Michele's Blog

One of the obstacles that keeps first time home buyers out of the housing market is the misconception that they need to have a 20% down payment.* As housing prices have risen, saving up a 20% down payment* can seem like a far-off goal. Are you trying to save up to buy a home? Did you know that there are plenty of low down payment options for you?

The down payment is the portion of the home price that you pay cash for rather than financing it - most lenders require that some percentage of the purchase price be paid at the time of closing. Though a 20% down payment* will allow you to avoid paying private mortgage insurance, the average down payment size for borrowers is typically in the range of 5-10%.

How a Low Down Payment Helps You

You can definitely purchase a home with less than a 20% down payment!* Being able to make a low down payment can benefit you in a few ways:

  • You may be able to buy a home sooner since you’ll need less money down.
  • You may be able to afford a higher priced home if the down payment is no longer an obstacle.
  • A low down payment lets you use more of your money toward closing costs or new home expenses.

Low Down Payment Programs for First Time Home Buyers

There are several loan programs that allow low down payments and APM is proud to offer these loans to help first time home buyers like you. Here are some of our programs that allow low down payments:

*There may be qualifying factors. Please visit our Disclosures page for more details on loan types.

There are more specialty programs with APM that can help you afford a home by allowing a lower down payment - check out a few programs below!

And don’t forget - many first time home buyers can also get assistance with down payments:

Down Payment Saving Tips

Now that you know you have several low down payment loan options with APM, you can focus on saving up the amount you will need. Saving up a down payment doesn’t have to feel like such a chore. Try a few of our saving tips:

  • Set up an auto-transfer to a savings account for a set monthly amount. Chances are when it happens automatically, you won’t even miss those extra dollars.
  • Adjust your monthly bills - try going without or reducing your Cable bill,  or increasing car insurance deductibles and adjusting coverages to reduce your expenses.
  • Skip eating out for a month and put all the money you saved toward your down payment.
  • Put your tax refund, bonus pay and unexpected monetary gifts toward your down payment savings.

Achieving your homeownership dream may be just around the corner! Research your low down payment options, start saving your dollars, and contact one of our friendly loan advisors today so they can help you discover the programs that will work for your situation and help you plan ahead for your purchase.


Posted in:General
Posted by Michele Morse Reen on July 3rd, 2018 2:11 PM

The Bay Area real estate market continues to grow at exponential rates. Over the last six years, the median home price has surged by 143%. The area is currently experiencing a feverish high-demand, very-low-supply dynamic. The near-continuous hike in home prices means that many Bay Area homeowners have enjoyed surge in equity, thereby giving them the means to upgrade to larger homes.

However, many of the would-be homebuyers have their wealth tied up in their first home. They can’t afford to upgrade to a new house without selling the old one first. They could put in contingency offers on the homes they hope to buy, but with a long line of other buyers ready to put down all-cash offers, it may be difficult to compete.  

In an ideal world, they could sell their property at the same time as buying their new property, but two escrows would mean double the risk. If they sell their home first, they would need to rent until they find a new home and their offer gets accepted. However, with the high-demand of the Bay Area real estate market, it could take months or more, which means potentially wasting thousands of dollars on a rental property.

A potential solution to this type of dilemma is a getting a Bridge Loan. A Bridge Loan is not a replacement for a mortgage; it’s a loan secured by your current home as collateral. This type of loan is typically used by home buyers to purchase a new home prior to selling their current home. It’s a short-term loan that gets repaid within a six-month to three-year timeframe, depending on the terms that are negotiated.

Essentially, a Bridge Loan allows a Bay Area home buyer to purchase their second home, even if their first one hasn’t sold yet. Since the Bay Area real estate market is in no short supply of buyers, selling a home usually isn’t a problem, it’s just a matter of time – Bridge Loans allow for time.

If you want to further explore whether a Bridge Loan is right for your situation, contact us today. The Reen Team will give you the individual attention you deserve. We will help you understand the process to qualify, apply and be approved.

Call today at (408) 626-1879! You can also apply here.

Posted in:General
Posted by Michele Morse Reen on June 21st, 2018 12:41 PM
When you apply for a mortgage, we calculate your debt-to-income ratio to ensure you have enough income to comfortably pay for a new mortgage while still being able to pay your other monthly debts. Most underwriting for conventional mortgage loans requires a qualifying ratio of 28/36.

The Front-End Ratio considers and adds up your anticipated monthly mortgage payment, plus other monthly costs, such as homeowner association (HOA) fees, property taxes, mortgage insurance and homeowner’s insurance, and divides it by your gross monthly income.

The Back-End Ratio looks at your other payments and revolving debts such as minimum monthly credit card payments, student loan payments, alimony, child support and car payments – all of which are analyzed and added together. Then, those payments are added to your estimated monthly mortgage payment and housing expenses, and divided by your monthly gross income for your total debt-to-income ratio.

Here are some examples:

28/36 (Conventional)

  • Gross monthly income of $8,000 x .28 = $2,240 can be applied to housing
  • Gross monthly income of $8,000 x .36 = $2,880 can be applied to recurring debt, plus housing expenses

With a 29/41 (FHA) qualifying ratio

  • Gross monthly income of $8,000 x .29 = $2,320 can be applied to housing
  • Gross monthly income of $8,000 x .41 = $3,280 can be applied to recurring debt, plus housing expenses

If you would like to run your own numbers, we offer a Mortgage Loan Qualification Calculator. Remember, these ratios are only guidelines. Contact us and let us help you figure out what kind of payments would best fit your budget. We help home buyers every day achieve the dream of home ownership!

Posted in:General
Posted by Michele Morse Reen on May 29th, 2018 3:21 PM

At a recent Housing Wealth in Retirement Symposium held by The American College of Financial Services and the Bipartisan Policy Center in Washington, D.C., researchers and policymakers discussed the role of reverse mortgages under the Home Equity Conversion Mortgage (HECM).

They found that Reverse Mortgages are underutilized by seniors today and can in fact, help provide added retirement security to retirees when used appropriately. According to a study conducted by Laurie Goodman, PhD, founder and co-director of the Housing Finance Policy Center at The Urban Institute, less than one percent of eligible homeowners utilize a reverse mortgage today.

Chris Mayer, professor of real estate at Columbia Business School, stated that recent changes to the HECM program have added additional consumer protections. In fact, reverse mortgage programs that exist today offer more consumer protections than in the past. For example, currently, a homeowner is not on the hook for a HECM debt that exceeds their home value at the end of the loan.

Ultimately, the Housing Wealth in Retirement Symposium found that reverse mortgages deserve more attention from retirees because, when used appropriately, a reverse mortgage can help support a more financially secure retirement for seniors.

Many homeowners who are on a limited income and need additional funds find reverse mortgages advantageous for their circumstance. Social Security and Medicare benefits aren't affected by reverse mortgages and the funds are nontaxable.

The requirements of a reverse mortgage loan are:


  • Being 62 or older;
  • Using the home as your main residence; and
  • Keep current on taxes, insurance and home maintenance.

Paying back your loan is not required until when the borrower puts their home up for sale, moves somewhere else, such as into a care facility, or passes away.

If you want to further explore the advantages of *reverse mortgages, contact us today at (408) 626-1879!

Our loan professionals will give you the individual attention you need and deserve.

*Reverse mortgages are loans offered to homeowners who are 62 or older who have equity in their homes. The loan programs allow borrowers to defer payment on the loans until they pass away, sell the home, or move out. Homeowners, however, remain responsible for the payment of taxes, insurance, maintenance, and other items. Nonpayment of these items can lead to a default under the loan terms and ultimate loss of the home. FHA insured reverse mortgages have an up front and ongoing cost; ask your loan officer for details. These materials are not from, nor approved by HUD, FHA, or any governing agency.

Posted by Michele Morse Reen on May 10th, 2018 10:44 AM

With a reverse mortgage (technically known as a home equity conversion loan or HECM), homeowners over the age of 62 may use home equity for anything they need without selling their homes.

With a reverse mortgage, the loan is based on your home equity. You can decide how you would prefer to receive your funds: by a monthly payment, a line of credit or a lump sum. You don’t have to pay the loan, interest accrued and finance charges back until you sell the home or move into a care facility.

Many homeowners find reverse mortgages advantageous for their circumstance.

There are a lot of great reasons to take advantage of a reverse mortgage and we have decided to list the top three reasons why our clients rave about them.

Reason #1 Invest that money. The saying goes, “It takes money to make money.” A lot of retirees have money sitting in their home’s equity not doing much for them. However, many retirees are finding that they can use that equity to put it to good use. Some retirees have taken a reverse mortgage and purchased property that they can rent out to bring them more income. Social Security benefits don’t always offer enough to live a comfortable lifestyle. So, if you’re looking to supplement your retirement income, you can get a reverse mortgage to get a lump sum large enough to buy property you can rent out. In some cases, retirees are making $2,000 to $3,000 a month in extra income off their rental property.

Reason #2 Retire early. As individuals get older, it becomes more difficult to work full time. Whether for health reasons, or lack of high-paying jobs for seniors, sometimes early retirement is the best option. However, continuing to pay a regular mortgage can become a challenge for many seniors and early retirement may not be an obvious option. However, with a reverse mortgage, seniors over 62 can take their regular mortgage payment and put it into bills and a retirement account, such as a 401(k). Those investments will keep growing for several years, making you more money than it otherwise would have as equity. You may be better off leveraging the equity in your home and keeping the retirement savings in place because that’s earning more money. So, you can take that money to build a retirement savings that can last 10 to 20 years after you stop working. Or, if you have plenty in savings, you can stop working 10 years earlier because you planned.

Reason #3 Travel. Using a reverse mortgage for travel is used for seniors who have already planned for retirement and have savings tucked away, but don’t have enough disposable income to travel to places they’ve never been, or they want to address other wants on their bucket list. Some people live and work their whole lives and never get a chance to visit places they’ve only dreamed of visiting. There is a space of time in everyone’s life when there is time for travel and your health is relatively OK. Work has subsided, the kids are grown and you don’t need around-the-clock nursing care – a lot of time, but nothing to do. This is the time when seniors should take advantage of what they have worked hard for, such as utilizing the equity in their home, and using the time they have left wisely.

Don’t wait until you’re too old to travel. Use a reverse mortgage to travel so that you can look back fondly at the trips you took with your grandchildren, spouses or friends. Those are some of the greatest memories we can take with us through the journey of life.

Reverse mortgages do not affect your Social Security and Medicare benefits. Plus, the funds are non-taxable. Reverse Mortgages may have adjustable or fixed rates. Your home will not be taken away if you live past the loan term, nor will you be obligated to sell your residence to pay off the loan even when the loan balance grows to exceed current property value.

Contact us at (408) 626-1879 if you want to explore the advantages of reverse mortgages.

Posted by Michele Morse Reen on April 12th, 2018 9:42 AM

Is this the year you’ll finally buy that dream home? Have you been wondering whether you should wait until later in the year to start your homeownership journey?


Buying a home now

It may still be the “off-season” for home buying, but that is about to change with the arrival of Spring. Consider jumping into the housing market now to get ahead of the competition of Spring/Summer buyers and to avoid potentially higher mortgage rates that are being forecasted for 2018. Of course, you should always research your market and plan ahead. Let’s talk about some reasons to go ahead and buy a home now…

Why You Should Consider Buying a Home Now

  • Mortgage Rates Rising
    Since December 2017, mortgage rates have slowly been on the rise. Though rates are still at affordable levels, they are forecasted to continue to rise in 2018. As rates increase, so would your monthly payments on a new loan. More importantly, rates impact the purchase price you will be able to qualify for. Lenders qualify home buyers based on several factors, most notably your debt-to-income ratio (DTI). DTI is calculated by dividing total recurring monthly debt by gross monthly income, and it is expressed as a percentage. As rates rise, your DTI is impacted, which often decreases your buying power and therefore the price of the home you can afford. A good way to determine how much you will qualify for is to get pre-approved before you begin to shop for a home.
  • Less Competition in the Market
    April through June are the busiest months in the housing market, with the highest number of listings and the most people looking to buy a home. Buying before the busy season means you may have a better chance of having your purchase offer accepted and therefore less likely to end up in a bidding war.
  • Sellers are Motivated
    Homes that are on the market in the off-season may be there due to not selling in the past months or due to an urgent need (relocation, financial situation, life event) to list now and sell quickly, which means sellers are more willing to negotiate. You might need to be willing to compromise on what you want in a new home, but you also have an improved chance of getting a good deal.
  • Abundance of Industry Professionals
    During the off-season, real estate professionals are less busy and are working with fewer clients at one time. This means realtors, title companies, loan advisors, and others will have more time to devote to you and your home buying needs, helping the process to go even smoother and quicker.

Take the Next Step

If you want to take advantage of buying a home now and are ready to start down the path to homeownership, check out the tips from our First Time Homebuyers Checklist (even if you’re not buying for the first time!) and then our 5 Step Roadmap of the Home Loan Process. These tips and resources will help you plan for the step-by-step process as you partner with one of our expert loan advisors.

If you’ve been on the fence about buying a home now, we hope you’ll carefully consider your options and see why this might be a good time for you to purchase. If you’re ready, let us team up with you to make the process simpler!

Posted in:General
Posted by Michele Morse Reen on March 14th, 2018 2:17 PM

Buying a home involves more than just looking at houses that fit your wish list. There’s the loan process to think about as well. As part of that process, you know that there will be a loan application to complete, but do you know what information lenders are looking for on that application? You might be surprised.

Just know that we’re here to help you navigate the process and make it as simple as possible. Let’s take a look at what lenders generally will be looking for…

What Lenders Look for on Loan Applications


Credit Score and History - Lenders will be looking at your credit score and credit history. Your credit score is one of the main factors that helps determine what type of home loan and rate you will qualify for. You can check on your credit ahead of time and work on boosting your score.

Debt Ratio - Lenders consider your debt-to-income (DTI) ratio, which is your total monthly debt divided by your gross monthly income. Generally, lenders require a DTI of 43% or less. If your ratio is higher than that, don’t panic - there may still be loan programs available to you.

Income Type and Amount - Lenders will want to ensure that you have sufficient monthly income to cover your mortgage payments. This income includes salary and bonuses as well as income from dividends and interest. Depending on how much your income fluctuates may make a difference in how much documentation you need to provide. Please note: Try not to make any sudden employment changes right before applying for a home loan.

Employment History - Lenders will usually verify at least two years of your employment. They are looking at length of time in your profession, as well as whether your income is stable. If you are self-employed or own your own business, you should be ready to provide your tax returns and additional documentation. APM has loan programs to make documentation simpler for self-employed borrowers.

Assets and Reserves - Lenders will ask for bank and/or investment account statements for the past two months or more to confirm how much you have available in assets and cash reserves. They will be checking to make sure that funds have been there for several months and will ask for sources of any recent large deposits. Save up as much as you can to show that you can cover a few months of mortgage payments.

Down Payment Amount - Lenders will consider the amount of down payment you have, which will determine which loan programs are a fit as well as whether or not you will be paying private mortgage insurance (PMI). If you pay a 20% or more down payment, you will not require PMI and may qualify for more favorable loan rates and programs. If you have less than a 20% down payment, there are still plenty of loan programs available, mostly ranging from 3%-20% down payments as well as some zero down loan programs.

By being aware of what lenders will be looking for on loan applications, you will be better prepared and avoid feeling overwhelmed when you begin the process.


More Help With Loan Applications


Be sure to check out our additional resources to take the mystery out of the loan process and help you to know what to have ready for home loan applications:

Feeling ready to take on the home loan application process and begin your homeownership journey? We’re here to simplify the steps for you as well as help you through the process. Find your nearest friendly loan advisor and let’s do this together!

Posted in:General
Posted by Michele Morse Reen on March 6th, 2018 10:19 AM

You may have checked your credit score once or twice over time as you applied for credit cards, loans, or even new jobs. But have you thought about it much since then? As you reach the point of thinking about homeownership, it’s important to learn about your credit. Your credit score is an important piece of obtaining a home loan. We can help you by sharing some common credit mistakes to avoid.


Your credit score is calculated by credit reporting agencies. The most common credit score used is the “FICO®” score, and helps lenders determine how much risk they will be taking on when they loan money to you.


Avoiding common credit mistakes is important whether you’re already a homeowner and may need a new home loan or refinance down the road or whether you’re just starting to consider making a home purchase. You can start improving your credit several months in advance of needing a home loan - it’s never too early to begin. But even avoiding credit mistakes as you are starting to look for your dream home will help.

5 Credit Mistakes to Avoid

Here are some common credit mistakes that consumers make which result in lower credit scores:


Falling behind on credit card payments. Late payments will lower your credit score. Make it a priority to stay current on all accounts.


Maxing out credit cards and accounts. The higher amount of available credit you are using, the more it will negatively impact your score. Aim for using no more than 30% of your available credit at any given moment.


Closing out credit accounts. While closing out your unused credit accounts may seem like a good idea, it decreases the amount of available credit, which then increases your debt percentage. Keep accounts open but with no balance, if possible.


Consolidating debt to one card or account. By moving your balances to one card, it can make that card appear to have too high of a ratio of debt to available credit. Keep percentage of debt to total balance on each card as low as possible.


Opening too many accounts in a short time. Applying for or opening too many credit accounts in a short period of time is considered a red flag and may negatively affect your credit score. Only apply for what you really need and try to space out applications over time.


Avoiding these common credit mistakes can help you improve your credit score and be prepared when you are ready to purchase a home.

Additional References

We are happy to provide plenty of resources for you when you’re looking at and trying to understand your credit score. Be sure to check out our blog posts about credit scores:

How Your Credit Score is Calculated

How Can I Get My Credit Score?

Credit Score: Here's What You Should Know When Buying a Home

What is a Good Credit Score?

Top 5 Questions to Understanding Your Credit Score

The Ins and Outs of a Credit Score

4 Tips to Help Improve Your Credit Score Long-term

What Credit Score is Needed to Buy a House

Avoiding common credit mistakes will help you keep up or improve your credit score whether you’re ready to buy your home now or considering it further down the road. As you prepare to start the homeownership journey, check in with our helpful loan advisors who will walk you through the steps you need to take.


Note: American Pacific Mortgage Corporation is not a credit repair company; this information is for information purposes only. We are not licensed credit repair specialists or counselors.

Posted in:General
Posted by Michele Morse Reen on February 14th, 2018 9:43 AM

The Tax Cuts and Jobs Act was signed into law in December, 2017. This new bill amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals as well as businesses. Some of the changes have already taken place and will continue through 2018. As a homeowner or home buyer, here is what you can expect from the bill and ways it may impact you.

Mortgage Interest

  • If you purchased a house before December 16, 2017, you will be allowed an itemized deduction for the mortgage interest you pay up to $1 million.
  • For purchases after December 16, 2017, that cap is lowered to $750,000.
  • Refinancing of “grandfathered mortgages” that were acquired prior to December 16, 2017, can retain the deduction limits, but not beyond the original mortgage’s term/amount (some exceptions apply for “balloon payment” mortgages).

Second Homes

  • An itemized deduction can be made for a principal and second residence mortgage up to a combined total of $750,000  (or up to $1 million if grandfathered prior to December 16, 2017).
  • This means that the interest you pay on your loan for a second home, if the above loan limits are exceeded, will not be deductible in 2018.
  • However, if you rent your vacation home, you can write off the costs associated with that activity, which would include a portion of mortgage interest and property taxes.

Home-equity Debt

  • Interest paid on home-equity loans will no longer be deductible beginning in 2018. Therefore, 2017 will be the last year for a while to be able to deduct this interest.  
  • However, interest may be deductible on home equity loans (or second mortgages) if the proceeds are used to acquire or substantially improve the residence and can be documented. Talk with your tax advisor.

Exclusion of Gain on Sale of a Principal Residence

  • The final bill retains current law. Therefore, Taxpayers will continue to be able to exclude up to $500,000 ($250,000 for single filers) from capital gains taxation when they sell their home, as long as they have lived there for two of the previous five years.

Property taxes

  • Property, state and local income taxes face a combined $10,000 deduction limit.
  • Note: The tax bill also specifically precludes the deduction of 2018 state and local income taxes prepaid in 2017.

Mortgage Credit Certificates (MCCs)

  • The final bill retains current law.

Depending on how you fit into the above categories, you and your tax advisor can determine whether you will see a difference from a financial standpoint if you’re a homeowner.

Is it Still a Good Time to Buy a Home?

If you don’t already own a home, you may be wondering what these tax changes mean for your future purchasing plans. There are always several factors to consider when you are deciding whether to rent or buy. Purchasing a home is still an investment opportunity and a chance to take pride in owning a house that you can truly make your own. Your dream home may be waiting for you right now!

As always, I am ready to help you determine what type of loan might be right for your situation and to help you get started on your homeownership journey!

Disclaimer: This material is for informational purposes only. This material does not provide individually tailored investment advice or offer legal, tax, regulatory or accounting advice. We recommend you contact your financial planner or tax advisor for details and more information.

Posted by Michele Morse Reen on February 1st, 2018 2:21 PM

In 2015, millennials surpassed baby boomers as the largest generation population wise. In fact, more than one-third of America’s workforce are millennials. The expanding population makes millennials, widely accepted at those born between 1980 and 2000, a generation that is entering the real estate market and is here to stay. The characteristics of millennials and their outlook on home ownership, purchasing habits and the world in general are much different than baby boomers.


Let’s start with transportation. Public transit is something millennials are comfortable with and use frequently. A study by the National Association of Realtors and Portland State University found that millennials are more likely to have used public transit in the last 30 days than any other age group. You may assume that this is simply a result of median income, but millennials also prefer to live in attached housing and like to have shopping and restaurants within walking distance, coupled with short commutes to work. While public transit and connected communities are part of the preferences for millennials buyers, they will put good school districts above all else. According to a survey by realtor.com, millennials are “less likely than other generations to compromise on school districts when in house-hunting mode.”


Millennials are already entering the home ownership realm, but research points to 2020 as the year that they have subtly targeted. An Urban Land Institute survey found that 70 percent of millennials who aren’t currently home owners have a personal goal to purchase by 2020. So what will they want when they decide to purchase? A big house. According to the National Association of Home Builders, millennial first-time home buyers prefer 2,375 square feet (four bedrooms) while baby boomers desired 1,879 square feet.


And how will they shop for it? Not at an open house. The 2015 National Association of Realtors Home Buyer and Seller Generational Trends study, found that Generation X relied on open houses while millennials relied on real estate agents, mobile device applications and search engines on the Internet.


The purchasing habits of millennials will change as they begin to earn more and become parents. While they are an independent generation they accept assistance with large purchases like homes, relying on real estate agents and brokers heavily.


If you are a millennial ready to buy this year, make sure to contact us. Our mortgage team members will help you with any questions you may have related to a loan. We understand you're making a commitment in purchasing a home, refinancing a mortgage, or tapping into your home equity. So we make a promise to you: We will help you qualify, apply and be approved for the ideal mortgage loan for you.


Give us a call at 408.626.1879. 


Posted by Michele Morse Reen on February 11th, 2016 4:03 PM

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