With all the negatives to come out of the current pandemic situation, one positive is the historic low California 30 year fixed rate home loans available on the market. For borrowers planning to stay in their homes for at least a few years, being able to secure rates at these levels makes a lot of sense. With that being said, however, todays fixed loan options have some new obstacles to navigate.
For borrowers looking to do a rate and term refinance - which is where no cash out is being taken - rates and programs are extremely attractive. When was the last time you've seen rates in the 2's? Borrowers just looking to refinance into a lower rate are securing ridiculous sounding rates right now. Appraisal waivers are not uncommon on these transactions either. For rate and term transactions, you should be getting quoted the best of the best.
For borrowers looking for cash out, we come to the first obstacle. As soon as you add cash out to your transaction, rates and terms are taking decent sized hits. You can still benefit in this situation, as rates are still historically low, but the cash out adds right now are seemingly across the board, regardless of credit, loan to value or other compensating issues.
The next obstacle comes with regards to income and employment. For many, the current pandemic situation has created a temporary situation where income has been reduced, work hours have been reduced or employment has been terminated. Right now employment checks are being required upfront as well as prior to funding. A reduction in hours, income, employment status, etc. can impact a loan file negatively (as I'm sure you're aware). For many in this situation, even if you have cash on hand to weather the storm, are receiving temporary unemployment or have another solution, this could cause issues with obtaining a loan today.
While the markets have settled greatly since mid March, refinancing activity has really gone up. While it is great that so many people are able to take advantage of the great rates and terms, the downside is that turn times at many places are very long. Lock expirations and 60 day closings are not uncommon. This is where working with the right source comes in handy. Those groups set up to run smoothly online still have great turn times - while groups that are trying to transition to remote employees and automated systems are running much slower. Having a funding partner where everything can be done electronically is great - not only for social distancing purposes, but also for faster turn times.
We specialize in private money, but have many wholesale relationships to access these historic 30 year fixed rate home loans. We have a team in place to streamline the process, with electronic delivery and signing for all upfront disclosures and documents. In addition, we are willing to price these loans in a different manner than many brokers. Ask us about our wholesale rate options and pricing for borrower paid compensation. Most brokers quote rates on a lender paid scale. While that reduces the cost of the loan, the trade off is a higher rate. Brokers typically make more under this pricing model, and many do not have the discussion about the trade offs that come with zero cost loans.
We are willing to price loans at our wholesale rates on a one point cost model. This offers full transparency on pricing, and lower rates than what would be offered through the alternative lender paid compensation model. Of course we are also willing to price on the lender paid compensation as well, where we are not charging you fees. Give us a call and compare your options!