Unlocking Jumbo Mortgage Opportunities: The Mechanics of High-Balance Home Loans and ARMs for Los Angeles Homebuyers

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Are you looking at homes with purchase prices that are higher than the conforming loan limit for Los Angeles County? Chances are, you may be, because for 2023, the conforming loan limit is $1,089,300. 

In the past, home buyers who were interested in jumbo and super-jumbo home loans had relatively limited options. Most jumbo loans required down payments of 20% or 30%. Few of them were available with ARMS: adjustable rate mortgages. However, options have changed in the high-balance home loan sector.

Combo Home Loan Financing for High-Balance Home Loans

It is possible to use a first mortgage up to the conforming loan limit of $1,089,300 in Los Angeles County. This mortgage can be issued with a lower down payment, possibly as low as 10% or even 5%. In this scenario, the conforming loan interest rate is likely to be more favorable than non-conforming loan interest rates.

It’s also possible to investigate options of 95% financing in loan amounts up to $2 million, and there may be programs which can offer 90% financing up to $3 million. While each situation is individual, an expert mortgage broker can let you know which options may be the best choices for your home buying needs and short- and longer-term financial plans.

Are There Options in Super Jumbo Mortgage?

At the $4 million to $5 million level, mortgage loans are officially regarded as “super jumbo.” Financing structures for these loans can be flexible. Also at this level, the appraised value of the property that you want to buy will influence the mortgage terms and options. 

When you are interested in buying a home with a value above the conforming loan limit of $1,089,300, your options in home loan change from the ones you will see for online calculators that are used by big online mortgage companies. Home values in the neighborhood that you’re interested in could influence the amount of mortgage which you can qualify for. Your requirements of down payment can be much more flexible in the past, and your loan can be structured to meet your financial needs and home buying preferences.California Platinum Loans has qualified mortgage loan and real estate experts who can guide you through the process and help you to structure your financial transaction to buy the home you need and want. Contact them today.

Sources:

Richmond, Steven. “Jumbo vs. Conventional Mortgages: What’s the Difference?” Investopedia, 5 September 2022, url: https://www.investopedia.com/articles/personal-finance/061815/jumbo-vs-conventional-mortgages-how-they-differ.asp

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2023 Mortgage Rate Trends: Expert Predictions on 30-Year Fixed & ARM Rates and What Does It Mean for Your Home Loan?

2023_Mortgage_Rate

Each year, various finance industries, real estate professional associations, and government-backed organizations like Freddie Mac predict mortgage interest rate trends. These predictions sometimes differ, and there’s no guarantee that they will be accurate. However, February is the time of the year when these mortgage rate predictions tend to solidify, and different experts weigh in. Current forecasts on mortgage rates vary between 5% and 7% for 2023, depending on the expert source. When interest rates go down, the housing market tends to heat up, so if you’re in the market to buy a home or refinance in 2023, it’s a good idea to keep an eye on trends in mortgage rates.

Encouraging Mortgage Rate Forecasts

Some mortgage rate predictions show an encouraging trend of lower or steady mortgage interest rates for 2023. 

First, Compass, Inc.’s Regional President Neda Navab predicts that mortgage rates are at or near their peak as of the beginning of 2023 and could be around 5% by the end of the year, thanks to the slowdown in inflation and lower U.S. Treasury bond yields that impact mortgage rates.

Another prediction from the Mortgage Bankers Association (MBA) says that “long-term rates have already peaked.” The MBA says that mortgage rates will end the year at a precise 5.2%. The MBA comprises of industry leaders, direct experts, and the leading power players originating the loans, making their predictions carry a lot of weight.

Less Optimistic Mortgage Rate Forecasts

Freddie Mac, one of the two government-sponsored home mortgage enterprises, and Fannie Mae predict that the average 30-year mortgage rate will be 6.6% at the beginning of 2023 and end the year at about 6.2%, an entire point higher than the Mortgage Banking Association.

An economist with Realtor.com, Jiayi Xu, predicts that ongoing inflation will keep mortgage rates in the 6% to 7% range in 2023. 

The National Association of Realtors (NAR)’s senior economist Nadia Evangelou says that mortgage rates could end 2023 at slightly under 6% as long as inflation continues to slow down.

Adjustable rate mortgages (ARMS) offer lower interest rates than fixed-rate mortgages. Working with an experienced broker like California Platinum Realty and Loans can provide you with more choices in a mortgage that can fit your financial goals and objectives, along with delivering a home purchase loan or a refinance. Contact California Platinum Loans to discuss your options in home mortgages today.

California Platinum Loans

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Navigate the Complex Mortgage Home Loan Process Like a Pro: Don’t Do it Alone! Business Owners, Entrepreneurs, and Self-Employed Individuals All Trust California Platinum Loans to Guide them Every Day!

Home Loans for Self-Employed

Buying a home is a significant acquisition that can be more challenging for self-employed individuals and business owners to secure a home loan. Fortunately, several loan products are available to help them navigate the mortgage process and achieve their dream of home ownership.

Types of Home Loans for Self-Employed Individuals and Business Owners

Self-Employed Borrower Home Loan

A Self-Employed Borrower Home Loan is a home loan designed for self-employed individuals who need help meeting traditional loan income verification requirements. This loan product requires documentation such as tax returns and financial statements to verify the borrower’s income. The loan amount that can be borrowed will depend on the borrower’s income, credit score, and other economic factors. Self-Employed Borrower Home Loans typically have more flexible income verification requirements, lower credit score requirements, and lower down payment options than traditional loans, making it easier for self-employed individuals to qualify for a home loan.

No Income Verification Loan

A No Income Verification Loan is a type of home loan that does not require income documentation to be provided by the borrower. Instead, the loan approval is based on the borrower’s credit score and the value of the property being purchased. This loan product is typically used by self-employed individuals or those with irregular income who find it challenging to provide sufficient income documentation to qualify for a traditional loan. No Income Verification Loans may have higher interest rates and stricter qualifications than conventional loans due to the lack of income documentation. However, they offer a more straightforward application process and a faster approval time.

Stated Income Loan

A Stated Income Loan is a type of home loan that allows the borrower to state their income on the loan application without providing any income documentation to verify it. The loan approval is based on the borrower’s credit score and the value of the property being purchased. Stated Income Loans are typically used by self-employed individuals or those with irregular income who have difficulty providing sufficient documentation to qualify for a traditional loan. These loans are also known as “liar loans” since borrowers could overstate their income, making them riskier for lenders. Due to this higher risk, Stated Income Loans may have higher interest rates and stricter qualifications than traditional loans. However, they offer a more straightforward application process and a faster approval time.

Business for Self Loan

A Business Self Loan is a home loan designed for small business owners. This loan product is based on the borrower’s credit score and personal and business income. It allows self-employed individuals to use their business income as a source of income to qualify for the loan. The loan amount that can be borrowed will depend on the borrower’s business income, personal income, and credit score. Businesses for Self Loans typically have more flexible income verification requirements, lower credit score requirements, and lower down payment options than traditional loans, making it easier for small business owners to qualify for a home loan.

No Doc Loan

A No Doc Loan is a home loan that does not require any income or asset documentation from the borrower. The loan approval is based solely on the borrower’s credit score and the value of the property being purchased. No Doc Loans are typically used by self-employed individuals or those with irregular income who have difficulty providing sufficient documentation to qualify for a traditional loan. These loans are considered high-risk due to the lack of income documentation and contributed to the 2008 financial crisis. As a result, No Doc Loans are now more prevalent than they once were and may be harder to find. They may have higher interest rates and stricter qualifications than traditional loans if available due to their higher-risk nature.

Benefits of These Loan Products

One of the key features of these loan products is that they have more flexible income verification requirements, lower credit score requirements, and lower down payment options. These features make it easier for self-employed individuals and business owners to qualify for a home loan.

Consult a Financial Adviser or Mortgage Broker

Notably, these loans may have higher interest rates and stricter qualifications than traditional ones. Therefore, it is always good to consult a financial advisor or mortgage broker before making decisions.

Self-employed individuals and business owners have several loan products available to help them navigate the mortgage process and secure financing. These loan products include self-employed borrower home loans, no income verification loan

California Platinum Loans

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