Owner of O.C.'s Ritz and Montage says its luxury hotels are up for sale

Strategic Hotels & Resorts Inc. – owner of seven California luxury hotels including two in Orange County – is up for sale.

Chicago-based Strategic – which owns the 393-room Ritz-Carlton Laguna Niguel and the 250-room Montage Laguna Beach – followed Wall Street tradition by announcing the move Monday with the otherwise oddly worded phrase: “exploring possible strategic alternatives for the company, including the potential sale of the company.”

CEO Rip Gellein said in a statement, “We are confident in our strategic plan and the value we have created for our shareholders. At the same time, we are always open to ways in which we can further maximize shareholder value.”

Of course, there was a nudge for the hotel owner’s corporate rethinking.

Technology legend Bill Gates’ investment firm – Cascade Investment Inc. – recently built a 9.8 percent stake in Strategic’s shares, then said it was interested in talking to the hotel owner about possible business combinations. Strategic's hotel portfolio includes 18 high-end hotels nationwide including San Diego’s iconic Hotel del Coronado and the Essex House overlooking Manhattan’s Central Park.

Strategic has been a longtime player in Orange County’s luxury hotel scene.

Its ownership of the Ritz dates to 1997, when a predecessor company bought it Ritz for $225 million.

In 2006, at the height of the previous hotel-buying boom, the current Strategic business – a publicly traded real estate investment trust – bought the the Ritz for $330 million. That was roughly $840,000 per room, at the time the second-highest hotel sale valuation in California.

In January, Strategic Hotels acquired the Montage for $360 million, or $1.4 million per room – a price that shattered state hotel pricing records.

The Differences between FHA and Conventional Mortgages

The mortgage market can be confusing. Many people find that the differences between FHA and conventional mortgages add to the confusion. Home buyers often do not know which mortgage is best for their situation, but there is always one mortgage that is the best mortgage. Mark McDonell from Eagle Home Mortgage can answer your questions about the differences between FHA and conventional mortgages and will help you find the best mortgage. Listed below are the important differences between FHA and conventional mortgages.

THE ADVANTAGES OF FHA LOANS:

-Down payments often as low as 3 percent

-Gift money can be used for the down payment and the closing costs

-Borrowers often find it easier to qualify for an FHA loan

-No cash reserve requirements such as 3 months of mortgage payments in savings

-No prepayment penalty

-FHA lending guidelines are not as strict as some conventional loans

-FHA loans can be transferred to the new owner when you sell your home

-FHA has an Energy Efficient Mortgage Program that allows the borrower to finance energy-efficient features as part of the home purchase price

-Fixed rate mortgages are available for 15 and 30 year loans

-Adjustable rate mortgages are available

THE ADVANTAGES OF A CONVENTIONAL LOAN:

-Mortgage insurance is not required if the mortgage is 80 percent of the loan to value (LTV) or lower

-Some loans with down payments as low as 5 percent are available

-Interest rates are generally lower

-Existing mortgage insurance can be cancelled when LTV reaches 80 percent

-Available on all types of residential property

-Buyers can have more than one conventional loan

-No limit on the loan amount

-More lenders, including banks, to choose from

-More loan term options are available

-The property standards are not as strict

The differences between FHA and conventional mortgages can be summarized as the differences between the needs of the borrowers. Borrowers who are credit challenged will find an FHA mortgage easier to obtain. While the down payment can be less and gift money can be used, FHA mortgages carry a financial penalty because mortgage insurance premiums are required. This can be the biggest disadvantage of the FHA loan since this premium can be as high as 1.5 percent of the loan at closing and 0.5 percent of the mortgage amount to be paid annually for the entire life of the loan. Many borrowers find that the differences between FHA and conventional loans come down to the qualifications of the borrower and their resources. 

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5 Tips for Finding the Best Mortgage

The smart home buyer can find more mortgage sources than they can homes. However, searching for the best mortgage available can be a challenge for the buyers if they attempt to embark on this process without the help of a mortgage professional. Real estate agents refer buyers to mortgage lenders they like, but these lenders may not have the best mortgage for the buyers. Banks will only tell the buyers about the mortgages they offer.

Here are 5 tips for finding the best deal on your mortgage:

1. A mortgage broker is the best source for finding the best deal on a mortgage. Mortgage brokers know about all of the mortgages that are available. They also know which mortgages would be best for you. This will help you obtain a mortgage without having to apply at several mortgage sources. The broker can find a mortgage that will be best for your situation. This is the top tip among the 5 tips for finding the best deal on your mortgage.

2. Ask the mortgage broker to obtain your credit reports. The credit reports and scores that mortgage companies use are not the same as the consumer reports that are available from the credit bureaus. However, it would be helpful to review your consumer credit reports from the three reporting agencies before meeting with the mortgage broker, because this will help you be prepared to discuss any problems that appear on your reports. This tip is important among the 5 tips for finding the best deal on your mortgage.

3. Be prepared to give the broker all of the details about your financial situation including your employment history. This will help the broker determine which mortgage would be the best one for you. Be very open about any negative credit experiences or short-term job histories. 

4. Compare the costs involved between different mortgages, because the costs can very. Always ask how many, if any, "points" will be required at closing. One "point" is equal to one percent of the mortgage amount. "Points" are usually charged when the interest doesn't cover the return that the lender wants. 

5. Don't look at just the interest rates, Compare the terms such as the length of the mortgage in years and whether the interest rate is fixed or variable. A variable rate means the rate can increase at various times and this will raise the monthly payment. Interest rates which are tied to the London Interbank Offered Rate (LIBOR) will increase when the LIBOR increases.