Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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Mortgage Points, What Are They?

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Mortgage points, also referred to as ‘discount points ‘or an origination fee are made payable at closing. Each point is charged at a portion of 1% of your mortgage loan. A discount point reduces your interest rate by a set amount. The amount by which the rate is reduced for each point varies according to your mortgage and your lender. On average it is 0.25% – 0.5%. A discount point is different than an origination fee; however it can also be termed ‘a point.’

The origination fee is a lender fee. Some lenders charge this fee while others don’t. You should always ask your mortgage professional whether the quote they are offering has an origination fee and/or discount points associated with it. This will allow you to know exactly what your monthly payment will be.

If you reduce your interest rate by paying discount points, your monthly repayment will also be reduced. It is a good idea to take into consideration what the monthly savings are by paying the additional cost of points and whether it is money well spent. You may want to use the funds to increase your down payment or do some improvements to your new home, which in turn will increase its value or make the home more enjoyable to you. Points can in some cases be tax deductible, so it is a good idea to check with your tax professional for advice.

Mortgage points can be a good investment for you. Your mortgage professional should help you with this calculation and find what will work best for you in the long run. As I always say, never hesitate to ask questions. Mortgage professionals are here to help you during this process and to make it go as smoothly as possible.

If you have any questions or suggestions on future topics please feel free to contact me at Ingrid.Quinn@cobaltmortgage.com or visit me at http://www.CobaltMortgage.com/IngridQuinn or http://www.ScottsdaleMortgageExpert.com .


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Investment Purchase Options

Purchasing an Investment Property?With recent media attention and television shows that focus on buying and/or flipping (buying distressed properties and remodeling), there has been an increase in property investment purchases. These investors know the benefits of buying an investment property. Whether they rent them out to tenants or they flip a distressed property, buying another home can generate passive income for a homeowner. Because restrictions or tightened guidelines have come to mortgage lending companies, many investors are looking for alternative ways to finance their purchase. By researching all of your available options, you will be able to find a way to finance your potential investment property. Below are some options that may be available to you:

Conventional Conforming Mortgages

The rules will vary depending on whether an investor owns 4 or less financed residential properties or 5-10 financed residential properties. Before applying for a loan, make sure that you have your bank/asset and income paperwork in order. Lenders will require your last 2 years personal Federal tax returns. If you currently own rental property and will need to use rental income as qualifying income, it should be reported on your tax returns. Many investors set up LLCs or partnerships for managing rental property income and expenses. Copies of those returns will be required as well. Also, it is a good idea to obtain a current copy of your credit report as lenders will also have FICO requirements for investment mortgages that may be higher than those scores required for a simple owner occupied transaction.

Private Portfolio & Hard Money Lenders
Investors that flip properties must have short term cash to complete the majority of their purchases. Often, they are attending courthouse auctions to buy foreclosed homes. Many times, they obtain loans from private lenders at high interest rates and costs. With this type of loan, investors are under pressure to sell the house as quickly as possible.
You may choose to finance your investment purchase by using the equity in your primary residence as collateral. You can borrow the money from your primary home to pay cash for your investment property.
If you own additional properties, you can use the equity in multiple homes to finance your next purchase by using cross-collateralization. Some lenders will use your primary residence, as well as second home equity as security when buying an investment property.

How have you financed an investment purchase?
Please comment or email me at Ingrid.Quinn@cobaltmortgage.com or visit my websites at http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.