Huntington Beach Mortgage Refinance

Cash-Flow Loans - If you are a borrower looking to maximize your monthly cash flow, there are alternative mortgage loan products available for you to increase your cash flow.

Reverse mortgages are one way of creating cash-flow. Reverse mortgages are specifically designed for senior citizens and use the equity in the property to generate monthly income.

One of the most popular home loan mortgage programs to maximize your cash flow is the interest only mortgage. This option allows you to make an interest only payment, usually for up to 10 years. With a normal mortgage you usually make a principal and interest payment. With an interest only loan you are able to only make the interest only portion of the payment. This is great for people who have unsteady incomes such as self-employed borrowers and commissioned borrowers and for real estate investors. With most interest only loan's you can make a payment that is larger than the required interest only payment and everything above the interest only amount will be applied directly towards the principal of your loan and lower your loan balance automatically.

An interest only loan can increase your cash flow by a couple of hundred dollars a month. The disadvantage is that you will not be paying down your mortgage. The biggest advantage is that you will have more available money to you on a monthly basis. This money can be used to pay down your high interest credit cards, and potentially saving you even more money in the long run.

One way to increase monthly cash flow is to take a 40 year mortgage. A longer term directly effects your monthly mortgage payment. Be sure to ask you preferred mortgage professional if you qualify for a forty year mortgage and just how much you can save per month.

Most consolidation loans are simply to increase cashflow.

When taking out a loan to pay off credit cards, try to pay off the cards with the highest monthly payments. This saves the most monthly cash flow and, in most cases, retires the most expensive debt first.

The Pay Option ARM, or Pick-a-payment loan will increase your monthly cash flow the most. This type of loan has a very low minimum payment rate usually based on 1-2%. This payment option does not cover all the interest each month, the difference is added to the balance of your loan. This is called negative amortization. These minimum payments can often decrease your monthly payments by 30% - 40%. The increased cash flow can be used to pay down high interest credit cards, maximize a 401(k) contribution, start a college fund, contribute to other investments or retirement savings, etc.

Another loan program designed to maximize cashflow is the Balloon Mortgage. A common Balloon loan is the 15/30, which is a mortgage that is due in 15 years but amortized for 30 years. With a 30-year amortization, the monthly payment is much smaller than those that are amortized for 15 years.

No Cash-Out Refinance - A No Cash-Out Refinance is a transaction in which the new mortgage amount is limited to the sum of the remaining balance of all existing mortgages, closing costs (including prepaid items), and any discount points.

Many people will do a no cash out refinance to simply lower their term from 30 years to 25 or from 20 years to 20 years, etc... By lowering your term you will save a substantial amount of mortgage interest. Cash out refinances can also be done for the opposite reason: A borrower may be on a 15 year mortgage and something happens at work or an unexpected expense comes up and it may be necessary to increase your term back up to a 30 year mortgage instead of the 15 so that you can free up some money each month.

You are only allowed to receive $2,000 or 2%, whichever is the lesser, of your loan amount back in a rate and term refinance, also known as a no-cash out refinance. No cash out refinances are done for many reasons. One reason is to lower the rate and or term of your loan. Lowering your rate can save you money from your monthly mortgage payment and lowering your term can cut the time it takes you to pay off your mortgage saving you tens of thousands (possibly hundreds of thousands) of dollars of mortgage interest.

You are allowed to receive a maximum amount of $2000 during a No Cash-Out Refinance.

An experienced mortgage broker often submits Rate and Term Refinance applications to the banks that currently hold the mortgage notes, because there is a good chance the homeowners qualify for "Streamline Refinance" programs, which offer reduced documentation and less settlement costs to the homeowners.

No Cash Out means different things to different lenders. If you are looking for a mortgage that is non conventional then the rule of thumb is 1%. That means you cannot have more then 1% cash in hand for a non cash out refinance.

Another reason to do a no cash out refinance is because you currently have a 3,5,7 year fixed-adjustable rate mortgage and it is about to expire and start adjusting every 6-12 months, or you would like to get off the adjustable rate mortgage all-together and into a fixed rate mortgage before the market climbs into the 7% range.

How much cash will I need to purchase a home - The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:

Earnest Money: The deposit that is supplied when you make an offer on the house

Down Payment: A percentage of the cost of the home that is due at settlement

Closing Costs: Costs associated with processing paperwork to purchase or refinance a house

Although one can easily obtain mortgage financing without putting up much cash investment, a homebuyer can often get better loan terms with a larger down payment. home buyers with at least 20% down payment often get the lowest interest rates available.

Look at it from a lender's perspective: If you put a large downpayment into a home, you aren't likely going to default. With this lower risk comes better terms on your mortgage. While you may need no cash to purchase a home, having cash will allow you to secure a lower rate on your mortgage.

If you are in a situation where you would rather save your money then lock it into a home, there is always the possibility of asking for a seller concession and try to get approved for 100% mortgage financing.

While this it is possible in today's lending climate to buy a home with literally no money down, it behooves the borrower to at least expect and prepare for some minimal expenses. Look at it this way, if you can buy a home for as little as first and last months deposit for a rental home, you are way ahead.

In some cases it is even possible to purchase a home with only slightest, or in some instances, even no earnest money deposit. Combined with seller concessions and/or no closing cost loans, it is possible to get into a home with actually no out of pocket expenses.

You must be prepared to come up with the closing costs plus 1 years worth of homeowners insurance upfront, pay for any application fees, appraisal fees and inspection fees.

Even though you're under the impression that all your closing costs will be paid due to seller concessions, sometimes lenders ask for more than what your loan officer expects, such as 6 months tax reserves, when normally it would be 3 months, etc. Don't be surprised if you have to supply a pittance at the closing table.

For homebuyers in California, I offer a unique service. If you choose to use me to represent you as you buyer's agent in addition to securing your financing, I can usually credit several thousand dollars towards your closing costs.

This, combined with 100% financing means you can buy a home with almost no cash out of your pocket. Call me for further details.

You will be provided with a HUD (settlement statement) before closing which details the closing costs and the exact amount you need to bring to the table. A good broker will be able to help you calculate with good accuracy (not exact) what you charges will be.

Don't forget that you will also need to purchase homeowner's insurance in order to complete the transaction. You will have to prove that a full year of homeowner's insurance has been paid for. If you think that you may be a little short on cash, consider putting down less earnest money in order to cover the homeowner's insurance. Many times you can save money on your homeowner's insurance by going to the same person that provides you with your car insurance and any other type of insurance you may have.

Down payment money can often be taken from retirement accounts subject to some restrictions. Contact your mortgage professional and your tax professional to see if a loan from your retirement account or an early withdrawal may be right for you.