The goal of homeownership isn’t always an easy one to achieve. But when you do become a homeowner with a mortgage, you can then use that achievement to realize other objectives. Let’s look at a few ways that refinancing can help you to utilize the equity you have in your home as a tool to reach a variety of financial goals. 

Investing as a Goal 

For a huge number of Americans — almost one in five based on a recent survey — investing is their top financial goal. And this objective is nearly equal across different age demographics, with Generation X, millennials, and Generation Z all showing similar desires to invest more. Baby boomers lag just behind them with about 15% of people in that age group looking to make more investments.  
 

Cash-out refinancing may be one of the best ways you can use the equity you have in your home to help you invest. With this strategy, you would replace the mortgage you currently have with a larger one, and, as the product’s name suggests, take out the difference in cash. You can then use that money to fund a host of different investments. The key here is to invest in something stable that has a rate of return that’s higher than the rate you are paying on the funds you took out through refinancing.  

Stocks can be one way to do this. While subject to market forces and not 100% guaranteed to be profitable, historically, the stock market offers an average return of 10%. As a hypothetical, if one is paying 5% interest on the cash they use to invest, and that investment is returning at 10%, they’re making a steady profit. Granted, the rate of inflation will reduce those profits, and stock values fluctuate, so the stock market is a long-term strategy best managed with the help of financial professionals who know what they are doing.  

And you might consider that the money you may gain isn’t limited to what the investment earns; given today’s attractive interest rates, you could very well get a better rate on your current mortgage through refinancing and lower your monthly payments. 

Refinancing and Real Estate Investing 

One of the most direct ways to employ cash-out refinancing to invest in real estate is to use the money you get to put a down payment on an investment property. This could be a considerable amount, as cash-out refinancing allows for borrowers to get up to 80% of the equity they have in their homes — with low credit score requirements, as low as 640. Some borrowers could very well have enough equity in their homes to buy an investment property outright with cash.  

Also, keep in mind that refinancing works for the second property as well if, like many, you use a mortgage loan to buy an investment property. Just as you can with your primary residence, you can use refinancing to change the mortgage terms on an investment property. One might wish to refinance from a mortgage with an adjustable rate to a fixed one. Or shorten the term of a loan to own a property sooner, paying higher monthly payments but accruing less overall interest. You might also use cash-out refinancing with the mortgage you have for an investment property to pay for maintenance and repairs on that property. 

Paying Down Debt 

Recent data shows that paying down debt is the number-one financial goal of people in the United States, as about 20% of Americans are looking to reduce what they owe. You may be able to simply achieve this goal by using the money you save in monthly payments by refinancing at a lower rate and putting that difference toward debt each month. Though one can also use cash-out refinancing to pay off debt by consolidating high-interest debt with a lower-interest loan. Credit card debt, for example, tends to have a higher interest rate than mortgage rates. 

Home Improvement as a Financial Strategy 

Repairing or upgrading your home isn’t just a goal that could improve your living situation in the short term — it’s also a long-term financial goal. Several home improvements offer significant returns on investments by increasing property values. While not all home upgrades pay off, many do. These often include kitchen updates, replacement entry doors, energy-efficient windows, wood decks, and new garage doors. In terms of cost versus value, Remodeling magazine found that adding stone veneer to a home’s exterior recoups 95.6% of its cost when a property sells. These improvements, paid for through refinancing, could earn you money in the long run. 
 

To utilize refinancing to pay for some or all of these upgrades, you can look to an FHA 203k Rehabilitation Loan. Backed by the Federal Housing Authority, these versatile loans can be used for basic upgrades such as a revamped kitchen or a bathroom makeover, or extensive projects such as additions or even tearing structures down to their foundations to rebuild. It’s a simple deal: you just roll the renovation costs into your current monthly mortgage payment. All with credit-score requirements as low as 580, no tax returns are needed, and you don’t have to currently hold an FHA mortgage to take advantage of FHA refinancing. 

More Money for Retirement 
 

One way to use refinancing with retirement goals in mind is to shorten the term of your mortgage so that you pay off a home sooner and retire with less debt. Entering retirement with a home paid off offers peace of mind that goes beyond pure financial stability. But others use a different strategy: using cash-out refinancing to invest in their retirement savings by contributing to a 401(k) or an IRA. This might make sense if the return on the investment is higher than the interest rate on the home loan.  

Are you ready to take proactive steps to secure your financial future? If so, City Lending is waiting with a range of loan products designed to help you achieve your financial goals. Contact us today. 

While others are out searching for Easter eggs, will you be on the hunt for a new home? The two hunts aren’t all that unalike, taking you into unfamiliar terrain where what you seek feels hidden from sight. So, let’s look at a few ways to make your Easter time home search easier. 

Things You Should Do While House Hunting 

• Get Pre-Approved for a Mortgage. If you only follow one tip in your hunt for a house, this should be it. Mortgage pre-approval sets serious buyers apart from those who are “just looking.” Many sellers don’t even consider offers from buyers who don’t have the security of likely financing that pre-approval provides. Plus, pre-approval gives you a very good idea of what you can afford, saving you time and frustration in considering homes you can’t. 
   
• Make a Must-Have List. Do some serious soul-searching here — separate the wants from the needs. Of course, must-haves are as diverse as buyers themselves, but many people consider things like commute time to work, the number of bedrooms, and the size of the kitchen as must-haves. A pool is often a want, while things like a home office or a good school district are often needs. Once you have your list of must-haves, the house hunting will be more focused. 
   
• Shop and Shop Some More. Even though demand is high, and inventory is low, historically speaking, there are still sure to be lots of homes that fit what you’re looking for. Instead of letting competition force you into making a rash purchase, take the time to consider as many options as you can. Just don’t be leisurely about it.  
   
• Explore the Neighborhood. Gauging the level of traffic you’ll have is important; this can affect your quality of life. Talk to the neighbors. Check out the zoning laws you’ll be living under. Don’t just consider what the neighborhood is now, but what it may be, as development could considerably change that location. Once you’re serious about a location, you might even consider a mini-vacation and spend a few nights at a hotel there, exploring your would-be neighborhood during the days. 

• Understand Patience Vs Inaction. This is a tricky one. You want to take the time to consider all the factors before making one of the most important purchases of your life. And you also don’t want hesitation to make you lose out in a fast-moving market. A good real estate agent can help you to know when to pull the trigger on an offer and when to hold back. 

• Check Out Some Amazing Apps. Why not combine your love of scrolling through content on your phone with your hunt for a home? There are some great apps that make it simple. A few of the top ones include the Zillow app, with its much-touted Zestimate feature, estimating the values of homes with remarkable accuracy. Trulia’s app gets points for its user-friendly maps, showing important data such as crime rate, weather, and traffic, while the Realtor.com app features new listings just about every hour. 

• Think Long Term. If you’re like many, you picture yourself living in your dream home right now. And that’s great; homes should suit current lifestyles. But where will you be in five, ten, or 20 years? Data from the National Association of Realtors shows that on average people stay in homes for about 13 years, and that in large metropolitan areas that number goes up to 16 years and higher. Is this the home you see your future self in? If there’s a chance your family will grow with children, you should consider looking for a house with more bedrooms and bathrooms than you need right now. As this is a long-term investment, it’s a good idea to investigate whether the homes in the neighborhood have gained or lost value, and by how much. 

Things You Shouldn’t Do While House Hunting 

• Look Beyond Your Budget. What’s wrong with just taking a few peeks at homes you can’t possibly afford? Just to see what the houses beyond your price range are like. Bad idea. You’re apt to fall in love with something you can’t pay for, then somehow justify that maybe you can afford it, ultimately putting you in a bad financial spot. And if you buy the home that you can afford after dreaming of ones you can’t, you may feel unsatisfied with a home that should otherwise be quite satisfying. 

• Go it Alone. You may be driving down a street and see an open house sign. Nothing wrong with a solo pop-in, right? Wrong. If you’re serious about buying a house, you should always have enlisted a broker or real estate agent before you do any in-person visits to properties. You don’t want to risk getting into any kind of discussion with the seller’s agent without having an agent of your own. 
    
• Fall for a Fixer-Upper. Unless that’s what you want. If you understand the time, energy, budget, and skills that are needed for home renovations and repairs, you can judge whether a home that’s in need of work is worth it. Otherwise, avoid houses with major flaws that you’ll have to fix — distinguishing between what you can fix and what you can’t is an essential tool of house-hunting. 
   
• Succumb to Spring Fever. Much of the motivation behind the surge in home sales we see around Easter is psychological; spring represents change, the cold of winter giving way to warmer weather, bluer skies, and new growth. With greener lawns and flowers in bloom, houses simply look better at this time of the year. And the Easter season could be the best time for you to find a new home. But if not, patience may be your best friend, reminding you summer and fall may also be good times to buy. After all, we are living in a year-round homebuying season. 

 And no matter where your hunt takes you, from loan pre-approval to closing, City Lending is ready with a big basketful of mortgage options guaranteed to meet your lending needs. 

If you are a real estate agent who is helping homebuyers navigate today’s fast-moving housing market, you could probably use a trusted and reliable lender on your side. And City Lending could be the right preferred lender for you, for a whole host of reasons. Let’s delve into a few of these reasons and look at how they can help you sell more homes. 

The Importance of Pre-Approval 

As you surely know, we’re in a seller’s market — and a red-hot one at that. Most homes for sale get multiple offers these days and bidding wars are all too common. You’ve been in a few yourself and faced off against a selling agent who has ignited a bidding war. So, you understand the importance of a buyer having a pre-approved mortgage in getting a home deal done. We do too. That’s why we’re dedicated to providing a swift and smooth pre-approval process to make home-buying easier for both you and your clients. 

Loan Products for Every Homebuyer 

As homebuyers are as unique as the homes they seek, we have a wide-ranging selection of loan products to meet a variety of needs. Here are a few you can suggest to your clients. 

FHA Loans. These can be perfect for first-time buyers or for those borrowers who might not qualify for conventional loans. Less money down is a big plus with an FHA loan, often requiring as little as a 3.5% down payment for borrowers with credit scores of 640 and higher. All your client needs to do is to show two years of W-2s and pay stubs going back 20 days. And City Lending doesn’t add overlays; we underwrite using FHA guidelines. 
 

ITIN Loans. Chances are you’ve come across a potential client with worries that their immigration status will prevent them from getting a mortgage. But that’s not necessarily the case. Not if they choose an Individual Tax Identification Number (ITIN) Loan Product. Foreign-born people who lack social security numbers may still quality for home financing if they are legally allowed to work in the U.S. Two years of tax returns and two months of bank statements is all it takes to get the approval process started. 

 
Bank Statement Loans. Your roster of clients almost surely includes some people who work for themselves, from small business owners to workers who are a part of the ever-growing gig economy. So, you know the difficulty they can face trying to meet the financial documentation requirements of conventional mortgages. Enter Bank Statement Loans, which use a potential borrower’s bank deposits in determining their eligibility for a loan. With lenient requirements — people with credit scores as low as 620 and debt-to-income ratios as high as 50% can qualify. 

VA Loans. If you’re showing listings to veterans or active members of the armed services, they’re likely to be interested in VA loans. These government-backed products have some serious selling points: the possibility of putting no money down, no need for mortgage insurance, eligibility for those with credit scores as low as 600, and more. All with a reasonable interest rate and possible for amounts up to 1 million dollars. 

FHA 203k. Whether you have a client who is looking for a fixer-upper or one who just wants to make their new dream home a little dreamier, the FHA 203k Rehabilitation Loan Product might be right. This loan, insured by the Federal Housing Administration, allows homebuyers to finance their renovations — perfect for first-time homebuyers who may go the more economical route of buying a home that needs some work. 

Rely on the Support of City Lending 

You might not have heard of City Lending in 2014 when we were getting started with a small, but dedicated team. We’ve since grown to have over 200 employees, a success story that’s founded on our dedication to our clients, our investor relationships, and the ever-growing City Lending in-house team. Should you choose to work with us, you’ll be able to take advantage of our considerable resources.  
 

With a dedicated staff of loan processors and assistants, our loan originators are never bogged down with paperwork, leaving those important but often cumbersome details to a team of pros. Who do it quickly. Our compliance team reviews content for turnarounds in 48 hours or less. For you, that means you can count on some of the fastest loan processing times in the lending business. We move so swiftly because we don’t outsource our work, handling everything from processing and underwriting to managing an appraisal roster in-house.  

There may be no real estate agent on earth who hasn’t fielded calls from impatient homebuyers, fretting while they wait for the underwriting process to complete. While we can’t make underwriting time go away, we do have the high-tech tools to make it as expedient as possible. These include Optimal Blue, LoanBeam software, the ability to track the mortgage process with SimpleNexus, and access to fast financial verification through Birchwood services.  

Fast Closings and Communication 

What does all this tech and support staff mean for you? Fast closings, for one. We don’t want financing to linger in limbo any more than you or your clients do. So, we’ve assembled a team of highly skilled professionals and created an unrivaled system to streamline the process. As you probably know, there are lots of things that can spoil a real estate deal. We strive to make sure that financing isn’t one of them.  

As with most relationships, communication is fundamental to maintaining a good lender-agent relationship. It’s why we put considerable attention and resources toward promptly answering every call, email, and text from agents. We know that in today’s market, homes sell fast. You need answers fast, to sell that current home and to move on to selling the next one. 

Are you ready to consider selecting City Lending as your lender of choice? If so, we’d love to have a chat. Contact us today. 

We’re always on the lookout for talented loan officers to join the City Lending family. But why might you want to come aboard? One look at City Lending’s diverse suite of loan products says it all, with financing options to meet the unique needs of every kind of borrower imaginable. Let’s look at a few of City Lending’s offerings. 

Purchase Products for a Multitude of Borrowers 

Bank Statement Loans for Non-Traditional Earners 

An emerging trend even before COVID-19 shifted the world into a more online direction, gig workers and other self-employed folks are a rising demographic you should be targeting. These non-traditional earners often don’t have the pay stubs, tax returns, and work histories that conventional loans generally require for approval. But these would-be borrowers are creditworthy and can benefit from Bank Statement Loans that gauge earnings by looking at bank account deposits. 

VA Loans Are Available for Millions 

While veterans and active-duty members of the military don’t have to get VA loans when seeking a mortgage, they would be wise to consider one. Thanks to backing by the U.S. Department of Veterans Affairs, VA Loans have highly attractive features, such as up to 100% financing of the value of a home, with no maximum loan limit. Plus, there’s no mortgage insurance required and borrowers with credit scores as low as 600 can often qualify.  

How many of these potential borrowers are out there? According to the most-recent V.A. data, there are about 19 million veterans in the United States today. Add that to the 1.3 million active-duty members of the armed services and you’ve got north of 20 million people who might benefit from a VA Loan. 

Real Estate Investors Spend Billions 

Often when we think of people who are applying for mortgage loans, the mind conjures up an individual, couple, or family looking for a single-family home. And they are common borrowers. But loan officers know that these folks make up only a part of the lending landscape; property investors compose a huge portion of homebuyers in today’s market. In the third quarter of 2021, about 18% of all home sales went to real estate investors, who collectively spent around $64 billion. If nearly one in five homebuyers is a property investor, that’s a group you can’t overlook.  
 

So which loan products best serve these investors? City Lending’s Investor Cash Flow Program is tailored to the needs of real estate investors. With no requirement of personal income verification and loan amounts up to $1 million, Cash Flow loans look at the potential income that a property will generate in evaluating qualification. And not just for purchases — this program can also be used to refinance investment properties. 

FHA Loans for First-Time Homebuyers 

While first-time homebuyers don’t necessarily need to get FHA mortgages, it is a popular option for many. People who are buying their first home often have less money for a down payment, and FHA guidelines allow for as little as 3.5% down. Given that first-time homebuyers tend to be younger than those who have owned homes before, their credit histories are often shorter, and perhaps with a few issues, making the moderate credit score requirements for FHA loans a good potential fit. 
 

And the pool of first-time homebuyers is a group you certainly would not want to ignore. While the percentage of people who are buying homes for the first time fluctuates from year to year — falling from 33% in 2021 to 27% in January 2022 — the number of first timers who might be right for FHA loans is comfortably in the millions. 

ITIN for Foreign-Born Borrowers 

A considerable number of people who are allowed to work in the United States lack social security numbers or the documentation needed to qualify for conventional loans. This represents many would be home buyers who fall into this segment of the market.  

Many of these people may benefit from City Lending’s ITIN Number Loan Product. Even if a potential borrower is undocumented, or doesn’t have a valid residence permit, they may still be able to qualify for a mortgage loan. They just need two years of tax returns, and two months of bank statements among the requirements, and they can own a piece of the American dream even if they aren’t American citizens. 

Refinancing to Fit the Needs of Many 

RefiNow offers an excellent way for low-income homeowners to refinance and take advantage of today’s attractive interest rates to save money each month. How much money? At least $50 a month, though that number is often higher. RefiNow is perfect for those who may not qualify for a conventional loan, as this refinance program has more-relaxed application requirements, a debt-to-income ratio of up to 65%, and credit score requirements as low as 620. 
 

Do you know a borrower with a fixer-upper in need of serious work? Or maybe one who just wants a simple renovation, such as a bathroom makeover or an upgraded kitchen. Then they’re ripe for an FHA 203k Rehabilitation Loan Product, versatile loans backed by the Federal Housing Administration that allow borrowers to make home improvements on either a new home or one that they already own.  

You’re unlikely to find a borrower who doesn’t like getting cash that they can use for anything they want. From paying off a credit card to buying a new car, covering tuition costs, and more, FHA Cash-out refinancing can be an ideal way to use one’s home equity to put cash in their pocket. How does it work? The borrower simply replaces the mortgage they currently have with another mortgage, quite possibly at a lower rate given today’s interest rates.  

Are you considering a career at City Lending? If you’re ready for a challenging opportunity that perfectly balances work life and home life, we’re ready to talk. Contact us today.