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Keeping money in one place a key to getting a mortgage

By Scott Sheldon January 30, 2015 12:00 am

Keeping your money in one place is vital to a mortgage transaction.

Cash to close and savings post closing escrow become critically important to sealing the deal. I’ll detail what you need to know if you’ve been moving money around and are applying for a mortgage.

It’s an issue for banks

Moving money around in different accounts may raise concerns for suspicious activity with home mortgage banks. Lenders these days must be able to document the paper of funds on each and every loan made. While 99.9 percent of mortgage borrowers are simply moving money from one bank account to another for various convenience reasons, they are at the same time creating a red flag when the origin of the funds cannot be substantiated.

When you move money around, the lender has to document each account the money passes through.

Picture yourself having a standard checking account that does not contain significant assets but is used for your monthly accounting of bills and expenses, and you took the money for your down payment to purchase a home from another account and moved this money into your checking account while continuing to pay bills.

It could appear to the mortgage lender, like you, are spending part of your down payment creating a cash to close roadblock. A better solution? Keep the money in the same place. Transfer the money when needed, sending directly to escrow on your loan transaction, simplifying the details.

Create a paper trail

To best avoid lending conditions surrounding money movement, be prepared to show the full statements of the monies leaving each account. It is customary within mortgage lending to provide two months of statements for each account needed for cash to close escrow and/or for savings required after the fact as a safety cushion. This paper trail must appear to the naked eye that the money begins in one account, goes to another and ends up at close of escrow.

As long as the paper trail is clear and conspicuous, the lender should have no concerns with these monies as long as the funds can be supported. The same goes for gift funds; gift monies will also need a clear paper trail. The same requirements that come into play maybe needed for that safety cushion incumbent of your loan program.

For example:

• Conventional loans: Two months mortgage payments needed in the bank in most cases financing a primary home, six months of mortgage payments for investment homes for all properties owned.

• FHA loans: No reserve requirement.

• VA loans: no reserve requirement.

• Jumbo loan: Varies by lender; generally at least six months mortgage payments in assets needed post closing escrow.

*If you plan to use a bank statement in conjunction for obtaining a mortgage that shows a history of money movement, including money transfers and other various accounts and/or additional monies being deposited independent of your income, you’re going to have some homework to do.

Other considerations include:

• Joint bank accounts: If you’ve been moving money out of an account with another party whose name is on the account but is not a party to the mortgage transaction, the lender is going to request a letter from this other individual stating you have 100 percent access to those funds.

• Cash deposits: Placing cash deposits in your bank account independent of your normal income, i.e., your normal job, can be problematic for getting a mortgage because these monies cannot be identified as to the origin of where they come from raising possible suspicious activity concerns even though they can be legitimate deposits-like freelancing or side jobs. Lenders want to see at least two months of mortgage statements without cash deposits and without large movements of money otherwise, expect these transfer and deposits to be identified, questioned and documented.

While these requirements can be somewhat of a nuisance making the prospect of getting a mortgage somewhat unpleasant, it is also a byproduct of the quality of loans being made in the market today, fully documenting improving everything leaving no stone unturned further substantiating a mortgage borrower’s ability to qualify.

As such, these credit requirements help ensure there is little risk to buying a home or taking on a mortgage you cannot afford.

Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.

[…]

The Mortgage Mistake You May Not Realize You're Making

It’s no secret you need cash on hand to get a mortgage, but you may not know that the way you handle that cash as you apply for a loan can seriously derail your homeownership chances.

Keeping your money in one place is vital to a mortgage transaction. Cash to close and savings after closing escrow are critically important to sealing the deal. Here is what you need to know if you’ve been moving money around and are applying for a mortgage.

It’s an Issue for Banks

Moving money around in different accounts may raise concerns for suspicious activity with mortgage lenders. Lenders these days must be able to document the paper of funds on each and every loan made. While 99.9% of mortgage borrowers are simply moving money from one bank account to another for various convenience reasons, they’re creating a red flag for lenders when the origin of the funds cannot be substantiated.

When you move money around, the lender has to document each account the money passes through. Let’s use an example. You have a standard checking account that does not contain significant assets, but it’s used for your monthly accounting of bills and expenses. If you moved the money for your down payment into your checking account from your savings account while continuing to pay bills, it could appear to the mortgage lender like you are spending part of your down payment, creating a cash to close roadblock. A better solution? Keep the money in the same place. Transfer the money when needed, sending it directly to escrow on your loan transaction, simplifying the paper trail.

Create a Paper Trail

To best avoid lending condition surrounding money movement, be prepared to show the full statements of the monies leaving each account. It is customary within mortgage lending to provide two months of statements for each account needed for cash to close escrow and/or for savings required after-the-fact as a safety cushion. This paper trail must appear to the naked eye that the money begins in one account, goes to another, and ends up at close of escrow. As long as the paper trails is clear and conspicuous, the lender should have no concerns with these monies so long as the funds can be supported. The same goes for gift funds. Gift monies will also need a clear paper trail. The same requirements that come into play may be needed for that safety cushion, depending on your loan program.

Here’s a quick guide to typical requirements for “safety net” funds your lender may require:

Conventional Loans: Two months of mortgage payments needed in the bank in most cases if you’re financing a primary home. You’ll need six months of mortgage payments for investment homes for all properties owned.FHA Loans: No reserve requirementVA Loans: No reserve requirementJumbo Loan: Requirements vary by lender, but you will generally need at least six months of mortgage payments in assets after closing escrow.

The bottom line: If you plan to use a bank statement that shows a history of money movement, including money transfers and other various accounts and/or additional monies being deposited independent of your income, you’re going to have some homework to do.

Just because you have a paper trail doesn’t mean you’re home free yet. If you have a joint bank account or have cash outside of your normal income that’s entering your account, you have a few more steps to satisfy lenders. Here are the details.

Joint Bank Accounts

If you’ve been moving money in and out of a joint bank account with another party who is not a party to the mortgage transaction, the lender is going to request a letter from this other individual stating you have 100% access to those funds.

Cash Deposits

Placing cash deposits in your bank account independent of your normal income can be problematic for getting a mortgage. Since these deposits can’t easily be traced to their origin, it may raise some suspicious activity concerns even though they can be legitimate deposits from other income sources like freelancing gigs or side jobs.

Lenders want to see at least two months of mortgage statements without cash deposits and without large movements of money. Otherwise, expect these transfers and deposits to be identified, questioned and documented. While these requirements can seem like a nuisance to the average homebuyer,it’s a byproduct of the quality of loans being made in the market today. By fully documenting everything and leaving no stone unturned, lenders can do their due diligence in further substantiating a mortgage borrower’s ability to qualify. As such, these credit requirements help ensure there is little risk to buying a home or taking on a mortgage you cannot afford. (Here’s a calculator to help you figure out that home affordability number.)

In addition to income and a paper trail for your homebuying funds, make sure your credit score is in good shape before you head to your lender to get pre-approved or apply for a mortgage,. You can get your free annual credit reports at AnnualCreditReport.com under federal law. And you can see your credit scores for free every month on Credit.com.

More from Credit.com
How Much House Can You Afford?How to Get Pre-Approved for a MortgageWhy You Should Check Your Credit Before Buying a HomeFinanceLoansmortgage lendersbank account […]

Venture West Funding Arranges $5.4 Million Loan on Midland, TX Apartment Building

EL SEGUNDO, Calif.–(BUSINESS WIRE)–

Venture West Funding, Inc., a mortgage company headquartered in El Segundo, CA announced it has arranged a $5.4 million loan for the refinance take-out of a $4.5 million construction loan on the Westwood Villas apartment building located at 4100 W. Illinois Avenue in Midland, TX. Construction of the 52-unit apartment complex was completed in 2014. The property is managed by Capstone Real Estate Services, Inc. one of the top third-party managers in the United States. The borrower is an experienced real estate investor who also owns the adjacent Westwood Village Shopping Center.

Matt Douglas and Jean-Marc Herrouin of Venture West Funding arranged the financing through Berkadia Commercial Mortgage, LLC to Freddie Mac. The non-recourse loan is at a very competitive 10-year fixed rate and provided the borrower significant cash-out. According to Mr. Douglas, “Together with Berkadia Commercial Mortgage, LLC we were able to fulfill the borrower’s unique objectives by providing advantageous loan terms at a very competitive rate. This refinance allowed the borrower to replace the construction loan with permanent debt while maintaining profitable cash flow. The Venture West team worked closely with the borrower and lender to ensure a successful loan closing.

Venture West Funding was founded more than 18 years ago and has placed more than $8 billion in loan originations since 2001. Venture West Funding is one of the largest firms of its kind operating throughout Southern California, and specializes in providing mortgage loans secured by apartment buildings, commercial properties and single-family homes to a wide variety of borrowers. Venture West Funding is headquartered at 2301 Rosecrans Avenue, Suite 3170, El Segundo, California 90245 (310.706.4450). The firm also maintains a full-service office in Orange County at 31371 Rancho Viejo Road, Suite 101, San Juan Capistrano, California 92675 (949.218.4002).

Venture CapitalLoansconstruction loan Contact:

Venture West Funding

Matt Douglas, 310-706-4462

mattd@ventwest.com

or

Jean-Marc Herrouin, 310-706-4456

jherrouin@ventwest.com
www.venturewestfunding.com

or

Tom Santley, 626-441-1445

tsantley@socal.rr.com […]

Monarch Financial Reports Higher Income, Strong Loan Growth, and Declares Cash Dividend

CHESAPEAKE, Va., Jan. 30, 2015 (GLOBE NEWSWIRE) — Monarch Financial Holdings, Inc. (MNRK), the bank holding company for Monarch Bank, reported improved fourth quarter and annual financial performance. The Board of Directors also announced a quarterly common stock cash dividend of $0.08 per common share, payable on February 27, 2015, to shareholders of record on February 10, 2015.

Annual 2014 highlights are:

Net income of $11,211,850, for Return on Equity of 10.95% Diluted earnings per share of $1.05 Cash dividends of $0.31 paid per share, up 29% from 2013 Loans held for investment grew $59.9 million, up 8.4% Non-performing assets at 0.28% of total assets Net Interest Margin was 4.25% $1.6 billion in mortgage loans closed, with 80% home purchases

Fourth quarter 2014 highlights are:

Quarterly net income of $2,683,163, up 24% Return on equity of 10.03% Diluted earnings per share of $0.25 Loans held for investment grew $58.9 million $446 million in mortgage loans closed with 69% home purchase

“We are pleased with our quarterly and annual financial performance, with very strong organic loan growth finally taking hold in the fourth quarter. Unlike many of our peers we have grown loans with our bankers, in our markets, and have not purchased loans to drive this growth. Mortgage production was in line with the previous year with our best year ever for purchase mortgage loan closings. We improved our performance in all three lines of business to include banking, mortgage, and wealth management,” stated Brad E. Schwartz, Chief Executive Officer. “Non-performing assets remained low, our margin improved due to asset mix and pricing discipline, and our capital grew stronger with our retention of earnings. The market has responded to our performance with price appreciation in our common stock that, when combined with the increase in our common stock dividends, produced a 14% total shareholder return for 2014.”

For 2014 net income was $11,211,850 compared to $11,091,007 for the same period in 2013, a 1% increase. The 2014 return on average equity (ROE) was 10.95%, and the return on average assets (ROA) was 1.13%. Annual diluted earnings per share were $1.05 compared to $1.08 in 2013, as our higher earnings were more than offset by the number of additional outstanding shares.

Net income was $2,683,163 for the fourth quarter of 2014 compared to $2,156,566 for the same period in 2013, a 24% increase. The quarterly annualized return on average equity (ROE) was 10.03%, and the annualized quarterly return on average assets (ROA) was 1.04 %, both metrics up from the same period a year ago. Diluted earnings per share for the fourth quarter were $0.25, up 25% from the previous year.

Total assets at December 31, 2014 were $1.07 billion, up 5% from the prior year. In 2014 loans held for investment grew 8% to $773 million and mortgage loans held for sale grew 48% to $148 million. The vast majority of the net loan growth occurred in the fourth quarter. Total deposits grew 3% to $919 million, with demand deposits growing $40 million or 15% for the year. Demand deposits now represent 33% of total deposits, an achievement driven by our dedicated cash management and banking office teams. While the current rate environment does not appropriately reward banks for a transaction-focused funding strategy, this strategy should deliver net interest margin protection when rates eventually rise.

“We are pleased to deliver over 8% quarterly and year over year loan growth. We are equally proud that we produced each and every loan and have not been tempted by participation loans or other loan purchase programs we see in the marketplace,” stated E. Neal Crawford Jr., President of Monarch Bank. “We continue to hire talented bankers and expect to continue expanding the banking team into 2015. Our Richmond and Peninsula expansion is driving quality loan growth and deposit growth while our cash management and private banking teams continue to focus on growing core deposits.”

Non-performing assets were 0.28% as of December 31, 2014 compared to 0.25% one year prior, and non-performing loans to loans held for investment were 0.37% compared to 0.31% one year prior. Non-performing assets were $3.0 million, comprised of $175 thousand 90 days or more past due and still accruing interest, $2.7 million in non-accrual loans and $144,000 in one parcel of other real estate owned that is already under contract for sale. The allowance for loan losses represents 1.16% of total loans held for investment and 311% of non-performing loans.

Average equity to average assets rose to 10.39% at year-end 2014, an increase from 9.73% one year prior. Cash dividends of $0.08 per share were paid in the fourth quarter of 2014, and a total of $0.31 per share was paid during the year, an increase of 29% over 2013. Total risk-based capital to risk weighted assets at Monarch Bank equaled 13.79%, significantly higher than the required level to meet the highest rating of “Well Capitalized” by federal banking regulators. We also already meet the new Basel III capital standards for a well-capitalized bank. Monarch was again awarded the highest 5-Star “Superior” rating by Bauer Financial, an independent third-party bank rating agency that rates banks on safety and soundness.

Net interest income, our number one driver of profitability, was flat for the year driven by the large volume of mortgage loans held for sale in the first six months of 2013 compared to the balances carried in 2014. These balances are driven by mortgage loan closings. Excluding the mortgage loans held for sale volatility, the net interest income from core banking operations increased 5.9% or $1.9 million. Our net interest margin for 2014 was 4.25%, up from 4.10% due to asset mix, loan and deposit pricing, mortgage loans held for sale pricing, fee income capture, and the additional income from loans previously on non-accrual status. Loan growth that occurred late in the year had minimal impact on net interest income even though it should contribute to net interest income on a going forward basis.

Non-interest income decreased $2.8 million in 2014 over the previous year driven by lower mortgage revenues, which was more than offset by a reduction of $3.6 million in commissions and incentives. Net overhead, or the difference between non-interest income and non-interest expenses, increased only $372 thousand or 1.7% due to increased spending for facilities, technology, technology risk management, compliance and marketing. Salaries and benefits were held flat for the year, a significant accomplishment with our increased benefits costs. Investment revenues related to Monarch Bank Private Wealth totaled $1.6 million for the year compared to $1.1 million the previous year, a noteworthy increase. The Company is recognized by Raymond James Financial Services as a top performing bank investment program, with $235 million in assets under management accumulated since the formation of Monarch Bank Private Wealth in the third quarter of 2012.

Mortgage revenue remains the number one driver of non-interest income. $446 million in mortgage loans were closed during the fourth quarter of 2014 (69% purchase) compared to $350 million in the fourth quarter of 2013 (80% purchase). Monarch closed $1.6 billion in mortgage loans during 2014 compared to $2.0 billion in 2012. While volumes year over year declined approximately 20%, revenues from mortgage lending declined only 5% due to a strong focus on loan product mix, secondary market pricing, and fee income.

“Our focus on the purchase market paid off in 2014 when we had the best year of purchase mortgage business in our history. We closed $1.3 billion in home purchase loans and $0.3 billion in refinances, and altogether closed over 6,000 loans during the year,” stated William T. Morrison, CEO of Monarch Mortgage. “The year 2015 is beginning with an attractive rate environment and a much stronger pipeline of activity, and we expect it to be a great year for our mortgage operations.”

Monarch Financial Holdings, Inc. is the one-bank holding company for Monarch Bank. Monarch Bank is a community bank with ten banking offices in Chesapeake, Virginia Beach, Norfolk, and Williamsburg, Virginia. Monarch Bank also has loan production offices in Newport News and Richmond, Virginia. OBX Bank, a division of Monarch Bank, operates offices in Kitty Hawk and Nags Head, North Carolina. Monarch Mortgage and our affiliated mortgage companies have over thirty offices with locations in Virginia, North Carolina, Maryland, and South Carolina. Our subsidiaries/ divisions include Monarch Bank, OBX Bank, Monarch Mortgage (secondary mortgage origination), OBX Bank Mortgage (secondary mortgage origination), Coastal Home Mortgage, LLC (secondary mortgage origination), Monarch Bank Private Wealth (investment, trust, planning and private banking), Monarch Investments (investment and insurance solutions), Real Estate Security Agency, LLC (title agency) and Monarch Capital, LLC (commercial mortgage brokerage). The shares of common stock of Monarch Financial Holdings, Inc. are publicly traded on the Nasdaq Capital Market under the symbol “MNRK”.

This press release may contain “forward-looking statements,” within the meaning of federal securities laws that involve significant risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in the economic scenario: significant changes in regulatory requirements; and significant changes in securities markets. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s most recent Form 10-K and 10-Q reports and other documents filed with the Securities and Exchange Commission. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Consolidated Balance Sheets Monarch Financial Holdings, Inc. and Subsidiaries (In thousands) Unaudited

December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013 ASSETS:

Cash and due from banks $ 14,503 $ 21,083 $ 19,661 $ 18,510 $ 18,971 Interest bearing bank balances 49,761 58,207 37,166 37,033 31,955 Federal funds sold 1,135 3,938 29,761 84,232 53,985

Investment securities, at fair value 23,725 25,137 23,773 23,197 48,822

Mortgage loans held for sale 147,690 138,590 156,584 92,839 99,718

Loans held for investment, net of unearned income 772,590 713,667 700,159 715,088 712,671 Less: allowance for loan losses (8,949) (8,977) (9,070) (9,213) (9,061) Net loans 763,641 704,690 691,089 705,875 703,610

Bank premises and equipment, net 30,247 30,368 31,407 29,902 28,882 Restricted equity securities, at cost 3,633 3,179 3,169 3,156 3,683 Bank owned life insurance 9,687 9,587 7,526 7,467 7,409 Goodwill 775 775 775 775 775 Intangible assets, net — — 15 60 104 Accrued interest receivable and other assets 21,940 23,688 22,973 19,673 18,786 Total assets $ 1,066,737 $ 1,019,242 $ 1,023,899 $ 1,022,719 $ 1,016,700

LIABILITIES:

Demand deposits–non-interest bearing $ 235,301 $ 252,286 $ 240,348 $ 221,357 $ 206,891 Demand deposits–interest bearing 66,682 53,093 51,563 55,949 55,528 Money market deposits 369,221 365,041 377,096 367,590 374,462 Savings deposits 20,003 25,211 24,539 24,327 22,137 Time deposits 228,207 189,142 197,747 224,947 234,100 Total deposits 919,414 884,773 891,293 894,170 893,118

FHLB borrowings 1,075 1,100 1,125 1,150 1,175 Federal funds 10,000 — — — — Trust preferred subordinated debt 10,000 10,000 10,000 10,000 10,000 Accrued interest payable and other liabilities 18,710 18,145 18,650 17,422 14,661 Total liabilities 959,199 914,018 921,068 922,742 918,954

STOCKHOLDERS’ EQUITY:

Common stock 51,864 51,735 51,624 51,584 51,432 Capital in excess of par value 8,336 7,966 7,675 7,357 7,069 Retained earnings 47,354 45,523 43,566 41,232 39,437 Accumulated other comprehensive loss (102) (135) (159) (314) (419) Total Monarch Financial Holdings, Inc. stockholders’ equity 107,452 105,089 102,706 99,859 97,519 Noncontrolling interest 86 135 125 118 227 Total equity 107,538 105,224 102,831 99,977 97,746 Total liabilities and stockholders’ equity $ 1,066,737 $ 1,019,242 $ 1,023,899 $ 1,022,719 $ 1,016,700

Common shares outstanding at period end 10,652,475 10,646,873 10,624,668 10,619,444 10,502,323

Nonvested shares of common stock included in commons shares outstanding 279,750 299,910 299,910 302,710 215,960

Book value per common share at period end (1) $ 10.10 $ 9.87 $ 9.67 $ 9.40 $ 9.29 Tangible book value per common share at period end (2) $ 10.02 $ 9.80 $ 9.59 $ 9.33 $ 9.20 Closing market price $ 13.75 $ 12.56 $ 11.72 $ 12.26 $ 12.31

Total risk based capital – Consolidated company 13.79% 14.16% 14.29% 14.27% 13.91% Total risk based capital – Bank 13.81% 14.18% 14.31% 14.30% 13.95%

(1) Book value per common share is defined as stockholders’ equity divided by common shares outstanding. (2) Tangible book value per common share is defined as stockholders’ equity less goodwill and other intangibles divided by commons shares outstanding

Consolidated Statements of Income Monarch Financial Holdings, Inc. and Subsidiaries Unaudited
Three Months Ended Year Ended
December 31, December 31,
2014 2013 2014 2013 INTEREST INCOME:

Interest on federal funds sold $ 4,980 $ 42,283 $ 84,850 $ 115,963 Interest on other bank accounts 92,156 28,626 244,702 58,027 Dividends on equity securities 33,545 67,540 106,955 277,700 Interest on investment securities 100,957 60,311 359,604 230,496 Interest on mortgage loans held for sale 1,376,920 1,090,070 4,866,818 7,021,186 Interest and fees on loans held for investment 9,752,472 9,388,407 37,327,978 36,645,065 Total interest income 11,361,030 10,677,237 42,990,907 44,348,437 INTEREST EXPENSE:

Interest on deposits 722,537 905,970 3,185,965 3,936,203 Interest on trust preferred subordinated debt 46,337 122,850 416,233 491,910 Interest on other borrowings 16,615 15,002 58,966 358,345 Total interest expense 785,489 1,043,822 3,661,164 4,786,458 NET INTEREST INCOME 10,575,541 9,633,415 39,329,743 39,561,979 PROVISION FOR LOAN LOSSES — — — —

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 10,575,541 9,633,415 39,329,743 39,561,979

NON-INTEREST INCOME:

Mortgage banking income 16,210,774 13,276,836 62,440,013 65,672,402 Service charges and fees 489,974 502,373 2,058,262 1,941,926 Title income 216,895 124,774 669,785 789,253 Investment and insurance income 382,774 336,002 1,592,398 1,053,429 Other income 72,366 111,924 318,783 425,261 Total non-interest income 17,372,783 14,351,909 67,079,241 69,882,271 NON-INTEREST EXPENSE:

Salaries and employee benefits 8,798,996 8,772,157 34,134,998 34,112,834 Commissions and incentives 6,926,507 5,248,131 24,754,633 28,344,347 Occupancy and equipment 2,412,086 2,220,634 9,548,543 8,449,912 Loan expense 1,676,134 1,526,317 6,652,007 7,891,835 Marketing expense 990,383 807,717 3,111,535 2,873,259 Data processing 715,057 459,681 2,272,785 1,696,535 Telephone 296,396 314,984 1,226,389 1,184,894 Other expenses 1,789,789 1,212,731 6,778,966 6,357,202 Total non-interest expense 23,605,348 20,562,352 88,479,856 90,910,818

INCOME BEFORE TAXES 4,342,976 3,422,972 17,929,128 18,533,432 Income tax provision (1,616,093) (1,179,017) (6,490,273) (6,386,040) NET INCOME 2,726,883 2,243,955 11,438,855 12,147,392

Less: Net income attributable to noncontrolling interest (43,720) (87,389) (227,005) (1,056,385) NET INCOME ATTRIBUTABLE TO MONARCH FINANCIAL HOLDINGS, INC $2,683,163 $2,156,566 $11,211,850 $11,091,007

NET INCOME PER COMMON SHARE:

Basic $ 0.25 $ 0.21 $ 1.06 $ 1.09 Diluted $ 0.25 $ 0.20 $ 1.05 $ 1.08

Weighted average basic shares outstanding 10,648,184 10,486,056 10,619,443 10,167,156 Weighted average diluted shares outstanding 10,689,219 10,535,313 10,658,600 10,299,471

Return on average assets 1.04% 0.86% 1.13% 1.07% Return on average stockholders’ equity 10.03% 8.88% 10.95% 11.97%

Financial Highlights Monarch Financial Holdings, Inc. and Subsidiaries
(Dollars in thousands, For the Quarter Ended except per share data) December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013 EARNINGS

Interest income $ 11,361 $ 10,639 $ 10,557 $ 10,434 $ 10,677 Interest expense (786) (928) (977) (971) (1,044) Net interest income 10,575 9,711 9,580 9,463 9,633 Provision for loan losses — — — — — Noninterest income – mortgage banking income 16,211 16,658 17,369 12,202 13,277 Noninterest income – other 1,162 1,241 1,130 1,106 1,075 Noninterest expense (23,605) (23,121) (23,007) (18,747) (20,562) Pre-tax net income 4,343 4,489 5,072 4,024 3,423 Minority interest in net income (44) (46) (121) (16) (87) Income taxes (1,616) (1,635) (1,767) (1,471) (1,179) Net income $ 2,683 $ 2,808 $ 3,184 $ 2,537 $ 2,157

PER COMMON SHARE

Earnings per share – basic $ 0.25 $ 0.26 $ 0.30 $ 0.24 $ 0.21 Earnings per share – diluted 0.25 0.26 0.30 0.24 0.20 Common stock – per share dividends 0.08 0.08 0.08 0.07 0.07 Average Basic Shares Outstanding 10,648,184 10,635,275 10,620,869 10,600,766 10,486,056 Average Diluted Shares Outstanding 10,689,219 10,670,507 10,660,217 10,641,782 10,535,313

ALLOWANCE FOR LOAN LOSSES

Beginning balance $ 8,977 $ 9,070 $ 9,213 $ 9,061 $ 11,228 Provision for loan losses — — — — — Charge-offs (174) (181) (184) (12) (2,252) Recoveries 146 88 41 164 85 Net charge-offs (28) (93) (143) 152 (2,167) Ending balance $ 8,949 $ 8,977 $ 9,070 $ 9,213 $ 9,061

COMPOSITION OF RISK ASSETS

Nonperforming loans:

90 days past due $ 175 $ 243 $ 499 $ 759 $ 472 Nonaccrual loans 2,705 2,180 3,028 1,718 1,740 OREO 144 767 144 302 302 Nonperforming assets 3,024 3,190 3,671 2,779 2,514

ASSET QUALITY RATIOS

Nonperforming assets to total assets 0.28% 0.31% 0.36% 0.27% 0.25% Nonperforming loans to total loans 0.37 0.34 0.50 0.35 0.31 Allowance for loan losses to total loans held for investment 1.16 1.26 1.30 1.29 1.27 Allowance for loan losses to nonperforming loans 310.73 370.49 257.16 371.94 409.63 Annualized net charge-offs to average loans held for investment 0.02 0.05 0.08 -0.09 1.25

FINANCIAL RATIOS

Return on average assets 1.04% 1.11% 1.29% 1.06% 0.86% Return on average stockholders’ equity 10.03 10.72 12.63 10.46 8.88 Net interest margin (FTE) 4.42 4.18 4.18 4.25 4.13 Non-interest revenue/Total revenue 60.5 62.7 63.7 56.1 57.3 Efficiency – Consolidated 84.5 83.7 81.8 82.1 85.5 Efficiency – Bank only 61.2 61.7 63.9 59.9 60.4 Average equity to average assets 10.39 10.40 10.18 10.13 9.73

PERIOD END BALANCES (Amounts in thousands)

Total mortgage loans held for sale $ 147,690 $ 138,590 $ 156,584 $ 92,839 $ 99,718 Total loans held for investment 772,590 713,667 700,159 715,088 712,671 Interest-earning assets 1,003,332 945,697 949,872 956,160 952,981 Assets 1,066,737 1,019,242 1,023,899 1,022,719 1,016,700 Total deposits 919,414 884,773 891,293 894,170 893,118 Other borrowings 21,075 11,100 11,125 11,150 11,175 Stockholders’ equity 107,451 105,089 102,706 99,859 97,519

AVERAGE BALANCES (Amounts in thousands)

Total mortgage loans held for sale $ 131,471 $ 138,382 $ 116,851 $ 70,856 $ 104,104 Total loans held for investment 725,093 701,137 698,851 704,917 695,074 Interest-earning assets 958,904 930,420 927,552 910,929 935,059 Assets 1,021,591 999,358 993,003 970,815 990,734 Total deposits 883,478 867,980 867,217 848,969 869,113 Other borrowings 14,575 11,124 11,150 11,174 11,199 Stockholders’ equity 106,088 103,908 101,092 98,374 96,415

MORTGAGE PRODUCTION (Amounts in thousands)

Dollar volume of mortgage loans closed $ 445,846 $ 440,784 $ 446,863 $ 271,233 $ 349,695 Percentage of refinance based on dollar volume 30.9% 16.0% 15.0% 19.1% 20.3%

Financials IndustryBanking & Budgetingmortgage loans Contact:

Brad E. Schwartz - (757) 389-5111, www.monarchbank.com

[…]

Capital Senior Living Corporation Acquires Two Communities and Closes on Sale of Four Non-Core Communities

DALLAS–(BUSINESS WIRE)–

Capital Senior Living Corporation (the “Company”) (CSU), one of the nation’s largest operators of senior living communities, today announced the completion of three transactions that will strengthen the Company’s operating portfolio and enhance its cash position to provide for further growth: the acquisition of two senior living communities, the disposition of four non-core communities and the refinance of an existing community loan. The Company also announced that it recently executed early rate locks on refinancing transactions associated with two communities at an average interest rate of approximately 3.85%, both of which are expected to close by the end of the first quarter of 2015.

“We are extremely pleased to add two high-occupancy communities with excellent financial and operating metrics to our consolidated operations and to complete the sale of the four communities that are not core to Capital Senior,” said Lawrence A. Cohen, the Company’s Chief Executive Officer. “The completed loan refinance reflects the appreciation in value of this owned community and allows the Company to continue to benefit from historically low interest rates and fix this debt at attractive rates while extending the maturity to 2025, as do the two additional refinancings which will be completed in the first quarter. On a net basis, the completed and upcoming transactions announced today provide us with $35 million in incremental cash proceeds that we will use to continue to invest in the acquisition of high-performing communities, enhance our cash reserves and pay off short-term bridge loans.”

The two acquired communities were purchased for $32.8 million. One of the transactions was completed in mid-December and the other in mid-January. They are comprised of 127 assisted living units and are located in regions in which the Company already has extensive operations. The communities are financed with $24.5 million of 10-year fixed-rate debt that is non-recourse to the Company with a blended interest rate of 4.41%.

The Company is conducting due diligence on additional acquisitions of high-quality senior living communities in states with extensive existing operations totaling approximately $45 million. Subject to completion of customary closing conditions, the acquisitions are expected to close in the first half of 2015.

In January, the Company sold the four non-core communities for $36.5 million and will receive approximately $18.0 million in net proceeds after relieving the debt associated with the communities and paying customary transaction and closing costs. The communities sold were comprised of 547 independent living units. The net effect of the reinvestment of these proceeds in high-quality communities is expected to be accretive.

In December, the Company refinanced the debt associated with one community, lowering the interest rate and yielding $9.3 million in incremental cash proceeds from the new loan after customary transaction and closing costs. The new mortgage is $18.9 million with a 4.46% fixed interest rate and matures in January 2025. The new mortgage replaced $8.4 million of fixed-rate debt with an interest rate of 5.75% that was set to mature in March 2017.

The Company executed early rate lock agreements on $45.0 million of mortgage debt for two communities at an interest rate of approximately 3.85% with a 10-year maturity. These new mortgages will close by the end of the first quarter of 2015. This debt will refinance an existing mortgage of $8.0 million with an interest rate of 5.46% due to mature in August 2015 and one short-term bridge loan of $21.6 million with floating rate interest of 2.92% due to mature July 2016. Net proceeds from these two refinance transactions will total approximately $15.0 million. The Company plans to use these proceeds to pay off two short-term, floating-rate bridge loans totaling $14.0 million.

Additional highlights of the acquisitions, refinance and rate locks include:

Acquired Communities

Increases annual revenue by $5.2 million Increases CFFO by $1.2 million, or $0.04 per share Improves earnings by $0.4 million, or $0.02 per share Average monthly rent for the communities is approximately $3,606

Mortgage Debt Refinance

$18.9 million of 10-year fixed-rate mortgage debt at 4.46% 129 basis point reduction in the fixed-debt interest rate Cash proceeds to the Company of $9.3 million Extends maturity to 2025

Mortgage Rate Locks

$45.0 million of 10-year fixed-rate mortgage debt at 3.85% Net proceeds of $15.0 million upon the refinance of the two mortgages Proceeds used to pay off short-term bridge loans of $14.0 million

The Company also noted that the previously-announced plan to convert 360 independent living units to assisted living units at certain communities remains on or ahead of schedule. As of December 31, 2014, approximately 207 units had been converted with the remainder expected to be completed by the middle of 2015.

ABOUT THE COMPANY

Capital Senior Living Corporation is one of the nation’s largest operators of residential communities for senior adults. The Company’s operating strategy is to provide value to residents by providing quality senior living services at reasonable prices. The Company’s communities emphasize a continuum of care, which integrates independent living, assisted living, and home care services, to provide residents the opportunity to age in place. The Company operates 114 senior living communities in geographically concentrated regions with an aggregate capacity of approximately 15,000 residents.

Contact Carey Hendrickson, Chief Financial Officer, at 972-770-5600 for more information.

FinanceInvestment & Company Informationinterest rate Contact:

Capital Senior Living Corporation

Carey Hendrickson, 1-972-770-5600

Chief Financial Officer

[…]

Trying to time the market with a mortgage?

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Dear Dr. Don,
We currently own a multifamily unit with two 30-year fixed mortgages. One is for $200,000 at 5.25 percent and the other is for $65,000 at 3 percent. Our home is valued at $280,000. We would like to refinance and have cash to pay down the mortgage so that we will have 5 percent equity in the house to refinance. Do you recommend using the cash to pay down the debt to refinance or waiting until the home value rises? We also want to buy another home in the next few years in addition to the one we have.

Thanks,
— Michelle Myriad

Compare refinance rates and lower your monthly payments

Dear Michelle,
Unless you’re having cash flow problems that you’re trying to resolve by refinancing the two mortgages into one loan, the assumption here is that the lender on the $65,000 mortgage won’t sign off on refinancing the $200,000 loan, which forces you to refinance both loans. Otherwise, you’d hold on to that 3 percent rate.

Bringing cash to closing can get you that new mortgage, but you’ll still wind up paying private mortgage insurance on a conventional mortgage with less than 20 percent down. If you live in the home, an FHA loan requires less money down, but you’ll pay mortgage insurance upfront and in your monthly mortgage payment. An FHA loan requires a 3.6 percent down payment, and you’ve got that much equity in the property now without bringing cash to closing.

I’d lean toward refinancing now versus waiting for home values to rise, just because I don’t think you’ll like where mortgage rates go if you wait. It also makes things easier by having the financing in place before shopping for your next property.

Compare the cost of a cash-in closing on a conventional mortgage with the cost of closing an FHA loan. Private mortgage insurance doesn’t last forever with a conventional loan, but the mortgage insurance premium is permanent on an FHA financing. The difference in interest rates between the two loans should be small, but that’s also important in determining which loan is right for you.

[…]

Griffin Announces Closing on Mortgage Loan

NEW YORK, Jan. 5, 2015 (GLOBE NEWSWIRE) — Griffin Land & Nurseries, Inc. (GRIF) (“Griffin”) announced that a subsidiary of its real estate business, Griffin Land, LLC, closed on a $21.6 million nonrecourse mortgage loan (the “Mortgage Loan”) with First Niagara Bank (“First Niagara”). The Mortgage Loan is collateralized by two industrial buildings aggregating approximately 531,000 square feet in the Lehigh Valley of Pennsylvania. These two facilities, developed by Griffin Land on a parcel of undeveloped land acquired in 2010, are the Lehigh Valley Tradeport. One of the Lehigh Valley Tradeport buildings had a nonrecourse mortgage loan with First Niagara with a balance of approximately $8.9 million that was refinanced into the Mortgage Loan. The Mortgage Loan has a variable interest rate, but Griffin Land has entered into an interest rate swap agreement with First Niagara, that combined with an existing interest rate swap agreement, will fix the rate of the Mortgage Loan at 4.43% over the Mortgage Loan’s ten-year term. Payments on the Mortgage Loan are based on a twenty-five year amortization period.

At closing, Griffin Land received cash proceeds (before financing costs) of approximately $10.9 million from the Mortgage Loan. The cash proceeds are net of the current principal of the refinanced loan and $1.85 million to be advanced when, and if, a portion of the vacant space in the more recently developed Lehigh Valley Tradeport building is leased. A five-year lease for approximately 201,000 square feet of the approximately 303,000 square feet in that building was signed in the 2014 fourth quarter. The other Lehigh Valley Tradeport warehouse building is fully leased.

Forward-Looking Statements:

This Press Release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. These forward looking statements include the statement concerning additional mortgage proceeds to be received when, and if, a portion of the currently vacant space in one of the mortgaged buildings is leased. Although Griffin believes that its plans, intentions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such plans, intentions or expectations will be achieved. The projected information disclosed herein is based on assumptions and estimates that, while considered reasonable by Griffin as of the date hereof, are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, many of which are beyond the control of Griffin and which could cause actual results and events to differ materially from those expressed or implied in the forward-looking statements. Important factors that could affect the outcome of the events set forth in these statements are described in Griffin’s Securities and Exchange Commission filings, including the “Business”, “Risk Factors” and “Forward-Looking Information” sections in Griffin’s Annual Report on Form 10-K for the fiscal year ended November 30, 2013. Griffin disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release except as required by law.

View photo.Oil, Gas, & Consumable FuelsFinancemortgage loanFirst NiagaraLehigh Valley Contact: Anthony Galici
Chief Financial Officer
(860) 286-1307
[…]

Fitch Rates CSMC Trust Series 2014-11R

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings assigns a rating to one group of CSMC Trust series 2014-11R, a U.S. RMBS resecuritization:

Group 17 Securities

–$5,373,000 class 17-A-1 ‘BBBsf’.

The Rating Outlook is Stable.

Fitch is not expected to rate the following classes:

–$1,632,800 subsequent exchangeable class 17-A-2;

–$816,000 initial exchangeable class 17-A-3;

–$816,800 initial exchangeable class 17-A-4.

CSMC 2014-11R is comprised of 17 groups. Fitch is rating one bond in one of the groups (Bond 17-A-1 in group 17). Each group is a resecuritization of an ownership interest in a residential mortgage-backed security. As a resecuritization, the securities will receive their cash-flow from the underlying security. The Fitch-rated group is collateralized with class A-2 from Deutsche Alt-A Securities Mortgage Loan Trust series 2007-RAMP1. While the mortgage pool has performed worse than initial expectations, performance has stabilized and improved in recent years.

Fitch’s stressed mortgage pool loss assumption in the ‘BBBsf’ rating scenario is approximately 50% of the underlying pool. Fitch assumes home prices decline 20% below their sustainable levels in a ‘BBBsf’ rating scenario. The principal balances of all subordinate classes of the underlying transaction have been entirely written down. However, the underlying class A-2 benefits from a sequential payment priority that effectively provides approximately 38% subordination for principal recovery in the underlying transaction. The new resecuritization class 17-A-1 benefits from additional credit support of 23.3% as a percentage of the A-2 class (approximately 14% as a percentage of the underlying pool balance).

Ocwen Loan Servicing (Ocwen) is a primary servicer of the underlying mortgage pool. Fitch recently placed Ocwen’s servicer rating on Rating Watch Negative due to concerns raised by the New York State Department of Financial Services (NY DFS). The NY DFS has alleged significant issues with Ocwen’s systems and processes, especially relating to borrower requests for mortgage loan modifications. Ocwen’s increased risk is mitigated by the presence of Wells Fargo Bank, N.A. (Wells Fargo; rated ‘RMS1’ by Fitch) as Master Servicer.

This transaction contains certain classes designated as Initial Exchangeable Securities and another as a Subsequent Exchangeable Securities.

For Group 17, classes 17-A-3 and 17-A-4 are Initial Exchangeable Securities and class 17-A-2 is a Subsequent Exchangeable Security. For the Fitch rated group, interest is paid pro-rata and principal is paid sequentially.

KEY RATING DRIVERS

Key rating drivers include the performance of the underlying pool as well as the collateral characteristics, such as sustainable loan-to-value ratio (sLTV), credit score and geographic concentration. For the Fitch rated group, Fitch ran various prepayment speeds and loss timing scenarios in its analysis of the deal structure. This analysis was done to determine that the cash flow to the senior bond rated by Fitch would not be exposed to losses as a result of potential alternative cash flow timing stress scenarios.

RATING SENSITIVITIES

Fitch analyzes each bond in a number of different scenarios to determine the likelihood of full principal recovery and timely interest. The scenario analysis incorporates various combinations of the following stressed assumptions: mortgage loss, loss timing, interest rates, prepayments, servicer advancing and loan modifications.

The analysis includes rating stress scenarios from ‘CCCsf’ to ‘AAAsf’. The ‘CCCsf’ scenario is intended to be the most likely base-case scenario. Rating scenarios above ‘CCCsf’ are increasingly more stressful and less likely outcomes. Although many variables are adjusted in the stress scenarios, the primary driver of the loss scenarios is the home price forecast assumption. In the ‘Bsf’ scenario, Fitch assumes home prices decline 10% below their long-term sustainable level. The home price decline assumption is increased by 5% at each higher rating category up to a 35% decline in the ‘AAAsf’ scenario.

The group-to-bond association for the Fitch-rated group is as follows: Group Seventeen represents a 14.29% interest in the Deutsche Alt-A Securities Mortgage Loan Trust series 2007-RAMP1, Class A-2. Fitch’s ‘BBBsf’ rating for class 17-A-1 reflects the credit risk of the underlying transaction and the additional subordination provided by the new resecuritization trust. The underlying collateral pool for Deutsche Alt-A Securities Mortgage Loan Trust series 2007-RAMP1, class A-2 consists of fixed-rate and hybrid ARM mortgage loans. As of Nov. 25, 2014, Fitch estimates the loans remaining in the underlying pool had an original weighted average (WAVG) credit score of 689, an estimated current combined loan-to-value of 98% and a sustainable loan-to-value of 102%. The top three state concentrations are New York (12%), Florida (11%) and New Jersey (9%). Approximately 36.5% of the remaining pool is delinquent.

For further information, see CSMC Series 2014-11R Representations and Warranties Appendix, published December 2nd, 2014.

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (May 2014);

–‘U.S. RMBS Master Rating Criteria,’ (July 2014);

–‘U.S. RMBS Surveillance and Re-REMIC Criteria’ (June 2014);

–‘U.S. RMBS Loan Loss Model Criteria’ (November 2014);

–‘Counterparty Criteria for Structured Finance and Covered Bonds’ (May 2014);

–‘U.S. RMBS Cash Flow Analysis Criteria’ (April 2014);

–‘Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds’ (January 2014);

–‘Rating Criteria for US Residential and Small Balance Commercial Mortgage Servicers’ (January 2014).

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=961875

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Security Upgrades & DowngradesFinanceFitch Ratings Contact:

Fitch Ratings

Primary Analyst

Ryan O’Loughlin

Analyst

+1-212-908-0387

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Grant Bailey

Managing Director

+1-212-908-0544

or

Media Relations

Elizabeth Fogerty, +1 212-908-0526

elizabeth.fogerty@fitchratings.com […]

Mortgage Experts at Network Capital Funding Renews Sponsorship of The Mortgage Radio Show

IRVINE, CA–(Marketwired – Oct 28, 2014) – Network Capital Funding, an award-winning national full-service leader in mortgage lending, is proud to continue its ongoing sponsorship of “The Mortgage Radio Show.” Launched in 2009, “The Mortgage Radio Show” is a popular podcast that delivers useful updates on mortgage rates, negotiating terms, working through the loan process, and other helpful information. Whether the topic is purchasing a first home, refinancing for a lower payment/term, or pulling cash from home equity, “The Mortgage Radio Show” provides experienced, professional advice. Co-hosts of the show include Emmy-winning writer and well-known radio personality Teresa Strasser and mortgage expert Sean Meador. Strasser’s credits include co-host on “The Adam Carolla Show,” “Win Ben Stein’s Money,” and TLC’s “While You Were Out.” Sean Meador, with over ten years’ experience, has become one of the top performing producers in the mortgage industry. He advises listeners on the mortgage loan process, loan programs, and credit qualifications, such as first and second mortgages, as well as numerous government programs. He loves the close relationships he develops with clients while helping them to save money and accomplish their mortgage goals.

With mortgage rates at their lowest in over 50 years, anyone who owns a home or is looking to buy one is the prime audience for “The Mortgage Radio Show.” Everyone should have the opportunity to take advantage of low rates and the radio show offers great advice on how one, regardless of lifestyle or living situation, might improve his or her financial outlook.

Finding a mortgage is often stressful and time-consuming notwithstanding whether the borrower is a first-time homebuyer or a seasoned veteran. Founded in 2002, Irvine-based Network Capital Funding works to make the process simpler for each and every one of their clients. They were recently honored by making Inc. Magazine’s 2014 list for the “Fastest-Growing Companies in the U.S.” — their fourth year in a row, which have seen over 1,027% growth for the Irvine-based company. Other recognitions have included being named one of “The Best Places to Work,” 2012 – 2014, by the Best Companies Group and the Orange County Business Journal. The company enjoys an overall 98% customer satisfaction rate.

Network Capital Funding works to make homes affordable by eliminating lender fees, upfront application fees, rate lock-in fees, and offers some of the lowest rates available on the market. Working as a direct lender, they have taken the middleman out of the loan granting equation and by fully underwriting a file, the company can offer a “Same as Cash” pre-approval process which allows a buyer to compete with cash offers. They can often close within as little as seven days rather than the typical 30-45 days of escrow. Loan options include $0 down payment for a VA Loan; 3.5% down payment for an FHA Loan; and 5% down payment for a Conventional Loan.

Network Capital Funding Blog: http://www.NetworkCapitalFundingNews.com

Facebook: http://www.facebook.com/NetworkCapitalFunding

Twitter: http://twitter.com/NetworkCapital

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2706631
Embedded Video Available: http://www2.marketwire.com/mw/frame_mw?attachid=2706633

[…]

5 Top Alternatives To A Reverse Mortgage

If you’re 62 or older, you may be able to convert the equity in your home into cash with a reverse mortgage. This loan lets you borrow against the equity in your home to get a fixed monthly payment or line of credit. Repayment is deferred until you move out, sell the home, become delinquent on property taxes and/or insurance, the home falls into disrepair, or you pass away. Then the house is sold and any excess after repayment goes to you or your heirs.

Home equity loans can be problematic if not done correctly ( see 5 Reverse Mortgage Scams ) and require careful attention to the rights of the surviving spouse, if you are married. And of course, the end of the process means you or your heirs give up your home.

There are other ways to tap into your home’s equity that are worth considering. Here, we take a quick look at the top alternatives to reverse mortgages.

1. Refinance Your Existing Mortgage

If you have an existing home loan, you may be able to refinance your mortgage to lower your monthly payments and free up some cash. One of the best reasons to refinance is to lower the interest rate on your mortgage, which can save you money over the life of the loan, decrease the size of your monthly payments and help you build equity in your home faster. Another perk: If you refinance instead of getting a reverse mortgage, your home remains an asset for you and your heirs.

2. Take Out a Home-Equity Loan

Essentially a second mortgage, a home-equity loan lets you borrow money by leveraging the equity you have in your home. It works the same way as your primary mortgage: You receive the loan as a single lump-sum payment, and you cannot draw any additional funds from the house. The interest you pay is generally tax deductible for loan amounts up to $100,000.

These are generally fixed-rate loans, which provide security against rising interest rates. Because of that, the interest rate is typically higher than for a home equity line of credit. As with refinancing, your home remains an asset for you and your heirs. Because your home acts as collateral, it’s important to understand that your home is at risk of foreclosure if you default on the loan.

3. Take Out a Home Equity Line of Credit (HELOC)

A home equity line of credit, or HELOC, gives you the option to borrow up to your approved credit limit, on an as-needed basis. Unlike a home equity loan, where you pay interest on the entire loan amount whether you’re using the money or not, with a HELOC you pay interest only on the amount of money you actually withdraw. HELOCs are adjustable loans; your monthly payment will change with fluctuating interest rates. The interest is generally tax deductible for loan amounts up to $100,000, and your home remains an asset for you and your heirs. As with a home-equity loan, your home acts as collateral and could be foreclosed if you default.

4. Sell Your Home (and Maybe Downsize)

The other options so far keep you in your existing home. If you’re willing and able to move, however, selling your home gives you access to the equity you have built. This option may be especially appealing if your current residence is too big for your current needs, too difficult/costly to maintain or has prohibitively expensive property taxes. The proceeds can be used to buy a smaller, more affordable home (or you can rent), and you’ll have extra money to save, invest or spend as needed. See Downsize Your Home To Downsize Expenses and Avoid the Downsides of Downsizing In Retirement.

5. Sell Your Home to Your Children

Another alternative to a reverse mortgage is to sell your home to your child (or children). One approach is a sales-leaseback agreement, where you sell the house, then rent it back using the cash from the sale. As landlords, your children get rental income and will be able to take deductions for depreciation, real estate taxes and maintenance.

Another approach is a private reverse mortgage, which works like a reverse mortgage, except the interest and fees stay in the family. Your children make regular payments to you, and when it’s time to sell the house, they recoup their contributions (and interest). Although it’s not free to set up this type of arrangement, it is typically much cheaper than getting a reverse mortgage through a bank, and the home remains an asset for your and your children.

Selling to your children has tax and estate-planning ramifications, so it’s important to work with a qualified tax specialist or attorney.

The Bottom Line

Reverse mortgages may be a good option for people who are “house-rich and cash-poor”, with lots of home equity, but not enough income for retirement. There are other options, however, that allow you to tap into the equity you have built up in your home.

Before making any decisions, it’s a good idea to research your options, shop around for the best rates (where applicable) and consult with a qualified tax specialist or attorney. See Is Relying On Home Equity In Retirement A Good Idea? , and Reverse Mortgage Or Home-Equity Loan?

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