California Median Home Price by County

The median home price in California has reached its highest level since 2007, coming in at $522,440 for February 2018 (data compiled by the California Association of Realtors - CAR.) That's an 8.8% increase, year to year, from February 2017, when the median home price in the state was $480,270. The peak of the market for California came in May of 2007 when the median home price was $594,530. According to CAR  "year-over-year price gain has been growing at or above 7 percent for eight of the past nine months." Get Pre-Approved for…continue reading →

Mortgage Rate Recap and Outlook For Week Ending March 29, 2018

The markets will close ahead of the long weekend at 2 pm EST on March 29th, and traders began 'parking" money in the bond market late Wednesday, the 28th. That means the market will react to the economic data released this week until Monday, April 2nd. We'll see traders moving money out of bonds and putting it to work, based on the data showing inflation increasing slightly. Top of the economic indicators released this week was the Feds key measure of inflation - Personal Consumption Expenditures (PCE) with a year-over-year (YOY) reading of…continue reading →

Mortgage Rate Recap and Outlook For Week Ending March 23, 2018

This week's news focused on the Federal Reserve Bank's Open Market Committee meeting on March 21st, with minimal speculation about the outcome of the meeting -- an increase in the Federal Funds overnight rate.  There was a surprisingly mild reaction in the bond and stock market after the Fed hiked the rate from 1.5 to 1.75%, and increased their economic projections. But -- when the Fed meets, the real impact on the market is in the minutes of the meeting and commentary by individual Fed officials. Mortgage Backed Securities (MBS) moved to their…continue reading →

Understand Capital Gains When Selling Your Home

Understanding how capital gains tax affects your profit when you sell your home can be challenging.  According to IRS guidelines, it depends on time and money, and it's not that simple. Capital gains tax is a fee you pay when you sell your home for more than you paid for it. But when you sell, the IRS Sec 121: Exclusion of gain from the sale of the principal residence (Sec 121) allows you to make a certain amount of tax-free profit before the capital gains tax calculation. Up to $250,000 in profit if…continue reading →

Mortgage Rate Recap and Outlook For Week Ending March 16, 2018

This week's news has had little impact on mortgage rates.  Trade war concerns shifted from steel and aluminum tariffs to China's history of piracy issues in technology and intellectual property. The majority of the media commentary is around the appointment of Larry Kudlow as White House economic advisor. Kudlow has a pro-growth, anti-tariff, pro-tax-cuts stance, and those are negatives for long bonds (which directly impact mortgage rates). The elephant in the room is the Senate's passing a bipartisan bill relaxing restrictions placed on the banking industry via the 2010 Dodd-Frank Act.  The new…continue reading →

The Rest of the Four C’s: Credit, Capital, and Collateral

To understand how the underwriter looks at your information, you need a detailed explanation of the remaining three C’s.  Each C covers a lot of information, and the impact of government regulations push and pulls all of it outside the boundaries of common sense. Looking at the process may shed light on the underwriter's decision process. This blog post is second in the series of two blog posts. Read the first here about the 1st C - Capacity Credit is the most well known of these three categories, and the least understood.  A…continue reading →

Borrowing Down Payment from 401k or IRA for Home Purchase

Securing a down payment is often cited as the biggest challenge for buying a home - both for First Time Home Buyers and Move-up Buyers. To overcome these challenges, you can consider borrowing from retirement funds - 401k and IRA. Here is how it works. Borrowing Against 401k for Down Payment   How Much Can I Borrow From My 401k? You can borrow 50% of your vested balance or $50,000 whichever is lower. How Do I Pay It Back? The repayment term is usually between 5 and 15 years. The payment which includes…continue reading →

How Do Underwriters Decide Who Gets A Mortgage?

The Four C's of Credit: C #1 - Capacity Lenders haven't changed the method used to determine if someone qualifies for a mortgage in decades. But if you're on the outside, the one waiting to hear if you're approved, the mystery of how they decide might be frustrating. Yes, qualifying is a detailed process, but underwriters organize those details under four categories.  They're known as the Four C's: Capacity, Credit, Capital, and Collateral. Most people hear this and respond the same way, “what does that even mean?!” A brief overview of each area…continue reading →

Mortgage Rate Recap and Outlook For Week Ending March 9, 2018

The big news dominating financial markets right now is split between the continued improvement in employment numbers and the potential impact of the pending Tariffs on steel and aluminum. So far this year, most economic releases have met or exceeded predictions, proving that the economy is growing. But right now - the focus of the markets is on speculation about a potential global trade war when the tariff bill is signed by President Trump. As far as the upcoming Fed meeting, markets have already absorbed the effect of the pending rate increase. The…continue reading →

Can I use Restricted Stock Units (RSUs) for mortgage qualification?

Restricted Stock Units (RSUs) are a common form of compensation in high-tech companies (and some not so high-tech). But using that income to qualify for a mortgage has been a challenge. Well, not anymore! Subject to certain guidelines, income from RSUs can now be considered qualifying income towards a mortgage. RSUs are an eligible source of income for employees of publicly traded companies subject to the following requirements: • No more than 35% of your total qualifying income may be generated from RSUs • The stock must be from a publicly traded company; so…continue reading →

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