February 2005

 The Allstate Lending Group Update is sent to you as a free news service providing information regarding the Mortgage Industry, Refinancing, and Company Information.

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In this issue...
  • Feature Article: Should You Refinance?
  • Tips: A Guide to Refinancing
  • Economic Forecast: California's Housing Trends
  • Mortgage Terms of the Month
    • Feature Article :.

    ARE YOU A CANDIDATE FOR REFINANCING?

    Refinancing your home can be a great way to lower your monthly mortgage payments, as well as help you pay off credit cards and other debts. So how do you know if it is something that you should consider? Well, first you should determine your current financial situation and goals. When you have a clear objective in mind for refinancing your mortgage, it will help you to choose a loan that will assist you in achieving successful outcomes to those objectives.

    Here are some reasons refinancing can be a good option for you:
  • Lower Monthly Mortgage Payments: Lowering your percentage by just one half to three quarters of a percentage point can lower mortgage payments.
  • You can refinance your home at a lower interest rate, which will lessen your payments and free up that money for other things.
  • You can change the term of your loan from a 15 to 30 year mortgage, which will result in a significant decrease in your monthly payments; or you can change the term from a 30 to 15 year mortgage, increasing your payment but saving you thousands of dollars over the life of your loan.
  • Switching from a traditional mortgage with principal and interest payments to a mortgage program that allows interest only payments will also lower monthly payments.
  • Accessing Cash through Your Home’s Equity: If you are looking to finance a special project – home improvements, etc., or just need money for a vacation, college, or to pay off outstanding debts, refinancing can provide you that money. Instead of charging things on credit cards, which costs you unnecessary compounded interest charges, using your home equity allows you to take advantage of your simple mortgage interest, which is sometimes even tax deductible.
  • Simply Saving Money: If you are only planning to live in your home for a few years, and yet you have a 30-year fixed-rate mortgage, you could be spending more than you have to. An alternative, and a way to save that money, is to consider switching to an Adjustable Rate Mortgage (ARM), which can greatly decrease your payments. The same goes for the reverse situation. If you plan on living in your home for several years, and yet you have an ARM, a fixed-rate loan might be a financially better decision for you.
    • The bottom line: The best thing you can do for yourself is to talk to a refinancing expert. They can assess your needs and goals, and tell you what the best options for your personal situation are. You may not need to do anything different, but there also might be some easy ways for you to save a lot of money.

    Call Allstate Lending Group today, and let our refinancing experts help you. 1-800-648-5363.

    Allstate Lending Group Spotlight:.

    A GUIDE TO REFINANCING

    Follow these steps, and you will be on your way to refinancing and accomplishing your financial goals:
  • Complete a loan application.
  • Have any documentation that might be needed in the loan application process easily available to you. Documentation needed will vary depending on individual circumstances and your lender, here are a few things typically required:
  • Proof of income – Pay stubs for last 30 days
  • Copy of homeowners insurance
  • W2 forms
  • Asset Information
  • Contact an expert at Allstate Lending Group to get started, 1-800-648-5363.


    • Economic Forecast::.

    CALIFORNIA'S HOUSING TREND

    California’s Deepening Housing Crisis High Demand/Low Supply: California continues to experience very high rates of population growth and further tightening of its housing markets. Even encompassing the recession of the early 1990s, California’s population grew by an average approximating 450,000 people annually and is projected to gain around 600,000 annually over the next decade.1As of January 1, 2004, California’s population was 36,144,000 which increased by 532,000 people in 2003.

    The new population reflects a 1.5 percent increase over 2003. This is just under the 1.6 percent growth rate experienced in calendar year 2002 when the State added 563,000 residents. Since 2000, net migration slightly exceeds natural increase in California; however, in the last two years natural increase contributed a larger share of the annual population growth.2Housing production has not kept pace with the State’s housing needs, particularly in the coastal metropolitan areas and housing need has worsened, especially for renter households and low incomeowner households throughout the State. During the 1980s, 2.1 million units were built whereas the 1990s saw only 1.1 million units built.

    While the average annual need is projected at approximately 220,000 housing units, construction has lagged substantively below the need. Since 1999, less than 170,000 residential new construction permits have been issued each year. During 2004, 201,000 new homes and apartments are projected to be built, representing the highest production since 1989

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      Industry Terms  
      Cash-out Refinance – When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as a "cash out refinance."

    Refinance Transaction – The process of paying off one loan with the proceeds from a new loan using the same property as security.

    Third-party Origination - A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market.

    		 
     
      In the News  
     


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    Suite B108
    Monterey Park, CA 91754
    Tel: (800) 648-5363
    Fax: (323) 262-7889

    		 
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