How Hard Is It to Refinance a Mortgage?

On a weekend morning you wake up:

A)  Before 6AM.

B)  Before 8AM.

C)  Before 10AM.

D)  Yeah, yeah, I’m awake…

It’s time to take out the trash when:

A)  Pickup is the following day.

B)  The level of trash is approaching the top of the trash can.

B)  The level of trash has crossed the plane of the top of the trash can.

C)  Expert levels of jenga skill are required to balance your trash on the top of the steaming heap.

If you answered “D” to either of the above, and you have a mortgage in California, this blog post is dedicated to you.  You may be sitting on a pile of savings but are also concerned that refinancing your home loan may be too difficult or expensive, require tons of paperwork and inconvenience and may even end up in failure.  So let’s get serious about how to refinance your home here in 2020, even when the COVID-19 pandemic shows little signs of disappearing like a miracle.

What’s Involved?

If your only experience with the home finance process was getting a loan when you bought your home, you should find that the refinance process is far less stressful.  This is because you don’t have the ominous deadline requirements imposed by a purchase contract.  Time’s still of the essence — your rate lock is only valid for a specific period of time, but unlike with a purchase, if you run late, your earnest money deposit is not a risk.  I’ll generally ask a refinance prospect to send me a copy of a current mortgage statement and with that, I’ll do a complete analysis to determine if it even makes sense to refi.  This work up is free and has zero obligation.  If it makes sense to proceed, we’ll have a client fill out a digital mortgage application (if that is convenient) and then we’ll request the usual suspects as far as documentation is concerned; paystubs, bank statements and tax returns.  Often, the list is very manageable because we strive to reduce paperwork and variables at every turn.  We may even learn at this stage that the transaction does not require an appraisal.

What Does It Cost?

A typical refinance for a loan size ranging from $250,000 to $1,250,000 will usually cost between $3000 and $5000.  Sure there are ways to make these costs significantly higher or lower, but when you factor in the fundamentals; lender fees, title/escrow fees, prepaid interest, insurance, appraisal, etc., this is a reliable range for a “no point” refinance.  If an appraisal is required, it’s usually the only fee paid “up front.”  Most refinances will “roll” the closing costs into the new loan balance as well, and this prevents the borrower from having to write a check at close of escrow.  One can also choose to do a “no cost refinance” but the best fit for any client is always a math equation of financial objectives and available savings.  We are happy to help with this discussion.

How Do I Start?

Kicking off a conversation about a refinance involves no cost or obligation.  If you think you may have an opportunity to lower your rate, lower your payment, lower your interest payments over time, get cash out of your home or consolidate higher interest rate debt, get in touch.  It can’t hurt to learn about the options, but it can often help to act on them. Especially in the current, and historic low, interest rate environment.

You snooze you lose,

 

Rob Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960
Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

The New Abnormal

We’ve just turned the corner from March to April, but here in the San Francisco Bay Area, we are still sheltered in place (SIP).  Everybody in our home is making adjustments to our new abnormal and it’s a good lesson for today’s homeowner too.  We may not be able to move around or go out, but can we hunker down and tweak our financial situation so that it better positions us to weather the next few months?

First, a little perspective.  Even if the health implications of the pandemic miraculously prove to be short-lived, my sense is that the economic ripples will reverberate well beyond that timeline.  Why?  Because in finance we tend to see credit capacity build slowly and steadily, but evaporate suddenly and even violently.  Even though we are in the early innings of dealing with COVID-19, much of the mortgage industry has seen significant pullback in loan options for the consumer.  Among them:

  1. The all-but-complete disappearance of non-QM loan product (bank statement programs, asset-depletion mortgages).
  2. The tightening of guidelines on jumbo and portfolio loans (lower loan-to-values, restrictions to cash out).
  3. Higher rates on riskier loan options.

This is the underlying market’s way of saying that it feels it’s time to be more conservative, trim expenses and reduce risk exposure.  As consumers, it might be beneficial to follow that lead.

So how do we accomplish our own rebalancing of risk and expense when we’re homeowners?  The primary way we’ll see our clients do this is through a refinance.  Of course, if you already have a low, fixed-rate loan, you may be set.  But some of our clients who may have previously not been excited by saving $150, $250 or even $350 per month are now suddenly looking at the prospect of reduced work hours or possibly unemployment of one of the working spouses.  Viewed in this light, any savings can take on new urgency.  And of course, I am never one to advocate for refinancing a loan for short-term benefit while not considering the long-term implications, but current circumstances do, we must admit, change this paradigm.  Everybody must first navigate the present’s choppy waters in order to sail into the safe harbor of a better future.

Home equity lines of credit (HELOCs) are another strategy the savvy will use.  Remember, a HELOC has no payment if you don’t draw against it.  Some homeowners keep a home equity loan as a safety net.  Some take a new line so they have a source of capital during a downturn and a way to make an investment that other, cash-strapped buyers cannot.  Sure, there is risk, but how many people do you know who say they wished they had bought at the bottom of the last crash?  Let me let you in on a secret.  There are two reasons they didn’t; first, they didn’t have the resources to do it.  Second, they were scared, like everybody else.

Make no mistake about the COVID-19 pandemic — this is wildly unfamiliar terrain for everybody.  It’s also our new, daily existence for some time.  We can hope and wish and pray it will blow over soon, and like you, I’m optimistic it will.  But in the meanwhile, I am taking financial matters into my own hands and advising my clients to do the same.  Some of the old rules don’t apply here and even the ones that do must be viewed in the light of our new abnormal.

Stay weird,

Robert J. Spinosa
Vice President of Mortgage Lending

Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

 

Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960

Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

How a Refinance Can Drive Down Your Monthly Expenses

While all real estate may be local, so too is it true that one homeowner, confronted with the opportunity to save $250 per month through refinancing, for example, may view that as a significant financial relief while another may feel it’s not even worth it to get off the couch to consider going through the hassle of the loan process. As we work into the second half of 2019, there is no mistake that the low rate environment we are enjoying again is providing opportunities for homeowners to refinance. Often in these cases, having an open mind about any level of savings can help us determine whether or not a refi is “worth it.”  Here in the San Francisco Bay Area, if we take an average loan size and make some assumptions on monthly savings through a refinance at today’s rates, we see that it’s not unreasonable to think that our clients can save between $150 and $350 per month. When you look at this in relation to the most significant household budget expenses; auto loans, student loans and credit car payments, it’s easy to see why a careful review is a great idea. Need more proof?

  • As of 2018, it is estimated that 44% of American adults have a car payment. On average these individuals owe over $30K on their auto loan and they pay over $500 per month on their payment. Interest rates vary but with an average FICO score of 695, you can bet your bottom dollar that some of these merry motorists are not enjoying 1% interest rates on their auto debt. It’s possible today’s refinance could cut your auto payment in half — or at least that’s the way it would feel until the car is paid off.
  • The average student graduates (or not…) college with about $25,000 in student loan debt. It’s estimated that the payment on this would hover around $280 per month. Owning a home is a big financial responsibility. Owning it alongside student loan debt can turn it into a financial burden that refinancing might ease.
  • Depending on what stats you review, it’s estimated that the average American carries between $4000 and $7000 per month in credit card balances that roll from month to month. And you can be sure that as this revolving debt ages, the interest rate on it does not suddenly get better. To break this cycle, a refinance can provide needed monthly budget space to slash the credit card balances and get off the minimum payment treadmill.

Bear in mind that in each case above, I am not advocating that our clients take on more debt! We are not suggesting that they do a cash-out refinance and pay off these other obligations. That may prove to be a good strategy and might warrant further examination. But even in cases where a borrower simply does a “rate and term” refinance and lowers the rate and payment on an existing mortgage, the savings that result can go a long way to comprehensively addressing the other components of any household budget.

We’re here to help when you’re ready to look under the hood, roll up your sleeves and do the work.

My uncle has a country place, 

 

Robert J. Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

Jumbo Mortgage with an H-4 Visa

“I pledge my head to clearer thinking,

my heart to greater loyalty,

my hands to larger service,

and my health to better living,

for my club, my community,

my country and my world.”

Hold on a second! That’s the pledge for 4-H Club, Rob, and you’re supposed to be discussing the H-4 visa here. You’ve got it backwards. Ah yes….sorry about that.

The H-4 visa. This is a visa issued by the U.S. Citizenship and Immigration Services (USCIS) to immediate family members of H-1B visa holders. These individuals are not US citizens or permanent resident aliens (green card holders) but “non-permanent resident aliens.” Make special note that they are also not “foreign nationals” or “non-residents.” That aside, it is not uncommon for us to get a call from H-1B/H-4 holders who have attempted to qualify for a home loan and been told by their lender that the income from the H-4 holder cannot be considered. Naturally a married couple purchasing a home would plan to use the combined household income and often they’ve used online tools and calculators to determine their debt-to-income (DTI) ratio in this manner. However, the vast majority of lenders will not permit the income of the H-4 holder and when the spouse’s income is removed from the loan application, often a denied loan is the result. But there is hope and we do have jumbo mortgage programs that will allow H-4 income.  These programs will also allow for a 10% down payment up to purchase prices approaching $2MM.

Here in California, we will accept the income of both the H-1B and H-4 visa holder assuming, in addition to other requirements, we have the items below:

  1. Social security numbers for both borrowers.
  2. At least two years of filed tax returns in the United States.
  3. At least two years of US credit history and acceptable FICO scores.

Aside from the H-1B and H-4 visa, I am no stranger to the other types of non-permanent resident alien visas that we commonly see here in California, and they include; E-1 and E-2 visas, the L-1A and L-1B, the L2 and others. If you’re unsure if your visa type is eligible for mortgage financing, please get in touch any time.

To make the best better,

 

Rob Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

Lock Watch for the Week of 3/11/2019

Volatility-O-Meter:

A lot of key reports this week and on the heels of the real dud of a jobs number Friday. Could this be an inflection point? We’ll see. Oh, and let’s not forget auctions too.

Economicalendar (all times are Pacific):

  • Mon, 3/11:   Retail Sales (5:30am), Business Inventories (7am), 3-Yr Note Auction (10am).
  • Tues, 3/12:   CPI (5:30am), 10-Yr Note Auction (10am).
  • Weds, 3/13:   Durable Goods and PPI (5:30am), Construction Spending (7am), 30-Yr Bond Auction (10am).
  • Thurs, 3/14:  Jobless Claims and Import/Export Prices (5:30am), New Home Sales (7am). Fed Balance Sheet (1:30pm).
  • Fri, 3/15:    Empire State Mfg Survey (5:30am), Industrial Production (6:15am), Consumer Sentiment and JOLTS (7am).

10-Year Treasury History

  • 2.64%   Market Open
  • 2.74%   One Week Ago
  • 2.63%   One Month Ago
  • 2.87%   One Year Ago

(Need a rate quote for your specific scenario? Click anywhere on this link.)

Marin Ultra Challenge 50K

The weather forecast called for 100% chance of rain. High of 52F, low of 39. A great day to tackle another ultramarathon and my second 50K (31 miles in name, closer to 29 by way of my Garmin), right? The Inside Trail Marin Ultra Challenge started at 6:30am at my favorite House of Horrors, Rodeo Beach. This time, the course would be different than last month’s Coastal Trails 50K, but employ many of the same trails, ascents and descents. Combined again with the muddy conditions, it was shaping up to be one of those days where you would be wise to live by the motto, “Don’t think, just do.”

So up we climbed out of the staging area. Oh, and lest I not be grateful, it was not pouring rain while we waited to get underway. The first miles of an ultra should always be uneventful and traversing Gerbode Valley, I kept my pace in check and focused on not repeating the epic fade that defined last month’s race. At the first aid station, some 5 miles in at Conzelman, I felt zero strain. I pressed on to the Tennessee Valley aid station at mile 10 using the same cautious, at times even absurdly slow, approach. The climb out of Tennessee and down to Pirate’s Cove was also very conservative and the trail here was treacherously slippery. Too early to make mistakes, fall or otherwise get discouraged. As the skies opened I was mostly thinking about my son’s Junior Warriors basketball that I would be missing, and that would be getting underway shortly.

Out of the Cove, we climbed up to the ridge above Muir Beach and then descended to the aid station there. At this point, none of us were protecting our feet any longer. There were too many puddles, too few firm patches of trail and one simply resigns to having their feet soaked. At Muir, we started an out/back on Dias Ridge and were greeted with the day’s worst weather; cold, dark, rainy, ridiculous.

Returning to the Muir Beach aid station, my mindset shifted to the two key climbs required to get me home. First, to ascend out of Muir valley, then once back in Tennessee, to go up and out of there, gain Hill 88 and downhill to the finish. It would work out to be almost another two hours of running and despite the mud at Green Gulch, there was some promise of sun, and it was a promise fulfilled upon gaining the top of the last ridge.

At about this point, I realized I might make a time goal that seemed improbable at the start but within the grasp of reality assuming a strong push and no mistakes. That was a mixed blessing because now I had to work hard and not let up. I would have much rather cruised home while taking in the sweeping coastal vista, but instead I downed another caffeinated energy gel and gave it a go.

I learned a lot last month about what not to do in a 50K. I can be pretty hard-headed, but since I don’t have time to train very much and because I’m playing with fire every time I suit up to run long distance these days, I figured it was a safe bet to apply those new skills and, for the most part, it worked. I felt pretty good upon finishing, got into dry clothes and hung around to cheer others in. Oh, and though still brisk at the beach, the sun smiled and capped a really solid day in the saddle. Next stop, twice the distance, but that’s a bit off and not something to think about right now.

It keeps you runnin’,

 

Robert J. Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

I Got Another Rate Quote. Can You Beat It?

Talk may be cheap, but money is not. And you can bet your bottom dollar that most consumers seeking to get a mortgage will shop for the best rate quotes through any number of ways; their local bank, the internet, etc. We will often get requests to match or beat rate quotes as a result. Instead of publishing rates and promising that we’re the cheapest and best source for all rate shoppers, which is something that is frowned upon by the regulators of our industry, I instead want to shed some light on some of the governing principles that guide rate quotes from any and all lending sources. Below are three constants that apply in each case and to all shoppers for all programs.

[Too lazy to read the rest? Watch the rockin’ video below for all the information covered in this blog!]

Follow the Regs

With the passage of the Dodd-Frank Wall Street Financial Reform Act, the mortgage industry became subjected to the ‘anti-steering provision’ which prevents a mortgage loan originator from earning any more or less in commission depending on the rate charged to the consumer. In short, whether we provide you with a 3%, a 4% or a 5% rate, our compensation is the same. We have no incentive to put you into a program with a higher rate. In fact, you could argue that we have an incentive not to do this. After all, lower rates give an edge in winning rate competition and they bestow more qualifying power on the borrower. But there is an ugly side to the anti-steering provision — the lender’s inability to leverage their compensation to be more competitive. For example, prior to Dodd-Frank, originators had flexibility with their commission. If they needed to cut it in order to win a deal, they could. But now, our regulators say that if we had the ability to charge less to Consumer A, who does a lot of homework and negotiates strongly, what would prevent us from raising our compensation on unsuspecting Consumer B? The ability for us to negotiate is largely a thing of the past. Sure, we can submit for price exceptions on occasion, but they are just that — the exception. And the rule severely limits a lender’s ability to match or beat.

Time Is of the Essence

In real estate, we write “time is of the essence” into our contracts and this philosophy holds true with rates too. Just like the stock and bond markets, rates fluctuate every day and sometimes even multiple times when the markets are especially volatile. So it is vitally important that consumers shop for rates on the same day. A common scenario we see will have a borrower apply for a home loan in, say, January. Maybe they will get all the way to the altar with a pre-approval but then not find a property. During that process, the lender likely quotes a specific rate. Now, fast forward a few months and the borrower is working with a different lender and gets a quote that is higher or lower. This does not necessarily mean that the second lender’s rates are organically any better or worse. It might simply mean that the market has changed during the interim. So, collect your rate quotes on the same day if you’re comparing multiple sources. It may be time-consuming but it’s the only way you can truly be accurate.

The WebMD Syndrome

Lastly, when pitting one source of rates against another, make sure they’re all on equal footing in terms of the depth of the quote. Look at it this way. If you wake up one morning with a rash, you can research your symptoms online and get an idea of your condition. Or you can actually visit your doctor who will do a physical exam, perhaps blood work and then give you a diagnosis. Now you have a choice, you can follow the instruction of the doctor or of the internet. You see where I’m going with this. So too in the field of rate quotes, if you have had a lender pull your credit, review your complete application and provide terms for your loan, placing this on equal footing with an online quote could be risky. Rate quotes for jumbo mortgages are most sensitive to the finer qualifying attributes of the applicant and for this reason, I highly advise those in the jumbo market to get a complete credit approval prior to comparing rates.

I have always believed that an educated and informed consumer is our best client. And this applies to rate shopping as well. I similarly feel we always have a very strong chance of earning business based on available rates so long as quotes are on a level playing field, and getting the shopping public up to speed on this is something I’m very happy to do. If we can help you with your next home mortgage, let me know!

No one wants to be defeated, 

 

Robert J. Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

Jumbo Mortgage for the Self-Employed

One thing of which our industry does a terrible job is promoting a sense of optimism among the self-employed.  Whether the one-man-band sole proprietor, or the complex, greater-than-25% owner of a multi-million dollar S-Corp, this long-suffering subset of the borrowing population has traditionally experienced stiff headwind in the mortgage process because the objectives of running one’s own business frequently fly in the face of what it takes to qualify for a jumbo mortgage.  There are a combination of reasons why this has been the case and we’re going to look at those here, along with what the self-employed borrower and business owner can do to stack the deck in his/her favor when it comes to qualifying for any mortgage, but especially one that exceeds the conforming and FHA loan limits.

Choose Your Lender Wisely

I realize the temptation to seek a mortgage at the institution where you have your business checking account may be great, but don’t let convenience trump expertise.  As an industry insider, I can tell you right now that I have known MANY colleagues who cannot decipher a business tax return.  Simply, you very well could find yourself working with a mortgage loan originator who does not know how to accurately calculate your income and give you the benefit of every qualifiable dollar.  Of course, many of the self-employed write off as many expenses as possible in an effort to limit their tax exposure.  But beyond this truth, loan officers who do not know how to distinguish between sole proprietorships, partnerships, S-corps and corporations and the documents each require are definitely going to struggle to give the buyer/borrower the benefit of the qualifying doubt.  This becomes even more evident when jumbo mortgage financing is at stake because here, nuances in how income is qualified will be investor specific and often single-entity retail banks will not have the flexibility to qualify the maximum percentage of all buyers — their guidelines simply do not accommodate enough scenarios.  Inexperienced, uninformed and even lazy loan officers can work at some of the largest banks in the nation.  Don’t let the name and the convenience of your checking account’s home fool you.

Understand the Alternatives

At the end of the long, hard workday, some of the self-employed may simply have a really tough profile, one that doesn’t fit neatly into the standard credit box.  For them, a loan originator needs to be well-versed in programs that perhaps allow bank statement or asset-backed qualifying parameters.  While these are not the stated income loans of yesteryear, some of them compare very favorably to “A paper” options and often we find that these loans are a viable alternative.  Once we stop trying to put a square peg into a round hole, the self employed borrower begins to realize how much more in-step these programs are with the way they actually run their business.  For some of these options, no tax returns are required.  And for a partner who may have many K-1 forms, you can imagine the relief they sense when we actually make the documentation process easier rather than the opposite.

Running a business is challenging enough for the self-employed owner.  Getting a mortgage should not be equally as difficult and understanding the lending environment goes a long way towards fostering success.  As a mortgage lender who is fluent in self-employed business entity types, and who has access to an independent mortgage banking platform that provides many options to the business owner, I want business owners to know that they should indeed be optimistic when they go to qualify for a home loan.  Loan agents like me are out there and we want to help.  Let me know if I can be of service today.

Takin’ what they’re givin’, 

Robert J. Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960
Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

Lock Watch for the Week of 2/11/2019

Volatility-O-Meter:

Amid a backdrop of economic slowdown abroad, the US kicks off the week quietly but then things ought to heat up. And let’s not forget the threat of another government shutdown (Nightmare on Elm St. Part II).

Economicalendar (all times are Pacific):

  • Mon, 2/11:   Quiet.
  • Tues, 2/12:   JOLTS (7am).
  • Weds, 2/13:   CPI (5:30am). Treasury Budget (11am).
  • Thurs, 2/14:  Jobless Claims, PPI, Retail Sales (5:30am). Business Inventories (10am).
  • Fri, 2/15:    Empire State Mfg Survey and Import/Export Prices (5:30am). Consumer Sentiment (7am).

10-Year Treasury History

  • 2.66%   Market Open
  • 2.72%   One Week Ago
  • 2.71%   One Month Ago
  • 2.86%   One Year Ago

Coastal Trails Golden Gate 50K

On Saturday I ran my first “ultramarathon.” The Coastal Trails Golden Gate 50K (that’s 31 miles for us non-metric folk and 33.6 miles for us looking-at-my-Garmin-Fenix5-running-watch-stats folks) was, to cut to the ‘being chased’, a tale of suffering the likes of which I have not felt in some time. Even though I would consider myself a “seasoned” endurance athlete as a result of 14 Ironman triathlon finishes and countless other long distance competitions, not much could have prepared me for the exquisite combination of distance, climbs and descents, cold rain and mud that I experienced on this glorious day. Now, granted, hardcore ultramarathoners will consider my journey here, and 50K itself, a dance among the daffodils, but when career and parenting conspire to allow you to run only 15 to 20 miles a week in training, giving a fat 30 miles a go elevates the term ‘Weekend Warrior’ to a whole ‘nother level.

Anyway, let’s get dirty. The race started at Rodeo Beach and despite the rainy forecast, the day could only muster breaking clear and cold. From sea level, there is nowhere to go but up and that’s exactly what we did, climbing the Coastal Trail past Battery Townsley and up over the ridge to then descend into Tennessee Valley — another awesome place for a nice hike. But again, today was not that day. From TV, we headed up the Fox Trail and then descended into the Pirate’s Cove loop, which is Marin coastal scenery at its best. The weather held nicely and the muddy, uneven steps out of the loop were manageable. By the time we were back on the valley floor we were about 10 miles into our day and ready to tackle the long, steady Marincello ascent towards Wolfback Ridge. I was hanging in on the descent to the Golden Gate Bridge but somewhere along the subsequent climb alongside Conzelman Road I started to feel the fatigue of 16+ miles setting in. But still, not even halfway there.

The Persians have a saying, “The drowning man is not disturbed by the rain,” and oh, did this prove to be true. On the long descent back to Rodeo Beach, the rain set in, the skies grew dark and it got cold. The two, short and steep insulting stretches along the Coastal Trail at the bottom of the descent were mud-choked runnels of Slip-and-Slide fun. And so it was that I returned to the start area again and headed back up the hill for loop two. But not after a very kind volunteer helped me pull a fleece hat out of my running vest and send me off with words of encouragement. One thing I learned while racing long ago? Don’t linger at transition points that come through any start/finish area. The temptation to bail is too great and it makes succumbing to such temptation much easier. In fact, don’t even look at the festivities. Keep moving.

I somehow managed to top out without too much pain. I even descended consistently and with gratitude, as for this loop we did not need to retrace the Pirate’s Cove section. Instead, we turned right back up Marincello and repeated the half marathon loop. It was on that descent that I realized my training-deficient legs had the endurance to run only about 24 miles and that the remainder of this day, if I was to complete it, would be a mixed bag of hiking the ascents quickly, running downhill gingerly on my shattered quads and then playing a game of mental poker comprised of the phantasmogoric next hands of psychological milestones I could soon reach before throwing in the proverbial sponge.

Just shy of 6 hours, I brought her in. My wife and son were there in the rain to greet me. Despite the self-inflicted hardships and what the author of this post might otherwise have you believe, this was a profoundly moving experience. And it was also an important step on the path to a larger goal. Like most such endeavors, it didn’t go exactly to plan and it was way bigger than myself. Part of what excites me now is the prospect of figuring out how to do it better. What seems daunting at this moment, will be the skill and ability I will possess later. And I will be better for having stuck with it.

Get there when you get there,

 

Robert J. Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

Am I Too Old to Get a 30-Year Mortgage?

Does your job ever, from time to time, force you to provide the answer to what you feel is a simple and obvious question? Do you feel a twinge of embarrassment at your inability to contain slight laughter upon responding?

If you can relate to this situation, I want to confess that I have, on more than one occasion, spoken with a mortgage prospect who, shall we say, would be “of retirement age.” This person will ask, “Am I too old to get a mortgage?” The logic, of course, is that if the likelihood the mortgage term would exceed life expectancy, there’s no way the bank would want to take the credit risk. Makes sense, right?

This is incorrect.  We may not exercise age discrimination in lending. So long as the borrower is not a minor and otherwise has legal capacity to make important decisions, then the qualifying criteria such as income, assets and credit, are the same for the 91-year old borrower as the 31-year old.

As I write this in 2018, what’s interesting to note is that the Greatest Generation, a demographic that generally hated debt to start, is often the same that has the belief that their age prevents them from perhaps getting the loan they need for any number of reasons. The aversion to debt and the assumption that no lender would take the age-related risk often prevent so much as inquiry being made about feasibility. Hopefully, this post will confirm that we’re happy to help — even if you should survive to 105.

Carpe diem,
Robert J. Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960

Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

Closing in the Name Of

There will be no profanity in this post, just in case you get the cultural reference in the title. I won’t even repeatedly scream at you. Instead we’re going to cover a topic that sidesteps injustice, drama or even frequent occurrence, but it deals with a scenario that comes up occasionally and when it does, there is quite a bit we should know before taking action. So let’s talk about closing a residential real estate transaction in the name of an LLC or other business entity, like a partnership or a corporation. Can you do that? What’s different and where does one start the process?

[Too lazy to read the rest? Watch the video instead!]

Guarantee, Guarantor, Guarantas

The first two words above, anyway, are the key concept here. It is indeed possible for a one- to four-unit residential property to be closed or vested in the name of a business entity, but when this happens, essentially what’s transpiring on the lending side is that one or more of the business owners are using their personal income, asset and credit profile to guarantee the loan on behalf of the entity. So, in essence, the “borrower” becomes a “guarantor.” Again, critical to grasp the concept that the business itself is not the borrower(s). If that were the case, we’d be talking about a commercial loan and not a residential mortgage, as here.

Wage Against the Machine

Consistent with a traditional mortgage for a traditional borrower with a traditional credit profile, our business entity borrower will have to provide an additional layer of documentation pertaining to the business itself. When vesting or closing in the name of an LLC, partnership or corporation, the owners of the business, if not the same as the borrowers/guarantors for our loan, will need to provide articles of incorporation, partnership agreements and other forms and questionnaires to support that the owners are all aware that a mortgage is being taken on the subject property. Perhaps most importantly, when seeking to obtain a loan in the name of a business entity, expectations need to be set up front to assure that the “borrowers” as well as the other majority owners in the business understand what will be involved.

So yes, we can close in an LLC. We can close in a partnership or corporation too. But we have to view things differently from Day 1 in order to get it right and our clients must understand what will be expected of them and their co-owners. With the new tax laws and with an increasing number of real estate investors holding their properties in an entity for both legal and tax purposes, closing in an LLC or other entity is becoming more common. If you have questions about how to efficiently get a mortgage in the name of such an entity, let me know how I can assist.

Some of those that work forces, 

 

Robert J. Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959
rob.spinosa@rate.com

Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960

Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283