Southern California Mortgage Broker

Jumbo Home Loan - Getting home financing for a jumbo home loan is not always easy. The perameters and lending guidelines become more strict- assuming the borrower has more of an ability to afford a larger home mortgage than the typical home owner.

Jumbo loans have the same lending options as your conforming loans in regards to interest only, fixed rates, payment option arms, amortizing arms, and 100% financing.

Jumbo loans have different underwriting guidelines than the conventional loans do. The reason for this is that jumbos have to be packaged and sold differently in the secondary market. Investors in the secondary market want to protect themself from default on such large loan amounts.

With a jumbo mortgage loan a borrower is going to pay a little bit higher interest rate than with a traditional conventional loan. Once a Loan exceeds the limits that are set by Fannie Mae and Freddie Mac, which is $417,000 as of 2006, the loan is considered a jumbo loan.

While a jumbo loan may have a slightly higher interest rate and different underwriting criteria there are many options including subpime loans available even with lower credit scores.

Jumbo loan guidelines will usually require more in the area of assets or cash reserves than their conforming counterparts. Many borrowers use 401K accounts or other retirement accounts to satisfy these reserve requirements.

When the Jumbo loan amount is only a little higher than conforming loan limits, one can avoid pay the higher Jumbo interest rate by dividing the loan amount into two mortgages, one within the conforming limit and a second mortgage to make up the difference.

The reason that the interest rate is higher on jumbo loans, is because of the chance of default. The more money that the lender has invested in one particular property, the more risk that they also have invested in that property. More risk also equals a higher interest rate.

Home Improvement Loan - If youre looking to take out a loan to make improvements on your home consider refinancing your mortgage.

Renovation loans are also available to homeowners as well as investors. When the appriaser comes out to assess the value of the property, he or she will also take into consideration the improvements that will be made. They will report two values: as-is and after completed. A renovation loan will be based on the after completed value. The funds are disbursed similar to a construction loan.

The Department of Housing and Urban Development (HUD), through the Federal Housing Administration, offers many programs that insure lenders against loss due to homeowner defaults. The 203(k) is a program that is designed to encourage lenders to make mortgage loans secured by properties that are in need of improvements or modernizations. The loan amounts of 203(k) program are determined based on the values of the improved properties.

Also, by borrowing against your home, the interest that you pay will increase your current tax deductible mortgage interest. If you were to finance your home improvements with Credit Cards, or through a Personal Loan, the interest would not be tax deductible, and the interst rate will always be higher than that of a Home Equity Loan(Second Mortgage) or Home Equity Line of Credit.

Improvements such as kitchen remodels, room additions, bathroom additions or remodels often will raise the value of a home for a greater amount than is paid for the improvement.

In such cases, it makes good financial sense to access funds for such improvements by borrowing against the home.

When making improvements with your home be sure to make sure you have researched your intended improvements. Just because you install a $30K pool does not mean your home will be worth $30K more.

If you need to improve your home you can get the cash by refinancing. Home improvement is a common reason for refinancing. Often people increase the value of there home by doing improvements from the cash they receive by refinancing.

When looking to apply for a home improvement loan you should consider a refinance of your current 1st mortgage, a second mortgage or a HELOC (Home Equity Line of Credit). All of these options will provide you with great rates, tax deductible interest and the money you need to complete your home improvements. Home equity loans are revolving lines of credit that work pretty much like a credit card. 2nd mortgages are term mortgages that are set for a specific term such as, 5 years, 10 years, etc... Another thing to consider is that almost all mortgages and HELOC's have a grace period when making your payment, usually 5-15 days. A credit card has no grace period and if you are 1 day late more than once or twice in a 6 or 12 month period of time they will increase your rate.

Some second mortgages allow you to take up to 115% and 125% of your property value. If you're planning on making serious upgrades consider this option.

If your property is worth $300,000 the 115% loan allows you to borrow up to $345,000.

If your property is worth $300,000 the 125% loan allows you to borrow up to $375,000.

Home Improvement Loans are great for the borrower as they are able to take some of thei equity they have built and improve their investment so hopefully when they do decide to sell can get a sell at a greater price than if they had not done the home repair loan to begin with.

You can usually borrow up to 80% of the value of your home and even up to 100% in some cases - minus any liens against the property. The interest you pay is usually tax deductible. (Consult your tax advisor for exact details.) A home improvement loan can only be used for improvements performed by a professional contractor and inspections of the work are required in most cases. You can borrow from $1,000 to $150,000 with terms ranging from 3-15 years.

You can even take out a loan using the future appraised value of your home. This loan would lend off the future value as high as 90% and sometimes higher. It is best to use this loan when you are short on equity for home improvements.