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Questions & Answers


Here are some answers to our most frequently asked questions (FAQ) regarding mortgages, refinances, title and many more questions for transactions in the state of California. If you have a question not addressed here, please call or email. We are happy to help and guess what, we are nice too!

Simply click a question to see the answer.

Won’t I pay more if I use you?

No, and you'll probably pay less than you would at your bank or credit union! We work with more than 30 lenders to get you the best rate and terms available, we basically do the shopping for you. Even if you went to 10 lenders (please don't or you'll kill your credit) you couldn't be sure you got the best rate and terms. Every borrower is different and every lender is different, it is our job to find the best fit at the best price and help throughout the entire transaction.

How long will it take?

Residential Real Estate loans usually take anywhere from 15 – 60 days from beginning to end. The length of time depends upon how fast title, escrow, appraisal and underwriting happen. We generally close loans in 30 days or less. Loans involving different filings, changing lenders or loan programs, multiple applications or construction loans may take longer.

What will be my “out-of-pocket”?

Your out-of-pocket can usually be whatever you want it to be, no kidding! Ask us how we can work within your financial goals.

Why do interest rates fluctuate daily?

Mortgage Rates are determined by the supply of money on the open market. Every day money flows in and out of different investments based upon investors’ perception of where the greatest opportunity lies for them to make money. When money flows into the Stock Market the market rallies and much of it comes from the Bond Market where money has been sitting making a safe return. There is now less money available to lend and the price of money increases and rates go up. When money flows out of stocks (the Stock Market declines) it usually flows into a variety of Bonds which tend to be much safer investments. Rates fall when this occurs because there is more money to lend.

Will my loan be re-sold?

You will receive a Transfer Disclosure Statement with your loan documents which will indicate the probability of your loan being re-sold. Many loans are re-sold, depending on the lender.

Who are Fannie Mae & Freddie Mac?

Fannie Mae (FNMA) & Freddie Mac (FHLMC) purchase conforming loans on the seconday market enabling banks to regain capital and issue more loans (otherwise banks would run out of money to lend). Borrowers must qualify under FNMA/FHLMC's guidelines in order to get the lowest rates available. Fannie Mae & Freddie Mac were once government agencies but are now classified as Governement Sponsored Enterprises (GSE's) after being "privatized" and have become two of the largest corporations in the world. Fannie and Freddie hold some mortgages while others are securitized and sold.

What does the title company do?

The title company researches and insures the title history of the property. They prepare a report and forward it to escrow. They insure the title in the borrower’s name and record the actual title transfer with the County Recorder.

What is Title Insurance?

It guarantees the property owner that they own the property free and clear of any liens or encumbrances other than what they agreed to when they purchased the property. It basically insures that the party who sold them the property had the right to do so. Title Insurance also guarantees that the lender has a valid and enforceable lien secured by the property and that no other prior lien will take precedence unless the lender OKs it. Title Insurance is a one time fee and covers the life of the loan it was obtained for.

What does the escrow company do?

Escrow companies provide a wide variety of services in any real estate transaction. The main function of escrow is to serve as the neutral depository of funds. However, they also are responsible for:
  • Facilitating communications to all parties
  • Preparing escrow instructions
  • Ordering the preliminary title report
  • Preparing the deed as well as other documents
  • Requesting issuance of title policy
  • Prorating and adjusting taxes, interest, insurance, concessions, etc.
  • Informing the lender when all conditions are met
  • Requesting funding
  • Forwarding the deed and other documents for recording
  • Disbursing funds
  • Preparing the Final Closing Statement

What am I going to pay in Property Taxes per year?

The official answer is:
"Proposition 13 limits the general property tax rate to 1 percent of the assessed value, plus an amount for the debt service on any bonds approved by popular vote. The tax rate will vary depending upon where the property is located. You can obtain exact tax rates for a particular parcel by contacting the county auditor's office."

Currently, the Property Tax Rate in Los Angeles and Ventura Counties is 1.25% of your assessed value per year. Typically your assessed value is your purchase price (what you bought your house for) plus any assessments since that time.

For questions on:
Propositions 60/90/110 - (Transfer of Base Year Value)
Propositions 58/193 - [Transfers between Parent and Child; Grandparent and Grandchild] as well as answers to many other property tax questions go to: http://www.boe.ca.gov/proptaxes/faqs/faqspropindex.htm

When are Property Taxes due?

Property Taxes payments in the State of California are broken up into two installments for the taxpayers' convenience. The First Installment of Property Taxes is due on or before December 10. The Second Installment is due on or before April 10 (Nice timing). The Second Installment pays you up through Dec. 10. You will usually receive a bill a month and a half or so before the due date. Even if you don't receive any bills you are responsible for paying your Property Taxes or making sure your lender pays them for you if you have impounds.

What is a Homestead Declaration?

A Homestead Declaration protects the homeowner from losing a portion of their equity due to lawsuits that result in judgment liens. Homestead Declarations must be recorded with the County Recorder to be valid. The limits on protected equity are:
  • Any individual with an interest in a home $50,000
  • Head of Household $75,000
  • Husband & Wife $75,000
  • 65 Years or older or disabled $100,000
  • Husband & Wife over 65 or disabled $100,000
Some items that are not covered by the Homestead Declaration include:
  • Judgment lien for spouse or child support
  • Any loans secured by the property (i.e. any mortgages)
  • Tax lien
  • Mechanic’s Lien
  • Judgments recorded before your Homestead
If you have recorded a Homestead and wish to refinance you will need to file an “Abandonment of Homestead” for the purposes of the loan because you are switching lenders. You are then free to file another Homestead Declaration upon completion of your loan.