If you are searching for the strongest housing market in the United States, look no farther than California. While the entire state is enjoying a strong housing boom, the Los Angeles area is leading the charge. The combination of affordable suburban homes combined with downtown locations make LA red hot. The Culver City area of Los Angeles has becomes one of the most desired and prestigious parts of the city. You have easy access to the ocean, to Beverly Hills and points north like San Francisco and beautiful destinations to the south like San Diego and even Mexico. Culver City is truly a one of a kind place to live. If you already call this magical place home, now is a great time to look into refinancing your current mortgage or even getting a home equity loan. If you are thinking about joining the stream of people who are headed to California, then you are probably in need of a first mortgage. Here are a few helpful tips to get you through your next bank loan.
Good Faith Estimate
One of the best changes in recent years to the way mortgages and refinances are processed is called the good faith estimate. A few years ago, the government, in an attempt to strengthen consumer protection laws, declared that all lenders must submit a good faith estimate which details every cost associated with the loan that the person is applying for. While the law varies from state to state, the good faith estimate must be given to a loan applicant within three business days after the application has been accepted. That way, you have plenty of time to study it and make sure that you can afford to get through your loan process.
Mortgages
The same good faith estimate that is given to people who apply for a refinance is also given to those that apply for a first mortgage. And since many people are not as well off financially when they apply for their first mortgage as they are when they apply for their refinance, a good faith estimate is even more important. Also, when you receive your good faith estimate, it is an excellent time to ask your lender if they allow you to buy points. Buying points is a way you can save some serious cash on your mortgage over the long term by paying a little bit now. Here is how it works. Let’s say you are offered a six percent interest rate on your 200,000 dollar mortgage. At closing, you might be given the chance to “buy points” which means you pay extra up front at closing, and in turn, your lender will lower your interest rate. Every lender works differently. Some will offer to lower your rate 1/6 th of one percent, while others go for 1/8 th of one percent. Even if your lender offers the low end of the spectrum, by buying a point (one point equals one percent of your loan) you can end up saving thousands of dollars down the road on accumulated interest.
Home Equity Loans
While there are far fewer costs involved with a home equity loan than there are with the other forms of loans we have talked about, your lender will most likely give you a good faith estimate, as well. The law in most states covers all types of loans, even home equity loans. When you get your fee estimate, you can calculate exactly how much the loan will cost and if it is in your best interest to take it.
If you would like more information on getting a home equity loan, a refinance or a first time mortgage, please fill out the form below and one of our experts will contact you.
