How to Rock “Second Home or Rental Property???”

Mortgage guidelines are positively prehistoric when compared to newer companies like AirBnB and VRBO, which have gained popularity as interest in short-term rentals has increased.

But when it comes to getting a home loan on a property that is not your primary residence, you have to state on your mortgage application whether you have a second (or vacation) home or you have a rental (aka investment) property, and there is no middle ground for a “vacation rental.”  However, there can be real consequences if you get the classification wrong.  

So, let’s rock the distinction between vacation home and investment property because if you work with your lender and you know the rules, you can, just like the Long Cool Woman in a Black Dress, have it all!

Temperature’s startin’ to rise,

Rob Spinosa
SVP 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 

*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.

How to Rock a Family Opportunity Loan

Looking to purchase or refinance a home for your elderly parents who wouldn’t otherwise be able to obtain a mortgage on their own?

Looking to assist a disabled or special needs adult child with housing or his/her own?

Or how about putting a college-bound child into off-campus housing that you decide to purchase?

All of these are both common scenarios and often difficult ones as viewed by the inflexible guidelines in the mortgage industry.  Until now…

The Family Opportunity Mortgage can be a great way to thread the needle of otherwise detrimental occupancy requirements for primary homes, second or vacation homes and investment/rental homes.  And if used in the right situation, the Family Opportunity loan will often permit you to obtain lower rates and lower down payment requirements.

So, let’s get so low in the weeds like sisters Anne and Nancy Wilson of Heart and ambush this beneficial mortgage program today! 

Grateful to know about the Family Opportunity loan?  Give me a like or subscribe on YouTube!

Ooh, barracuda!

Rob Spinosa
SVP 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.

How to Rock Cannabis Income on a Mortgage Application

Fifty years ago, when the Doobie Brothers were flying high and the folks in China Grove were rising for another day, it would have been hard to imagine that marijuana would eventually be legal in some states.  But, not legal in all states and not legal at the Federal level and that means those who work in the marijuana and cannabis industries can see their mortgage opportunities go up in smoke if not aligned with a lender who knows which programs and investors can navigate this relatively new industry.

So let’s take it to the streets and find out just how a homebuyer or homeowner can get a mortgage approval if they are employed in a cannabis business and get income from a business in the cannabis space.

Need some solid advice about mortgages and marijuana and cannabis income?  Give me a like or subscribe on YouTube!

Listen to the music,

Rob Spinosa
SVP 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

*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.

How to Rock Cryptocurrency As Your Down Payment

The mere mention of the words “bitcoin” or “cryptocurrency” or “blockchain” is sure to evoke comments and reactions that will be far-reaching.  There will be the speculators who rolled the dice and came up winners, or who are still white-knuckling their wild ride.  There will be financial technicians who have been forced to grasp how this technology has the potential to disrupt the exchange of currency as we know it.  But more than the reactions of either of these two subsets, you’ll encounter the expressions of the mostly and mildly bewildered.  Because really, when it comes to cryptocurrency, most people are downright confused:

  • About what it is.
  • About how it works.
  • And for us in the real estate world, about whether you can use bitcoin and other digital currencies to buy residential real estate.

So take a quick video tutorial with me on how to rock the use of cryptocurrency as your down payment!

Thinking about rocking the rebel currency on your next home purchase?  Give me a like or subscribe on YouTube!

Ground control to Major Tom,

Rob Spinosa
SVP 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.

Divorce Buyout Refinancing Explained

It’s a sobering fact that nearly 50% of married couples will decide to go their separate ways each year. But what happens when there’s jointly owned real estate involved? And what if that home has a mortgage on it as well? What’s the process for one spouse “buying out” the other and how can any couple best plan for this division?

Obviously, a marital separation is stressful enough.  The short video below aims to make it a little less so, at least when it comes to understanding the home loan options.  Oh, and we rock some Frontiers-era Journey while we’re at it…

Ready to take a journey with us and rock the divorce buyout process?  Please give me a like or subscribe on YouTube!

Break those chains that bind you,

Rob Spinosa
SVP 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.

Is a No Cost Refinance a Free Ride?

Back in the ’70’s, Edgar Winter extolled the virtues of taking a free ride.  But since that time and especially when it comes to transactions in the financial world, most of us have been conditioned to know that nothing’s ever free.

So how does this square with the concept of a “no cost” refinance?  We hear about these all the time and our clients ask for them.  How does the no-cost strategy work and can it offer real benefit in the right situation?  We cover all these timeless questions in this short, fun, rockin’ video:

Decided to take a free ride by my side?  Please give me a like or subscribe on YouTube!

It’s time to begin,

Rob Spinosa
SVP 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

HELOC or Cash Out Refinance?

HELOC-cash-out

As a teenager in the ’80’s, our dilemmas were a little simpler — should I stay or should I go? — for instance.  But today’s homeowner faces some additional complexities, especially when it comes to deciding the best way to finance a home renovation or other large purchase.

Using the equity in one’s home has always been an enticing way to cost-effectively confront large-ticket expenses, but what’s the best way to convert that equity into cash?  Should you get a home equity line of credit (a “HELOC”) or should you do a cash-out refinance?  We get this question so frequently that I created a short video to cover the basics and have a little fun with one of the most iconic punk tunes of the era:

Decided to stay?  Please give me a like or subscribe on YouTube!

Rock the Casbah!

Rob Spinosa
SVP 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

Refinancing a Jumbo Mortgage After a COVID Forbearance

Despite some recent setbacks that see COVID cases increasing, many of us are optimistic that vaccination rates will continue to go up and all of America will eventually commit to getting the worst of the virus behind us once and for all. There is no doubt that as we headed into the summer, we could feel the economy coming back on line and the country getting back to work. Sure the recovery has been uneven, but compared to the uniform bleakness of last summer, there could only be reason for hope this time around.

Not surprisingly, the progress we’re seeing in the general economy has carried over to what we’re seeing in the mortgage industry — many homeowners who took advantage of COVID forbearance and payment deferral plans are now back to work, back on their feet, seeing those arrangements draw to a close and contemplating their best options for long-term, future financing. This happens to coincide with an ongoing low rate environment, and that has opened the door to a refinance for a good percentage of owners. But wait… If a borrower has had a recent forbearance or deferral, and has a jumbo loan, can he or she even refi at all?

The answer is “Yes!” But if you have had a forbearance or deferral plan, you have a jumbo loan and you are out there researching a refinance, you are very likely going to get some conflicting information. A key thing to remember is that not all jumbo lenders are created. Because they are not required to follow the “Agency” guidelines, that is, the rulebook that governs conforming loans as dictated by Fannie Mae and Freddie Mac, jumbo mortgage lenders will have different demands for refinancing post-COVID.  Here’s what we’re seeing for the most lenient of our investors:

Repayment Plan

The homeowner must have completed the full repayment plan or made at least three consecutive timely payments (and not missed any other payments under the program).

Payment Deferral

The homeowner must have made at least three consecutive timely payments following the effective date of the deferral agreement.

Modification Trial Payment Plan

The homeowner must have completed the trial payment plan.

If you are in doubt about whether or not you will meet the requirements above, get in touch and we can figure it out — often without any credit checks or exchange of any other personal documents. From there, if a refinance looks promising, the process is IDENTICAL to the one employed by a borrower who has not gone through any sort of hardship plan. We understand the nature of these inquiries and the place from which they stem. If you need a hand with your scenario, extend yours to us today.

Wash your hands,

Rob Spinosa
SVP 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

It’s Cool to Conform in 2021

If you know me, you know that I don’t like to stick to convention.  I was the teenager who skipped college, moved to Hollywood and played rock guitar.  In my 20’s, I saved up vacation time not for sandy white beaches but instead for expeditions to the harsh mountain environs of the world’s highest peaks.  In my 30’s, I dove (literally) into the sport of triathlon — an endeavor, to quote my Aunt Marge, that would be something she’d “rather die a thousand deaths” before contemplating.  When I come to the fork in the road where straight and narrow diverges from the path less traveled, you can bet your best Yogi Berra’ism that I’m gonna take the latter.  So to write a blog post solely about the increase in conforming loan limits tests my own limits of conformity.  But for once, I am going to go along with the crowd and talk about pending changes coming to the San Francisco Bay Area, and across the state of California, in 2021.

Let’s step back for a minute and recognize that for the entire state (and country), the current conforming loan limit for a single family residence is set at $510,400.  In many of the higher cost, coastal counties of CA, we also have a “jumbo conforming,” “super conforming,” or “high-balance conforming” loan limit that exceeds this limit.  For example, here in my home county of Marin, that limit is presently set at $765,600.  Let’s look at how these will increase in 2021:

2020 Conforming Limit         2021 Conforming Limit

$510,400                                    $548,250

2020 High Balance Limit       2021 High Balance Limit          County

$765,600                                   $822,375                                      Marin

$765,600                                   $822,375                                      Alameda

$765,600                                   $822,375                                      Contra Costa

$672,750                                   $739,450                                      Monterey

$764,750                                   $816,500                                      Napa

$765,600                                   $822,375                                      San Benito

$765,600                                   $822,375                                      San Francisco

$765,600                                   $822,375                                      San Mateo

$765,600                                   $822,375                                      Santa Clara

$765,600                                   $822,375                                      Santa Cruz

$494,500                                   $550,850                                      Solano

$704,950                                   $707,250                                      Sonoma

As of the writing of this post (late November of 2020) we have already begun to implement the higher limits, so if you believe any of these increases will impact your purchase or refinance mortgage, please let me know.  I am a big fan of the higher limits because a conforming loan generally provides an easier qualification compared to a jumbo mortgage, and simply because we have higher home prices in the Bay Area should not be a reason to subject borrowers to a more burdensome loan process.  Yes, I realize that much of the country may not dance to the beat of my drummer.  But even though I don’t conform to their point of view, my idea of conforming is increasing, and that’s a step in the right direction.

We don’t get fooled again, 

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 Do Rate Locks Work?

There is one thing in common among all of our clients.  No matter what price point, no matter what loan size, no matter good credit or bad, no matter first-time buyer or seasoned investor, all are looking for the lowest interest rate at the lowest cost.  But how does a mortgage borrower secure such terms?  A part of the home loan process is “locking an interest rate” and this process could use a bit of explanation, so as to dispel some of the myths and offer a better understanding of how things work.

What Is a Rate Lock?

You’ve done your interest rate shopping and made a decision about working with a mortgage lender/broker.  The time has come to “lock” a rate.  What does this really imply?  A rate lock is a commitment the lender makes to you to preserve a given rate for a specific period of time.  In exchange for this commitment, you, the borrower, are insulated from market risk.  Once your rate is locked, that is (barring a few exceptions) the rate you will obtain for the life of the loan.  With many lenders today, there is no cost to lock a rate, but as you’ll see below, there are implications once a lock is in place.  It is fair to say a rate lock is a commitment on both sides of the transaction, borrower and lender.

Time Is of the Essence

All rate locks exist in finite periods of time and the most common lock periods are 30 days, 45 days and 60 days.  Longer locks will commonly have higher rates or costs associated with them, and this is a function of risk.  The longer a lender commits to preserve a rate, the more the lender is exposed to underlying financial market volatility.  Think of your rate lock in the same light as a life insurance policy.  Purchasing a policy with a longer term will be more expensive because the likelihood of a claim increases for the insurer as the years go by.  

Breaking the Chains

So now that you’ve locked your rate, what happens if your lock expires, or you decide to break the lock, or rates go down?  These are all valid questions and they can all be addressed by the blanket statement that just as in life in general, breaking a commitment in finance has consequences as well.  Some lenders offer enticing “float down” policies and suggest that clients can have it both ways — both locked and floating.  There is always an offset with such approaches because behind the scenes in the mortgage secondary market, rates locks are complex hedges that involve costs and have metrics that impact a bank’s efficiency and cost of providing funds.  All lenders want to have strong “pull through” on locks, and their ability to offer future clients competitive rates depends on this.  All this said, sometimes rates do drop dramatically while a borrower is in process and there is potential for a “renegotiation,” but this is not common and any rate lock should always be perceived, first and foremost, as a “for better or worse” proposition.  Finally, transactions that run longer than their lock periods are faced with extension costs, which are best avoided.  Borrowers should know that they cannot deliberately exhaust a rate lock in the hopes of capturing a new, lower rate with the same lender.  In those cases there is often a 30-day “freeze” where a new lock would be subject to “worst case” pricing.

Locking your interest rate on a mortgage is an important decision and an important commitment.  A good lender can help you navigate the nuances of the choices before you.  Fundamentally, one locks a rate to prevent the risk that rates will go higher while in the process of purchasing or refinancing a home.  What we see, in practice, is that deliberate action tends to relieve stress and assure a better outcome.  “Floating” a rate for better is always tempting because as we agree, everyone is enticed by the idea of lower rates and lower costs.  But remember, temptation can lead to unecessary risk and risk is what a rate lock strives to address by tamping down market volatility and containing aspects of your process that you don’t control.  Understanding how a rate lock works and formulating your own plan on locking is a smart move, and we’re here to help you with it.  

Lock ’em and doc ’em,

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