no closing costs to enter into an Equity Access Agreement
• No debt is incurred with an Equity Access Agreement
• The homeowner does not have to pay off their mortgage(s)
• The homeowner decides how long they want payments for (from 10 to 25 years)
• The homeowner decides how much equity they want to share
• An attorney is required to review the Equity Access offer to protect the homeowner
• There are no income requirements

1. The age of the youngest homeowner
2. The value of the home
3. The amount of mortgage balance(s)
4. The type of mortgage(s)
5. How long they want payments
6. How much equity they want to share

All of this information is placed into the Equity Access calculator. The calculator then determines the monthly payment.

If the payment is less than what the homeowner would like, there are ways to manipulate the calculation. For example, the homeowner could agree to share a larger percentage of the future equity. Or they could shorten the term of payments to be received. 

There are probably other professionals that could benefit from this information. If you know of a certain type I missed, I would love to know.

Which is better, a reverse mortgage or Equity Access Agreement? Like any financial tool, one product may be more suitable than the other. But it's nice to know that senior homeowners in California now have an alternative.

Spread The Word!

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Jumbo Loan Blog

Normally, homeowners in Atherton don't want a 15 year fixed rate because the payments are too high. Now there is a twist on a 15 year fixed rate that can keep your payment low!

This loan has a 40 year term. Initially it is a 15 year fixed rate. During the 15 year fixed rate term, the payments are interest-only. Because the payments are interest-only, the payment is a lot lower than an amortized 15 year fixed rate. 

Here's the neat part - if you pay principal during the 15 year fixed rate term, the payment decreases because the payment is based on the reduced balance!

After the 15 year fixed rate term expires, the rate adjusts once. The rate is determined by adding .5% to the Fannie May 60 day rate.

The new payment is based on the new rate, amortized over 25 years. Hopefully you have paid off enough of the principal during the 15 year fixed rate period so that the payment doesn't increase! The new rate can't be more than 5% higher than the initial rate.

As you know, homes in Atherton are very expensive. This program works well here because the maximum loan amount is $5 million.

This loan program is available to purchase or refinance expensive homes, such as those located in Atherton. One of the nice features is that there is no limit on the dollar amount of cash-out. Many loan programs are limiting the amount of cash-out to refinancing homeowners.

Another nice feature is that this program can be used to finance second homes at a slightly lower loan-to-value percentage. It is one of the few competitive jumbo loan programs that I am aware of that allows cash-out on second homes.

If you own a home in Atherton or in other expensive areas of California, and like the idea of a 15 year fixed rate with interest-only payments to keep the payment low, contact me to see if this program is a good fit for you.

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Jumbo Loan Blog

The last thing you want to worry about when you own a vacation home in California is the loan you have on it. You own a vacation home because you want a place to relax, not to add stress.

As I was sitting at my desk looking at the terms of this loan, I thought "this is perfect for vacation homes".

The rate on this loan is fixed for the first fifteen years. Fifteen years is a long time to hold a loan - wouldn't you agree? You can own that vacation home for 15 years and not worry about the interest rate changing! This part of the loan is what provides the stability.

Now for the affordability - the payments are interest-only for the first fifteen years. Most people don't realize that if you pay principal on an interest-only loan, the payment is less the next month! You do have this option.A vacation home loan with a rate that is fixed and with a payment that can decrease - grab the sunscreen and the blender, does it get any better?

This loan is for all types of vacation homes, small and large. You can finance that condo in Palm Springs, or the estate home in Lake Tahoe. The maximum loan amount is $5 million.

What happens with this loan after fifteen years, you ask? Well, it adjusts once. Then the rate is fixed, and you pay principal and interest for twenty five years. Remember, the payment will be based on the balance at the time of change. So if you have paid any principal down on your vacation home loan, the new payment will be based on the reduced balance!

This loan for vacation homes in California is available to purchase and refinance. You can even take cash-out, you just can't borrow as much of the property's value. 

To me, I picture a vacation home as a place to relax. One of the goals my wife and I have is to be able to buy a vacation home for ourselves and seven children some day. You can bet I will get a loan like this - long term stability with affordability!

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I have had real estate owners in San Mateo County ask me - what is a private money loan? A private money loan is a real estate loan funded by non-institutional sources.

Non-institutional sources of private money loans vary. The source could be an individual. Often it is a group of people who have pooled some funds together. 

There are companies that specialize in the placing and funding of private money loans. These companies serve at least two important functions.

The first function they serve is the marketing of the availability of private money loans. They often post ads on Craigslist, trade publications, and other marketing vehicles to let both the public and mortgage brokers know that they have funds to lend.

The second function they serve for the private money source is similar to a funnel. They receive loan scenarios and toss out the ones they know that the private money source will not be interested in. They package the files that fits the source's interests, present the file, and receive approval.

Why would someone become a private money lender? Generally speaking, a private money lender gets a generous percentage return that is secured by real estate. To the lending source, it is an investment of their money. It is an investment alternative, just like investing in the stock market is an investment alternative. 

Why would someone borrow private money funds? Well, that will be the subject of my next post that will tell the top ten reasons why someone would want or need a private money loan.

The terms of a private money loan are usually much different than the terms that banks offer. One major difference is the length of the term. Generally, private money loans are no longer than five years.

Another difference is the interest rate. Private money rates tend to be higher than the rates banks offer. Higher rates make sense because these loans are usually riskier.

The fees associated with a private money loan are usually higher than bank loans. It's not unusual to pay anywhere from three points to eight points to obtain a private money loan.

With the tightening of underwriting guidelines by banks, private money loans, I predict, will gain market share in the near future. 

If you need help with a private money loan in San Mateo county, or anywhere in California, you can contact me and I will try to help you.

Jumbo Loan Blog

Get Your Mortgage Phil

Many homeowners and home buyers in California have probably heard of a bridge loan but do not know what it is or who should obtain one.

A bridge loan is usually a short-term loan (usually written for three months to three years) that provides funds to buy real estate from a piece of real property that an owner has an intention of selling, but will not close before escrow closes on the new property. 

This transaction is called a bridge loan because these funds "bridge the gap" between the closing of two transactions. 

Let's look at an example of a bridge loan. Bill and Betty Buyer would like to purchase their California dream home for $800,000. The down payment required is 20%. They have enough money saved for the closing costs and cash reserves, but little else saved.

Their current home is worth $500,000. The existing balance on their mortgage is $50,000. They have $450,000 in equity.

Bill and Betty would like to make an offer on the new home non-contingent on the sale of their current home. How, they wonder, can they make this offer?

Enter Bob the Bridge Loan Guy. He tells Bob and Betty that he can help them obtain a $210,000 loan on their current home ($160,000 for the down payment plus $50,000 to pay off their current mortgage). Bob the Bridge Loan Guy has figured out that the Buyers can qualify for both the bridge loan and the purchase loan because their debts on both the current home with the bridge loan and the new purchase loan are less than the maximum amount of debts to qualify.

The Buyers successfully make their offer and close escrow 30 days later. Another 30 days later they close escrow on the home they listed for $500,000. They use $210,000 from the proceeds of the sale to pay off the bridge loan, and use the other $290,000 in proceeds to pay down the new mortgage.

A few important tips you should know if you are considering a bridge loan:

• You must be able to qualify for the bridge loan and the loan to purchase the new home.
• There is no guarantee that your current home will sell quickly. How long can you afford to pay mortgages on two homes?
• A bridge loan is usually more expensive than other types of loans. Consider other types of financing (do you have an equity line of credit available, for example?)
• A bridge loan may be available with stated income under the new Reg Z guidelines as of October 1, 2009.

I have found that many people that many people do not understand how mortgage rates get locked here in Burlingame, California, and in many other areas.

As a mortgage broker, I receive mortgage rates from our lending partners every day (sometimes more than once, but that is a story for another post). Each lender has the mortgage rates for each of their programs (30 year fixed, 15 year fixed, etc.) published on a ratesheet. 

Most people realize that there are many mortgage rates for each loan program. What they do not realize is that the points charged for the mortgage rates offered vary by the rate lock period.

Many lenders base the points charged in 15 day increments. Let's look at an example of mortgage rates for a 30 year fixed rate (these rates are for illustration purposes only, not truly a reflection of current mortgage rates).

Rate        15 Day     30 Day     45 Day     60 Day

8.00%        1.00      1.25          1.50        1.75

In this example, the 8% mortgage rate would cost a borrower 1 point for a 15 day lock, 1.25 points for a 30 day lock, 1.50 points for a 45 day lock, and 1.75 points for a 60 day lock.

This example raises two questions about mortgage rates for a homeowner or homebuyer: first, why would I lock for any longer than 15 days since the 15 day lock is cheaper than any of the other lock periods? Second, what needs to happen in order to get the 15 day rate lock?

Let's answer the first question - there are two reasons why mortgage rates should be locked in longer than 15 days. The first reason is because mortgage transactions typically take longer than 15 days. Refinances are harder to close faster than purchases because of the requirement that the borrower has three business days after signing the final loan documents to rescind the transaction. Purchases do not have this requirement. 

The second reason why mortgage rates should be locked in longer than 15 days is because it is protection for the homeowner or home buyer in a rising interest rate environment. Most of my clients are happy to pay a little bit more by locking in for 30 days or 45 days to guarantee they will get the mortgage rates they have been offered, provided their application is approved.

Let's answer the second question - what needs to happen to get a 15 day rate lock? The answer to this question is to work as a team with your mortgage broker.

Mortgage rates are volatile - we often have our lenders update their mortgage rates two or three times per day. Your mortgage broker should use a rate alert service in order to stay on top of the daily activity in the mortgage market. If there is a rate change he should be alerting you about the change. 

The mortgage applicant needs to do his part also in order to get the 15 day rate lock. Documentation needs to be completed in full. Most of our lending partners will not lock mortgage rates until the loan application has been approved, and all conditions for closing have been signed off by the underwriter. As you can see, speed, cooperation and teamwork is required by the applicant and mortgage broker.

Here is a strategy I advocate to get the 15 day rate lock in a declining rate environment. Let your mortgage broker know what mortgage rate and point structure you would like to target. When the mortgage rates are within .25% of your target, get your documentation submitted to your mortgage broker and try to get it approved ASAP. With an approval you can just wait until the rate targeted hits. Again, this takes great cooperation and communication

with the client and the mortgage broker. I have used this strategy with my clients here in Burlingame, California, with excellent success. 

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Are you interested in mortgage refinancing in Burlingame CA?  I have great news! Mortgage refinancing can now be customized to closely match the term of your current mortgage. 

You may not want a mortgage refinancing because you are thinking "Oh great, I have been paying on my 30 year mortgage for three years, now I am going to start over with a new 30 year mortgage!" You don't want to start over. You don't want to turn back the clock.

Here is the new mortgage refinancing solution for this problem: customized loan terms. Let's look at an example.

Suppose you have paid on your 30 year mortgage for three years, as above. You notice that interest rates are less than what you are paying on your current mortgage, so you are contemplating a mortgage refinancing. Instead of obtaining a 30 year mortgage, you are now able to customize the terms to a 27 year mortgage!

By customizing the terms with your mortgage refinancing, you do not have to turn back the clock! You can stay on the same amortization schedule to get your mortgage paid off.

The rates for this type of mortgage refinancing are determined by rounding up to the nearest published amortization term. In this example, the rates for a 30 year mortgage would be used for a 27 year mortgage.

Suppose you are 53 years old, and you would like to retire at age 65. You could apply for a 12 year mortgage refinancing to have your home paid off at the time of retirement. In this example, rates for a 15 year mortgage would be used because this term is the closest higher amortization term.

Customized mortgage terms are available with amortizations from 10 years to 29 years. Conforming loans and agency jumbo loans (loan amounts up to $729,750 for single family residences in certain counties) are available for customized mortgage refinancing solutions. Properties can be located not only in Burlingame Ca, but also in all parts of California.

Would you like to calculate your customized mortgage payment? Look over to the right under my picture and figure out what your payment will be with a mortgage refinancing.

Do you want to find out the current rates? Contact Me

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As a loan officer in California I specialize in the jumbo loan market. I have been encouraged recently by the re-appearance of some lenders (Suntrust, Citimortgage) into the jumbo loan space. Despite the increased competition, it is still very difficult to obtain a jumbo loan because of the strict underwriting guidelines.

I have done a survey of my jumbo loan sources with the purpose of finding some minimum standards required in each area of underwriting. Here is what I have found:

Stated income is virtually non-existent. However, I have one jumbo loan lender that will do stated income for large loan amounts. I wrote this blog post about the program.

The maximum loan-to-value percentage is 80%. In my area the maximum agency loan for a single family residential is $729,750. If you need to borrow more than this amount, you are limited to 80% of the property value. 

The maximum combined loan-to-value percentage for a jumbo loan is also 80%. By combined loan-to-value percentage I mean the  total amount of a first mortgage and second mortgage added together in comparison to the property value.

The minimum credit score allowed is 650. The score used to qualify is the middle score. If there are two or more borrowers, the lender will use the lowest middle score. The guidelines regarding credit score for a jumbo loan used to allow the lender to use the middle score of the primary wage earner.  

The maximum debt-to-income ratio for a jumbo loan is 50%. This maximum is exclusive to one lender. Most require a debt-to-income ratio of 45% or less. Several are at 40%. Most of the lenders tell us there are no exceptions to these guidelines. 

All loan programs with an interest-only payment option are qualified at the principal and interest payment. This requirement has presented some interesting problems for borrowers who are attempting to refinance their jumbo loan. I have presented quotes to clients in which their payment would go down significantly. However, because the lender requires the principal and interest payment to be used to qualify, they cannot, because the debt-to-income ratio has become too high with a principal and interest payment.

The maximum loan amount is $5,000,000. This maximum for a jumbo loan is not too limiting because there are very few borrowers who would like to borrow more than this amount, even in California. However, most of my lending sources have a maximum loan amount between $1,500,000 and $2,000,000.

The minimum amount of cash reserves is 6 months of PITI. PITI stands for principal, interest, taxes, and insurance. We do have one jumbo loan lending source that does not ask for verification of reserves, however, this is definitely the exception, not the rule.

Most jumbo loan lenders have a maximum amount of cash a borrower can take out - $350,000. However, there are a few lenders that allow more, but they generally are not as competitive with their rates.

A jumbo loan for a second home has a maximum loan-to-value percentage of 75%. Be prepared to prove that it truly is a second home with your tax returns. If income is declared for your second home, it is very difficult to get your loan approved as a second home.