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Buying a Home… For Your Pets?

Buying a Home… For Your Pets?

“I’m just trying to be successful enough to give my dog the backyard he deserves.”

 

Older generations might find the idea outlandish, but pets have become one of the most common motivators for homeownership among millennials. A recent survey found that for 33% of millennial home buyers, the decision to buy was motivated by their dogs. That’s a higher percentage than for marriage (25%) or children (19%).

 

“My Pet is My Child”

 

There are many factors that may explain millennials’ unusually deep love for their pets. The rise of the internet has certainly played a role; cute dog/cat videos have been a cornerstone of the online experience from the beginning, reminding us every day of the laughter and joy these animals provide. Thanks to modern science, we are also more aware than ever before of the intelligence and complexity of our furry friends. We know that they feel emotions like love, happiness, fear, and grief just as strongly as we do, and today’s pet owners may treat them more like equals as a result. In fact, most millennials would be horrified by the way older generations routinely treated their pets (e.g., shock collars, muzzles, physical discipline). Today, they are considered part of the family (including at Sharp Loan!).

There may also be a more practical reason for society’s fascination with dogs and cats; the cost of living is simply too high for many millennials to consider becoming parents. Many are waiting longer to have kids than previous generations did, and some are choosing not to have them at all. Pets are a significantly cheaper and easier alternative, and they still provide companionship and love.

 

Guide to Home Buying… For Your Pet

 

Yard and Fencing

Most pet owners envision a big backyard for their dogs to roam free, but it’s important to make sure they’re protected. If there isn’t a fence, you’ll likely need to add one (as per any HOA guidelines or restrictions in the neighborhood) to keep your pets safely inside and wild animals like possums and coyotes out.

The Neighborhood

With dogs, you have to consider how well-suited the area is for walks. Are there any trails or dog parks nearby? Are there coyotes and foxes roaming around at night that could pose a danger to your outdoor cat? How’s the car traffic on the streets surrounding your house? Are there any veterinary clinics or groomers close by? These are all important factors to consider during the home buying process.

The House Layout

Is there enough space inside for you and your pets to coexist comfortably and peacefully? If you have a large dog breed or multiple pets, this will be a crucial consideration. If you have cats, make sure that there is enough space to keep the food bowl, water, and litter box in their own areas. Another important factor is if the home has two or more floors; as your pets age, it may become difficult for them to use the stairs.

Flooring

This is one of the most important issues when buying a home with your pet in mind. Your best bet for dogs or cats is to go with a hardwood surface and area rugs. Hardwood can be refinished when it gets scratched, and area rugs can be cleaned or replaced more easily than wall-to-wall carpet. Fully carpeted floors can be a disaster for pet owners, easily trapping odors, stains, and pet hair. It’s also not helpful for the resale value of your home.

 

Summary

 

Many of us love our pets like our own children, and we know a house wouldn’t be a home without them. If you’re looking for the perfect home for you and your fur baby, call us at (888) 311-8339 or contact us below! We can help you achieve your homeownership dreams.

 

Meet Sharp Loan Team Member, Lauro Francisco

Meet Sharp Loan Team Member, Lauro Francisco

What is your role at Sharp Loan and how long have you been with the company?

I am a loan officer, Sales Supervisor, firefighter, problem solver extraordinaire, and class clown. I have been with the company since December 2017.

What do you enjoy most about what you do?

I love nothing more than getting a family into a home, especially first time buyers. It’s a huge financial decision and I enjoy guiding clients through the process. Seeing as a mortgage is typically the biggest expense a homeowner will have, it’s important to me to identify my clients’ needs and goals in order to get them the best loan for their specific scenario. No two borrowers are ever the same, and oftentimes I find that I’m advising clients on not just their mortgage, but their finances as a whole.

Can you share a memorable experience or story that happened while working?

The most memorable experience I have is every time I am able to deliver and close escrow when a buyer comes to me, either having been recently denied by another bank or when their escrow is about to fall through. I love being able to do what other lenders cannot.

What do you like to do in your free time when you aren’t helping clients realize their home ownership dreams?

I stay very active as it helps me decompress, and exercise pushes me to better myself on a daily basis. Whether it’s lifting weights, yoga, cycling, or running with my dog, as long as I’m moving my body I’m happy. I also sail a few times a month. Those close to me often say that if I’m not in the office, I’m probably at the beach.

If you were stranded on a desert island and could only take three items with you, what would they be?

A water filter, flint for fire, and a plane to fly the heck out of there.

What is one important skill that every person should have?

Self-awareness. When we practice self-awareness we see more clearly our values, aspirations, reactions, thoughts, feelings, and how they impact our own lives and the lives of those around us. Self-awareness pushes us to improve and allows us to communicate better, make sounder decisions, cultivate stronger relationships, and live a more purposeful, impactful, and fulfilled life.

 

Lauro Francisco
Sales Supervisor/ Loan Officer
NMLS: 1819667
Lauro@MySL.com | 714.224.6957

 

Need help with a home purchase or refinance? Contact us below!

Jumbo Loans EXPLAINED

Jumbo Loans EXPLAINED

In this series we have broken down the most popular mortgage loans, shown you how ARM loans work, and explained Home Equity Lines of Credit (HELOCs). For the final entry of our “Mortgage Loans EXPLAINED” series, we will dive into Jumbo Loans.

 

What is a Jumbo Loan?

 

A jumbo loan or jumbo mortgage is a mortgage loan that exceeds the limit set by the Federal Housing Finance Agency (FHFA). Jumbo loans cannot be secured by the government-sponsored Fannie Mae or Freddie Mac, which makes them riskier for lenders.

 

What Are Conforming Loan Limits?

 

Conforming loan limits are set by Fannie and Freddie, and they dictate how high your mortgage can be. Mortgages that fall under the limit have insurance that protects the lender. Jumbo loans are sometimes called “non-conforming loans” because they go above this limit.

Conforming loan limits vary by state and market. In 2021, you can only borrow up to $548,250 for a single-family unit in most parts of the U.S. However, conforming loan limits go as high as $822,375 in high-cost areas.

If the amount of money you borrow goes above these limits, your loan automatically becomes a jumbo loan.

 

Special Considerations

 

Before you attempt to take out a jumbo loan, consider these factors:

 

Cash Reserves

Before a lender will approve you for a jumbo loan, it is often necessary to have enough cash reserves on hand to cover 12-18 months of mortgage payments. In some cases, you can use up to 70% of your retirement account funds to cover a portion of the cash reserve requirement. Gift funds or business funds can also be used in specific cases, though this is less common.

 

Closing Costs and Interest Rates

Due to the size of these loans and the extra steps required to qualify for them, you should be prepared for a higher closing cost. However, the same does not always apply for the interest rate. While jumbo mortgage rates might be a little higher in some cases, generally you can expect them to be competitive with market rates (and maybe even slightly lower).

 

Income and Documentation

It is normal when applying for a conforming loan to be asked for extensive documentation, including tax returns, W-2s, and 1099s. With jumbo loans, these requirements are often even more stringent. You must be able to prove steady, consistent income, often going back 2 or more years.

 

Credit Score and DTI

To qualify for a jumbo loan, most lenders will require you to have a minimum credit score of 700-720. For your debt-to-income ratio (DTI), 45% is a standard cap. However, some lenders may be willing to budge on this if you have substantial cash reserves.

 

Summary

 

Jumbo loans are large home loans that are higher than the conforming limits set by Fannie Mae and Freddie Mac. These mortgages are riskier than conventional or government-backed mortgages because they don’t have insurance.

This means that if you default on a jumbo loan, the bank has to foot the bill. You can use a standard jumbo loan to buy many types of properties, though requirements may vary by lender. For more information and to see if you qualify for a jumbo loan, contact us below!

 

Meet Sharp Loan Team Member, Manny Garcia

Meet Sharp Loan Team Member, Manny Garcia

What is your role at Sharp Loan and how long have you been with the company?

I’m a Loan Officer and I assist homeowners and future homeowners with their real estate financial needs. I’ve been with the company since the beginning.

What do you enjoy most about what you do?

I truly enjoy the end result. Oftentimes my clients are living paycheck to paycheck, and I’m able to create a plan to save them hundreds of dollars a month. And the feeling of helping my client is buying their first home is priceless! This is what I enjoy the most.

Can you share a memorable experience or story that happened while working?

I’ve worked on enough loans to have tons of memorable experiences, but here’s one of the most recent: I had a client that was renting in LA and was denied many times by other companies for a purchase loan due to her type of income. She and her family were getting evicted, and time was of the essence. I was able to get her approved for a home loan, and even found her dream home. We closed escrow and to this day, I get calls from her telling me how appreciative she is. She has even referred me to several of her friends and family members. Going the extra mile pays off in the end.

What do you like to do in your free time when you aren’t helping clients realize their home ownership dreams?

I go to the gym, and I spend a lot of time with my family, my girlfriend, and my English bulldog Nala. I also love to travel and eat great food!

If you were stranded on a desert island and could only take three items with you, what would they be?

My laptop, earphones, and some water. I have to make sure I’m still closing deals!

What’s an item on your bucket list that you can’t wait to cross off?

Shark cage diving!

What movie can you rewatch over and over again?

That’s tough, but probably The Godfather.

What is one important skill that every person should have?

Patience. “Rome wasn’t built in a day.”

 

Emmanuel “Manny” Garcia
Sr. Mortgage Loan Originator
NMLS: 1184162 | DRE: 01957964
Manny@MySL.com | 714.453.9065

 

Need help with a home purchase or refinance? Contact us below!

Meet Sharp Loan Team Member, Ping Tsai

Meet Sharp Loan Team Member, Ping Tsai

What is your role at Sharp Loan and how long have you been with the company?
I oversee all marketing efforts for Sharp Loan. I’ve only been with the company for three months, but it feels a lot longer because of how welcoming the team has been. There’s a true sense of inclusivity that is felt from Day One.

What do you enjoy most about what you do?
I enjoy communicating and finding ways to connect with our customers, and letting them know about the various nuances that make Sharp Loan special. When you believe in something that can truly be of help to others, all you want to do is show everyone else. Finding creative ways to get people to notice what they are missing out on is part of the challenge, and it’s fun.

Can you share a memorable experience or story that happened while working?
The entire processing and underwriting department breaking out into a competitive and spirited contest midday to see who could do the most squats. All the cheers heard throughout the whole office made for an exciting afternoon indeed.

What do you like to do in your free time when you aren’t helping clients realize their home ownership dreams?
I spend most of my free time making sure that my family is taken care of, but when there’s downtime you can find me gravitating toward the mountains – climbing a local peak, backpacking in the Sierra Nevada, skiing, snowboarding, and anything else where I can be outdoors in nature. Some of the most beautiful places that I’ve seen can be accessed only by a long trek through the wilderness. The limited accessibility and remote nature of some destinations make them all the more worthwhile and rewarding when you reach them.

What’s an item on your bucket list that you can’t wait to cross off?
Climbing Mt. Kilimanjaro.

What is one important skill that every person should have?
How to do a search in Google.

Ping Tsai
Director of Marketing

 

Need help with a home purchase or refinance? Contact us below!

Home Equity Lines of Credit (HELOCs) EXPLAINED

Home Equity Lines of Credit (HELOCs) EXPLAINED

In previous weeks, we have broken down the most popular mortgage loans, and shown you how ARM loans work. For Part 3 of our “Mortgage Loans EXPLAINED” series, we dive into the Home Equity Line of Credit (HELOC).

 

What is a home equity line of credit?

 

A home equity line of credit, or HELOC, is a second mortgage that gives you access to cash based on the value of your home. You can draw from a home equity line of credit and repay all or some of it monthly.

With a HELOC, you borrow against your equity, which is the home’s value minus the amount you owe on the primary mortgage. You can also get a HELOC if you own your home outright, in which case the HELOC is the primary mortgage rather than a second one.

In either case, you could lose the home to foreclosure if you don’t make the payments.

 

How does it work?

 

Much like a credit card that allows you to borrow against your spending limit as often as needed, a HELOC gives you the flexibility to borrow against your home equity, repay, and repeat.

Most HELOCs have adjustable interest rates: this means that as baseline interest rates go up or down, the interest rate on your HELOC will adjust too. For more information on adjustable-rate loans, click here.

As with a credit card, you only pay interest on the amount of money you use, not the total amount available to borrow.

 

How do you qualify for a home equity line of credit?

 

Exact requirements will vary depending on your lender, but here are the general requirements to qualify for a HELOC:

  • A debt-to-income ratio of 40% or less.
  • A credit score of 620 or higher.
  • A home value of at least 15% more than you owe.

 

How to get a home equity line of credit

 

The process of getting a HELOC is similar to that of a purchase or a refinance on a mortgage. Here are the steps you’ll follow:

  1. Determine whether you have sufficient equity using a HELOC calculator.
  2. Once you have an idea of what you can borrow, call Sharp Loan.
  3. Gather the necessary documentation as advised by your lender.
  4. Once you have completed these steps, apply for the HELOC.

At this point you will receive disclosure documents. Read them carefully and make sure the HELOC will fit your needs. For example, does it require you to borrow thousands of dollars upfront (often called an initial draw)? Do you have to open a separate bank account to get the best rate on the HELOC? Consult with your lender if you are unsure.

The underwriting process can take anywhere from several hours to a few weeks, and may involve getting an appraisal to confirm the home’s value.

The final step is the loan closing, at which point the paperwork is signed and the line of credit becomes available.

 

How much can you borrow with a HELOC?

 

The maximum amount of your home equity line of credit will vary based on the value of your home, what percentage of that value the lender will allow you to borrow against, and how much you still owe on your mortgage. Two quick calculations can give you an idea of what you might be able to borrow with a HELOC.

Say you have a $500,000 home with a balance of $300,000 on your first mortgage and your lender will allow you to access up to 85% of your home’s value. Multiplying the home’s value ($500,000) by the percentage the lender will allow you to borrow (85%, or .85) gives you a maximum amount of $425,000 in equity that could be borrowed. Subtract the amount you still owe on your mortgage ($300,000) to get the total amount you can borrow with a HELOC — $125,000.

 

How do you pay back a home equity line of credit?

 

A HELOC has two phases: the draw period and the repayment period.

During the draw period you can borrow from the credit line by check, transfer, or a credit card linked to the account. The length of the draw period varies but is commonly set at 10 years.

During the repayment period you can no longer borrow against the credit line. Instead, you pay it back in monthly installments that include principal and interest. With the addition of principal, the monthly payments can rise sharply compared with the draw period. The length of the repayment period varies but is commonly set at 20 years.

At the end of the loan, you could owe a large lump sum — or balloon payment — that covers any principal not paid during the life of the loan. Before you close on a HELOC, consider negotiating a term extension or refinance option so that you’re covered if you can’t afford the lump sum payment.

 

Is a HELOC Right for You?

 

Do you think a HELOC could be the right choice for you? Do you still have questions? Contact us below to learn more!

 

Adjustable-Rate Mortgage (ARM) Loans EXPLAINED

Adjustable-Rate Mortgage (ARM) Loans EXPLAINED

Last week we gave an overview of some of the most popular mortgage loans. Now we’re back to talk about another: the adjustable-rate mortgage.

As the name suggests, an adjustable-rate mortgage is a home loan with an interest rate that adjusts over time based on market conditions. This type of mortgage comes with a 30-year term. The initial interest rate stays fixed for a specified number of years at the beginning of the loan term before it adjusts for the remainder.

 

Advantages of an ARM Loan

  • The biggest advantage of an ARM is the initial fixed-rate term, which, as mentioned above, can provide you a lower initial rate and monthly payment than other loans.
  • If you plan to move or sell your house within a few years, you can reap the benefits of a low fixed rate and sell the home before it adjusts.
  • If interest rates fall, you’ll be able to reap the benefits without having to go through the costs or paperwork of a refinance.

 

Disadvantages of an ARM Loan

  • While your interest rate may go down, it could also rise. If your interest rate increases, you’ll have a higher monthly payment that you may not have prepared for.
  • Some ARMs may have a prepayment penalty. Speak to your lender and make sure you understand the terms of the loan before you move forward.

 

ARM vs. Fixed-Rate Mortgage

  • Fixed-rate loans are most commonly offered as 15- or 30-year terms or custom-term loans. ARMs are typically 30-year terms.
  • Your starting rate may be lower for an ARM than a fixed-rate mortgage.
  • Your monthly mortgage payment may be more affordable in the first few years of an ARM.

 

How Does an ARM Loan Work?

Once the fixed-rate term ends on an ARM, the interest rate typically adjusts annually. This new rate is determined by adding the index (an economic indicator used to calculate interest rate adjustments for ARMs) to the margin (a fixed percentage point predetermined by your lender that is used to determine the interest rate for the entire life of the loan).

While this may cause the interest rate to increase, there are caps on how much it can increase. These caps are presented in a series of three numbers: initial cap/periodic cap/lifetime cap.

  • Initial cap: This cap is the maximum amount the interest rate can adjust the first time it’s changed after the fixed period.
  • Periodic cap: This cap puts a limit on the interest rate increase from one adjustment period to the next. The initial cap and the periodic cap may be the same or different.
  • Lifetime cap: This cap puts a limit on the interest rate increase over the life of the loan. All adjustable-rate mortgages have a lifetime.

Here’s an example of a common rate cap: (2/2/5). This means that your interest rate can only change by up to 2% the first time it adjusts. Each annual rate change after that is limited to 2% each year. Throughout the rest of the loan term, the highest the interest rate can go is 5% higher than the fixed rate. So, if your original rate was 3.5%, your interest rate can only go up to 8.5% during the life of your loan.

 

Different Types of ARMs

The structure of an ARM is presented with two numbers. The first number is how long your fixed-rate period will last. The second number is how often the rate will change every year. Here are the most common ARMs:

5/1 ARM

A 5/1 ARM has a fixed rate of interest for the first 5 years of the loan. After that, the interest rate will adjust once annually over the remaining 25 years.

7/1 ARM

A 7/1 ARM has a fixed rate of interest for the first 7 years of the loan. After that, the interest rate will adjust once annually over the remaining 23 years.

10/1 ARM

A 10/1 ARM has a fixed rate of interest for the first 10 years of the loan. After that, the interest rate will adjust once annually over the remaining 20 years.

 

Is an ARM Loan Right for You?

Do you think an ARM loan could be the right choice for you? Do you still have questions? Contact us below to learn more!

 

Sharp Loan receives license to lend in Arizona and announces expansion of services

Sharp Loan receives license to lend in Arizona and announces expansion of services

Orange, CA, August 25, 2021 – California-based mortgage lender Sharp Loan is pleased to announce that they have received their license from the Arizona Department of Insurance and Financial Institutions to begin lending in the state.

This comes at a time of great demand for mortgage services in Arizona, as many flock to the region from nearby western states for new opportunities and a more reasonable cost of living. The Sharp Loan team looks forward to reaching more people for whom the dream of homeownership may seem unattainable. With their tailored loan programs and signature customer service, Sharp Loan will do whatever it takes to help these families achieve their financial goals.

Sharp Loan’s Sr. Loan Officer Rey Reyes explained “Population growth in Arizona has skyrocketed, increasing by 12% over the last ten years – in fact, Phoenix grew faster than any other major city. Our decision to start lending in the state is a direct response to these changes, and the need for these residents to find the right homes for their families. We are very excited to serve new communities in their pursuit of homeownership.”

Sharp Loan treats each customer as an individual rather than a number, helping them obtain the best loan possible. They represent a wide range of “A” rated lenders with first quality rates to private “hardship” lenders, while providing the best rates on all types of loan programs including: 30-year mortgage, 20-year mortgage, 15-year mortgage, 10-year mortgage, 1-year ARM, 3-year ARM, 5-year ARM, Conventional, Jumbo, Home Equity Lines, VA, and FHA.

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Media Contact
Rey Reyes
Sharp Loan
714.206.4048
Rey@MySL.com

 

Need help with a home sale, home purchase, or refinance? Contact us below!