Lender Services you can Depend on
Thank you for your interest in our home loan programs.
Our goal at CW Mortgage is to not only handle your next purchase or refinance transaction, but to become your lifelong mortgage resource. We will work closely with you to find the loan program that best suits your individual needs.
In 2007, CW Mortgage was listed in the Southwest Airlines’ Spirit Magazine as one of the “Top Ten Most Dependable Mortgage Brokers” of Southern California.
We earned our spot as a top company by working hard, playing fair and giving our clients the service they deserve.
By working with a Premier Broker, our team of loan officers have access to special rates and programs that other lenders simply cannot offer.
When you work with CW Mortgage, you can expect:
- Personal contact with loan officers
- A Proactive Pre-approval process
- Competitive rates and programs
- Prompt responses to all of your questions
Follow these links to learn more about CW Mortgage.
- Meet the CW Mortgage Team
- Read about the Services we offer
- Read Testimonials from Past Clients
- Learn about the Work we do in the Community
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Contact CW Mortgage
- Just give us a call at (760) 746-7388 or email us. We are always available to answer questions!
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Shopping for a Home Loan – Be Sure to Compare Apples to Apples
Posted by Paul Gonzales | Leave A Comment »
You’re a smart cookie, so you called five different lenders and “shopped” for your home loan. If you are like most folks, you asked “what’s your rate?” and each lender tossed you a quote. What’s your next move – do you go with the guy that quoted you the lowest rate? You probably shouldn’t and here’s why – you didn’t ask enough questions, and probably didn’t speak to all of them on the same day.
Interest rate quotes by themselves literally mean nothing. This is because, all other things being equal, you can get a lower rate by paying ‘points’ or other closing costs. On the other hand you may reduce or even avoid those extra expenses by accepting a higher interest rate. The problem you have when you ’shop’ is that each lender may be simply tossing you an interest rate without explaining what it will cost you to get it. They simply want to take you off the market with whatever you want to hear – they’ll clue you into the full picture later.
Your job is to get the full picture right up front! Here’s how:
- be very specific about the kind of loan you want (30 year fixed, interest-only payments etc.. Rates very depending on the type of loan you are seeking)
- When they quote you an interest rate, ask them if that particular rate requires your payment of any discount points, an origination fee or application fee.
- Also ask what the Annual Percentage Rate (APR) is for that particular quote (see below for more information on the APR)
- finally, ask them to give you an estimate of your final and total closing costs including an appraisal and credit report
The Annual Percentage Rate (APR)
In addition to the interest rate being offered, the APR takes into account the costs necessary to actually get that rate. It does this by mathematically spreading those costs over the life of the loan (say 30 years) and treating that cost as an added interest burden. For example, if you are quoted a rate of 5.50% for a 30-year fixed loan of $300,000 and the total costs incurred to get that loan are $2,700, the APR might be 5.58%. This device is intended to help you better compare quotes from different lenders. If you talk to two different lenders about the same loan and each one quotes you the same interest rate but different APRs, you might conclude that the lender quoting the lower APR is estimating a lower closing cost figure. On the other hand, if one lender quotes a lower interest rate than another lender, but both APRs are about the same, the lower rate may involve paying discounts points that the second quote doesn’t incur.
A final word about interest rates
Mortgage rates for all lenders are subject to the frequent and rapid changes in the financial markets. They can (and commonly do these days) change literally hour-by-hour, much as the stock market does. In recent months we have actually seen interest rates on mortgages rise and fall as much as a half of a percent in the same day. The point is that if you are leisurely “shopping” for the best deal over a period of several days or weeks, your information has already gone out of date and you have no basis for a sound comparison.
The key is to recognize that rates alone are only half the picture. You also need to know the costs involved in getting those rates and talk with lenders preferably on the same business day, so you can compare “apples to apples”, instead of “soup to nuts”. The bottom line, however, is still choosing to work with a lender whom you can trust and who will work hard to get you the best interest rate-and-cost package you can qualify for. And that may definitely not be the the person tossing out the lowest rate of the day!
Paul Gonzales, Countywide Mortgage Lending, (760) 746-7388 or email at paulforloans@aol.com
Related Posts: Buyers, CW Mortgage, Home Loans, Interest Rates, Mortgage News, Real Estate News
BEWARE! The Type of Property You Choose May Affect Your Loan Approval!
Posted by Paul Gonzales | Leave A Comment »
Most people know they need to look their best when trying to get approved for a mortgage. Like brushing our teeth and combing our hair for a family portrait, we know that our credit scores, job history and general financial health are important. (To see how to avoid common pitfalls after you have been approved for a loan, see my recent post Your Loan is Approved! Now Avoid These Four Pitfalls That Can Really Ruin Your Day).
However, did you know that the type of property you choose may also have a major impact on your loan approval? If not, dear reader, then Press On!
Let’s say you start out thinking you’re looking for a cute house with a white picket fence. But then you begin to see different options. Let’s see how those choices may change, limit or even eliminate your financing options:
A Planned Unit Development, or PUD
A what? They look like a regular house, but are part of a large, master-planned community. Most homes built in recent years by major builders are PUDs. This property choice invariably comes with a required membership in a Home Owners Association (HOA). The monthly HOA dues can commonly run into the $200 to $400 range, especially in Southern California. This will reduce the amount of financing you qualify for because it will be included as part of your debt-to-income ratio.
Condominiums
- Non-Warrantable Condo Projects – This is a condominium that does not have official Fannie Mae or FHA approval (required to get financing from these agencies)
- Condo Conversions – These are condos that started life as apartments and then were converted to condominium building codes. Most are OK, but a few may be little more than cosmetically-enhanced apartments. Again, look for that all-important Fannie Mae or FHA approval on the project
- High-rise Condos – commonly defined as a condo above 4-stories tall. Some lenders won’t do mortgages on them
- Those ubiquitous HOA dues will change your qualifying debt/income ratio
Manufactured and Modular Homes
This can be a tricky area with regard to financing. These types of homes are partially built and assembled in a factory and then moved to the property site where they are permanently affixed to the land. Such homes manufactured in recent years can look like a traditionally-constructed or site-built home except to the most discerning eye (like an appraiser). However, lenders definitely make the distinction and the types of loans available to purchase or refinance this type of property are quite limited, especially in the current financial markets. Where available, a mortgage on this type of property will likely require a greater down payment. Options such as interest-only payments will be almost impossible to find. While this type of housing can be ideal for the right Buyer, be aware that it will limit the financing options for you now, and most likely for the next person looking to purchase it (from you)
Large or Unusual Properties
This one can catch you by surprise. A common example might be a home built on 18 acres of land. Regardless of how big or nice the house is, a large tract of land may actually dominate the total value of the property. Conventional mortgages are intended to finance residential property, not land. As a result, some lenders will limit the maximum size of the property they will finance; 5 acres is not uncommon. Other lenders will allow larger acreage but will require the appraisal to consider the value of the improvements (house) and limit land value to 5 acres. Another issue can arise if the property includes improvements other than what is common to residential property. Examples might be a home on 4 acres that includes 300 avocado trees, or a duplex where 1 of the 2 units actually houses a business such as a barber shop. These properties may be viewed as commercial or mixed-use in nature, rather than residential.
Multi-Family Property (Duplex, Triplex etc.)
Conventional financing is still widely available for 2 to 4 family properties. However, recent changes in the mortgage markets have tightened a number of requirements to qualify for financing on these property types. Examples include larger down payments, higher credit scores, higher interest rates and more conservative debt-to-income ratios.
The important point to draw here is that one size does not fit all when obtaining financing. It’s best to have a reasonably clear idea of the type of property you are seeking to purchase before you obtain loan approval. And if that idea changes, be sure to let your mortgage professional know as soon as possible. That will avoid unpleasant surprises and assure that your approved financing will work for the home of your dreams!
For questions about matching your loan to your home, call Paul Gonzales, Countywide Mortgage Lending at (760) 746-7388 or email me at paulforloans@aol.com
Related Posts: CW Mortgage, Find A Home, Home Loans, Mortgage News, New Homes, Real Estate News, homes for sale
Your Loan is Approved! Now Avoid These Four Pitfalls That Can Really Ruin Your Day
Posted by Paul Gonzales | Currently 1 Comment »
Your loan application has been officially approved by your lender and you are in escrow on your dream home. Just days before you expect to close your purchase and begin moving, your lender tells you that you no longer qualify for your financing. What happened?
During the typical thirty to forty-five day escrow, there is ample opportunity for the prospective home buyer to unwittingly sabotage his or her deal. These innocent mistakes can be grouped into four categories:
Credit Issues
Your initial credit report was good enough to qualify you, and then you went out and:
- forgot to make that dinky $18 payment on your J.C. Pennys account
- purchased a plasma screen TV with no payments due for a whole year (and now you have a new credit account with a subprime finance company)
- opened a new credit card or max’d out the balance on an existing card
- finally paid off that old traffic ticket that went to collection two years ago
Any one of these mistakes can have a dramatic effect on your credit score and disqualify you.
Employment
- you were a company employee, and now you are self-employed
- you still work for the same company but just switched from a salaried position to one that compensates you by commission or bonuses
- you have just made a significant career change, say from being an auto mechanic to a real estate agent
Lenders usually look for a stable employment and income picture for at least the last two years. Any significant change after your application is approved can start that “clock” over again
Income and Expenses
Your loan approval included a comparison of your present monthly consumer bills, together with the loan you requested, as a percentage of your monthly gross income, however:
- you or a spouse decided to switch from full-time to part-time
- you just made a major credit purchase such as a new car
- you have actually made no changes whatsoever, but you were qualified for a specific maximum loan amount to purchase a house. Now you want to buy a house or a condo that includes a $325 monthly homeowners association fee, or found a home in a neighborhood that has special tax assessments such as Mello-Roos.
Any significant decrease in income, or increase in expenses tied to consumer debts or the home purchase itself, can reduce the amount of financing you qualify for.
Financial Assets
Most loans require that the home-buyer have a minimum amount of financial assets such as money in the bank, investments or an IRA or retirement plan. Once approved, however, you:
- made a sizable cash purchase, such as furniture for the new home
- repaid a loan to Aunt Bethany
- took out a loan against your retirement plan
Your qualifying assets could fall below the minimum amount required to maintain your approval.
These mistakes are quite common and easy to make, because they involve normal activities and routine decisions that we make everyday. The key to avoiding any of these four major pitfalls is recognizing that your loan approval is like a photograph. It is literally a snapshot of you and your financial condition. Lenders will rely upon that snapshot right up until the time they wire the money to escrow, the title company records your new mortgage and your agent hands you the keys. There is nothing routine about that. So smile, look your best and stay “YOU” until your agent hands you those keys!
Paul Gonzales, Manager Countywide Mortgage (760) 746-7388 or paulforloans@aol.com
Related Posts: CW Mortgage, Divorce & Real Estate, Escrow, Financial news, Home Loans, Mortgage News, Real Estate News
The Federal Government: Lender-in-Fact
Posted by Paul Gonzales | Currently 1 Comment »
Fannie Mae, Freddie Mac and the FHA accounted for 96.5% of all home loans originated in the first quarter of this year as reported in the Wall Street Journal. That, folks, leaves only 3.5% of real estate loans originated by a non-government body (for the record, Fannie and Freddie are under Federal conservatorship and FHA doesn’t lend, but insures home loans). To put this in perspective, rewind back to the first quarter of 2006 when roughly 60% of real estate loans were originated by this same group – and Fannie / Freddie were not directly government owned/controlled, and FHA accounted for only about 3% of the action.
Some thoughts on this -
- as the whale in the mortgage market pond, the Federal Government will continue to be the dominate force in real estate finance, and hence in the recovery of the real estate market, for a long time to come
- the capital markets that constituted 40% of real estate financing just four years ago are now going through major regulatory changes that will have a huge impact on how or when that market may actually return to take back a share of the business
- Love it or hate it, the Government’s role in the real estate recovery will be key in defining that recovery
It will be a while before we return to “normal”….
Paul Gonzales, Manager, Countywide Mortgage (760) 746-7388 or paulforloans@aol.com
Related Posts: CW Mortgage, Financial news, Home Loans, Mortgage News, Real Estate News, San Diego
FHA Loans – Income and Employment Requirements
Posted by Paul Gonzales | Leave A Comment »
This is the third in a series of four posts that deal with important aspects of FHA financing. The first post provided an overview of the program while the second post detailed FHA credit requirements. This post will discuss the income and employment requirements necessary to obtain an FHA home loan.
Income Documentation
For employees this is quite straightforward. Copies of the most recent paystubs covering at least one month and W2s for the previous two years are required. Complete Federal income tax returns for the previous two years may be required as well.
For self-employed people signed copies of personal tax returns for the previous two years are required. If the business is a legal entity such as an “S” or “C” corporation, partnership or other legal entity then two years of business tax returns are also required. A signed year-to-date Profit and Loss statement (P&L) will be needed to complete the income documentation. FHA guidelines state that 25% or more ownership in a business is considered self-employment.
Types of Income for Employed People
The lender will review the paystubs together with the W2s and tax returns to establish a baseline amount of income as well as stability of the income. In general, if base income is increasing they will likely be able to use the current income amounts. On the other hand, income that is declining over the past two years will result in an averaging of the income. A significant decline in base income will require a written explanation.
- Overtime – to be counted it must have been relatively constant for the past two years as well as currently. There must be the prospect that it will continue and the employer will be required to state that it is likely to do so on a written Verification of Employment. If used it will be averaged over time and added to the base income
- Bonuses – the rules are similar to considering overtime.
- Commissions – will be averaged over the prior two years and must demonstrate reasonable stability; tax returns will be reviewed and unreimbursed business expenses will be deducted from the income
- Child support, alimony and spousal maintenance – such income can be included provided that it can be shown to continue for at least the next three years. It must be documented by a divorce decree, court order or separation agreement and actual receipt of the income documented by cancelled checks, bank statements or other positive means.
- Retirement income – Pension and Social Security income is acceptable and must be documented by award letters, IRS form 1099s and current “pay advices” (stubs). Again, there must be the prospect of continuing for at least the next three years
- Insurance and government income – workman’s compensation, long-term disability or other similar income must be documented and expected to continue for at least three years
Self-Employed Income
Income and expenses will be analyzed from the past two years tax returns and current P&L. The earnings will be averaged over this time period. Income that appears stable or increasing will be considered, whereas declining earnings may not be considered acceptable.
Minimum Length of Employment
Stable employment in the same general field of work or business for two or more years is considered minimum. Going from being an employee to self-employed, even in the same line of work, gets special scrutiny. A person who has been self-employed for at least one year AND has at least two previous years of employed experience in the same field may be considered. Formal training or education in the same line of work during the prior two years may be considered in lieu of employed experience.
The next post in this series will discuss the financial assets and down payment requirements for obtaining FHA financing.
For more information contact Paul Gonzales, Manager, Countywide Mortgage Inc (760) 746-7388 or paulforloans@aol.com
Related Posts: CW Mortgage, Financial news, Home Loans, Homeowners, Mortgage News, Real Estate News
