Money Lender Loans is an experienced hard money lender based in Orange County, California. We offer funding for various types of hard money loans, including purchase loans and refinance loans, and can guarantee low rates, fast approvals, and excellent customer service.
Certain circumstances, including low credit scores, foreclosures, bankruptcies, and short sales, may hinder you from accessing mortgages from conventional lenders. You may also be faced with a closing date when you must finish your payments or risk losing out on a property. It is during such financially challenging times that we can help to ensure that your dreams of owning a home or even improving your mortgage terms come to reality.
As hard money lenders who solely rely on asset-based loan financing, we are not concerned with poor credit ratings as long as your loan to value ratio is within the acceptable range. We extend purchase and refinance loans to facilitate you acquiring a home or refinancing your mortgage.
What are Purchase or Refinance Loans?
Purchase and refinance loans can both be classified as home or real estate mortgages even though there is a difference in their uses. Purchase loans or mortgages are used to finance the purchase of a home while refinancing loans are used to finance the existing mortgage. Consequently, there cannot be a refinance mortgage without an existing purchase loan because there would be nothing to refinance.
A purchase mortgage allows you to own a home while a refinance loan enables you to top of all, get a better interest rate as you are able to change the terms of the original mortgage. A purchase loan is evidenced by a mortgage or a trust deed that the buyer signs at the time they purchase the home.
What Types of Purchase or Refinance Loans are Available?
- Fixed-Rate Loans
The most sought after form of home loans, fixed-rate mortgages are favored for purchasing a home or refinancing an existing mortgage because they offer protection from market changes and allow for stable monthly payments. They feature a fixed interest rate over the loan’s lifespan, thus enabling the borrower to make predetermined payments. They range between 15 to 30 years and are considered to be affordable compared to the Adjustable Rate Mortgages. Besides, Fixed-Rate Mortgages feature easily understandable and straightforward loan terms.
A credit pre-approval is among the first simple steps to obtaining a fixed-rate mortgage. The credit pre-approval improves your credibility to the seller, enables you to get a property within your range fast, and it speeds up the closing process; hence, your loan is available faster.
A Fixed-Rate mortgage can be used to refinance a mortgage. You need your proof of income and mortgage insurance to refinance your loan using a fixed-rate loan.
- Adjustable Rate Loans
Adjustable Rate Mortgages (ARM) are popular among first-time home buyers due to their low starting interest rate or what is seen as upfront savings. Unlike the Fixed-Rate Mortgages, ARM interest rates are variable and adjust to the market over time. For instance, an 8 year ARM will change or adjust after the first 8 years of the mortgage after which the changes to the interest rate are capped.
Adjustable Rate Mortgage is favorable to borrowers who; expect a rise in income with time, purchase to resell the property, will refinance the mortgage before it adjusts, frequently are on the move, plan for big families and might need a larger house in the future or borrowers who want the initial low rate of interest and payment.
A credit pre-approval fastens your loan application. Adjustable Rate Loans are good for Cash-Out Refinancing, and as Purchase or Refinance Loans. The loan amount for a conventional ARM loan is ordinarily $453,100.
- Federal Housing Administration Loans
The Federal Housing Administration (FHA) loans are home mortgages that are insured by the FHA, which is a federal government backed body that enables low-income borrowers to obtain home financing from pre-approved lenders. These loans can be used to purchase or refinance a mortgage. They attract low down payments and require less documentation compared to conventional loans. They have a streamlined refinance facility which you can use to reduce your current interest payments.
FHA mortgages are beneficial to borrowers with low credit scores and even those who have had bankruptcy cases or foreclosures. They are popular among first-time homeowners due to their low down payment, flexible lending requirements, and lower interest rates than conventional loans. Additionally, the mortgage insurance premium that is payable on the FHA home loan has reduced over time making qualifying for a loan easier. It is also possible to use gifts or grants to reduce your down payment.
The FHA maintains a strict home inspection standard, and it may sometimes require the lenders or sellers to pay some of the closing costs for the borrower. It insures all property types.
Some of the available loan options under the FHA include:
- FHA Fixed-Rate Mortgages- This option has low monthly payments, low-interest rates, and low down payments. There is no penalty for early payments. The 15-year fixed-rate mortgage enables you to pay off your mortgage sooner and to build equity quickly. You also get to save quite a lot in interest over the span of the loan. The FHA 203K 30 year fixed-rate loan allows borrowers to make improvements or renovations to their current homes.
- FHA Adjustable Rate Mortgages- The 5/1 Adjustable Rate Mortgage is advisable for borrowers who hope to refinance after a while or those who won’t keep the home for long. The initial interest rates are normally lower compared to those of fixed-rate This plan keeps the rates low for 5 years.
- FHA Streamline Refinance Loans – The FHA 203K Streamline 30 Year fixed-rate Refinance Loan enables you to borrow up to thirty-five thousand dollars ($35000) cash out to undertake any renovations or home improvements. The FHA Streamline 30 Year Fixed-Rate Refinance Loan enables you to change an FHA Adjustable Rate Mortgage to a fixed-rate loan and attracts lower interest rates and thus lower overall payments. It necessitates less documentation and requires neither a credit check nor appraisals. It is easy to qualify for an FHA Streamline Refinance Loan.
- Veteran Affairs Loans
The Veteran Affairs (VA) loans are mortgages advanced to active military, veterans, and some of their spouses and are guaranteed by the Department of Veterans Affairs. Veteran Affairs mortgages are available for mortgage refinancing either through the VA Interest Rate Reduction Refinance Loan (IRRRL) Streamline Refinance or as a Cash-Out Refinance. These loans are popular among first-time homeowners who meet the eligibility criteria due to the outstanding benefits they provide.
VA loans require no down payment, neither monthly insurance premiums and have low-interest rates. You cannot be penalized for early repayments, and should you be receiving compensation for service-connected disability, you are qualified for reduced or no funding fees at all. The funding fee can also be spread out through the loan amount. There are no credit checks, and you can receive a 100% Cash-Out Refinance to meet your financial needs.
To qualify for VA loans, you have to have served continuously in the military for at least 3 months days during wartime, at least 6 months during peacetime and for 6 or more years in the National Reserves or the National Guard. An unmarried former spouse of a member of the military who dies while on duty or due to service-related injuries is also entitled to a VA mortgage.
VA Purchase fixed-rate Mortgages are ideal if you want to pay fixed installments during the loan term while VA Purchase Adjustable Rate Mortgages may be ideal if you prefer to exploit the upfront savings or expect to be redeployed to another station in due time. Refinancing options include the VA Cash-Out Refinance and the VA IRRRL or the VA Streamline Refinance which offers access to low monthly payments and interest rates, a simpler refinance process and you will not have to submit your bank statements, paychecks or W2 forms. A VA Cash-Out Refinance may allow you to use your home equity to obtain funds even if you have another loan facility with FHA or USDA.
- Jumbo Loans
A Jumbo mortgage can surpass conventional loan limits as set by Fannie Mae and Freddie Mac regulations which limit mortgages to between $453100 and $679650. Super Jumbo loans and Jumbo loans are more flexible than conventional loans and are ideal for purchasing or refinancing a home.
With Jumbo loans, you get loan options up till $15 million and Loan to Value ratio of 90%. Your non-occupying friend or family member, can co-sign to increase your chances of qualifying. Both Fixed-Rate and Adjustable Rate Jumbo mortgages are available under this program, which also allows you to refinance your mortgage.
Jumbo mortgages are available for residential, investment or vacation homes. They have an interest-only option which allows you to pay for the interest part of the loan only.
- Reverse Mortgages
This type of mortgage allows people who own a home and are over 62.5 years to use part of their home equity to take up a loan. These may be used to meet daily living expenses, medical expenses, or for home improvement. There are no monthly payments provided that you live in that home, pay property taxes, hazard insurance, home association charges, and maintain your house according to the loan guidelines. You do not need to pay back the loan unless the house is vacated, sold or the owner dies.
Lenders do not scrutinize your credit score or your debt to income ratios, but you must indicate your willingness and ability to meet set obligations. Reverse mortgages provide financial flexibility during retirement with the non-recourse loan, which is non-taxable and not transferable to heirs or relatives. It is insured by the FHA and is part of the Home Equity Conversion Mortgage program.
Reverse Mortgages can be used to; purchase a home for the borrower, retire an existing mortgage, or to refinance an existing loan. Here, a borrower is able to convert one HECM loan to another HECM loan to borrow more cash or lock in a low-interest rate.
The interest rate can be a fixed-rate or an adjustable rate, but the fixed interest rate is available only for lump sum payments.
What are the Advantages of a Refinance Mortgage Loan?
Over time you may have improved your credit score or say the economic climate improves, thus bringing about lower interest rates. Refinancing allows you to take advantage of the lower rates. You also get to free up equity built up in your home, which allows you to take cash-out for any major expenses such as tuition, investment property, or a vacation home.
A refinance mortgage allows you to consolidate higher interest debts by paying off any car loans or credit card bills using the loan. You can change an Adjustable Rate Mortgage to a Fixed-Rate Mortgage or combine two mortgages into one low fixed-rate mortgage to cushion you in case interest rates rise in the future.
How Soon Can You Refinance?
It is the industry’s norm to require borrowers to maintain their initial mortgage for a minimum of 12 months before they seek out refinancing. We welcome you to check with us for details and any restrictions. By refinancing with us, you do not require a new property appraisal or a new title search. We will be happy to offer you a comfortable rate.
What are the Closing Costs for Refinancing a Mortgage Loan?
Closing costs are payments made to meet the costs needed to finalize your mortgage when you purchase or refinance a home. They are made at the closing process of the mortgage acquisition where the property’s title is transferred to the buyer. The buyer pays most of these costs, which are determined by the home’s location, the mortgage size, and the type of loan.
Closing costs range from 1% to 5% of the total loan amount. They include:
- Loan Origination fee- This is used to compensate the loan officer working on the loan application. They are 1%-3% of the loan amount.
- Application fee- Lenders charge from $100-$300 for the loan application. At Money Lender Loans, we will be glad to waive this fee.
- Home appraisal charges- This is done by a professional valuation firm to estimate the value of the home.
- Documentation fees- Documents such as seller’s disclosures, truth-in-lending are among those you will fill. Charges are from $200-$500.
- Title search charges- A title search is necessary to ensure that the seller has the legal rights to sell the property. You can pay around $200-$400 for the deed.
- Recording fees- These are assessed to keep refinancing on the public record. They are set by the requisite government bodies and range from $25-$250.
- Home inspection fees- It is done by a professional firm to point out any issues with the property. They cost from $300-$500.
- Flood Certification- If your home is in a government-designated flood zone, you will need to pay for flood loan insurance certification ranging from $15-$150.
- Attorney fees- An attorney ensures the legality of the loan contract and charge anything from $300-$500.
- Survey charges- For the purposes of documenting the home’s boundaries, you will need to pay $100-$350 for a professional survey.
- Discount Points- Also referred to as ‘Buying down the rate,’ these are fees paid to the lender in exchange for a reduced interest rate. A point costs 1% of the mortgage.
What is a No-Closing Cost Refinance?
The closing costs of a refinance mortgage keep many people away from seeking it. A no-closing cost refinance enables you to obtain funds without the upfront charges which may run into thousands. The charges are due to insurance, underwriting and processing fees, appraisal fees, taxes, and attorney fees.
Usually, the lender meets these charges, which are later recouped back in the total mortgage bill or through a higher interest rate.
A no-closing cost refinance would be appropriate for borrowers who plan to refinance soon or those who won’t be staying in their homes for more than 5 years. Hence, the monthly installments due to the slightly high-interest rate will not be more than the closing cost that they would have paid. It also makes sense to get a no-closing cost refinance to undertake home improvement than taking a Home Equity Loan. This is however determined by the interest rates on both loans.
If however, you intend to use your home for the long term, it is better to pay the closing costs upfront and go for the lower interest rates and a lower total mortgage bill. This is because, in the long term, you will most likely pay a lot in interest than the closing costs.
How to Reduce your Mortgage Refinancing Costs
- Improving your Credit Score- A high credit score might lower your interest rates and ensure reduced refinance costs. The best way of improving your credit score is by paying down credit card debt. Balances below 15% of the credit card’s limit will raise your FICO scores.
- Negotiations with your lender- Some of the closing costs are not fixed, and thus, it might help to negotiate for reduced fees. Look to see if companies contracted to offer external services such as home appraisals and legal services are willing to go for a discount. You may also shop for affordable choices. It may also help to use a previous home appraisal.
- Compare different lenders- Fees and closing costs vary among lenders. It is best to compare offers from at least 3 lenders.
Find a Purchase or Refinance Mortgage Lender Near Me
Due to the unforeseeable economic climate and possible high-interest rates, you may consider seeking mortgage refinancing. However, the danger in refinancing is going into it blindly. Having little knowledge may increase your interest rates rather than lowering them.
At Money Lender Loans in Orange County, we are more than glad to help you with your Purchase or Refinance Loan process. We will provide you with as much information as you need to ensure that you make an informed decision. We invite you to contact us at 949-409-4372 to get you on track to purchase or refinance your loans.