Question 1

What are the advantages of using a mortgage broker?

Accepted Answer

There are so many types of mortgages available, and a good mortgage broker can help you navigate your options and make an informed decision so you get the right mortgage for right now. Not all borrowers are alike, and there are definite advantages to using an experienced broker rather than going to a local bank, a credit union or an online mortgage lender. You need a skilled professional who can assess your unique needs, educate you on your options and help you decide the best course of action to take. It’s all about education, and in a challenging real estate market, it’s more important than ever to make sure you understand your financing options.

Question 2

Is the real estate market going to crash?

Accepted Answer

Today’s real estate market is completely different than the housing market when the crash of 2006 started the Great Recession. This is especially true in the Bay Area, which is one of the highest-cost regions in the country. One of the most significant differences between the current market and the market of 16 years ago is that the super lax lending practices and toxic loan products of the past helped fuel the high prices. There was also so much more speculation then because investors had access to creative loan products that required very little investment. When the bubble burst, investors walked away from thousands of homes because they didn’t have much skin in the game. Lending practices immediately tightened up after the last crash, so most people who have loans now had to qualify for payments. Predatory lenders, bad decisions by buyers who ultimately couldn’t afford the payments, and those who had very little savings to weather a downturn all led to the bubble and the crash. There are still riskier loan products out there, but nothing like we had back then. Today, it’s simple supply and demand. There simply aren’t enough homes being built or sold for the number of buyers who wish to purchase them. Home prices continue to climb in certain local markets and don’t show much sign of stopping, and in other areas, prices are stabilizing and softening a bit.

Question 3

What are supplemental tax bills?

Accepted Answer

Supplemental tax bills are the difference between what the seller paid for their property taxes and what the tax bill will be for the new homeowner based on the purchase price of the home. This is prorated from the day you close escrow to the date the tax bill is issued, and if the seller had very low taxes because they lived in the home for a long time and you paid a hefty purchase price, the prorated amount can be daunting.

Question 4

Can I do anything about prorated supplemental tax bills?

Accepted Answer

Lenders will tell you that you’re responsible for paying the bill, but we advise calling the servicer of your mortgage and asking for the escrow department. You can ask them if there are enough funds in your impound account to cover the bill. Most of the time, there are additional funds in that account. If that’s the case, send your lender a copy of your supplemental bill and ask them to pay it on your behalf.

Question 5

Why should I use a mortgage broker and not a bank?

Accepted Answer

Mortgage brokers have superior prices and greater options compared to banks. Most regular banks have one or two products to offer, whereas we have more than 30 wholesale relationships. So, if Lender A doesn’t work for you, we have at least 29 more options, including hard money and private money that we can access to solve your particular financial desires.

Question 6

Are there alternative loan options available?

Accepted Answer

Yes. There are so many different loan products available, from your conventional 30-year fixed-rate loans to adjustable rates to alternative loan products that may not require as much traditional paperwork (such as pay stubs or tax returns) to qualify. You may have compromised credit from a recent bankruptcy and Fannie and Freddie won’t touch you, but there are lenders who will gladly loan you funds. Niche mortgage products are coming onto the market all the time. The average consumer wouldn’t need most of them, but there are innovative products that can really help certain people. <BR>

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