Bank Financing

We can assist you the buyer in obtaining a mortgage for the property so that you can buy it using less cash and enjoy a higher cash on cash return.

Mortgage Basics

There is no one-size-fits-all standard for personal loans, mortgage loans, or mortgage refinancing loans. The loan amounts, duration, and interest rates can vary dramatically and approval for borrowers can hinge on their credit history in addition to their capacity of return. Each type of loan carries its own particular benefits – and risks – for the consumer to weigh before signing on the dotted line. We recommend gathering as much information as possible prior to making a decision. You can start with our reviews of top lenders.

How to Apply for a Mortgage

So, how do we get started? When applying for a mortgage, the burden is on you to show lenders that you have the ability to make your monthly payments. You will be asked to provide lenders with an overview of all your sources of income, as well as your regular bills, debts, and other outstanding loans. They will also run a credit check to gauge how high risk you are.

Some lenders may have different requirements and make sure they specify every document they need for the process. In addition, it’s wise to keep your own personal copy of every document you submit to the lender.

When meeting with lenders, make sure they fully explain all the ins and outs of the mortgage before you sign. It’s also a good idea to check with a number of different lenders, in order to see who can provide you with the terms that best fit your income and ability to repay.

Mortgage Loan Types

There is a wide variety of mortgage loans available on the market, and it’s up to the individual borrower to decide what works best for them, through careful consideration of what the different loans entail.
The two main mortgage loans are fixed loans and adjustable loans. Fixed-rate loans keep the same interest rate for the entire duration of the loan, and will not fluctuate from month to month or year to year. Adjustable rate mortgage loans are just that – they adjust at pre-determined intervals over time, but with a lower beginning interest rate than that of fixed loans. Fixed rate loans afford the borrower security and stability – though they will start higher than adjustable mortgages.

Fixed rate mortgages
Fixed rate mortgages tend to be the best option for first-time buyers and those planning to stay in a house for the long-term or duration of the mortgage, while adjustable rate mortgages are best for buyers who plan to stay only a few years in the property, in that for the first few years the loan has a lower interest than that of fixed rate mortgages. Adjustable rate mortgages do carry risk though – if the value of the house plummets and your interest rates increase dramatically you may not be able to refinance your mortgage or sell the home – a reality for many borrowers during the mortgage crisis of 2008-2009.
In addition, there are conventional loans – which are not guaranteed by the government – and loans such as Federal Housing Administration (FHA), Veterans Affairs (VA), and Department of Housing and Urban Development loans (HUD), which may be an option for borrowers who qualify.

Two step mortgages
Two step mortgages have a fixed-interest rate for an initial period of time, which changes at a predetermined date. The second rate will be adjusted to the market rates at the time of the shift – which can work to the advantage or detriment of the borrower. When the rate shifts, the borrower has the ability to decide between a fixed or variable interest rate for the duration of the mortgage.

Balloon mortgages
Balloon mortgages are for much shorter terms and begin with a fixed rate with regular payments for a predetermined period of time, after which it “balloons” – and the rest of the remaining balance is owed with a one-time payment at the end. Though this sort of loan entails lower interest rates in the initial years, it requires the borrower to gamble that they will have the funds to make the large payment at the end of the loan period, which often hinges on their financial situation remaining stable, or the property maintaining its value.

Mortgage Rates

The good news for prospective homeowners is that mortgage rates are currently at one of the lowest levels in decades, hovering at below 4% for 30-year and 15-year-fixed rate mortgages. With rates at their current low, this may be a great time to lock down a fixed-rate mortgage.

Pacific Holdings
Real Estate Investments
(800) 403-3407
6300 Wilshire Blvd #970
Los Angeles, CA 90048
Direct: (800) 403-3407