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PURCHASE OR REFINANCE LOANS

Pyramid Capital Investments Corp. has been an experienced Mortgage Broker based in Newport Beach, California, since 1994 with over 30 years of experience in real estate lending and sales. We fund various loans from A to D type lending. We specialize in difficult loans and offer hard money loans for purchases and refinances with 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 face a closing date when you must finish your payments or risk losing out on a property or your money in the transaction. During such financially challenging times, we can help ensure that your dreams of owning the property of your choice 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 acceptable. We extend purchase and refinance loans to facilitate you to acquire the property of your choice 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 residential or commercial property purchases. In contrast, refinancing loans are used to finance the existing mortgage with or without getting cash out. 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 get a better interest rate as you can change the original mortgage terms. A purchase loan is evidenced by a mortgage or a trust deed that the buyer signs when they purchase the home.

What Types of Purchase or Refinance Loans are Available?

  1. 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 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 with the seller, enables you to get a property within your range quickly, and speeds up the closing process; hence, your loan is available more quickly.

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.

  1. 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. However, 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 eight 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 suitable for Cash-Out Refinancing and Purchase or Refinance Loans. 

Federal Housing Administration Loans

The Federal Housing Administration (FHA) loans are home mortgages insured by the FHA, 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 allow higher debt to income ratios than conventional loans. In addition, they have a streamlined refinance facility which you can use to reduce your current interest payments when possible.

FHA mortgages are beneficial to borrowers with low credit scores and even those with bankruptcy cases or foreclosures, depending on the filing date. 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. 

Some of the available loan options under the FHA include:

  1. 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 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.
  2. 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 usually are lower compared to those of fixed-rate This plan keeps the rates low for 5 years.
    1. Jumbo Loans

For example, with Jumbo loans, you may get a  loan to $30 million depending on the Loan To Value and income qualifications. In addition, with some programs, 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, allowing you to refinance your mortgage.

Jumbo mortgages are available for residential, investment, or vacation homes. They have an interest-only option that allows you to pay payments only for the interest rate part of the loan to lower the payments. 

  1. 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 home improvement. There are no monthly mortgage 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 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 fixed or adjustable, 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 significant 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. In addition, 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?

The industry’s norm is to require borrowers to maintain their initial mortgage for 12 months before they seek out refinancing; however, some programs allow refinancing after six payments have been made. We welcome you to check with us for details and any restrictions. 

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 with most loans. They include:

  1. Loan Origination fee- This is used to compensate the loan officer working on the loan application.
  2. Loan Processing Fee- This fee depends on the loan type and the size of the loan
  3. Home appraisal charges- This is a third-party fee paid to a professional valuation firm to estimate the value of the property.
  4. Documentation fees- Documents such as seller’s disclosures,
  5. Title search charges- A title search is necessary to ensure that the seller has the legal rights to sell the property. This amount depends on the size of the transaction.
  6. Recording fees- These are assessed to keep refinancing on the public record. They are set by the requisite government bodies.
  7. Home inspection fees- It is done by a professional firm to point out any issues with the property. 
  8. Flood Certification- If your home is in a government-designated flood zone, you will need to pay for flood loan insurance certification.
  9. Attorney fees- An attorney ensures the legality of the loan contract 
  10. Survey charges- This is for the purposes of documenting the home’s boundaries
  11. Discount Points- Also referred to as ‘Buying down the rate,’ these are fees paid to the lender in exchange for reducing the interest rate. 

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, due to the slightly high-interest rate, the monthly installments 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 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

  1. 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.
  2. 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.
  3. 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 Pyramid Capital Investments Corp., 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 make an informed decision. We invite you to contact us at 949-833-8747, Ext. 6600 to get you on track to purchase or refinance your loans.

 

Posted by Schram Rod on May 5th, 2022 3:35 PM

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PYRAMID CAPITAL INVESTMENTS CORP.

4667 MacArthur Blvd., Suite 320
Newport Beach, CA 92660