California: Economics

by Ian Kleine

The economic state of California holds a direct influence on the monetary system of the United States of America, due to the fact that the state pays more than as to the benefits it receives from monetary funds and benefits.

There are at least four major economic regions surrounding California. Hollywood, whose movies and projects cost and create a lot of money. California Central Valley, responsible for agriculture and the produce that supplies the state and its surrounding neighbors. Silicon Valley, which deals with the production, creation and development of computer hardware and electronic devices. And the wineries of California, particularly Napa Valley, Sonoma Valley and others.

By 2002, these regions were divided and more were added to the classification system. Among these were: Trade, Transportation and Utilities, Government, Professional and Business Service Providers, Education and Health, Leisure and Hospitality, Manufacturing, Financial Services, Construction, Information, Internet Business and Marketing and Agriculture.

The state also draws a lot of its income from tourism and international trade; after all, California IS the ‘melting pot’ of cultures in the United States. The tourism department makes at least an annual income of 134 billion dollars; with one third of that only coming from exports. The 96 billion something dollars left comes from revenue from direct traveling in to California.

California also competes with the other states in terms of agricultural produce. This includes the production of wines, cheese, dairy products, fruits and vegetables. California has been known to lead in the dairy category, with milk being the number one farming commodity, and has generated jobs and employment for at least 400,000 people far across the state.

Prospecting oil, so called liquid-gold, has also been under development. So far, rich strikes have been made near the Californian Coasts, Long Beach and Los Angeles. Oil drilling is not something new, it has actually supported the state over the years, now only making a comeback due to reduced and cheaper costs in drilling for oil around these areas.

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Going for a trip to California? Why not make it worth the trip? California craft shows. Visit California craft fairs, that’s what I use to check up on mine.

Thanks for the update on the California economic climate, Ian!

If you’d like to learn more about how this affects your individual financial decisions, just drop us a line today to talk it over with a professional.

Financially, there’s a lot at stake when you buy or sell a home. Unfortunately, many of the factors involved are beyond your control. An inspector might discover a fault that you were unaware of, or interest rates could jump without warning. The first step is to hire a good real estate agent. Here’s how you can eliminate buyer’s remorse and purchase the home you love for a price you can afford:

* Bear the location in mind

What type of neighborhood would you like to live in? What school district would be suitable for your family? Where do you like to shop?

Do you own a vehicle, or would you have to take public transportation? Do you need a driveway? If you already have an area in mind, you can start by driving around and looking for “For Sale” signs.

* How much house can you afford?

Even if you’re short on funds, the home buying process will go smoothly if you get familiar with the real estate market and narrow down your choices to fit within your budget.

Speak to a lender to see how much you can get pre-approved for. You can use your pre-approval letter as leverage, especially if the seller receives another offer similar to yours.

* House size matters

You can start the process of finding a perfect home once you have a workable price range. List the things you want, like hardwood floors, skylights or a spacious living room, and the things you definitely need, like three bedrooms, a garden, a first-rate school district, etc. If you discover a house that comes close to having all your needs but doesn’t have all you want, give it another look.

During a housing slump, it’s possible to buy a large home at significantly less than its listing price. This is because so many people are desperate to sell. Remember to take into consideration the physically challenged family member who may need wheelchair access, or the heart patient who cannot climb too many stairs to get to her room.

* Find a way to finance your new home

There are a number of mortgage loans nowadays that suit many different people for different reasons. The three most common are fixed rate, where your payment is fixed for the life of the loan, adjustable rate, where the rate can go up or down after a few years, depending on the market, and interest only mortgages, where for a specified time you’re allowed to make payments that cover only the interest portion of your monthly mortgage payment.

Most Americans know that they should pay their bills on time to help their credit score, but there are many other factors that can dramatically affect your ability to get a loan.  Let’s take a look at the 5 most common credit mistakes:

1.  Maxing out your credit cards

Repayment ability is the main factor that lenders are looking at, which is essentially your debt-to-income ratio.  If you have a small amount of debt compared to your income, you’re in a much better position to pay off what you owe (quickly).  Before you apply for a home loan, try to avoid charging a lot on your credt cards, so that your balance stays low.  If you carry a balance month-to-month, try to pay them down as much as possible.

2. Buying a car on borrowed money

One of the biggest mistakes many families make is financing a car or other major purchase right before they apply for a mortgage.  Sometimes is can mean the difference between approval and denial.  Wait until after your loan has closed - not just been ‘approved’ - before you take out another loan.

3.  Procrastinating

When you’re looking to refinance an adjustable rate mortgage (ARM), don’t wait until crunch time.  Start preparing at least a year in advance.  Most homeowners wait until just 2-3 months before the expiration of their initial rate, and this can really limit the number of available options. 

4.  Reconciling old bad debt

If you have old charge offs or collections on your credit history, it might seem like a responsible idea to pay down or completely pay off these debts.  Unfortunately, by paying into this debt, your credit report adjusts it to ‘current debt’ which makes your credit problems seem more recent than they were.

5. Reaching out for help

Credit counselors will often give advice that is relevant for getting you out of debt, but typically neglect your ability to get new financing, including home mortgages.  Many times, a counselor will recommend closing healthy credit accounts to stop you from using them, but canceling these accounts is bad for your credit score.  Additionally, lenders don’t like to see that you are having difficulties handing your own finances, and having credit repair services on your record can send up a red flag.

To qualify for a certain type of home loan under the Homeowner Stability Initiative, you might have to sign up for HUD-certified debt counseling program, but otherwise you should stay away from credit counseling before applying for a home loan.  If you really have a spending problem, a better strategy is to put your credit cards where they aren’t easily accessible to you (like a safe deposit box), or even cut them up.  Keep the accounts open, and continue to pay down your balances and make your payments on time.

By avoiding these mistakes, you can help boost your credit score enough to qualify for lower rates, bigger loans, or both!

If you’d like a free consultation to get the best mortgage for your current financial position, drop us a line and we’ll help you out.

8 Reasons To Buy a Home Now

If you’ve been straddling the fence about buying a home, you could be kicking yourself when this unique window of opportunity closes. Never in history have the cards beens stacked for the buyer as they are now.

Here are eight reasons that will convince you that NOW is the right time to stop renting and buy your own home.

1. The market is with you. A Buyer’s Market occurs when there are more sellers than buyers, which results in more choices and lower prices due to excess supply. Homes are bought in both Buyer’s and Seller’s markets, but for the purchaser, now is the time they will get the most bang for their buck.

2. Favorable interest rates. As of the week ending April 16, 2009, a 30-year fixed rate mortgage averaged about 4.82 percent. The same time last year, the same mortgage was 5.88 percent. Five-year-Hybrid Adjustable Rate Mortgages (ARMS), were 4.88 percent, down from 5.48 percent a year ago, and the lowest since 2005. Imagine knowing that for the next 30 years, you’ll pay under 5 percent for your mortgage.

3. Foreclosure opportunities abound. Currently foreclosure properties make up about one quarter of all house sales. In California, 55 percent of all closings are lender-owned properties. Banks that do not want to be in the real estate business are dictating the price of homes, and they are anxious to cover their investment and sell. You have to be careful of what you’re purchasing, but the deals are out there.

4. Tax credit for first time buyers. If a buyer has not owned a home in the past three years, and falls in the eligible income range, they can take a tax credit worth 10% of the home’s sale price, up to a maximum of $7,500. This applies to homes that have closed between April 9, 2008 and before July 1, 2009, and can be applied to either the 2008 or 2009 taxes.

The really nice part of this tax perk is that it is a true credit. If you owe $8,500 in taxes, the $7,500 refundable credit comes off the top, leaving an amount owing of only $1,000.

Not only is this a refundable tax credit, but it’s also a loan. This means that within two years buyers must begin paying it back at no more than $500 per year for 15 years. If the home is sold during that time, the amount is withdrawn from the profit. If there is no profit, the loan slate will be wiped clean.

5. The cost of rent is not going down, but house prices are. The cost of buying a house has gone down in most of the U.S., in some areas more dramatically than ever. This drop in price has not affected rent prices, which have remained fairly solid. According to a report from John Burns Real Estate Consulting in Irvine, California, which surveyed 50 percent of the 76 main area markets in the country, the average person can buy a house for less than they could rent one.

6. Solid investment. In this tenuous market of shaky hedge funds and bankrupt financial institutions, it’s good to have an investment that you can feel relatively safe with. Every dollar you pay against your principle goes back in your own pocket when you finally sell, and with some extra added profit to boot.

7. More House for Your Money. With the combined lower prices and record low interest rates, a new buyer can start out with far more house than they could have if they had entered the market four years ago.

8. Today’s Built in Safety Features. Some states, such as California are trying to make it easier for people to invest in a home. The California Association of Realtors have introduced the Housing Affordability Fund’s Mortgage Protection Program. For a house purchased in 2009, if a homeowner is unable to make their payments, the fund will cover up to $1,500/month for six months.

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Work with a qualified, dedicated agent for your Goose Creek real estate purchase. Find the ideal Charleston S.C. home at www.BuyingCharlestonRealEstate.com.

Excellent article, Mike.  This definitely is the smart time to buy.

If you’d like to speak with a Sacramento-area consultant about financing options for you new home, just drop us a line, and we’ll help you get started.

California New Home Communities with Great Features

As the most populous state in the nation, California is one of the most desirable places to live. With close to 37 million residents, and growing, those wishing to relocate to the state, or within the state, need to be accommodated.

Lotus Walk is a townhome housing community found in the thriving city of Garden Grove, California. Located near to local entertainment, dining establishments, and shopping centers, Lotus Walk has over a dozen floor plans to select from. Lotus Walk is built by Olson Homes and range in size, from 2 bedrooms, 2.5 baths, and up to 1,683 square feet. Each townhome includes granite countertops, underground parking, ceramic tile flooring, and Whirlpool stainless steel appliances. The new homes located at Garden Grove start in the $300s.

Serenity, a Brookfield Homes master-planned luxury home community, is located at The Estates at StoneBridge in San Diego, California. Overlooking acres of preserved open space, Serenity provides single-family and two-story homes that emphasize both Italian and Spanish architectural design. Each home at Serenity offers a master retreat, ladies’ vanities, and a bonus living area downstairs. Homes range between 4,040 to 4,759 square feet, 5 bedrooms, 4.5 baths, and three-car or four-car plans. New homes at Serenity start in the $800s.

Cristallo is a desert-living community in Indo, California built by Ryland Homes. Cristallo is located in the master-planned golf community of Terra Lago, and provides new homes ranging from 1,987 to 2,619 square feet; the homes offer up to 5 bedrooms, and 3 baths. This Southern California community allows residents to live the country club lifestyle, without having to pay the country club price. Home-sites are currently available alongside the golf course and buyers can choose from 7 different floor plans. The homes at Cristallo start in the low $200s.

Elliott Homes’ Tuscany community in Rancho Cordova provides several new homes ready for immediate move-in, including the Bordeaux which is a 5-bed, 4-bath, 3-car providing two stories and 3,705 square feet of livable space. This new home community is located just east of Sacramento and includes many upgrades, such as high-quality carpeting throughout, tile flooring throughout, upgraded countertops, Jacuzzi tub, an alarm system, pre-wired 5.1 surround sound, plus upgraded kitchen appliances. The Bordeaux was listed at $723,950, but is now available for only $495,000.

William Lyon Homes’ Shady Lane at Whitney Ranch, a Rocklin, California new home community currently offers several move-in ready homes for sale. Located on lot 21 is Plan 2C which offers 4 bedrooms, 4 bathrooms, a 2-car garage, and 2,394 square feet of living space. This home is nearing its final stage of construction, meaning there is still time to customize many of the features such as carpeting, cabinets, and countertops. This home is particular home is priced at $332,990.

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Search new homes california, orange county new homes and Californai new homes today!

If you’re moving to California, I hope you found this to be an excellent resource on the new communities you can look forward to moving into.

To talk to a local mortgage broker about financing your next home, simply head over to our free consultation page, fill out some basic information, and they’ll get right back to you!

Lower Property Taxes in California

California homeowners who are merciless to avoid the downward roller coaster housing market ride have an option. While some enjoyed the ride up and other entered at the peak of the housing market bubble, everyone is now currently in a free-fall. Luckily, there is small silver lining to benefit from in the coming years. As a property owner, it is your right to file for a decline in value in order to capitalize on a unique opportunity to reduce property taxes.

Expensive property tax appeal consultants who demand up front fees simply aren’t necessary. Homeowners can easily lower property taxes by asking for a property tax reassessment from the county assessor, by filing for a decline in value. With a little hard work and the correct instruction, homeowners can successfully file a professional property tax reduction appeal themselves.

Many California homeowners have benefited from the reassessment of their property values. Due to strict deadlines of the counties of California, you may be prevented from seeking a property tax reassessment if you wait too long. Act now before another deadline passes and the potential savings of another tax year vanishes.

This is not a gift or a benefit given by the state but your right as a California homeowner to be taxed fairly. Home values have dropped dramatically in California so a reassessment resulting in a property tax reduction is almost guaranteed if you purchased your home between 2004 and 2007. Usually, the state increases your property tax annually at a capped rate of 2 %. In rare cases will your assessor approach you to reassess your home. It does not benefit you to wait until they do.

Californian property owners have been bombarded by annoying advertisements from property tax appeal consultants asking for up-front fees to provide a service that they can do themselves. Now, more than ever, homeowners need to take matters into their own hands and find ways to save money on their homes. The time for over-spending and hiring out for everything has passed. Now is the time for people to take control of their home finances and weather the storm. It’s really pretty easy to save thousands on property taxes but it requires a proactive get-up-and-go mentality to demand a property tax reassessment and win.

Do it yourself! There’s a growing group of California homeowners who are about to save thousands of dollars! You too can save thousands on your property taxes by filing an appeal yourself, but you have to take action and demand a property tax reassessment before it’s too late. If you need help, there are great programs out there that will show you what to do step-by-step and provide all forms necessary for your property tax appeal letter. Do it yourself and save $1000’s. Yes, it is possible to take the roller coaster ride down and still survive the plunge.

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Don’t hire expensive consultants! It is your right as a citizen to file for a property tax reduction yourself and save thousands of dollars this year and in the coming years.

What an excellent optimistic article in a time when everyone else is seeing the glass as half empty. Thanks, Wallace.

If you’d like to discuss your personal situation in more detail, we have experts standing by to help. Just drop us a line today to get started.

Affordable Vacations with Something to Crow About

Summer is nearer and for many of us, this means some time off: time off from packing lunches for the kids, time off of work, time off of carpool or simply some time off from the daily grind that is our routine.

Perhaps you’re not headed to Europe or off to the Caribbean but you’d still like to get a way for a while, then why not look right here in California? Tens of thousands of tourists do each year, there must be something to see, let’s have a look around.

Isn’t it always so that we forget how incredible the place we live? To remember can remind us not to take for granted those who support and love us; too often, we can take them for granted as well.

From the oldest standing redwood grove, to massive ports of call, to one of the deepest lakes in the world, some of the best rivers to be rafted and surf to be rip-curled, California is as good as it gets and tens of thousands of people flock to its land yearly.

Here are some adventures you can have in the Sierra Nevada Foothills.

We’ll start with the area responsible for the Gold Rush, The Coloma / Lotus American River Valley.

El Dorado County is host to the American River Valley and Coloma, it’s only 2-hours from the San Francisco Bay Area, 1-hour from South Lake Tahoe and thus has some excellent vacation choices. This is a good choice for a cost friendly break from the daily grind and one that offers a bounty of vacation options. Within a reasonable drive from anywhere in the State, this is a solid option rich in US history as well.

The History:

As noted on the Marshall Gold Discovery State Historic Park website -James W. Marshall discovered gold in 1848 on the South Fork of the American River in the valley the Nisenan Indians knew as Cullumah. This event led to the greatest mass movement of people in the Western Hemisphere and was the spark that ignited the spectacular growth of the West during the ensuing decades. The gold discovery site, located in the still visible tailrace of Sutter’s sawmill, in present day Coloma California, is one of the most significant historic sites in the nation.

It seems true that we have a tendency to not see that which is part of our everyday and thus so many Californians are missing the great offerings of their State. The very Gold Rush you studied, the very Gold Rush all Americans have to study, took place right here. The State Park is one of the most heavily visited in all the United States. The Park is replete with historic items on display, buildings still stand from the era, including a jail cell, a replica of the mill, a few building are still employed that were part of the town during it’s boom time, etc.

Before you make your way to Coloma and the Gold Rush site, you have a decisions to make. Are you making a day of this? Is it just you and the family coming into town for a little history and picnic on the banks of the South Fork of the American River or are you planning a big family get together, reunion style, and you’re planning to employ some of the built in barbeques they have available for your use. Is the family going to stay a day or multiple days?

Lodging includes campgrounds, such as Camp Lotus or American River Resort, an RV park called Ponderosa Park (please call them as they have membership requirements I’m not familiar), a local historic Hotel, The Sierra Nevada House and bed and breakfast opportunities such as The Albert Shafsky House in Placerville. After you’ve decided how you’ll settle in at night, there are a variety of daily excursions you could look into: hot air ballooning, whitewater rafting and even excellent wine tasting!

South East El Dorado County is recognized by the Viticulture Society as some of the best land for specific wine-grape varietals. Thus, some of the best wineries can be visited and tasted while you’re right here. Personal favorites are Oakstone and Windwalker wineries both in Fairplay!

Nothing wrong with enjoying the spirits of wine tasting and relaxing into the warm; however, if you want to mix it up, check out rafting. It’s a great adventure for most age ranges and fitness levels. The local river offers great excitement for a seasoned adventurist but is not so intense beginners cannot venture onto a raft. The American River is one of the most rafted rivers in all the United States, and it’s ability to accommodate such a wide variety of guests is a big reason why.

You’ll definitely have your choice when it comes to a rafting outfitter, there are some 33-companies on the river. The best way to chose which is right for you is to go with the one you feel most comfortable with when you book. There are differences between the companies but the environment is so competitive they all have to mind themselves pretty well.

You really shouldn’t pass up the opportunity to raft. The majesty of the river canyon is cathartic in so many ways. Since there are so many things to do in the area, if you do come on a large family outing, there are plenty of things to do for those that absolutely won’t raft.

Ever wonder what the oldest hardware store in the west looks like? Or perhaps you’re into newspapers and you’ve long pondered where the home of the oldest western newspaper is. Well, wonder no more, visit historic Hangtown, now known as Placerville. The main street is lined with shops, eateries and real life local businesses.

Stretch yourself a bit more by driving up to South Lake Tahoe and visit the beautiful lake, play a few games, hike through Desolation Wilderness.

Perhaps wed all love to cruise the Mediterranean for a few weeks but its simply not in our cards right now. You can head to the foothills of Northern California from anywhere in the State and be there within a days drive. Once here, with some simple planning, you can have as fulfilling and diverse holiday as nearly anywhere in the world. Tens of thousands of people a year come to visit, shouldn’t you?

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Christopher Pyle is the owner of Action Whitewater, long a river lover, Christopher has been commercially guiding for 24-years and has grown up in El Dorado County. Since 1989 Action Whitewater Adventures has offered quality rafting on the on the South and Middle Forks of the American River. Curious, want to see rafting video, then please, click on over to our home on the web.

Thanks for that excellent Californian tour, Christopher! See what you have to look forward to in Sacramento?

If you’re planning to move to the Sacramento area, you should drop us a line and we’ll put you in touch with the best mortgage brokers in the area.

Why I Hate 40-Year Loans

During the subprime crisis we saw the advent of numerous bizarre loan products. In general the new loan products were designed to get people into houses they could not normally afford. As people started to default on their mortgages banks realized many of these loan products were not a good idea. During the subprime crisis we saw most of these new loan programs fall to the wayside. I think in most cases this is a good thing. Many of these new loan products reduced the chances that individuals could gain equity in their homes by paying off principle. When difficult times arose for people they were in a difficult position because although they had made years of payments their loan balance had not changed. The worst of the new loan products had “teaser rates” so that individuals made low payments for a few years until the rate and their mortgage shot up. Its a wonder why banks are surprised by the number of foreclosures.

The one product that has seemed to survive the subprime meltdown is the 40 year loan. I am not a fan of the 40 year loan. Mostly because the savings are minimal. Lets look at the current mortgage interest rates from Wells Fargo for a 40 year, 30 year and 15 year loan.

40 Year Loan = 6.375

30 Year Loan = 5.75

15 Year Loan = 5.125

Now using a mortgage calculator, lets look at the mortgage payments on a 200k house.

40 Year Loan = $1,153.14

30 Year Loan = $1,167.14

15 Year Loan = $1,594.64

While the difference between a 30 year loan and a 15 year is substantial, $441.50, the difference between a 40 year loan and a 15 year loan is only $14 per month. A little savings but is it really worth adding a whole extra 10 years to your mortgage. So over 30 years $14 dollars a month amounts to $5040. On the other hand an extra 10 years of mortgage payments comes out to $138,377. To run the numbers a different way by putting down a mere $2400 on your 30 year loan you would get the same mortgage payment as you would on a 40 year loan.

Obviously everyone’s situation is different and in a small number of cases a 40 year loan might be warranted. But in general the 40 year loan adds extra years to a person’s loan for a minimal benefit.

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Ki works as a realtor in the Austin real estate market. He provides updated stats on the market on his Austin real estate blog along with a free search of the Austin MLS.

Thanks for that insightful article, Dane.

If you’d like to talk to a local, Sacramento lending professional about finding the right mortgage for you, just drop us a line today and we’ll put you in touch with the best person to meet your needs.

The Essentials of First Time Home Mortgage Loan Borrower

Property ownership and buying a home for the first time can be an exciting yet mind-boggling experience. Before you make a decision, it is important, therefore, that you know your options as well as the basics of home mortgage loans.

What is a mortgage?

A mortgage is a loan you pull out to pay off your home. If you are a first time home mortgage loan borrower, you may be asked to deposit a down payment and pay for the rest (i.e. monthly) through a mortgage loan. Establishments that can offer mortgages are mortgage specialists, building societies and banks.

What are the types of mortgage?

-The repayment mortgage - monthly payments are made within an agreed term until loan and interest are paid off.

-The interest-only mortgage - monthly payments are made for a period of time as agreed in the contract, except payments cover only the loan’s interest within the initial term. Afterwards, you are asked to make interest payments in full every month.

-The fixed-rate mortgage - requires you to pay for a fixed interest rate over the whole term. Interest rates do not change and therefore offers a feeling of certainty for most borrowers.

-The adjustable rate mortgage - has rates that adjust after an initial term containing a fixed rate. Rates could adjust depending on the rise and fall of other economic rates. This could sound daunting for first time home mortgage loan borrowers, but those who want a lower initial rate can benefit from this type of mortgage.

What are the requirements?

1. Good credit report:

From your credit report, lenders will be able to determine whether they can grant your application or to increase the interest rates for your loan. Lenders especially want to make sure that a first time home mortgage loan borrower has the ability and willingness to make his or her payments.

2. Insurance:

Insurance can be used to pay off your mortgage if you have just been in an accident, lost your job or become sick. You might be required to use life insurance to pay off your mortgage should death occur. What are some tips I can use before purchasing property?

- Improve your credit report - Avoid applying for more credit and pay on time. - Review and correct credit information - Contact the credit bureau to correct inaccuracies - Get the best program - Choose a plan that is most suitable for your situation. - Research - Jot down your price range and find out how much you can borrow. - Do it online - Using the Internet could save you more time and money. Lenders now offer mortgage calculators online that you can use to predict which mortgage program is most suitable for you. - Choose the best mortgage specialist - Determine if the specialist works in a company that is likely to stay in business whenever rates fluctuate. - Ask for advice - Look for recommendations so you are familiar with what kind of mortgage plan you are getting into.

These are only recommendations, though, and should not be used in legal matters.

Read more data as a first time home mortgage loan borrower. Discover an online home equity mortgage calculator now.

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Those are some excellent tips for first times, Matthew! Thanks for sharing them with us!

If you’re a reader who would like more information and a chance to talk to an industry expert at absolutely no cost, simply get in touch with us and we’ll get you started on the right track.

How can a mortgage broker help you? by Ron Mark

Whenever one mentions the term mortgage broker one thinks of a person that can help obtain a loan through mortgage. For most people mortgage means signing the house to a lender for a big sum of money that they can repay over a long period of time in small installments. However things are not as easy as they seem and knowing where to apply for a loan or when to apply for it as well as how to prepare your application successfully are extremely important steps in getting the loan you want under the terms you want. This is where a specialized broker comes to scene.

The mortgage broker can explain the process step by step, can help you get the necessary documentation; can explain all the terms used in the mortgage industry and help you make an informed decision. If you are looking to buy a home consider the homes for sale in California especially if you like the location. Of course there are homes for sale in all the states, but there is an advantage when searching through the homes for sale in California. The mortgage broker in California has fiduciary duties. This means that he is responsible toward you the client and has to have low service fees. He or she can also explain the difference between pre-approval and pre-qualification and can help you with both. The pre-approval follows all the steps of the full approval and can present you in a higher position when facing the lender. The broker is the mediator of the meeting and the one responsible of helping you get the better part of the deal.

Although the price of the homes for sale in California and other states in the United States is declining, most of the prices for houses are still obligated to take a mortgage loan. A mortgage loan or simply known as mortgage means that the loan has as a guarantee a valuable asset of the person that intends to take such a loan. A mortgage loan is given for a long period of time and the installments reflect the interest rate too. One of the most important things one needs to understand when thinking of a mortgage loan is the foreclosure or repossession clause the lender has. The characteristics of a mortgage may also differ from case to case. Since there are no specific rules when it comes to applying for a mortgage it is essential to contact a broker specialized in mortgage loans, a broker who works in the area where you intend to buy or build a home.

Another reason why you need a broker specialized in mortgage when buying a home is his or her ability of explaining the different types of mortgage loans. The general characteristics are similar from state to state, but these kinds of loans are subject to legal conditions and local guidelines. The general characteristics are the interest that can be higher or lower; the duration of the loan usually around 30 years, and the payment and regularity of payments. The most common loans are the fixed rate mortgage and the adjustable rate mortgage. The first one states that the payments are fixed and cannot change for the duration of the loan. The second one as the name explains it has an adjustable interest rate and the risk is taken by the borrower and not the lender. In most of the cases where houses are being bought or build, the borrower has to put a downpayment before getting a mortgage loan.
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Even though there are homes for sale all over the country the homes for sale in California are becoming more and more popular not only because of the weather and region but also because of the mortgage broker which has to act in the best interest of his or her consumers.

Thanks for that exceptional read, Ron.

If you’re a reader who would like to learn more about the mortgage industry before you go broker-hunting, just drop us a line and we’ll let you know our recommendations absolutely for free.