Ricardo Bueno's Blog

                                                         Everyone wants to have a healthy financial life!

Unfortunately, not everyone knows how to do this. Additionally, and to further add to one's troubles, let's not forget credit cards, debt, and other useless junk that clutter our daily lives, constantly telling us that "we need this" or "we need that" and often we buy them regardless of the consequences.

Below are some ways that we can save money, and contribute to a healthier financial living. Some of the suggestions are easy, while others take a bit more planning and time. Regardless of time, all of these can help you to save money. Remember, every little bit helps.

Ways to Save Money

• Spend less money than you earn, and adjust your lifestyle if you need to.
• Create a budget plan to help you see how you're spending money from month to month.
• Do not use credit cards, except in emergencies, or for large purchases. If you must use a credit card, be sure to pay off the debt before the end of each month. If you find yourself getting deeper and deeper into credit card debt, try to consolidate your debt.
• If it applies, begin to pay off your student loans a little at a time so they don't pile up.
• Stop purchasing items on impulse, and instead stick to your budget.
• Refinance your mortgages, debts, and loans at lower interest rates. Also try to find cheaper insurance rates.
• Use coupons to shop, or try to find an online shopping club that offers discount rewards. When shopping for items, wait for them to go on sale, or to drop in price.
• Analyze your mobile phone bill.
• Buying generic merchandise can be effective to cutting costs, and usually, they taste, or work the same as the name-brand item.
• Saving money helps you to reward yourself because you are saving money, watching your debt shrink, and your investments grow.
• Ride the bus to conserve gas money. When buying a car, try to buy it used instead of new, regardless of the latest style.
• Reduce your auto insurance by following laws, slowing down, and not getting into accidents. This also helps increase your life expectancy rate. Eat out as little as possible, but if you do eat out, try to find coupons that will allow you to get more for your dollar.
• Invest the money you save so that it earns money too.
• Create a plan to save $100 per month (or as much as you can swing).  Try never to miss the monthly savings payment and try to find ways to increase it to $150 per month.
• Don't ever spend money just because you have it.
• Look critically at how you spend and save your money.
• Increase the money you earn (second job, promotion, new job, through investments, etc.)
• Sell your car and take the bus to work (may not apply to everyone).
• Contribute the maximum each year to your 401K or to an IRA.
• Remember, paying down debt is also a way to save money (it saves you from an interest payment and gets you closer to having money to invest). But remember that not all debt is bad debt; take your mortgage for example. It's the only tax deductible interest that you derive.
• Lower your cable bill by ending pay channels, switching to satellite, or dropping it altogether.

Cut your Mortgage, Utilities, and other Home-related Costs

Everyone can save money easily with little effort if they just try to cut back on how they spend their money. The more you attempt to save money, the better you'll prepare yourself for the future. Obviously no one can tell what the future will bring, but through saving money, we allow ourselves to have a better chance to live a more financially healthy life. Although your potential savings will vary, depending on your personal situation, hopefully these ideas below will give you an idea of how much money you can possibly save by cutting back.

SAVE MONEY ON YOUR MORTGAGE

Consider the option of refinancing your mortgage. For every $10,000 of your mortgage loan, 1/2 % difference in the interest rate saves you over $40/year or $3.40/month in interest expense. A $100,000 loan at 9 1/2% refinanced at 7 1/2% saves $142/month or $1,704/year, for a total of $50,991 over the life of a 30-year mortgage.
Potential Money Savings: $1,700/yr.

For even more dramatic long-term savings, consider a 15-year mortgage rather than a 30-year mortgage. A $100,000 mortgage at 9 1/2% over 15 years saves $114,747 over the life of the loan compared to a 30-year mortgage at the same interest rate. At 7 1/2%, the savings between a 30-year and 15-year mortgage of $100,000 would be $84,854. A 9% loan of $100,000, refinanced for 15 years at 7 1/2% would add $86/month to your payment but would save you a whopping $135,845 over the life of the loan.
Potential Money Savings: $84,000-136,000

SAVE MONEY ON UTILITIES: ELECTRICITY

Install the new type of fluorescent bulbs in lights you leave on for long periods. They provide four times as much light and last ten times longer than incandescent bulbs.
Potential Money Savings: $10-$50/yr.

Lower the temperature on your hot water heater to between 110 and 120 degrees. It's not necessary to have it any hotter and wastes energy.
Potential Money Savings: $20-40/yr.

Set thermostats no higher than 68 degrees in winter and no lower than 78 degrees in summer. Turn your heat down even further at night or when you're not home (unless you have a heat pump, which operates more efficiently at one consistent setting). Each extra degree in winter can increase heating costs by 3%. In summer, each degree can raise cooling costs by 6%. Potential Money Savings: $325 to $500/yr.

SAVE MONEY ON UTILITIES: WATER

Run your dishwasher only when you have a full load. Let the dishes air-dry instead of using the heat cycle. An average dishwasher costs $60 to $100 per year to run.
Potential Money Savings: $35-55/yr.

Install flow restricting shower heads. A family of four can save 8,000 to 12,000 gallons of water a year.You not only save on the cost of the water, but also the cost of heating it. Potential Money Savings: $100-$300/yr.

Add fabric softener to your laundry at the appropriate point in the cycle instead of adding it at the end and running another rinse cycle, which can use up to 10 extra gallons of water. Figure out how much time it takes your washer to reach the rinse cycle, and set a timer so you can add softener at the right time. Potential Savings: $25-100/yr.

SAVE MONEY ON UTILITIES: OTHER

Stick to basic phone service. Extra services like call waiting and call forwarding can almost double your costs for phone services.
Potential Savings: $168/yr.

If you can live without cable television, you can save between $300 and $600 per year. If you can't live without it, get basic service only. You can rent a lot of movies for the extra $150 to $600 per year you pay for movie channels like HBO, Showtime, etc.
Potential Money Savings: $144-700/yr.

Plant perennial flowers instead of annuals. You incur a one time cost and enjoy the flowers for years, with little additional effort or money. Annuals, on the other hand, require an outlay of cash and effort every year.
Potential Money Savings: $100-$300/yr.

Please note that although rates have been in an upward trend over the past couple of weeks, it might still make sense to consolidate your credit card debt by rolling it into your mortgage. Consult your Tax Advisor for the possible tax benefits that might be derived from such a move.

If you'd like a FREE consultation on your mortgage or are considering a Real Estate Investment, contact me today. A prudent investment revolves around careful, strategic planning. So let's talk and assess your current situation and the direction you're looking to head into.

I look forward to hearing from you!

Thank You!

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA 91101 - The City of Roses!

William Shakespeare said,

When we mean to build,

We first survey the plot, then draw the model,

And when we see the figure of the house,

Then must we rate the cost of erection,

Which if we find outweighs ability,

What do we then but draw anew the model

In fewer offices, or at least desist

To build at all? -- William Shakespeare

Moving from investing in small residential complexes to investing in complex multi-unit or mixed-use commercial complexes is the equivalent of moving from Junior High straight into College. Though today's market place allows the investor the same types of financing for their commercial properties as they normally would for residential properties, commercial investments require a whole new level of professional management. And if you're a full-time employee, do you really have the time to manage a 20-unit commercial complex?

I'm not advising against your investment in that 20-unit commercial but I am asking you to take a plan of action into consideration; a Business Plan so-to-speak. How will you finance it? How will you manage it? If your investment goes sour, what's your exit strategy?

How Will You Own It?

If you work with your own Financial Advisor & CPA, I'm sure that you've discussed ownership of your investment properties through some form of corporate or partnership structure.

                                                                                              WHY?

Because as a high net-worth individual, you want to insulate your personal wealth from any lawsuits or any other personal liability issues that may arise against you.

Here are some common types of ownership that you might consider:

• Sole Proprietorship
• Partnership
• Limited Partnership
• Corporation
• Limited Liability Company

Follow the Money:

You always want to finance as much as possible on your property purchase. If of course you have enough for a down payment that means a lower interest rate. But don't place more of a down payment than is necessary. Keeping liquid cash-flow and having it available is always important. In this case your purchase should cash-flow itself but having additional reserves for improvements/repairs never hurts.

Unlike Residential Financing, you'll find that Commercial Financing requires larger down payments, loan products carry shorter terms, and interest rates are generally higher. But don't fret, commercial financing is generally speaking a little more lenient than residential financing. There are still very competitive loan programs available in the market place. It's simply a matter of determining what your immediate needs are and locating appropriate financing terms.

Remember: Provide your lender/loan officer with as much information as you can! Give them a "mini business plan." The more information we have, the better we can structure your deal and locate an appropriate financing package.

Thank You!

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

323.810.2175 | rbueno@wilshire-financial.com | www.ricardobueno.com

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

Home Equity Loans: What They Are & How They Work 

A home-equity loan, also known as a second mortgage, lets homeowners borrow money against the equity in their homes. Home-equity loans provide a way for consumers to somewhat lessen the effects of that year's tax changes, which also eliminates deductions for the interest on most consumer purchases. Through home-equity loans, homeowners can borrow up to $100,000 and still deduct the interest when they file their tax returns. Now keep in mind that there are two types of these loans and both have benefits and traps to look for.

Two Types of Home-Equity Loans

Home equity loans come in two varieties - fixed-rate loans and lines of credit. Both types are available with terms that usually range from (5) five, (15) fifteen, (20) twenty, and (30) thirty years.

Fixed-Rate Loans
A Fixed-rate loan provides a single, sum of money paid to the borrower, which is repaid over a set period of time at an agreed-upon interest rate. The payment and interest rate remain the same over the lifetime of the loan.

Home-Equity Line of Credit
A home-equity line of credit, otherwise known as a HELOC, is a variable-rate loan that works a lot like a credit card. The borrower is pre-approved for a certain spending limit and can withdraw money when they need it via a credit card or special checks. Each monthly payment varies based on the amount of money borrowed and the current interest rate. Like fixed-rate loans, the HELOC has a set term. When the end of the term is reached, the loan amount must be repaid in full.

Benefits for Consumers

The benefits of home-equity loans are that it provides an easy source of cash. Although the interest rate on a home-equity loan is considerably higher than a first mortgage, it is much lower than a credit card or other consumer loans. The #1 reason consumers borrow against the value of their homes through a fixed-rate home equity loan is to pay off their credit card balances. The interest paid on a home-equity loan is also tax deductible, and by consolidating their debts with the home-equity loan, consumers get a single payment, a lower interest rate and tax benefits.

Benefits for Lenders

A Home-equity loan is a dream come true for a lender, who, earns interest and fees on the borrower's initial mortgage, and even more interest after fees. If the borrower drops out, the lender gets to keep all the money earned on the initial mortgage and all the money earned on the home-equity loan. The lender also gets to repossess the borrower's property, sell it again and start the cycle again with the next borrower.

A home-equity loan can be valuable tool for a responsible borrower. If you have a steady source of income and know that you will repay the loan back, the low interest rate and tax deductibility of paid interest makes it a sensible choice. Fixed-rate home-equity loans can help cover the cost of a single, large purchase, such as new carpet, or unforeseen accidents. The HELOC also provides a convenient way to cover short-term, reoccurring costs, such as college tuition, or for car insurance.

Recognizing Traps

The main trap associated with home-equity loans is that they seem like an easy solution for a borrower who may have fallen into a cycle of spending, then borrowing, then spending until they sink deeper and deeper into debt. This is so common, that lenders have a term for it: reloading, which is basically the habit of taking out a loan to pay off existing debts and to free up additional credit, but which the borrower then uses to make additional purchases.

Often reloading pushes borrowers to turn to home-equity loans offering 125% worth of the equity in the borrower's house. This type of loan may come with higher fees, since the borrower has taken out more money than the house is worth. The danger of this is that the loan is not secured by collateral. Also, the interest paid on the portion of the loan that is above the value of the home is not tax deductible.

Another trap may open when homeowners take out a home-equity loan to finance home improvements. Although remodeling the kitchen or bathroom may add to the value of a home, extravagant improvements such as a swimming pool may be worth more to the homeowner than to the market determining the total value. If you find yourself going into debt when making cosmetic changes to your house, try to determine if the changes add enough value to cover their costs.

Should You Tap the Equity in Your Home?

Food, clothing and shelter are considered a necessity, but only shelter can be used to obtain cash. Despite the risks involved, the temptation to use home equity to splurge on expensive luxuries can be troublesome. To avoid the trap of reloading, review your financial situation carefully, before you borrow against your home. Make sure that you understand all the terms of the loan and have the means to make the payments without cutting out of other bills.

"Call me today for a Free, No Obligation consultation!" -- R.B. 323.810.2175

Thank You!

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

SECOND MORTGAGES

A second mortgage is any loan that involves a second lien on the property. Some second mortgages are for a fixed dollar amount paid out at one time, in the same way as a first mortgage. As with firsts, such seconds may be fixed rate or adjustable rate.

A home equity line of credit (HELOC) is usually a second mortgage also, but instead of being paid out at one time, it is structured as a line of credit. A HELOC allows the borrower to draw an amount at any time up to some maximum. They are always adjustable rate. A line of credit is most convenient when cash needs are stretched out over time. A common example is a series of home improvements, one followed by another. Fixed-dollar seconds are best when all the money is needed at one time. Many home purchasers take out such seconds to avoid mortgage insurance on the first mortgage or the higher interest rate on a jumbo loan.

When taking a fixed-dollar second, borrowers can select between fixed and adjustable rates, as they prefer. When taking a HELOC, they take an adjustable, and if they want a fixed they can refinance into a fixed-dollar second after they have drawn as much as they intend to borrow on the line.

Second mortgages are riskier to lenders than first mortgages. In the event of default, the second mortgage lender gets repaid only if there is something left after the first lender is fully repaid. Hence, the rate will be higher on the second, provided everything else is the same. Of course, if the second mortgage is a line of credit with an adjustable rate, it may well be priced below the rate on a first mortgage with a fixed rate.

As a general rule, it is not a good idea to take out a second to pay off a first, because seconds are priced higher. If you take out a second mortgage to repay the first, the second becomes the first, which is advantageous to the lender because you are paying a second mortgage price on a first mortgage. But there is at least one exception to this rule. Borrowers with a high-rate first mortgage with a small balance may find it more advantageous to pay off the first with a second rather than refinance the first. This reflects the higher settlement costs on the first. Some borrowers lower their rate by refinancing a first with a HELOC In the process, however, they are exposing themselves to the risk of future rate increases. HELOCs are much more exposed than standard ARMs (Adjusted Rate Mortgage).

There are several things to keep in mind when considering a second mortgage:

1. Lenders consider second mortgages to be much riskier than first mortgages. In the event of default, the second mortgage lender gets paid off only after the first mortgage lender is paid in full. Because of this additional risk, lenders usually charge a higher rate for second mortgages than for first mortgages. Also, such loans are commonly adjustable rate mortgages, so lenders are largely protected against inflation or changes in interest rates.
2. If you are buying a home, a second mortgage can help supplement your down payment and closing costs. As long as you are able to make the proper payments, the lender shouldn't have any objections.
3. If you are financing to get cash out of your property, a second mortgage or home equity loan may be cheaper than replacing your first mortgage.
4. Second mortgages have shorter terms, typically ranging from 5 to 15 years. In contrast, most first mortgages have terms of 15, 25 or 30 years.
5. A second mortgage in the form of a credit line can advance you cash with relatively little cost up front. In addition, the interest rate is usually far lower than you would normally pay for unsecured consumer credit.

HOME EQUITY LINES

Consumer borrowing through personal loans and credit cards is at an all-time high. Many people are buried under thousands of dollars of debt with interest rates of 18 percent or more. A new breed of mortgage lenders has created a brand new class of second mortgage products designed to help consumers get out from under their mountain of debt.

These loans are commonly called equity lines, home equity lines, home equity lines of credit (HELOCs), or debt consolidation loans. These loans have interest rates that are higher than traditional first mortgages but are usually much lower than interest rates charged on credit cards.

There are no standard loan types for these second mortgage programs. The only common feature is that all of these loans are secured by a lien on the borrower's home. Unlike credit card debt, if the borrower fails to make a payment, the lender can foreclose on his home.

Some of these loans are structured like credit card debt and can actually be accessed with credit cards or checks. Others are fixed rate, amortizing loans or balloon loans. Up until recently, some lenders were eager to loan up to 125 percent of a home's value. A CLTV (Current Loan To Value) ratio of 125 percent is unthinkable in traditional mortgage lending.

Home equity loans have several inherent features that should concern potential borrowers.

Since a home equity loan is secured with a lien on property, a borrower who defaults can be foreclosed. Consider this: A homeowner has a $20,000 credit line, becomes unemployed and for whatever reason borrows $200 on a credit line mortgage, which is not repaid. Can a lender really foreclose if the outstanding balance is only $200? Yep. Will a lender necessarily foreclose? The answer depends on the lender's policies, but in the interest of good public relations it's likely that most lenders would try to work something out before foreclosing.

A second possible problem is that some second mortgages may actually be too accessible for some borrowers. Many otherwise responsible people overextend themselves with unsecured credit card debt, so it's likely that some borrowers will do the same with secured credit lines. Currently, lenders often permit the withdrawal of relatively small sums; often less than $500.

Whether you choose to start a second mortgage or a HELOC, you need to think hard and consider all your options. One or the other won't always be the best option for your needs.

Thank You!

Ricardo Bueno | Mortgage Planner

As you exit the 110 freeway, Arroyo Parkway serves as the gateway into beautiful Pasadena. This summer, Arroyo Parkway is in for quite the landscaping facelift!

What we know so far...

The project (known as The Arroyo Parkway Enhancement Project) will be supervised by the Public Works Department and will commence this summer between Colorado & California Boulevards; we can already see some of the renovations taking place as you drive up and down Arroyo Parkway close to Colorado Boulevard. Completion of the overall project is set for the Fall.

Imagine driving off the 110 freeway to the sights of this!      

This is one amongst a set of eight public works projects scheduled.

Come to a Community Meeting to learn more about the project:

        When: Thursday, June 28th

      Where: Blair High School cafeteria at 1201 S. Marengo Ave.

        Time: 6:00 p.m.

For additional information you can visit www.cityofpasadena.net/publicworks and click on Engineering. 

Remember...in my article on (6) Reasons Property Values Increase, Improved Infrastructure is one of the key reasons for an increase in value.

My suggestion: attend your local Neighborhood Council meetings and your Land Use Committee meetings. Be aware of any new developments in the community and alert yourself to the effects those developments might have. It's always best to be aware especially if you're considering buying or selling.

Thank You!

Ricardo Bueno - Residential & Commercial Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!  

Here are some of the Closing Costs that you should anticipate incurring while securing your new purchase or refinance loan. Once you have applied for a loan, you will receive a Good Faith Estimate of the settlement charges required for your loan.

Loan Origination Fee:

This is a fee charged by the lender to cover the servicing costs associated with the processing of your loan. This is a one-time fee charged and is expressed as a percentage of the loan amount.

Also note that some lenders will charge you Administrative and Processing Fees for your loan application.

Loan Discount:

Loan Discount is often referred to as POINTS. In my previous article I explain what they are: To Pay, Or Not To Pay...Points that is! What are they? A loan discount, like an origination fee, is a one-time charge assessed often for the purposes of obtaining a lower interest rate.

Appraisal Fee:

This will cover the cost of conducting an appraisal report on your property. An appraisal is required as it is a statement of the property value which will determine 1. how much cash you can draw against your home in the case of a refinance, or 2. how much money you'll have to borrow for your new purchase.

Credit Report Fee:

This covers the cost of running a credit report. Each brokerage firm is required by their lender base to process their own credit report in order to complete processing on your application. Even if you have secured your own credit report via a site such as www.FreeCreditReport.com, your lender will be required to obtain their own credit report.

Title Insurance Fee:

There are two types of policies: 1. A Buyer's Title Policy - this policy protects the new home owner, and 2. A Lender's Title Policy - this policy will protect the lender against any loss that might be incurred due to a defect in the title to your property.

Miscellaneous Title Charges:

In addition to the one-time fee assessed by the title company for a title report, you might incur additional charges to cover the following items: a title search, a title examination, document preparation, notary fees, recording fees, and a settlement/closing fee.

Document Preparation Fee:

You can anticipate a cost for preparing the final legal papers (we call this drawing docs); this includes preparing the Note & Deed of Trust.

Prepaid Interest:

You will be required to pay a prorated mortgage interest payment based on how many days are left in the month at the time of closing; this is referred to as interim interest. This may vary from a payment on a full months interest or a couple of days of interest.

For example, if you loan closes at the beginning of the month, you will have to pay the most interest.

If on the other hand, you loan closes near the end of the month, you will only be required to pay a couple of months of interest.

Your first mortgage payment will then be scheduled (30) thirty days after the date in which the pre-paid interest is paid through.

Mortgage Insurance (MI) Premium:

This is a fee assessed to protect the lender from any loss due to foreclosure on the property. Mortgage insurance however isn't always assessed. If you purchase the property with a large enough down payment, you will not be required to pay mortgage insurance.

Furthermore, it should be noted that not all lending institutions require you to pay mortgage insurance. With varying amount of loan products, you might find loan products that don't require you to pay mortgage insurance.

Taxes & Hazard Insurance:

Like prepaid interest, property taxes in the case of a purchase will be prorated between the buyer and the seller. Also, you will be required to pay for an entire year's hazard insurance premium. If you have already paid this premium, then you will only have to evidence a receipt of such a premium.

Some loan products will require that you obtain an impound account. Here you will be required to place a certain amount for taxes and insurance on a monthly basis. Your lender will hold this reserve account.

Here is an example of the closing costs you might incur on your next purchase/refinance. They are not EXACTLY accurate but are to serve as a reference guide when looking at your next Good Faith Estimate.

Unfortunately I've been in situations where new clients have previously paid $200 for a Credit Report & $650 for an Appraisal Report that should only cost $350. So be weary of predatory lending, read the fine print, compare Good Faith Estimates and then sign the paperwork. Don't pay attention to the guy on the right who says, "Don't worry, just sign here!"

Thank You!

Ricardo Bueno - Residential & Commercial Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

Well I told you all that I'd be at the Pasadena Chalk Art Festival today! I saw a lot of familiar faces and for those of you that were not able to make it, here's a look at some of the work!

With it being a Graduation weekend & Father's Day, there wasn't a lot of time to spend at the festival but it was nevertheless amazing to see all of the varying pieces of art. In it's 15th Year, imagine hundreds of artists from all around Southern California. And to think that they did it using only pieces of chalk!

Let's start with a Father's Day dedication and a dedication to our soldiers! 

How about a look at our 16th President, Abraham Lincoln!

Have you ever dressed up as Abraham Lincoln for Halloween? Come on, I know some of you have!

Or how about this drawing...The King himself; Elvis Presley! 

How many of your are fans?

Ok...now I know that you all will recognize this one! Johnny Depp in Pirates of the Carribean 2. This is one of my favorite scenes. He's just so funny! He played the role to perfection!

I don't know how everyone else feels about it but his work from "Edward Scissor Hands" to "Charlie and the Chocolate Factory" to "Pirates of the Carribean I - III"...well, he's an amazing actor!

Now don't tell me you don't recognize this couple. It's Brangelina (Angelina Jolie & Brad Pitt)!

These three were cute! There was a little girl dancing next to this one and she kept telling her mom, "mommy, mommy, look...I'm a ballerina!"

We agreed that the festival was filled with a lot of great art and it was a great way to get the family out of the house for some fresh air and some great art. And to think, it was open to the public for free!

 Thanks for stopping by! Maybe I'll see you at next years Chalk Art Festival!

Ricardo Bueno - Residential & Commercial Investment Advisor

What: The Pasadena Chalk Festival

Where: Paseo Colorado                                                                                                

           280 E. Colorado Blvd.

           Pasadena, CA 91101

           (Between Marengo & Los Robles)

           Murals on Garfield Promenade & Upper Fountain Court

When: Saturday 6/16/07 & 6/17/07

          10 A.M. to 7 P.M.

What is it? It's the world's largets street painting festival! Various artists from all across Southern California will be there to draw spectacular murlas using sticks of pastel chalk. And their canvas? Pavement covering two city blocks! This event is now in it's 15th year and is open to the public free-of-charge!

For more information you can visit: www.pasadenachalkfestival.com

Here some samples of great art produced by this event...

(From Left-to-Right: Para Los Padres by Adam Ocampo, Pin-Up Girl On Classic Car by Izimi Sunagawa, and Two Amigos by Marc Alavarez & Sal Romero)

Stop on by if you can. Maybe I'll see you there!

And HAPPY FATHER'S DAY!!!

Thank You!

Ricardo Bueno - Residential & Commercial Investment Advisor

Introducing our Pledged Asset Loan Program!

Let's say for example that you have an investment porfolio earning a pretty hefty rate-of-return for you. Now a rate-of-return simply put, is the gain or the loss of an investment over a specified period of time and it's usually expressed as a percentage increase on the initial cost of the investment (your cost-basis). So in our example, let's say that your investment portfolio is earning you a modest 12 - 14%. That's a pretty good rate-of-return; well that's more a matter of perspective based on one's wants and needs. But for the sake of argument, let's agree that it's pretty good.

Question: are you going to want to liquidate your investment portfolio to buy that piece of property valued at $3.5 million?

Answer: NOT if your mortgage payment is going to be 7 - 8%. You're better off maintaining your investment portfolio and letting it generate that 12 - 14% cash flow. If you liquidate it to tie it into the property, you're sitting on a bank and the rich know that creating wealth is more about making your money work for you. Let's remember, money makes money!

In short, this program is excellent for clients who wish to defer capital gains or losses while maintaining their current investment strategy!

How The Program Works: 

Certain eligible investment assets may be used/pledged in lieu of a down payment. 

          For Example: You have a purchase price of $3.5 Million

You'll have to pledge cash and other cash-equivalents equal to the top 45% of the purchase loan amount; that's $1,575,000. However, if you're pledging against stocks and bonds, you'll have to gross this figure up 143% to $2,252,250.

Once these accounts are verified, you'll qualify for 100% financing but will be required to maintain your investment position; in other words your investment assets will remain in their current position and the investing instution will monitor that you have not liquidated such assets until your pledge is removed. (For further information on this program and how a pledge is removed, you can reach me directly at 323.810.2175.)

Again, this program is excellent for those high net worth clients interested in defering capital gains while maintaining their investment strategy.

Features:

•     There is no rate increase or points charged for 100% financing

•     No down payment is required

•     Avoid Private Mortgage Insurance (PMI)

•     Maintain your long-term investment strategy

•     Maximize tax deductible interest

•     No need to move your investment accounts

•     You can assist a friend or family member in purchasing their home by pledging eligible assets on their behalf

Wilshire Financial, Inc. and I (Ricardo Bueno) believe that Residential Real Estate Financing is more like a science and Commercial Real Estate Financing is more of an art. So we're combining science and art through a collaborative process involving Financial Planners, Accountants and Attorneys to help realize the goals of every one of our clients.

Thank You!

Ricardo Bueno - Residential & Commercial Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

POINTS - An often mis-understood concept for the first time home buyer.

Question: What are points?

Answer: They are nothing more than interest that is paid up front; at the time of closing on your loan. You usually pay points in order to obtain a lower interest rate on a loan thereby making your loan payment more affordable.

For Example:

So what do YOU get out of paying $3,000? Paying (1) one point usually corresponds to 1/4 to 3.75/8 of a percent lower interest rate; depending of course on the loan program and your credit rating. Use the Loan Payment Calculator on my website or better yet, use the Loan Payment Calculator to your right and see what the differences in payment are.

CONSUMER: Should I pay points? Does it make sense?             

MY ADVICE: Paying points can be a very prudent financial move if you're intentions are to remain in the home for a long period of time. Although the cost might seem daunting to some, the savings derived from the slight difference in a lower monthly payment corresponds to a tremendous savings over a 30 year period. For example, let's say paying (1) point saves you $100 per month. In order to recuperate the $3,000 cost of paying the point, you will have to wait 30 months (2.5 years). Every month thereafter, you earning savings! But, if you refinance before that 30 month break-even mark, you will have in essence wasted $3,000.

One of the most important questions to ask yourself when you borrow money: "How long do I need to borrow this money?

Thinking of the answer will accomplish two things for you: it will answer,

1. Should I pay points?

2. What loan program is best suited for me?

But remember, it's not a question how long you plan to live in the home but rather, how long are you likely to be in that particular loan program. You might decide to move and rent your residence while keeping the loan you initially obtained to acquire the property.

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Ricardo Bueno - Your Residential & Commercial Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

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Additional Resources:

Is your Realtor working for you? Read this article posted by Irina Netchaev (your local Pasadena Realtor with Keller Williams): Pasadena Realtor Tells All: SELLERS BEWARE!!!