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How a Cross Collateral Loan Can Help You Buy & Sell Simultaneously


Cross collateral loans can help you buy and sell at the same time. Here’s how.

Today I’m joined once again by Dave Marzinke of Movement Mortgage to discuss cross collateral loans.

I have a client who’s looking to sell a $1-million house in Mission Viejo that they only still owe $550,000 on. They’re also looking to purchase another house, so the plan was to sell their current home first, and close on their new home, which is listed at $1.2 million. However, this process comes with moving problems and whatever complications arise from needing to coordinate closings.

This is where the cross collateral loan can help. Nobody wants to be a contingent buyer and have to sell their current property and be in escrow before making an offer on a new home, so this loan allows you to place a loan on two properties at the same time. It also allows for more flexibility on the down payment you’ll need for your new home.

Nobody wants to be a contingent buyer and have to sell their current property and be in escrow before making an offer on a new home.

So hypothetically speaking, let’s crunch the numbers for my client. The combined value of their current home and future home is $2.2 million. The cross collateral loan can be up to 90% of that value—in this case, $1.98 million. After paying off the balance of their current home, that leaves them with a little over $1.4 million to buy their new home. They can technically buy with no money out of pocket.

To qualify for a cross collateral loan, you’ll need a minimum FICO score of 700 and a minimum debt ratio of 50%. You’ll also need six months’ worth of cash reserves for your loan payment.

If you have questions about cross collateral loans or any other real estate topic, don’t hesitate to reach out to me. I’d love to help you.
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Location: Mission Viejo, CA, USA

An Important VA Loan Change


In 2020, you can use 100% financing for a VA loan even if the house you’re buying is over the loan limit.

An important change has been applied to the VA loan in 2020, and today I’m joined by Dave Marzinke of Movement Mortgage to discuss this change and why it benefits you. Previously, you had to come up with a down payment if you were buying a house whose purchase price was over the county loan limit. The down payment was 25% of the difference between the purchase price and the loan limit. Now, you can use 100% financing even if the house you’re buying is over the loan limit.

If you have any questions about this topic or need help buying your next property with no money down, call or email me anytime. I’d love to help.
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Location: Mission Viejo, CA, USA

Making Sense of 2019 & Looking Ahead


Today I’m giving you the scoop on how the market performed last year and what we can expect as this new year progresses.

In 2019, we saw a very strong U.S. economy. Trade wars with China, Brexit, and the Trump impeachment dominated headlines.

Unemployment reached a 50-year low, and the GDP delivered on high expectations. The interest rate for a 30-year fixed mortgage ranged anywhere from 4.5% to 3.5% and finished at 3.75%.

Here in our Orange County market, the active inventory is at about 3,700 homes. That number may sound high, but it’s actually anemic for our market. As the year heats up, we’re anticipating inventory to rise; by summer, we can expect about 7,000 homes on the market.

For those selling homes right now, you have no competition, so take advantage of it. On the buyers’ side, there aren't a lot of homes to choose from. Still, if you find something to your liking, be sure to put in a competitive offer—I’m sure the seller will take it.

Overall, 2020 will look a lot like 2019, just a tad hotter.

We’ll likely see a 3% to 4% growth in demand around the spring and summer. The housing cycle for 2020 will mirror 2019: We’ll start slow in the first quarter, heat up in spring, top out in summer, and cool off come fall.

If you’re in the market for a luxury property, now is a fantastic time. Days on market for that bracket is currently between 175 and 275 days, so conditions are prime for striking a good deal.

I foresee interest rates remaining about the same in 2020. If our economy continues trending upward, we may even see a slight increase. However, if developments regarding trade wars or Brexit rock the boat, we could see a small decrease to about 3.5% to 3.75%. To any potential buyers on the fence: Lock those rates in, get the house now.

Overall, 2020 will look a lot like 2019, just a tad hotter. Buyers need to be patient, as multiple-offer situations will become more common. If you have any questions about what the year ahead holds or if you’re thinking of buying or selling now, please reach out to me. I’m always happy to help.
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Location: Mission Viejo, CA, USA
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