Understanding Mortgage Loan Terms

There are so many different terms and phrases when it comes to buying a home. I want to simplify this process for you and help you understand the different terms that come with the home-buying process.

Here is a glossary of mortgage loan terms.

 Adjustable Rate Mortgage (ARM)

An Adjustable Rate Mortgage, or ARM, is a mortgage that offers a low introductory fixed rate term, typically for 5, 7, or 10 years. During the initial fixed period, the interest rates are generally lower than with a 30-year fixed mortgage. This means lower monthly payments for those first 5, 7, or 10 years.

After the initial period is over, the adjustable period follows for the remainder of the 30-year term. During the adjustment period the interest rates can adjust up or down, depending on the financial index it is attached to.

Fixed Rate

With a fixed rate loan, it doesn’t matter what is happening in the market. If interest rates begin fluctuating, your rates will remain steady and sure. Nobody knows what the future holds, but with a fixed rate mortgage you can have the peace of mind that nothing will cause your rates and payments to rise. 

A fixed rate mortgage is the most popular loan program chosen by homeowners. If you are one of the many homeowners who desires a stable monthly interest rate and payment over the life of your loan, then a fixed rate could be the loan for you. 

FHA

FHA loans are insured by the Federal Housing Administration, and with the government guarantee, lenders are more willing to lend with more lenient guidelines. With more lenient qualifying guidelines, FHA loans make homeownership more accessible to more people.

First Time Buyers can often benefit from the more lax guidelines of a FHA loan, including a lower down payment. Typical down payments can range between 10% - 20%, but with a FHA loan the down payment can be as low as 3.5%. This lower down payment can even be provided to you from a family member as a gift fund. FHA loans require mortgage insurance due to the low down payment. 

VA

A VA loan is insured by the U.S. Department of Veterans Affairs and issued by VA approved lenders. This government guaranteed loan encourages these approved lenders to lend with more flexible and lenient qualifying guidelines.

VA loans offer unmatched benefits to veterans, active duty, and surviving spouses. Benefits of a VA loan include 100% financing available, no mortgage insurance requirement, financing up to 100%, and funding fee may be financed.

Interest Only

An interest only loan allows you to pay only the full monthly interest due on your loan for the fixed period of the loan, which can range from 5 to 10 years. During the fixed payment period, you’re required to make only the interest payments while the principal remains unchanged. When the fixed period expires, you begin paying on the principal, too, resulting in an increased mortgage payment. 

Jumbo Loan

When the home of your dreams is in an extremely desirable higher priced real estate market, or your growing family demands a larger home, a Jumbo loan may be right for you.

Jumbo loans are also considered non-conforming loans because they exceed the conforming loan limit which ranges from $417,000-$625,000 depending on geographic area. Since some counties may vary in conforming loan limits, our experienced advisors will help you decide if your loan amount fits into the limits, or if a Jumbo loan is the right option for you.

Interest rates on Jumbo loans can be higher, due to the increased risk associated with larger loan amounts, and because the loans cannot be sold to Freddie Mac or Fannie Mae on the secondary market. Some borrowers may choose to pay a larger down payment to get their loan size below the conforming limit. Other borrowers are comfortable paying a higher monthly payment instead of putting the additional money down. For these borrowers with higher monthly income but less available savings, a Jumbo loan could be the right fit.

 USDA

USDA loans are government insured 100% purchase loans for rural property outside of major metropolitan areas. USDA loans are serviced by direct lenders that meet federal guidelines. USDA loans offer unique benefits, including no down payment requirements for buyers. If you live outside of a major metropolitan area, then you may qualify for a USDA loan.

Now that you have some of the basic terminology down, give me a call today (818) 263-7467 to find the loan type that is right for you, or for more great information go to my website; apmortgage.com/davidparker or get a loan quote today at APMortgage free loan quote . I understand the ins and outs of the different loan types and will help you find the loan that best suits your needs.

NMLS#1447810/1850

Persistence Is A Great Quality

Anything you set your mind to is possible—if you set it in your mind that you’re going to do it and just make it happen.

Opportunities seem to find people who are willing to go for it,  while others stand on the sidelines wondering, “What happened?”

You create your own luck.  The harder you work on you, and  creating a “core” for success, the more luck you find.

When successful people hit a brick wall on their journey towards a new accomplishment, instead of turning around, theyhave the ability to find a way through it, over it, and around it and continue their journey.

It’s the kind of person who understands that the Universe sees fit to reward us with what we ask of it. 

You can become the person who realizes, on the other side of that brick wall could be that pot of gold, could be that $5,000 a week instead of $500 a week. That same person realizes, that on the other side of the wall there could

be another two brick walls.

The winner in life is the one who keeps going even when life does not immediately go as planned.

Persistence is a great quality. Persistence is the ability to go, even though it seems everything is saying no.

We grow when challenged. We are evolving creatures, and as we grow and fix one issue, two more will pop up.

Overcoming temporary setbacks and obstacles, especially in times of uncertainty and adversity, brings out the best in us.

From the Book, "Totally Fulfilled, More Money, More Freedom, More Smiles, Less Stress."  By Dean Graziosi

Persistence Is A Great Quality

Anything you set your mind to is possible—if you set it in your mind that you’re going to do it and just make it happen.

Opportunities seem to find people who are willing to go for it,  while others stand on the sidelines wondering, “What happened?”

You create your own luck.  The harder you work on you, and  creating a “core” for success, the more luck you find.

When successful people hit a brick wall on their journey towards a new accomplishment, instead of turning around, theyhave the ability to find a way through it, over it, and around it and continue their journey.

It’s the kind of person who understands that the Universe sees fit to reward us with what we ask of it. 

You can become the person who realizes, on the other side of that brick wall could be that pot of gold, could be that $5,000 a week instead of $500 a week. That same person realizes, that on the other side of the wall there could

be another two brick walls.

The winner in life is the one who keeps going even when life does not immediately go as planned.

Persistence is a great quality. Persistence is the ability to go, even though it seems everything is saying no.

From the Book "Totally Fulfilled, More Money, More Freedom, More Smiles, Less Stress."  By Dean Graziosi

Practice, Not Perfection (staying focused)

I thought was great article and a lot of great content. Something everyone should read. I like to think of it as Progress, not perfection. (

Practice, Not perfection 

Posted by admin on Friday, September 9, 2016 · Leave a Comment 

By Brian Johnson

In a world that conditions us to obsess about outcomes while encouraging us to multitask rather than focus on a single goal, it’s easy to undervalue the importance of practice.

Practice is the key to true inner peace and contentment. By concentrating on specific tasks rather than spending our energy worrying about future outcomes or harping on our past “mistakes,” we’re able to be more focused and more present.

In The Practicing Mind, pianist Thomas Sterner brilliantly explains how cultivating discipline and focus through practice helps us create a friction less path to achieving our goals — and experience the joy that comes as a result.

Let’s jump in and explore what it means to practice and how we can shift our perspective to view practice, not perfection, as the ultimate goal.

FROM LEARNING TO PRACTICING

One way to move into focusing on the process rather than the result is to understand the difference between “practice” and “learning.”

“The word ‘practice’ implies the presence of awareness and will,” Sterner explains. “The word ‘learning’ does not. When we practice something, we are involved in the deliberate repetition of a process with the intention of reaching a specific goal. The words ‘deliberate’ and ‘intention’ are key here because they define the difference between actively practicing something and passively learning it.”

Learning is wonderful, but practice is a bit different. Practice involves setting an intention and being deliberate. It is the process of picking a goal and choosing to continually apply steady effort to reach it.

FOCUS ON THE WORK

Despite his steady effort to become an accomplished musician, Sterner notes that it was playing golf that really helped him understand the dynamics of practice.

While working on his swing, he began to notice that an attachment to results (which we can’t control) rather than to the process (which we can control) is what causes us to feel perpetually discontented.

This is really the essence of the whole book:

“When yoy let go of your attachment to the object you desire and make your desire the experience of staying focused on working toward that object, you fulfill that desire in every minute that you remain patient with your circumstances. There is no reason not to be patient. There is no effort, no ‘trying to be patient’ here. Patience is just a natural outgrowth of your shifted perspective.

“This shift in perspective is very small and subtle on the one hand, but it has enormous freeing power. No task seems too large to undertake. Your confidence goes way up, as does your patience with yourself. You are always achieving your goal, and there are no mistakes or time limits to create stress.”

In other words, when we focus our attention only on a desired outcome, we’ll experience stress, anxiety, lack of presence, and diminished performance.

But when our primary desire is to stay focused on the process of working toward a goal, we’ll experience presence, engagement, and increased performance. This makes it much more likely we will achieve the outcome we desire with “frictionless ease.”

It’s a subtle, but vital, shift to use our goals as rudders — occasionally checking in to make sure we’re on course — and focus our energy on the here and now of our practicing minds rather than on our wandering minds that are always looking ahead.

PRACTICE MINDFULLY

In order to enhance our ability to home in on the benefits of practice, we need to exercise our minds.

Like many great teachers, Sterner believes that meditation is one of the most effective ways to shift our attention, free us from the confines of our ego and its attachments, and fine-tune our presence.

“Though there are certainly a number of ways to accomplish [freeing ourselves from the confines of ego], the most effective method for spontaneously and effortlessly creating this alignment is meditation,” he writes.

But Sterner also provides another way to rock it, explaining that we can create a practicing mind by calling in the “DOC” — do, observe, and correct.

Here’s how he explains the technique:

“If, for example, you feel you tend to worry too much, then try to apply DOC to your actions. When you notice yourself fretting over something, you have accomplished the do portion. Now observe the behavior that you want to change. In your observation of yourself worrying, you separate yourself from the act of worrying.

“Now realize that the emotions you are experiencing have no effect on the problem over which you’re fretting. Release yourself from the emotions as best as you can — that is the correction portion.”

When you’re feeling off your game, the first step is to do something. It can be an action as simple as noticing a behavior.

Once you’ve parsed the problem, observe it like a good instructor — objectively and without judgment or emotion. Check in and ask yourself if the behavior is working well or if you need to adjust some things to get back on track.

Finally, correct what’s not working. Again, do this without emotion — other than perhaps some enthusiasm for realizing you’re cultivating the mojo of a practicing mind!

Don’t postpone feeling joy until you’ve reached your goals or fulfilled your dream. Learn to enjoy the process and you’ll open yourself up to the rewards available every step along the way.

goalsontrack.com

5 Things I Wish I Would Have Known About the Home Buying Process

You are ready to take the next step. You have decided you are ready to buy a home. Before you open up that web browser and tackle the home listing websites, there are a few things you should be doing.

Here are five things you should know so you don’t end up saying “I wish I would have known that before buying a home.”

 

1. I wish I would have checked my credit score sooner

The credit score is a direct reflection of your credit history, which is a financial inventory of things you’ve paid for. Credit cards, past loans, government information are all sources that make up your history. Other information includes the number of credit cards and loans you have and if you pay your bills on time. For some of those with poor credit, obtaining a loan will not be possible. But for the majority of future homebuyers, examining your credit standing will guide you toward better terms. Your home loan professional will help you understand what you need to work on to boost your credit score, and in the end, land a favorable loan.

 

2. I wish I would have gotten a pre-approval

A pre-approval on a loan will give you an advantage when you find your perfect home. You will know the exact loan amount you qualify for, what your monthly payment will look like and how much taxes and insurance will be. With a pre-approval, the loan process will be smoother and your offer will be stronger. Without getting pre-approved, you will be at a disadvantage and may not get the home you are looking for. When pre-approved, a lender provides you with a letter confirming the specific loan amount you can expect to be approved for. Presenting a pre-approval letter along with your offer when you find the home of your dreams will allow you to make the strongest possible offer.

3. I wish I would have know the difference between 20 percent or 3 percent down

You can purchase a house with as little as 3 percent down, but it carries with it mortgage insurance. Mortgage insurance, which is also known as Private Mortgage Insurance or PMI, is generally required when a homebuyer purchases a home with a conventional loan using a down payment less than 20 percent of the home’s purchase price. This adds to your monthly payment. If you put 20 percent down, there is no PMI requirement.

There are programs available to help borrowers with a down payment. One of APM’s loan programs, titled the Home Buyers Gift Advantage, allows you to use gift funds for 100 percent of your down payment. Gift funds can be used on a conventional or conforming fixed loan.

4. I wish I would have known the value of a real estate agent

Some home buyers may decide they want to enter the housing market without a real estate agent. They soon find that there is a lot that goes into the house hunting process – from the research, to the paperwork, to the negotiations, it is a long, tedious process. A good real estate agent has a keen understanding about neighborhoods, recent sales and listings, trends, crime rates and schools. A real estate agent will find listings tailored to your needs and will understand the lending environment. Real estate agents negotiate the best price in the current market and protect you by conducting property inspections.

 

5. I wish I would have know to get inspections done early

Consider getting inspections on the home you are interested in done early to find out if there are repairs needed. This can be beneficial when trying to get a 30-day close. If an inspection is out of the way there is less chance at any delays later in the closing process. Some market sellers are getting inspections done earlier and earlier to avoid delays.

There is a lot to wrap your head around when buying a home. Make sure you are aware of these things so you are prepared. And if you have questions, don't hesitate to contact me, 
Dave@CLSFinancial.com

Success Takes Time and Hard Work—Follow These 5 Steps to Stick With It to the End

Success Takes Time and Hard Work—Follow These 5 Steps to Stick With It to the End

Biggest Credit Myths, Mistakes and Misconceptions

Good credit is well worth the effort it takes to both achieve and preserve it. If you have good credit, the following tips will help you keep it that way. If you want to improve your credit, however, now is the time to get started. Give us a call. We'll review your credit and find out exactly where you stand. In the meantime, if you plan on entering into a loan transaction in the next 6 to 12 months, you simply cannot afford to make the following credit mistakes: Don't fall behind on existing accounts. This includes your mortgage and car payments. One 30-day late can cost you anywhere from 30-80 points or more depending on the other factors being reported on your credit reports. Don't pay off old collections or charge-offs during the loan process. Paying collections will decrease your credit score immediately due to the "date of last activity" becoming recent. If you want to pay off old accounts, do it through closing, and make sure that 1) you validate that the debt is yours, and 2) the creditor agrees to give you a letter of deletion. Don't close credit card accounts. If you close a credit card account, it will appear to FICO that your debt ratio has gone up. Also, closing a card will affect other factors in the score such as length of credit history. If you have to close a credit card account, do it after closing, and make sure that it is an account you've opened more recently. Remember, 10% of your credit score is made up of your Mix of Credit, so it is important that you have at least 1-2 major credit cards open and in good standing. Don't max out or overcharge your credit accounts. This is the fastest way to bring about an immediate drop of 50-100 points in your credit score. Try to keep your credit card balances below 30% of the available amount on your monthly statement, and especially during the loan process. If you decide to pay down balances, do it across the board. Meaning, make an extra payment on all of your cards at the same time. Don't consolidate your debt onto 1 or 2 credit cards. It seems like it would be the smart thing to do; however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above. If you want to save money on credit card interest rates, wait until after closing. Don't do anything that will cause a red flag to be raised by the scoring system. This would include adding new accounts, co-signing on a loan, or changing your name or address with the bureaus. The less activity on your reports during the loan process, the better. Don't give up. In many cases, small changes to your credit profile can yield big results that could save you thousands of dollars on your mortgage. *Note: American Pacific Mortgage Corporation is not a credit repair company; this information is for information purposes only. We are not licensed credit repair specialists or counselors.

David Parker Loan Officer CLS Financial Phone: (562) 594-6884 Cell Phone: (818) 263-7467 dave.parker@apmortgage.com 4450 Cerritos Avenue Los Alamitos, CA 90720 NMLS # 1850/1447810

© 2016 American Pacific Mortgage Corporation (NMLS 1850). All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions apply. Equal Housing Opportunity. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act; BRE 01215943 Our records indicate that CLS Financial may contact you by email to send you relevant and timely information. To opt-out of receiving additional promotional emails from CLS Financial, please click the link below CLS Financial David Parker 4450 Cerritos Avenue Los Alamitos, CA 90720