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Options for paying cost on a refinancing Caller: I picked up the above newspaper yesterday. Read your article. Good information. Thank you for that. A question re closing cost when refinancing. You said not to pay the cost out of pocket and not to add to loan. Do you mean, ask the lender to pay for it? Please clarify. Thank you for your response Ken Go: This is a true no cost loan. correct the lender will pay for all non recurring closing cost. I would like to add that its always good not to have to pay to start to save. Yes, you can look at the any cost to refinance. Due to the length of long term aspect of a lower rate, but seritime it will take to recover fees paid into it. ously how often do we refinance or move To further more make it more transparent, around for different reasons. Homeowners lenders are paid for a premium for rates are still averaging keeping their loans for higher than par pricing. Therefore, if you about 7 years, recently due to declining did not pay anything to get a refinanced rates, the average homeowner only kept loan, you have the option to keep refi- their loans for 2 years. nancing once the rates would drop again. Caller: I am ready to buy a house, Otherwise, you will keep increasing your how should I prepare the funds for down loan balance constantly and never get to payment? pay down your balance. Ken Go: This is a very important Caller: My current rate is 4.5% 30 years question, when you are buying a house, fixed. I am being offered by my lender now there are certain ways to show your down to refinance to 3.75% paying about $3200 payment to a lender. Cash deposits are in total fees. Do you think this is worth for a big NO NO! cash deposit are harder to me to take out? trace and paper trail. Lenders are always Ken Go: Let me dissect this situation looking for two months seasoning on funds and give a comparison to what I would do for closing and reserves. Some loans will for this client. I would offer her a 4.00 rates allow 100% gift funds for down payment for 30 years with absolutely no closing and reserves, while some will require a cost, nothing added to her loan. Here is min of 5% buyer contribution. Always why I would not do it any other way, with consult with a lender as to how to deposit her loan balance a 3.75% payment would your funds for down payment if you don’t get her a principal and interest payment have it in your account yet. of $ 1389.35, with my 4% rate offer her Caller: I read your article about a Repayments would be $1432.25. The differ- verse Mortgage and we are very interested ence is $43.00, by paying fee it would take in not having to pay our mortgage payher 74 months of payments to recover her ments. We are both retired and living on closing fees. fixed income. We would like to do more Since she is coming from a 4.5% rate, I during our retirement and is financially strongly recommend a no cost loan for her limited due to our mortgage payments.
Our mortgage balance now is about $395K and our retirement income is only about $ 2600 between the two of us. What is your recommendation? Ken Go : I truly believe that the reverse mortgage option is advantageous to most of senior homeowners. Unfortunately in this case, this homeowner does not have enough equity, their property is only worth about $450K. In order to qualify for reverse mortgage you have to have sufficient equity, remember the lender will have to a life expectancy base on your age and figure out how long you will be staying in your house. This type of loan is very favorable for homeowners who want to make use of the equity while living in the house. Caller: My name is on a loan with my parents, but I really want to be able to get out of the loan because I will soon be married and would like to be able to qualify for a mortgage with my spouse. What are my option. My parents are paying for the entire mortgage every month but I am both on the loan and on title. Ken Go: This is a very good question, since the mortgage bust about 7-8 years ago
a lot of homeowners had to bring sibling or relatives into a mortgage to qualify or keep their loans. Now, that the economy is recovering it would be good to get free of those mortgages that you help others co-sign. After reviewing the entire situation, this young caller is very fortunate that the parents can qualify on their own for a refinance, considering the mom losing her job and was out of work for almost one year. By refinancing, the parents was actually able to cash out a little to pay for some debts and take the daughters name out. The daughter now is preparing for her own mortgage next year after a supposedly big wedding. I have advise her to prioritize on preparing buying a house, she has her hands full. Thanks for all your inquiries, please call Ken Go of 1st Innovative Finance Group at 562-508-7048. I will be holding open function or an open meeting on how to prepare to buy a house on Tuesday around 6;30 pm. Please call to get more details, Call Ken Go at 562-508-7048. Thanks, like us on facebook at 1st Innovative Finance.
US construction spending rebounds in October Washington, United States | AFP | Tuesday 12/2/2014 - US spending on construction rebounded in October after a dip in September, helped by a rise in home building, the Commerce Department reported Tuesday. Total construction spending rose to an annual rate of $971.0 billion, 1.1 percent above the revised September figure. The increase was almost double the consensus prediction from analysts. Over the first 10 months of the year, construction spending was 5.8 percent higher than the same period in 2013. Construction spending in the private sector increased 0.6 percent in October, pulled higher by a 1.3 percent rise in home building. Nonresidential construction slipped by 0.1 percent. Public construction spending, a much smaller part of the overall figure, rose 2.3 percent. That included a 2.2 percent rise in educational construction and a 1.1 percent rise in highway building.