REFINANCE - 

When you need a quick and easy refinance of your home or investment property, try Arrowhead Capital Corporation. Our customers have said that our speed of processing, knowledgeable staff and aggressive programs set us apart from our competition. Here is what you need to know should you consider a refinancing option: 


Deciding to Refinance - 

The decision on whether or not to refinance has, in the past, meant balancing the savings of a lower monthly payment against the costs of refinancing. In recent years, mortgage lenders have introduced "no cost" and low-cost refinancing packages that minimize or completely eliminate the out-of-pocket expenses of refinancing. With traditional refinancing, the interest rate for your new mortgage is often about 2 percentage points below the rate of your current mortgage. However, with the newer low and no-cost refinancing programs offered, home owners can find it valuable to refinance to obtain a smaller reduction in interest rates.

Refinance Issues to Review - 

There many things to consider when refinancing your home loan. The fees associated with refinancing can add up quickly so, many mortgage companies will waive fees associated with refinancing applications and legal fees. This fee reduction can amount to large savings for the home owner but may result in a slightly higher percentage rate than expected. It is important to talk about your loan options with your loan officer. Additionally, the amount of time you plan to spend in your home will impact your decision to refinance. Many mortgage lenders will allow home owners who expect to live in their home for a minimum of three to five years to pay “points” and closing costs upfront. This option ensures the home owner obtains the lowest percentage rate available.

Evaluate Your Assets - 

Saving money is important to many consumers in today's economy and refinancing your home loan is one way you can lower your monthly payments. A careful analysis combined with the advice of your mortgage broker will ensure that you make the right decision. The costs associated with refinancing are similar to those of obtaining an original home loan and include legal fees, application fees, settlement costs, and other related fees. When refinancing, additional fees will arise and they can include a fee charged if you paid off your original mortgage early, the points associated with the refinance, and the home loan interest rate. Typically the cost runs between three and six percent of the total amount of the home loan. However, many mortgage brokers can offer zero point loans and low-cost refinancing. Therefore, even if your rate change is less than one percentage point, you may be able to save some money by refinancing. Contact your home loan advisor to discuss the various costs and laws governing the fees charged by mortgage companies and the potential savings you can enjoy. 

Cash Out Refinance - 

Many mortgage lenders will offer a refinance package where you refinance for more than the balance remaining on your old home loan. In the mortgage world this is called “cashing out”. The economy has also caused interest rates to drop recently which may allow you to refinance your home without increasing your monthly payments. The extra cash that results from refinancing can be used for many purposes; one of the smartest ways to use these funds is to pay off any loans with higher interest rates. If you are in a positive position regarding debt you may be interested in using the money for a more enjoyable purpose, such as building an addition on to your home. How ever you decide to spend the money, your mortgage broker can help you through the process.

Will Paying Points Affect My Rate? - 

When home owners make the decision to refinance their home loan they must decide which interest rate will work best for their situation. There is typically a range of interest rates at different amounts of points. Remember, a point is equal to one percent of the loan amount. When you work with you your home loan representative you will be able to analyze the different interest rates and related points, which can save you money. Some combinations of interest rates and points may cause your monthly payment to increase though. Be sure to discuss all options with you home loan advisor before making a decision. 

Refinance Expenses - 

The costs associated with refinancing are similar to those of obtaining an original home loan and include legal fees, application fees, settlement costs, and other related fees. When refinancing additional fees will arise and they can include a fee charged if you paid off your original mortgage early, the points associated with the refinance, and the home loan interest rate. Typically the cost runs between three and six percent of the total amount of the home loan. 

Your Second Refinance - 

Refinancing makes sense for many of our clients because refinancing can result valuable savings. Now is also a good time to refinance for a second time. The timing is important because when interest rates are falling quickly you can reduce your monthly payments even further. Your mortgage brokers will also help you understand the tax write off associated with a second refinance. The money that American’s are saving can be used to build emergency cash funds, build additions onto their homes, or they can save it for a child’s college fund.

Converting Your ARM to a Fixed Rate - 

Home owners have two rate options when refinancing their home loan, fixed rate mortgages and adjustable rate mortgages, often referred to as ARMs. ARMs are attractive in today’s economy because they offer very low introductory rates but due to financial market instability these rates can jump quickly and homeowners may find themselves paying more than they had bargained for. Adjustable rate mortgages are not always unpredictable though. Homeowners who know the length of time they plan to stay in their home may secure an ARM for that specific amount of time, which will save the homeowner money and avoid rising payments. 

Refinance and Taxes - 

Mortgage brokers are knowledgeable of the laws governing taxes that are related to mortgages. Many homeowners find the tax issues related to the home loan refinance process confusing, but your mortgage broker will guide you through the process. To explain briefly, the Internal Revenue Service (IRS) has ruled that interest paid for refinancing must be deducted over the life of the loan. However, if the home loan is being used to make improvements to your house, the borrowers may be permitted to deduct a portion of the interest right away. The exact tax laws concerning refinancing are complex and the details should be discussed with your mortgage broker. The IRS website, www.irs.gov, may also be helpful when gathering general information on the subject of taxes and refinancing. 

Redlands Refinance - 

Refinancing your Redlands home loan is a great way to gain extra cash. Redlands refinances are popular among Redlands home owners and our Redlands mortgage brokers are experienced with Redlands refinances.  Contact us today to learn more about your Redlands refinance. 



PURCHASE - 

One of the most exciting adventures you will ever encounter is purchasing a home. If your a first time buyer or an experienced investor, we will make the process quick and easy! 

Here is some helpful information to get you started: 


Low Down Payment Qualifications - 

Many factors are considered when applying for a low down payment home loan. These factors include a good credit background, sufficient appraisal value, and adequate income to pay the monthly mortgage payment. While these factors are important other considerations are also taken.

Your home loan professional will be able to discuss your qualifications with you on an individual basis. At this time other factors including your ability to pay the closing costs will be discussed. Closing costs are typically 2% to 3% of the price of the house. Your home loan officer will also discuss with you certain formulas that are used to determine your long term ability to pay for the home loan. 

Down Payment Gifts, Loans and Your 401K - 

Loans and gifts from family, friends, and other organizations can help you put together a down payment sufficient for your home loan needs. The percentage of the loan or gift that is available for use as a down payment can vary depending on the type of home loan you qualify for. It is important to discuss any loans or gifts you plan to use as a down payment with your mortgage lender.

Many companies also offer programs to their employees to make the home buying experience easier. 401K plans are often used for this purpose and employees are permitted to withdraw from their 401K plans without penalty to provide a down payment on a home loan. Making use of your 401K program can be useful and beneficial but there can be drawbacks that must be examined. 

Housing Authorities - 

There are national non-profit organizations dedicated to assisting homebuyers with their down payment and closing costs.

Housing authorities are agencies in cities and states around the nation that handle housing issues in their designated areas. Many housing authorities strive to provide stable and affordable housing for low and moderate income persons and create living environments that help residents learn to live independently. Your mortgage broker is educated about current housing authority issues and can serve as a liaison between you, the borrower, and your Housing Authority. 

Down Payment Support Programs - 

Purchasing a home is a goal shared by many people but it can be difficult for some to collect the funds needed for a down payment. Fortunately, there are many programs to assist those who need help with down payments. There are national assistance programs and programs specifically for residents of your state. The precise requirements of the individual programs will need to be discussed with your mortgage broker but many assistance programs do not require repayment of the gift and do not place caps on the borrower's income to qualify for assistance. One such program is called Neighborhood Gold. This down payment assistance corporation provides free grant money to borrowers with no down payment. The qualifications for the Neighborhood Gold program are relatively simple to meet and your mortgage lenders are knowledgeable of the requirements.


FIRST TIME BUYERS - 

Many home loan programs have been specifically created for first time home buyers. These loans feature low down payments and approval guidelines that make it easier to qualify. Some of the more popular first time homebuyer programs are listed below. 


What is a First Time Buyer Loan? 

Many people dream of owning a home, but the home loan process can be confusing for many first time home buyers. Mortgage lenders offer first time buyers with many home loan options and assist the buyer in finding the best home loan for them. First time home buyer programs can offer lower interest rates, low down payments, or reduced taxes.

FHA and VA Loans for First Time Buyers 

First time homebuyers often experience the most difficulty amounting a significant down payment and everyone should have the opportunity to buy a home. For this reason the Federal government has developed two loan programs to assist homebuyers that have a little or no down payment. These programs are called the Federal Housing Administration (FHA) and the Veteran's Administration (VA). These programs are not solely intended for first time home buyers; your home loan advisor will be able to determine if you qualify and if so which program is acceptable for your needs. FHA and VA loans can be especially advantageous when combined with a HFA or MCC first time homebuyer program.

Who is Eligible? 

First time home buyer programs are designed to help borrowers who may not have enough money to pay the full cost of the down payment or the closing costs on a mortgage. These programs make obtaining a mortgage more cost effective. There are even programs specifically for residents of each state. First time home buyer programs are available to those who have not owned a home for the past three years.

Community Home Buyer Programs 

Community homebuyer programs reduce the down payment the borrower must pay to 3%, which must be the borrower's own funds. The closing costs can be gift funds, a grant, or seller assistance up to 3% of sale price. This type of home loan requires the home buyer to take a class on home ownership in their state. Upon completion of the class, the homebuyer will receive a certificate that reduces the cash requirement and expands the qualification ratios. Community homebuyer programs have been making it possible for many people to have the opportunity to buy a home.

Escrow. What is it? 

Escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of an event.

In simpler terms, escrow is where the transaction changes hands and prevents the seller from not receiving the money from the sale and prevents the buyer from not receiving the home that was purchased. Escrow is important to both buyers and sellers during the mortgage process.

Mortgage Credit Certificates

A Mortgage Credit Certificate or MCC is a certificate awarded by your local government agency authorizing the home loan borrower to take certain federal income tax credits. The credits awarded help to free up funds and make the monthly home loan payments more affordable for the homeowner. First time home buyers are typically the candidates eligible for an MCC but in special cases that you may discuss with your home loan advisor this requirement may be waived. Income and purchase price requirements also vary state to state and should be covered in conversations with your home loan representative.

Redlands First Time Buyers Program

At Arrowhead Capital Corporation, our Redlands mortgage brokers offer a wide variety of first time buyer programs to Redlands first time buyers. First time buyer programs in Redlands can make securing a Redlands home loan easier and more affordable. Contact your Redlands mortgage lenders at Arrowhead Capital Corporation to begin your first time buyer loan.



SECOND MORTGAGES - 

Our second mortgage programs can be tailored to your specific needs. Below is some information to help get you started. 


Home Equity Credit Line

There are many options for home owners who wish to meet growing financial demands; one way to improve your financial situation is to borrow money is through a home equity line of credit. This source of credit can provide certain tax advantages and generally allows you to borrow large sums of money at affordable rates. This line of credit uses your house as collateral though, which means such a credit line can be risky if you default on the monthly mortgage payments. The funds that you receive from a home equity credit line can be used to fund anything from home improvements to a child's school tuition.

Second Mortgage Terms

Mortgage lenders offer several different terms for second mortgages. The repayment terms for your second mortgage will depend on your individual circumstances and will depend on the amount of time you will require prior to repayment. It is often difficult for borrowers to repay a large loan in a short period of time. For this reason it is best to choose a second mortgage on your home that does not require repayment after only couple of years.

The Expense of a Second Mortgage

Borrowing money for a second mortgage can be costly because the price of a loan is, in most cases, equal to a percentage of the loan amount. Most mortgage lenders charge a fee for lending money and this fee is based on a point system. One point is equal to one percent of the loan amount. Laws in some states place a cap on the amount of money that can be charged for a second mortgage and this will help keep the cost of your second mortgage down.

Second Mortgage Rates

The two most common types of interest rates that can be linked to your second mortgage are adjustable rates and fixed rates. Adjustable rate mortgages allow the interest rate to fluctuate during the life of the home loan. Fixed rate mortgages, on the other hand, maintain the same interest rate for the life of the loan. Both fixed and adjustable rate mortgages have their strengths and weaknesses. In today's unstable economy, adjustable rate mortgages can be risky for the homeowner because the rate can increase with little notice. On the other hand, this type of mortgage may allow you to purchase a more expensive home.

Determine Your Monthly Payment

As a home owner it is important to determine what your monthly payment will be when you take out a second mortgage or home equity line of credit. When the monthly payments are calculated you will have a better idea of your ability to pay for the loan. Mortgage lenders are not required to determine your precise monthly payment on a home equity credit line because it will vary month to month but will instruct you about how the payments are calculated on a monthly basis.

Redlands Second Mortgages 

As a home owner it is important to determine what your monthly payment will be when you take out a second mortgage or home equity line of credit. When the monthly payments are calculated you will have a better idea of your ability to pay for the loan. Mortgage lenders are not required to determine your precise monthly payment on a home equity credit line because it will vary month to month but will instruct you about how the payments are calculated on a monthly basis.


FHA & VA LOANS -

Everyone knows that loans themselves can be a bit hard to understand. When you put government loans in the mix, you have even more to wrap your mind around! There are many factors to consider when applying for a government loan. We will be by your side every step of the way! 


FHA Loans

What is the Federal Housing Administration's Mission?

The Federal Housing Administration was started in 1934 as part of the new deal. The FHA's goals have remained the same through out the years and they are to contribute to building and preserving healthy neighborhoods and communities, maintain and expand homeownership, and to stabilize credit markets in times of economic disruption.

So What Are the Details? 

The FHA now offers a variety of loan programs to a large population and FHA mortgages can have fixed or adjustable interest rates. Many find these home loans attractive because they require very small down payments, gifts can be used for down payments and closing costs, and because the FHA regulates the closing costs. These loans also have qualifications that are easier to meet than traditional mortgages. The FHA does not require a minimum FICO score to meet qualifications and these programs will allow home purchase two years after a bankruptcy filing.

What are Energy Efficient Mortgages?

Energy Efficient Mortgages, EEMs, recognize that reduced utility expenses can permit a homeowner to pay a higher mortgage to cover the cost of the energy improvements on top of the approved mortgage. FHA EEMs provide mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy-efficient improvements into the mortgage. The borrower does not have to qualify for the additional money and does not make a down payment on it. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, or savings and loan association, and the mortgage is insured by HUD. FHA insures loans. FHA does not provide loans.

Rehabilitation Mortgage Insurance (203K)

Section 203(k) insurance enables homebuyers and homeowners to finance both, the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage - or to finance the rehabilitation of their existing home. FHA approved lending institutions which include many banks, savings and loan associations, and mortgage companies can make loans covered by Section 203(k) insurance.

Reverse Mortgages

Reverse mortgages are becoming popular in America. Reverse mortgages are a special type of home loan that lets a home owner convert the equity in his/her home into cash. They can give older Americans greater financial security to supplement social security, meet unexpected medical expenses, make home improvements, and more.

FHA Refinance Requirements

FHA has permitted streamline refinances on insured mortgages since the early 1980's. The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:

  • The mortgage to be refinanced must already be FHA insured
  • The mortgage to be refinanced should be current (not delinquent).
  • The refinance is to result in a lowering of the borrower's monthly principal and interest payments
  • No cash may be taken out on mortgages refinanced using the streamline refinance process

 


VA Loans

Why Go For a VA Loan?

The more you know about our home loan program, the more you will realize how little "red tape" there really is in getting a VA loan. These loans are often made without any down payment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans. Aside from the veteran's certificate of eligibility and the VA-assigned appraisal, the application process is not much different than any other type of mortgage loan. And if the lender is approved for automatic processing, as more and more lenders are now, a buyer's loan can be processed and closed by the lender without waiting for VA's approval of the credit application.

Additionally, if the lender is approved under VA's Lender Appraisal Processing Program (LAPP), the lender may review the appraisal completed by a VA-assigned appraiser and close the loan on the basis of that review. The LAPP process can further speed the time to loan closing.

What is a VA Guaranteed Loan?

These loans are made by a lender, such as a mortgage company, savings and loan or bank. VA's guarantee on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer veterans loans with more favorable terms. The amount of guarantee on the loan depends on the loan amount and whether the veteran used some entitlement previously. With the current maximum guarantee, a veteran who hasn't previously used the benefit may be able to obtain a VA loan up to $240,000 depending on the borrower's income level and the appraised value of the property. The local VA office can provide more details on guarantee and entitlement amounts.

Who is Eligible? 

Veterans who served on active duty and were discharged under conditions other than dishonorable, during World War II and later periods are eligible for VA loan benefits. World War II (September 16, 1940 to July 25, 1947), Korean conflict (June 27, 1950 to January 31, 1955), and Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days' service. Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days' active service. Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years. VA regional office personnel may assist with additional eligibility questions

VA Loan Applications

The application process for VA financing is no different from any other type of loan. In fact, the VA application form is the same as that used for HUD/FHA and conventional loans. The mortgage lender verifies the applicant's income and assets, and obtains a credit report to see that other obligations are being paid on time. If all is well and the appraised value of the property is enough to cover the loan needed, the lender, in most instances, can then close the loan under VA's automatic procedure. Only about 10 percent of VA loan applications have to be submitted to a VA office for approval before closing.

What You Can Use a VA Loan For

You may use VA-guaranteed financing:

  • To buy a home. 
  • To buy a townhouse or condominium unit in a project that has been approved by VA. 
  • To build a home. 
  • To repair, alter, or improve a home. 
  • To simultaneously purchase and improve a home. 
  • To improve a home through installment of a solar heating and/or cooling system or other energy efficient improvements. 
  • To refinance an existing home loan. 
  • To refinance an existing VA loan to reduce the interest rate and add energy efficiency improvements. 
  • To buy a manufactured (mobile) home and/or lot. 
  • To buy and improve a lot on which to place a manufactured home which you already own and occupy. 
  • To refinance a manufactured home loan in order to acquire a lot.

The Cost of a VA Loan

A basic funding fee of 2.0 percent must be paid to VA by all but certain exempt veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent and a 10 percent down payment will reduce it to 1.25 percent.

A funding fee of 2.75 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 2.25 percent and a 10 percent down payment will reduce it to 2.0 percent.

The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.

Veterans who are using entitlement for a second or subsequent time who do not make a down payment of at least 5 percent are charged a funding fee of 3 percent. 

CONSTRUCTION LOANS - 

Are you a do-it-yourselfer who just happens to know a little bit about home construction, but find yourself in need of a bit of help along the way? Do not fret! Construction loans are tailored for folks like you. Check below for more info so you can finish your dream home!


Why Need a Construction Loan?

Borrowers will need a construction loan if they intend to purchase a home in a new development or if they are building a custom home. Construction loans are necessary because of the longer time frame and special requirements of the building process.

One Time Close Construction Loans

Many mortgage lenders offer borrowers One Time Close construction loans. This type of construction loan will finance the construction of a primary or secondary residence and the permanent loan when construction is finished. A One Time Close construction loan requires borrowers to sign only one set of documents and allows borrowers to lock in a rate for the permanent loan at this time. This type of home loan will allow for 12 months of construction time and during the construction period, interest is charged only on the funds that have been disbursed.

What Are the Qualifications and Requirements?

There a few documents and qualifications that borrowers will need to have when they begin the application process for a construction loan. Some of the qualifications mortgage lenders will require are a minimum credit score of 620 and sufficient liquid assets. The documents construction lenders will ask for include a building department permit and many require that construction be completed within 12 months.