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How to move past renting?

Most people believe that owning a home is a good long tern investment for many reasons, but frequently renters feel obtaining a mortgage is difficult. This is not necessarily true; by structuring your profile to reflect as much strength as possible and using our innovative financing options you can successfully obtain your home loan. At Centek, we utilize our technical knowledge in conjunction with our decades worth of professional broad based expertise to help clients prevail with an offer and close their purchase.

Source: https://www.mpamag.com/news/consumers-see-housing-as-good-financial-investment–survey-105174.aspx

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4 Myths about Mortgages for Millennials

MYTH #1: It is very difficult for Millennials to become homeowners

FACT: Despite the fact that Millennials face many hurdles, such as student loan debt, underemployment, and high rental prices, many creative finance structuring options exist. Today, it is possible to close a loan for up to $679,650 with only 3.5% down payment, which is a manageable course of action. As with any financing, reserves are required. However, they are not pledged in any way.

MYTH #2: My branch at (insert personal bank here) offers loans. I should go there.

FACT: Unlike direct lenders who only represent the bank, brokers work with a variety of wholesale banks and specialized lending institutions. Make sure to prepare your paperwork in advance. This cannot be stressed enough as there are many variable layers in the homebuying procedure. If any bank deposits are out of the ordinary, provide that information too. Mortgage brokers know what questions to ask and work with you to fill in gaps. Their technical experience allows them to package the loan to highlight your strengths and minimize any issues.

MYTH #3: I don’t need to start working on my mortgage until I find a house I want to make an offer on.

FACT: In order to prevail in today’s aggressive market, it is imperative that homebuyers are prepared to present an offer with minimal contingencies as soon as possible. A pre-approval letter makes a prospective buyer seem more attractive because it shows that the buyer does not have an issue in obtaining a loan. You should arm yourself with a pre-approval letter customized to your needs, which can subsequently be tweaked later in the process depending on the home’s selling price. Pre-approval and approval letters are taking on a new dimension, as well-regarded pre-approval letters are even able to compete with all cash offers.

MYTH #4: It is hard to improve my credit score

FACT: With proper support, there are many strategies for repositioning your credit score, which is subjective based upon your spending and payment history. Mortgage brokers run the 3 Bureau Credit Report, which better reflects your credit score than any report you can run online. With this scoring system, brokers can do an analysis of credit cards that can be strategically paid down to certain amounts to pump up your overall credit score. Additionally, it is not unusual for trivial things, such as minor medical collections, to impact the credit score.

If you are a Millennial First-Time Homebuyer, feel free to contact CenTek Capital Group at 310-275-3202 to take advantage of any of our gratis mortgage services. We are available on M-F from 7:00 AM- 7:00 PM to run what-if scenarios. We also return calls on the weekends.

We know that breaking into the housing market alone can be rigorous and time-consuming for young professionals. With 30+ years of experience, CenTek Capital Group has funded every type of loan, issuing a detailed up-front loan approval for many programs and closing purchase transactions in about 25 days. CenTek acts as your partner throughout the financial process, guiding our millennial clients through mortgages and more. Our team maintains long standing relationships with a vast network of funding sources to gain unparalleled access to the most aggressive real estate financing options and solutions on the market. Ultimately, we utilize our technical knowledge in conjunction with our decades worth of professional connections to help clients and their agents prevail with their offer and close the deal.

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3 Ways Parents, Grandparents, or Other Family Members can Help Millennials Prepare for Homeownership

The overall U.S. population is expected to expand from 319 million in the year 2014 to approximately 360 million by 2030. Both healthcare improvements and expansions in higher education have impacted the housing market. There is a higher demand for homes as more seniors are living longer and there is also an increasing amount of young adults seeking higher education. Many millennials who were once hesitant to buy homes because of student loan debt or who wanted career location flexibility are now entering the market in their late twenties and early thirties more financially established than traditional first-time homebuyers.

Because of the high demand for homes, multiple bids on a single home are becoming the norm. Thus, to succeed in today’s aggressive market, it is imperative that both first-time and experienced homebuyers, are prepared to present an offer with minimal or no contingencies as soon as possible. Despite the fact that some Millennials may not be able to make a down payment by themselves, there are many other creative options for parents, grandparents, or other relatives to help their millennial prevail with their offer.

Option #1: Work with your Millennial to maximize their credit score to its fullest potential

One’s credit score is both multi-layered and very subjective based upon one’s spending and payment history. With proper support, there are many strategies for helping your Millennial repositioning their credit score. Firstly, it is not unusual for parents to affect their child’s credit score, if the child is still listed on the account. While these outstanding debts might not impact the parent’s credit score, they have more weight on the child, as their credit history is usually shorter.

Additionally, if your Millennial does not regularly use credit cards, encourage them to get cards and establish an active history. Department store credit cards and gas station credit cards are readily available. Make sure to activate them and do not pay them until the first bill comes in.

Option #2: Include yourself in the mortgage as Non-Occupant Co-Borrower

The non-occupant co-borrower status is another opportunity in which parents and grandparents can help their Millennial. This is a situation when a non-occupant, such as a parent or grandparent, can use their income to help the borrower qualify for loan. There is no proportion needed to qualify. In this scenario, the financial strength ratios of both borrowers are blended to help the borrower qualify.

In this case, the Non-Occupant Co-Borrower’s obligations are countered with the Millennial’s checks and the co-borrower’s credit is not impaired. It is important for the Millennial to show taxes, even if they are at a college-part time job, and have some credit.

Option #3: Gifting Money

Not all families have the ability to give their Millennial a contribution. A gift is defined as something that is not to be repaid. With some programs, mortgage brokers can structure a payment plan into loans.

Consider making a financial arrangement from the approach of a business standpoint. Specifically, a family member might want to share in the eventual appreciation of the real estate as an investment concept. This is a tremendous avenue to explore as long the down payment is clearly documented. This could be a good way for parents or grandparents to help their Millennial who is early on their career path. Although gifts are not made to be repaid, Millennials may take it upon to themselves to help out their family members as their career develops.

If you are a Millennial First-Time Homebuyer or a parent, grandparent, or other relative looking to help their Millennial buy a home, feel free to contact CenTek Capital Group at 310–275–3202 to take advantage of any of our gratis mortgage services. We are available on M-F from 7:00 AM- 7:00 PM to run what-if scenarios. We also return calls on the weekends.

We know that breaking into the housing market alone can be rigorous and time-consuming for young professionals. With 30+ years of experience, CenTek Capital Group has funded every type of loan, issuing a detailed up-front loan approval for many programs and closing purchase transactions in about 25 days. CenTek acts as your partner throughout the financial process, guiding our millennial clients through mortgages and more. Our team maintains long standing relationships with a vast network of funding sources to gain unparalleled access to the most aggressive real estate financing options and solutions on the market. Ultimately, we utilize our technical knowledge in conjunction with our decades worth of professional connections to help clients and their agents prevail with their offer and close the deal.

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May 2nd Market Update

Hard to believe we are already knocking at the doorstep of summer. …Difficult to tell if life has just sped up with all of the technological advances or are we just getting older!!! The Federal Reserve announced today that they are leaving interest rates unchanged for the time being, but that the outlook remains that the economy is doing well and that inflation has ticked up enough to warrant more aggressive Fed policy at upcoming meetings. Remains to be seen, how many additional rate increases will occur for the balance of the year. General consensus is another two increases with a possibility of three. How does this translate to the overall mortgage interest rate environment? Difficult for mortgage rates not increase in lock step with these additional Fed rate increases. Even though rates remain at historical lower levels, we have all been spoiled with how low rates went. We all need to re-evaluate what higher rates mean to us individually and how this translates to the overall real estate market and economy. In addition, we need to incorporate the new tax laws into our mindset to further complicate matters. The net effect of new policies remains to be seen on how it relates to the real estate arena.

On a positive note, there are many exciting loan programs that have rolled out that allow us not to use tax returns or other traditional underwriting methodology. We need to move away from an interest rate driven financing market to one that is a “means to an end.” Needless to say, no one wants to pay a higher rate than is necessary, but sometimes we need to just get the deal done and accomplish our goal. There are still many traditional / standard lender’s we deal with that are extremely aggressive, but these banks are not for everyone…

The real estate market remains in good condition with properties listed at realistic prices, receiving multiple offers. Inventory remains tight, but an over looming question that needs to be answered is if one sells their house with a sizable gain, where do they move? The move up buyer is stuck between a rock and a hard place with higher interest costs and new tax limitations. Many of our clients have elected to scrap plans for purchasing a new home and instead opt for an extensive remodel of their existing house. We can assist with the cash out necessary for the remodel via a traditional refinance or we have construction loans available.

The demand for housing remains robust as Los Angeles continues to attract people from all over the globe. Who doesn’t want to live here!!!!

As always, please feel free to contact us with any what if scenarios or just to say hello!!

Best Regards,

Gloria Shulman and Curtis Cohen

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March 28 Market Update

Spring is here!! We are hopeful that everyone is about to enjoy the upcoming Passover and Easter holidays (for those who celebrate)!! Time for introspection and reflection on who and what we are and where we want to go….

Our recommendation, as it relates to the mortgage arena, is to allow Centek to evaluate your existing mortgage profile and analyze if any alternative programs would be better suited for your overall financial strategy – reducing the amortization of your current loan, changing from an adjustable rate mortgage to a fixed rate or conversely changing from a fixed rate mortgage to an adjustable rate program. We have included an analysis of when your mortgage adjusts from the fixed period to an adjustable rate as well as when an interest only mortgage converts to a principal and interest payment with a new amortization basis. The numbers are quite compelling to refinance into either a new ARM or changing to a fixed rate. In either of these instances, the rate/payment might increase, but better to have the stability of a new fixed rate for a defined period of time than be at the mercy of the global interest environment. The Libor index which most of the adjustable rate mortgages are linked to, has risen dramatically and as of today stands at 2.67%. When you add the margin of 2.5-3% to this, the new rates upon adjustment will be in the 5%+ range!! The past couple of days have seen mortgage rates drop to levels of early February. Our steadfast philosophy is to have your loan package in and ready to go in order to best take advantage of any rate decline or be prepared to “bite the bullet” and change out of an adjustable to a fixed rate or even a new adjustable rate to provide a longer fixed period even if this means increasing your current interest rate. The end result will alleviate all of the what if scenarios that could potentially play out..If we start the process further down the line, we might not be able to catch the window of opportunity.

In regard to the real estate market, we feel the most prevalent issue is with the lack of inventory for sale. The lack of inventory is due to several interrelated factors that we have not recently experienced. The escalation of property prices in our California market (especially our SoCal & Bay areas),the vibrant California economy & the increases in the stock market. The combination of these and other factors including the demand from foreign investors, has limited the number of available properties on the market.  The flip side to this equation is where is the seller of the property going to move? This point is a large reason as to why more properties are not for sale. This is a problem and a main reason why with elevated home values more properties are not on the market. The move up buyer is difficulty in selling their existing house and being able to afford the next level up in price….This by no means applies to everyone, but is a major point in the overall real estate market place. Another salient issue is with the new tax laws. The limiting of the interest mortgage deduction to $750,000 is a marginal issue. The canary in the coal mine is how the limitation on the deductibility of real estate taxes in conjunction with other state and local taxes , has an effect on real estate values…..

Please feel free to contact us to discuss your financing or overall real estate acquisition or sales needs. We can review and strategize with you. Stay tuned!!

Best Regards,

Gloria Shulman & Curtis Cohen

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February 19 Market Update

Feb 19, 2018

Mortgage rates have continued their upward march towards the 5% area. The move has come quite quickly and has created further questions as to how high rates can climb. However, we must keep rates in a historical perspective. Even at these “lofty” levels, rates are still extremely attractive from a historical standpoint and those of us who are old enough to remember, we really know what high rates look like!! Our philosophy is to analyze a borrower’s overall financial profile and recommend the mortgage that best suits the individual. In this marketplace, there is no such thing as one loan fits all! Many of our lending partners have developed programs (with our feedback) that only require bank statements or rental income for qualifying, not the traditional tax return methodology. Please ask to us to review all the various options available – fortunately, there are alternative options that exist, versus the heavy handedness of the last few years. Keep in mind, these rates won’t be the lowest, but our goal is to get you into the property or be able to pull the cash out that you need. There is a time and place for everything and sometimes a slightly higher mortgage rate is just a cost of doing business…..The key is being in the game instead of a spectator.

In regard to the real estate market, we feel the most prevalent issue is with the lack of inventory for sale. Multiple offers are the norm for well priced properties. Another issue that we need additional time to see how plays out, is the effect of the new tax laws and how this will alter, if at all, the mindset of buyers because of the tax deductibility of property taxes. We don’t feel that the mortgage component will have a material effect on whether or not someone purchases a home.

Our recommendation as it relates to the mortgage arena is to allow Centek to evaluate your existing mortgage profile and analyze if any alternative programs would be better suited for your overall financial strategy – reducing the amortization of your current loan, changing from an adjustable rate mortgage to a fixed rate or conversely changing from a fixed rate mortgage to an adjustable rate program. Mortgage rates have spiked above 4% and if rates continue down this path, our steadfast philosophy is to have your loan package in and ready to go in order to best take advantage of any rate decline or be prepared to “bite the bullet” and change out of an adjustable to a fixed rate or even a new adjustable rate to provide a longer fixed period even if this means increasing your current interest rate. If we start the process further down the line, we might not be able to catch the window of opportunity.

Please feel free to contact us to discuss your financing or overall real estate acquisition or sales needs. We can review and strategize with you. Stay tuned!!

Gloria Shulman & Curtis Cohen

Some of our unique programs to help you close your deal or have a smooth refi…

 
  • 3.5% – 5% down program up tp $679,650 loan amount
  • 10% down program up to $1.450M sales price
  • 15% down program up to $2M sales price. We can also go higher with larger downpayment.
  • With married couples, we are now able to utilize the highest credit score for qualifying purposes.
  • In divorce situations with alimony paid involved, we are able to treat the payment as a reduction to income vs. liability; this has a dramatic affect for the qualifying process, especially with higher alimony payments.
  • Fully blended ratios with borrower and co-borrower treated as 1 entity for loan qualifying. This translates to parents who want to buy for their children, with limited income, are now able to obtain owner occupied rates and terms. 
  • With some programs, we close with 1 year of tax returns and / or qualifying bank statements instead of the usual two.