What You Need to Know Before You Start Investing in Real Estate

Learning about real estate investing can be a complicated process. However, a simple overview of the basics is the best way to get started. You’ll have a useful framework if you begin by understanding: The value of leverage Tax Benefits Depreciation We’re going to cover each of these in this blog post, beginning with the value of leverage. As you read, be aware that you’ll need to identify your ultimate purpose and long-term goal for investing in real estate. Knowing this will help you make decisions on properties to invest in by determining…continue reading →

Mortgage Rate Recap and Outlook For Week Ending September 28, 2018

The Federal Reserve raised the Fed Fund overnight rate by one-quarter percent yesterday, as predicted. Commentary by Fed President Powell also indicted another increase will come at their December meeting. The markets expected this rate increase so minimal movement in the markets as a result. Further based on the commentary released from the Fed meeting yesterday, going forward the Federal Reserve Board is going to be more reactive and sensitive to market changes. Given this strategy, it's difficult to predict the timing of future rate hikes over the next two years. The Fed…continue reading →

Why You Should Not Use APR to Compare Loans

Everyone in the market for a mortgage loan thinks comparing the Annual Percentage Rate (APR) from competing mortgage companies is the way to choose the best loan. And it’s all wrong. At best, trying to understand what APR means and using it to find the best loan adds unnecessary confusion to the process of finding the right lender. And in the worse case, it gives you incorrect information. Here’s a simple explanation of what APR is, why it exists, and why it may not be helpful in choosing your mortgage. The Annual Percentage…continue reading →

Mortgage Rate Recap and Outlook For Week Ending September 21, 2018

Mortgage rates have increased for the last three weeks, and there's a strong likelihood that they will continue on that path for the foreseeable future, and definitely for the next week. Earlier in the week, there was a sell-off in the market which was justifiable - so no correction is expected. The Fannie Mae 4% coupon is now at it's highest price in several years. Other significant economic data released was Jobless Claims 4-week moving average coming in at a new 50-year low; national median home price, now $264,800, makes 78 straight months…continue reading →

Is the Real Estate Market Changing in the Bay Area?

Only time will tell if the summers’ slowing sales in California are a momentary pause or a sign of a permanent change in the market. According to the latest data provided by CoreLogic, home sales barely increased for July 2018 above July 2017, following two months of lower home sales. The slowing volume of sales does not, however, mean that housing prices have dropped. In California, home prices are volatile from month to month, with July 2018 prices dropping 0.8% over June 2018. However, when compared year to year, prices are up, and…continue reading →

Mortgage Rate Recap and Outlook for Week of September 14, 2018

The last three weeks delivered increasing mortgage rates and the coming week is shaping up to be a repeat. What's behind this negative break from the summer doldrums rates have languished in is a steady sign that inflation is substantially above the Feds target of 2%. The latest CPI 4-week average came in barely below expectations (2.7% vs. 2.8%), while jobless claims, at 208K, are at a 46 year low. The Fed released the latest version of the Beige Book this week as well, highlighting a stable outlook for the US economy, the…continue reading →

Do Higher Mortgage Rates Mean ARM Loans Are Now Better?

Are rising mortgage rates and housing prices bringing back the Adjustable Rate Mortgage (ARM) loan? Well, they never completely went away, but they’re making a comeback. Sort of. Before the mortgage melt-down, at the peak of the market in June 2005, ARM loans accounted for 77%  of all loans made in the US according to CoreLogic. They accounted for only 4% of all the loans in the US by the end of 2016. Quite a swing but not surprising. Fixed rates were under 4% for a long time, and there wasn’t a good…continue reading →

California Home Buying Affordability Index Drops to a 10-Year Low

Are California homebuyers getting squeezed out of the state? In early August, the California Association of Realtors (CAR) released its’ housing affordability index for the second quarter of 2018. The major takeaway offered by CAR in the report is that the combination of increasing housing prices and rising mortgage rates have reduced the home buying affordability in the state to the lowest level in 10-years. In the first quarter of the year, 31% of California homebuyers could afford a home in the state, but by the end of the second quarter, it fell…continue reading →

Mortgage Rate Recap and Outlook For Week Ending August 31st, 2018

The Federal Reserve uses PCE Index, Personal Consumption Expenditures, as their preferred measure of inflation, and it's now hit a 6-year high at 2.3%. The impact of an uber strong GDP (4.2%), combined with the 2.3% PCE Index, should be causing a sell-off in Mortgage Backed Securities (MBS) - but that's not happening right now. The markets have stagnated waiting for Trade agreements to be hammered out and signed. At this point, Canada is at the table with the U.S. and the possibility exists they will sign by Friday, August 31st.  Mexico already…continue reading →

The Best Things to Do Now to Get Your Finances Mortgage Ready

Somethings in life take a little preparation. Like going on a first date, decorating for the holidays, and applying for a mortgage. Imagine the outcome if you did zero prep work for the first two occasions? So why do so many people miss the obvious fact that applying for a mortgage has its own set of behind-the-scenes preparations? Yes, you could find a house and connect to a mortgage company on the spur of the moment act of bravado. But are you sure about what the lender will tell you? Do you already…continue reading →