Author Archives: Shawn Molem

Home loan refinance FAQs

Category : Real Estate Loans , Residential Loans

What is refinancing?

Refinancing lets you change your home loan to suit your new circumstances. Mortgage Choice recommends an annual  Home Loan Health Check to assess whether the original home loan you chose is still the most suitable option.

How does refinancing work?

When you take out a new loan, you use some or all of the funds to pay out your existing loan. The new loan often comes from a different lender, but many people refinance with the lender they’ve been using for years. If you move to a new lender, that lender will take care of paying out your existing loan.

If you are unsure whether refinancing is right for your current situation, refer to our refinancing checklist. Check out our latest Refinance Home Loan Infographics too for more details.

What type of things do people refinance for?

Home loan refinancing may be used for different reasons including:

Renovating your home or other home improvements such as a pool.

Paying off your debts such as credit cards by rolling them into your home loan.

Obtaining a cheaper rate, even if it means giving up a few loan features.

To raise cash for a purchase such as a car

You are paying a high interest rate – for example, if you arranged a low-start, rising-rate loan from your home builder.

You want to switch from a variable rate to a fixed rate, perhaps because you can want to reduce the risk of higher repayments.

How will refinancing benefit me?

Refinancing can be a smart way to manage your money. Here are a few reasons why you may want to refinance:

To get a peace of mind with a fixed rate

To obtain a lower interest rate so as to reduce your monthly payments

To gain the flexibility to pay off your loan faster

To consolidate credit cards, personal loans or other debts to reduce your interest rate and monthly repayments

To unlock the equity in your current property to finance a renovation, purchase an investment property or free up some extra cash.

Loan features to consider before applying for loan

Category : Real Estate Loans

The questions below will help you decide the features you need, which should in turn guide you to the home loan that suits your needs. When answering the questions, think ahead, not just until next year but also to 5 or even 10 years down the track. It’s important to be realistic in your answers. Ask yourself the following questions:

Do I want to pay the loan off as quickly as possible or am I happy to see out the term of the loan?

Am I good at sticking to a budget or am I a spendthrift?

Do I require certainty in the amount of my loan repayments or am I happy for them to fluctuate with official interest rate movements?

Am I likely to want to draw back some of my repayments in the future for spending on holidays, cars, furniture, etc?

If I am planning on having children, how will this affect mine or my partner’s work situation?

For existing children, have I adequately budgeted for school fees and other expenses that are likely to come up in the future?

Am I likely to receive some form of cash windfall or bonus at any stage?

How secure is my employment or work situation?

These answers will assist you in clarifying your goals, which will in turn help us work through the different loan options and arrive at the one that suits you.

Five most common questions about “Hard Money Loans”

Category : Hard Money Loans

For those who have never obtained a hard money loan, there are typically a lot of questions. Here are some of the most commons questions and answers about private and hard money loans:

 1. What exactly is a hard money and or private money loan?

A hard money or private money loan is a non-bank loan. Whether the source of the loan is a private individual, a fund, or an insurance company, a hard money or private money loan is any loan that comes from a non-bank source. Interest rates charged are typically higher than a bank loan, and loan terms are much shorter. One can expect to pay between 7% to 18% interest, and the loan term offered is between 90 days to 2 years.

 2. Do some hard money lenders offer longer loan terms such as a 15, 20, or 30 year mortgage?

Typically a hard money / private money lender will provide a loan for a term of 90 days up to 5 years. Most hard money loans are made on a short-term basis. It is very rare to find a hard money or private money lender that will offer a loan term for longer than 5 years, however there are some exceptions.

3. Will a hard money lender give me 100% of the purchase price like the old days of hard money lending?

Before 2007, it was common to find hard money loans that would give you 100% of the purchase price of a piece of real estate. Since the real estate crash however, most hard money lenders will only give you a loan for a percentage of the purchase price. And these days, more emphasis is placed on the borrower’s ability to bring in a significant down payment. With most hard money loans, be prepared to bring in between 10% to as high as 50% on some real estate.

4. What if I have a bankruptcy, short sale, or a foreclosure on my credit? Can I still get a hard money loan?

Although there are some hard money lenders that will not make a loan to you under these credit-based circumstances, there are many that are still willing to make you a loan even if you have these types of marks on your credit report.

5. What kind of collateral can be used for a hard money loan?

Although most hard money lenders only use real property as collateral (real estate), there are some hard money lenders who will use jewelry, recreational vehicles, and other types of collateral to make a loan. However, it is difficult to find hard money and private money lenders that will accept such collateral. Most hard money lenders want to use real estate as the collateral for the loan.

How to avoid Paying Too Much money for a Property

Tags :

Category : Buying & Selling Tips

There are bidding wars going on in many markets all over the U.S. with a new round of buyers bidding up the prices of real estate over the asking prices. Most of my repeat real estate investor borrowers are all complaining about the same things: inventory is tight, margins are thinner, and everyone is paying over the asking price on real estate. But how do you prevent yourself from paying too much on a property in a bidding war? Here are 3 tips to avoid paying too much:

Determine Your Max Offer Price and Stick with it: Decide what your max offer price will be and stick with it. Many times agents will encourage their buyers to offer way over the asking price in order to win the bidding war. Don’t cave in from the pressure.

Keep Your Comparables in Hand: A real estate agent will provide you with comparables but do your own homework. How far away from your property are the comps? Are they similar properties with an equal number of bedrooms, bathrooms, square footage, and upgrades? A finished basement or a detached garage are examples of things that can throw off the comps, so ask the hard questions and make sure your comps are accurate. Don’t allow incorrect comps to make you overpay for a property.

Determine the Repairs Before You Bid: Get inside the property and make a punch list of repair items and upgrades that will be needed. What will be the cost and does the deal make sense once you factor these in?

These are 3 common tips for not paying too much.

Buying a Home is Cheaper Then Renting…

Category : Buying & Selling Tips

Most renters feel that they cannot buy a house because the payments would be too high. They feel that, even
though rent every month seems like a waste of money, they cannot afford to buy a house, despite the fact that
they would love to own.

This may have been true in the 70’s or 80’s, when interest rates were higher, but with interest rates still on the
low end of their history, renters can actually buy and pay the same as they would if they were renting. The trick is
finding a suitable property whose price is affordable.

Following the end to the housing boom of the early 2000s, home prices are currently far more affordable than
they have been in quite a while. It is the perfect time to buy, but renters still need to see that they won’t be
paying more to own.

Imagine a renter who has a two bedroom, two bathroom apartment and rents it for $1,300 a month. This renter
thinks it is only a dream to buy a house and still pay the same. Provided one is not located within the city limits in
most cities in California and Nevada, a suitable property at a reasonable cost is actually quite realistic.

There are six parts, or variables that make up a mortgage payment: Initial loan amount, interest rate, term,
mortgage insurance, homeowner’s insurance and property taxes.

First, there is the loan amount. Believe it or not, a house costing as much as $160,000 using an FHA loan is
possible for our comparison. This would create a loan amount of approximately $157,000.
Next, there is the interest rate. Currently, 30 year fixed interest rates are in the low four percent (4%) range. But
we will use five percent (5.00%) for our comparison to compensate for a low credit score and/or the inability to
pay closing costs.
Next, there is the term. Currently a 30 year repayment schedule is the maximum most lenders will allow.
A $157,000 loan at five percent (5.00%) over 30 years would make a principle and interest payment of
approximately $839 a month.

Then, there is mortgage insurance. Mortgage insurance on an FHA loan of $157,000 would be approximately
$163 a month.
Then, homeowner’s insurance. Safely, a figure of approximately $75 a month would cover a house with
$160,000 of value.
Lastly, there are the property taxes. Using 2.25% of the purchase price annually, monthly property taxes would
be about $294 a month.

Taking $839 a month and adding $163 (mortgage insurance), $75 (homeowner’s insurance) and $294 (property
taxes) gives us a final PITI (principle, interest, taxes and insurance) of $1,371 a month.

Through this illustration, one can easily see that purchasing a similar property to the one being rented is entirely
possible, while keeping the payment the same.

So renters, strike while the iron is hot. It’s a buyer’s market as home prices are low and sellers are motivated to
sell and rates are great. Buy your home before it’s too late.

« Previous Page — Next Page »

Recent Posts

Recent Comments

    Archives

    Categories

    Meta

    Website Pages:
    Contact Details:

    Tel: (310) 734 4044
    Fax: (310) 734 4055
    Email: info@magnaloans.com

     

     

    Address:

    Magna Capital Group, Inc
    8730 Wilshire Blvd., Suite 410
    Beverly Hills, CA 90211

    Although Magna Enterprises, LLC and Magna Capital Group, Inc. are referred to throughout the text of this website as Magna Group of companies, they are not affiliates, parent or subsidiary companies as both companies are separate and distinct entities. Any questions or issues regarding this disclaimer should be addressed in writing c/o Shawn Molem.

    Magna Capital Group, Inc™ 2020| California DRE License # 01866646 | Nevada DRE License # RE.1450801 | NMLS ID # 342925