Blog with MAE Capital

We are now in week 3 of the mandatory shelter in place order.  Since my last update things have become clearer on why we are at a standstill.  On the Real Estate front, it is pretty easy to report on as it is stopped for the most part except for existing purchases and some commercial deals.  Our private money division is still seeing activity and people willing to lend in this environment, but it has slowed as well.  Interest Rates have not done us any favors over the last week, but we are seeing some life as things start to get figured out.    The appraiser dilemma is in the beginning stages  of getting figured out as well. 

Let’s look at interest rates and why they have not gone down to the lows they should be at.  I read an article this morning that clarified things for me a bit more in an area where I had not paid attention to until now.  The area of lending is the servicing side (where mortgage companies collect your payments).  Think about it, if the government has mandated mortgage companies to stop collecting payments from homeowners for a period of at least 90 days what will happen to the mortgage company?  Mortgage servicers must collect payments from borrowers and then they have to pay out on the bond they created and sold to Wall Street.  The mortgage servicer still must make payments to Wall Street but if they have not been able to collect payments form the borrowers they will go broke quickly.   I believe this has a large part to play in how new loans are being priced up front.

The 2 Trillion-dollar Stimulus Bill that is being signed by the President today does not carve out any funding for mortgage servicers as they don’t fall under banking in most cases. What this means is that while the Government has suspended mortgage payments from borrowers the lenders still have to make their payments on their bonds to Wall Street.  This will get figured out in the next round of Stimulus, we hope, but until then mortgage bankers don't have their servicing portfolio to hedge their origination pricing so interest rates will stay high.   Until this aspect of the mortgage industry is figured out we will see higher than normal interest rates and a degradation in service from all originators in the mortgage industry.  As it stands all of the loan companies have to go to the same well to get their water, so to speak, so no one company in this crisis will outshine another for this reason.  At MAE Capital we are a Broker which means we have access to funding across the nation, so we have our finger on the pulse of this evolving issue.  MAE Capital will also be the first to find lenders that are willing to lend or adjust their rates down and when the market changes we will be on the forefront of the new economy.

As for appraisers in this market, which is another hold on closing loan transactions and Real Estate deals.  Fannie Mae (FNMA) just announced new guidelines regarding what is acceptable for appraisers to deliver in this market.  FNMA said that appraisers can do a drive bye appraisal and the agent or the homeowner can send interior pictures to get an appraisal done.  FNMA also gave guidelines on “Desktop Appraisals” which are appraisals done from information only such as public record information and MLS information any other sources other than physically going to the house.  As for refinances we are seeing more appraisal waivers being offered for those borrowers with good payment history and a lower loan to value.  All these steps are positive and are moving in the right direction, but the time to implement these new guidelines is a major hold up. 

Meanwhile the market for Jumbo Loans and non-Agency loans (non FNMA, FHLMC, GNMA) and non-qualified mortgages have basically closed down.  In fact, today we got news from a few “Non-QM” lenders that they have shut their doors indefinitely as they have no money to lend.  What this does is take an essential segment out of the Real Estate market that is essential for many investors seeking capital for fix and flips, construction, and rental property loans.  We have received several notices today that companies have closed their doors that originate and close these loans.  This market will take months to come back if ever. 

On a positive note, I see the Qualified Mortgage market (Agency loans; FHA, VA Conventional Loans) coming back in the next 3-4 weeks as this all get’s figured out and the Stimulus Bill.  I say 3-4 weeks but that could change based on the “curve” flattening out and how the contagion mutates and changes and hangs on in our society.  The mortgage market will need some definite infusions of money from the Stimulus Bill in the serving side of the business before rates can come back to where they should be.   We will be seeing interest rates in the 2s when this all shakes out so if you have been thinking of refinancing now would be the time to get your paperwork in order.  However, if you have lost your job we can’t refinance you until you are back to work, but that may change as this evolves too.  So this virus is killing us in more ways than one, but as Americans we will persevere.     

Posted by Gregg Mower on March 30th, 2020 9:40 AM

OK the world has gone crazy, have you?  Do you have 2 thousand rolls of toilette paper, 15 bottles of hand sanitizer?  I get the idea of being prepared, but to hoard essential items is ridiculous, but with the media fanning the flames of hysteria I understand the effects.  What the average person doesn’t understand is how all of this works from an economic point of view.  We have a situation that we have never seen in history, and history is how we evaluate the present in economics.  Economics and theories that support the way markets interact are changing as I write this.  Obviously demand and supply is still in full swing, but in very different ways.   What we are seeing here is a rapid shift in demand from a wide variety of items that people want or need on a daily basis such as cars and appliances and other items that are nice to have but in the overall scheme of things  are not as necessary as food and basic need items like toilette paper and this is why we are seeing a rush on these items. 

So, it stands to reason that if the demand for those nice items such as Real Estate has diminished, temporarily, you will see some real change.  In the short term you will see Real Estate values will correct downward as people are not going to buy during these times.  People are also worried about their jobs going away or that their income will be cut from layoffs or even getting sick.  Interest rates are not helping with this at all, despite the Federal Reserve lowering their Funds rate to zero.  What people don’t know that Long-term mortgage rates are not controlled by the Feds.  In actuality, the mortgage markets have gotten worse and rates have risen significantly over the last few weeks.  Where the long-term mortgage rates, in the beginning of March, was down to 3% and now after all the panic in the markets long-term rates are up to around 4.5% or more.  Why is this happening? The answer is complex, but simply put, when everyone is trying to sell their investments and there are not enough buyers price has to go down to get people to buy.  When talking about interest rates you get an opposite effect as Interest Rates have to go up to attract investors to buy them (the Mortgage Notes), put simply. 

So, you have people with no jobs, or are laid off, and have a higher interest rate environment, the demand for housing dramatically down.  What you have here is a perfect storm.  The demand for housing or home ownership is going to stop until the world gets figured out.  The good news is that those that do own a home will most likely be able to keep it as the Government has enacted measures that will not allow mortgage companies to foreclose during this crisis.   Mortgage companies can offer forbearance as an option during these tough times, which is putting your mortgage payment off until you get your job back.  Forbearance, has to be granted it is not a given even in these times, you have to ask your mortgage company for forbearance and they will grant it to you if you can prove you have been financially hit.  So don’t just stop making your mortgage payment call first, but also know that you will have to pay the amount back that you are not paying now, it will be added to the end of your mortgage and you will pay interest on it. 

Renters that lose their jobs or can’t pay for some reason can’t be evicted for up to 4 month but know that you will have to pay that amount back within 2 years to your landlord, so if you can make your rent do as you will get way behind and may get evicted in the end.  It is always recommended that you make your housing payments if you can, because getting behind on payment that large may get you to a point in time where you just can’t make it up.  On the other hand, if you are renting and have been saving to buy a home and you don’t use that money to live on during these times you could come out of this being able to buy at low prices. 

If you have been considering selling your home, it might be prudent to wait until people get back to work in a few weeks to put it on the market.  Realtors in this market are seeing people that had their homes for sale prior to this put their listing on Hold.  What this means is that the sellers of property that put their listing on hold can’t show them or make offers on them but by doing so their listings are still being seen by potential buyers that after the crisis is over may be looking to buy.  As in the Stock Markets you want to buy low and sell high and I think that in the short term there will be deals for investors to get in on, but it will be short lived.  As this crisis ends and people go back to work their attitude will change towards buying again as they feel more financially secure.  If your house is on the market right now be patient and talk with your Agent as to how to strategize the sell of your home when this is all over.  I see that there will be a short-term drop in prices but will recover as the Stock Markets recover. 

This is unheard of and we have never seen this before on any scale let alone as large as it has gotten, global. With no history to look back on we just don’t know what is going to happen.  In history we had a pandemic in 1918 that ended up killing over 100 million people, we don’t see this happening with this one, but there was a war going on at time and no shelter in place orders.  During that time the war machine was roaring so the economy was not hit nearly as hard as this one with everything shutting down.  So, we don’t have anything else to compare to in history as to what is going to happen.  I can’t help but to think when this goes away what economic carnage will it have left for the entire world to mop up?  What I do see is that Interest Rates will come back down as the Government pumps money (liquidity) into the banking system and they start purchasing Mortgage Backed Securities again.  With Rates going down people will refinance their existing debt to lower rates and take equity out of their home to recover from this time.  For now, we all have to wait and be patient, put things on hold, and enjoy what we have and help others that may not be as fortunate. 

Posted by Gregg Mower on March 19th, 2020 12:41 PM

Here is a topic I have not visited in while but feel it is time again to address what is going on with mortgage rates.  The stock market has taken some serious hits over the last few days due to concerns with the Coronavirus and that has put downward pressure on the US Treasuries and the bond markets.  Why you ask?  I will get into the details of why later on but know that when there are panics in the Stock markets money tends to flow towards safe and secure investments while the markets are gyrating like bonds.   Some of the reasons the Stock Markets have corrected downward is over fear of the Coronavirus and the price wars going on now with oil prices after Russia pulled out of OPEC.  So there are a lot of economic new stories right now driving the markets.

Let’s talk about the effects of the Coronavirus and why it is driving the Stock Markets down around the world.  But first you have to understand what stocks are.  Stocks are shares of large companies that are sold to the public so the company can remain capitalized (i.e. have enough ready capital, money) to build and expand their business.  People who buy and sell stocks tend to look for companies that will have good growth into the future to buy so the hope is the value of the stock will grow with the company.  Investors in stocks will tend to sell their stock in a company if they foresee a potential down-turn in the company’s profits.  That said with this threat of Corona virus in the public it is believed that people will not buy or do normal activities if they can not go out into the public, thus not spending money on goods and services they would normally have spent their money. 

Now that you understand how the markets work in a basic form you now can see why the markets have been selling off.  But how does that affect the interest rates you ask?  Well this is where is gets interesting so follow along closely as I am about to open a door into a reality that few actually see or know about and that is economics.  As we have seen the Stock markets selling off due to the potential earnings loss of companies due to lack of demand (people not buying goods and services), investors in the Stock Markets have been looking for a relatively safe place to park their client’s money during this correction.  The place is the Bond Markets where fund managers and Stockbrokers park funds while Stocks settle down.  Specifically, the United States Treasury Bonds are the specific bonds that are purchased.  This is where it gets really interesting so hold on to your hat.  Not only do Stockbrokers and Money managers park their funds in U.S. Treasuries, the Mortgage industry uses the 10 year Treasury Bond to hedge their bet on interest rates. 

Hedging defined is buying or selling an investment to reduce the risk of an adverse price movement of another investment, kind of like an insurance policy.  In other words, the folks that sell mortgages will buy U.S. Treasuries to offset the possible movements in the interest rates.  The concept of hedging is important to know because the interest rates are being driven by this right now.  As the Stock market continues to correct and Treasuries are being pushed to their lowest levels in the history of the Treasury market, so what does this have to do with long-term interest rates?.  Although this does not directly affect interest rates it does take a way the hedge vehicle for mortgage bankers.  In response to that when interest rates should be declining, they have actually raised.  That’s right interest rates have gone up over the last few days as the Stock Markets declined the Bond Markets rallied but longer term interest rates have actually gone up. 

The Federal Reserve saw this affect happening and decided to lower the rate they can control to try to stimulate the markets with low interest rates.  You have to understand that the Federal Reserve does not control long term interest rates, the only rate they control is the Fed Funds rate.  The Federal Funds Rate is that rate in which Banks can borrow from the Federal Reserve.  The rub is that banks don’t need to go to the well for money in a strong economy to borrow money.  So, there is little to no effect on long term mortgage rates with the Federal Reserve or “Fed” lowering their rate. 

On another front is oil prices and their effect on long term interest rates.  With Vladimir Putin pulling out of OPEC ( the largest oil cartel on the planet who sets oil prices around the world) and OPEC responding by lowering crude oil prices to as low as $31 a barrel creating essentially a war over the control of oil prices.  This has a very adverse effect on American oil production as when oil prices dip to these kind of lows American oil companies cannot produce oil at that low of a price it will become more beneficial to import oil at the lower prices and hurting American oil producers and the workers that produce the oil.  There are now worries over American oil producers filing bankruptcy.  This now will impact American workers and those that support that industry like steel, heavy machines, plastics and so no, then the effects trickle down the towns in which those workers live and those companies that support those towns.   This will inevitably turn up in our unemployment numbers signaling a slow down in the overall economy.  This affects the Stock markets in the same ways as mentioned above. 

There is a bunch of things happening to where the Stock Markets and the Bond Markets have been reacting crazy.  This is a very unique time in our economy to watch what is going on as it is truly historic and has been going against everything we know and seen over time.  There is a component that I have not mentioned here that is hurting the overall economy in ways it has no idea and that is the media.  The media has been blowing this virus out of proportion to the point that people are panicking and running scared.  I do not profess to know anything about this outbreak nor do I profess to be any kind of medical professional but what I do know is numbers and when you see the differences between the deaths by Coronavirus versus the regular Flu there is no comparison far more people have died year to date over the Flu, so it stands reason that there is a abnormal hysteria going on out there.  I am not trying to discount how terrible this virus is, but I can’t buy into the hysteria. 

So, if you are wondering and scratching your head as to why interest rates have not done what the media is implying this is why.  Interest Rates are great I am not going to discount that and yes I love the attention we are getting from the media that interest rates are at historic lows it has been great for business, but don’t get set on getting a long-term mortgage in the 2’s without paying greatly for it.  My team is ready and waiting for your calls to go over your existing mortgage and see if now a great time to refinance.  We can refinance your mortgage without resetting the term which is a huge help with the over all interest you would pay on a mortgage over time.   For example, you took your existing loan out 2 years ago and have 27.5 years left on your existing loan and you don't want to lose those years you have already paid.  How about a refinance that would be a 27 year loan as to not take away the time you have already paid, we are doing this all the time.  For more information on refinancing your home or investment property give us a call today and we will tell you the truth about Refinancing and give you the best interest rates from Banks across this great nation.  916-672-6130 and download our app for free.  

Posted by Gregg Mower on March 10th, 2020 2:18 PM

It’s March 2020, not yet spring but in California it is always spring like weather.  Do you know what your house is worth this year?  Have you thought about selling and buying another home?  This might be the perfect year to do just that.  Why, you ask?  Well when the earth the stars and the moon all align you should take notice.  The interest rates are at historic lows would be the first good reason.  The second good reason would be that our economy is at full employment (Full employment is when the unemployment rate is less than 4%).  The third and most important for sellers is that the housing prices are still high, and we have not seen any correction in prices.

Interest rates are important for a variety of reasons.  When you are selling a house, you want the rates to be as low as possible so more potential buyers can qualify your house.  Low interest rates also provides a sense of security for home buyers when they are shopping.   Low rates also create a sense of urgency with potential buyers as they don’t want to miss the opportunity to get a low interest rate.  At MAE Capital Real Estate and Loan having control over both the Real Estate and the loan process can further save potential buyers and sellers as we will give buyers money towards their loan to lower their interest rate even further when we represent a buyer and do the loan.  With Rates so low putting your home on the market sooner than later will get you property sold faster as the inventory is so low currently.

In addition to low interest rates Americans are fully employed according to the labor department. So, with the majority of Americans employed in this booming economy there should be more potential home buyers in the market today.  These young buyers have more information at their fingertips than ever so they know that rates are low and that they can afford to buy.  In a market where most people are employed wages tend to be a bit higher so employers can keep those employees they have and not lose them to their competition, thus keeping job security and higher wages to potential home buyers.   This sense of job security is also making existing homeowners feel more comfortable with their finances and are exploring the possibility of selling and moving up.

We have not seen the influx of sellers yet as most potential sellers like to wait until spring to put their house on the market traditionally.  Those that make the move early will reap the rewards from a quick sale at the top of the market if their house is price properly.  All of this creates stability in the Real Estate prices as the current supply is less than the demand which usually means that prices should increase,  We have not seen the increases yet as we are still seasonally stagnant with buyers waiting for the spring inventory to hit the market.  With that said if you are thinking of selling your home this year it would be prudent to get your home on the market as soon as possible with rates low and full employment.  Here at MAE Capital Real Estate and Loan we are here to help.  We have programs for first time home buyers, we have the lowest rates in the market on home loans, we  bundle our services to save our clients money and if we list and sell your home represent you when purchasing your next home we will kick in money to lower your payment even further.  Give us a call (916-672-6130) or check out our site and download our App. 

  
Posted by Gregg Mower on March 3rd, 2020 10:59 AM

Hey there fellow bloggers and Real Estate enthusiasts we have a new Application/ App that just hit the market the beginning of the year and it's FREE.  The app can be found both on Google Play and The Apple App Store and it is the MAE Capital App.  This App is unique in that you can search Real Estate in the Quad County area around the Sacramento Area.  As we are located in in Rocklin this is the beginning of a growing market for MAE Capital as we currently arrange loans up and down the State of California we are slowly growing the Real Estate presence throughout the state and always looking for partners to help. 

The MAE Capital App is unique in that is combines or bundles the Real Estate process with the Home Loan process.  Not seen in any other App on the market till now.  You can search Real Estate and then see if the houses you have been looking at will qualify for financing as well as you.  With one App you now have the power to see all the property on the market in real time and the search engine is Metrolist or the Multiple Listing Service (MLS).  The searches have been broken down to  towns and cities so you don’t have to dig too hard, the App will take you to the area you want to research.  The App will show you open houses in the area so you have that information at your figure tips when out driving around looking at homes.  Read about the tips and tricks to buying and selling Real Estate in the App.

You can get Pre-Approved right on the app with a push of a button and inputting some basic financial information.  You can apply for a home loan and scan and upload all the documents you need to be approved for a home loan within the App.  You can see current interest rates and get the status of your home loan all through the app.  If you don’t understand the process flow or know what to expect, all the information is right there in the App.  You can get all the information you need on your phone today. 

If you are thinking about selling a home or piece of property in the near future we have the tools to help you understand the ins and outs of selling Real Estate.  You can search property that has sold in your area to get an idea of what your home is worth.  You can reach out to one of our Agents with just a few clicks in the App and an Agent will call you and go over what you need to do.  If you aren’t ready to talk yet you can do the research yourself and learn what will be expected and how to prepare your home or property for sale.  Then you can get qualified to buy your next home on the very same App. 

If you are a Real Estate Investor you can search property and put parameters in that fit exactly what your investment needs are such as fixers or good rental properties.  We also have all the information you need to know about obtaining a Private Money Loan to act as a cash buyer or buy a property or land that a bank won't lend on.  Private Money is also a necessity when you are looking to flip homes as most traditional lenders won’t lend on extreme fixer properties.  Do all the Research then contact one of our Agents to see the property you want to see.  Our App is a one stop shop for Investors and good investors know that time is of the essence and the App can save you time and money.

If you have been thinking about buying Real Estate or Selling Real Estate you need this App.  Or if you just like to look at Real Estate and wonder how much homes are listed for get this App.   Get all the power in the palm of your hand and save thousands when working with MAE Capital as we will bundle the services to save you thousands.  Which means we will take some to the Real Estate commission that is generated in the transaction and apply it towards your home loan to lower your interest rates and lower your monthly payments.   MAE Capital Real Estate and Loan is your true partner giving you the tools and the information to be cutting edge in the Real Estate game.  Click here to Download the App from the Apple store and click here to Download the App from Google Play the android solution

Posted by Gregg Mower on January 21st, 2020 11:42 AM

 


When you need a home office but don’t have space for it, there are a few options you could consider: look for a larger home, build an addition, or increase your space by converting your garage. A garage conversion is the easiest and most affordable of these options, and it has the potential to become the workspace you’ve always dreamed of.


Picture Your Perfect Work Space


Whatever your garage may hold now, think of your garage conversion as a blank slate. You’ll have to empty your garage anyway to make the space livable, so go ahead and picture it as empty — but full of possibilities. If you do have a garage full of stuff, renting a storage unit is an affordable and easy way to store it all off-site. In Rocklin, the price for a self-storage unit over the last 180 days has been about $131.41 on average. When you consider the cost, think of it this way: renting a storage space takes the worry out of what to do with your stuff, and it’s way cheaper than renting a “traditional” office space.


With a clean space to work from, you can then come up with a plan to meet your needs. Ask yourself how you can maximize this space. Do you want it to be a multi-use space that can double as a guest retreat or family room? Or, do you need it to be a dedicated office space? Think about your work routine too, and in specific terms. For example, Entrepreneur.com says to ask yourself what type of work you’ll be doing, whether you need space for guests, what kind of storage you’ll need, and whether you’ll do video conferences or conference calls. 


Along with the functionality you need, don’t hesitate to give your plans a personal touch. You aren’t in an industrial office building, so there’s no need to go all gray — unless gray is what you like!. We love these design ideas from House Beautiful, including decor that borrows from nature, bold colors, vintage and modern elements. This is your space, so it should inspire you.


Put Your Plan Into Action


Once you have a plan for how to set up your space, the next thing to consider is how to make it happen. Garages aren’t exactly built for comfort, so it will take some work to bring it up to livable standards. This part may require the help of a contractor because it will require construction and possibly also electrical work. Here’s what you need to consider.


  • Insulating Walls: If your garage is drafty, you may want to hang drywall and add insulation. Be sure to insulate the ceiling too so that heat doesn’t escape. You will also need to decide whether to keep the garage door or replace it to enclose the room. One option that’s ideal for letting more light into your office is to replace the garage door with floor-to-ceiling windows.


  • Heating and Cooling Systems: If you live anywhere other than a perfect climate, you’ll need a way to keep the room comfortable. According to the Spruce, if you have an attached garage, you may be able to extend your home’s HVAC system easily. Otherwise, you can consider independent systems, such as electric baseboards and a portable air conditioner, which you can find at retailers like Home Depot.


  • Flooring: Flooring is one element of your garage that’s more than just functional — you also want it to have a certain look and feel when you’re converting the garage into a room. An affordable and easy option is to lay laminate flooring. If you prefer carpet, the blog Garage Remodel Guides gives a word of caution about moisture, but choosing indoor/outdoor carpet can be a good solution. If you like wood floors, it’s recommended that you go with engineered flooring over solid hardwoods because engineered floors withstand moisture better.


The ultimate goal is to transform your garage from a space that’s cold and industrial into a room that feels warm and homey — and inspires productivity! After all, working from home gives you the opportunity to love where you work. So, why not make this space into exactly what you want for ultimate comfort and productivity?


Photo credit: Unsplash


Author

Natalie Jones


Posted by Gregg Mower on January 14th, 2020 3:41 PM

Hiring Season in the Real Estate and Mortgage Business is the time of the year when the business slows down for the holidays.  It is also a time for Realtors and Mortgage professionals to reflect on the current year’s production numbers.  It is also a time to reflect on personal business plans and trying to figure out how to get more business going into the new year.  For a Realtor it is setting goals for the next year to hit the Masters Club or an income level that is higher than this year’s income.  For Mortgage professionals it is always about closing more but figuring out just how to get that done assuming the market conditions stay stable.  This time of year is a time to reflect and make plans now that will go into next year and the future of your career.  This industry is commission based so we are never really feeling comfortable with our income situation and are always looking for some stability. What if there was a way to help mitigate the commission short falls in your personal production would you jump on it?

As a good salesperson you always want to pose questions to your clients where they are nodding yes as that keeps their attention positive then you can lead them to the outcome you want.  If you didn’t recognize that as a sales trick you need the training and coaching that we provide and you need to read no further and just click here and start the process to become employed with MAE Capital Real Estate and Loan.  I state it that way as you have to know the tricks of the trade if you are going to be successful in this industry and asking for the business is the first rule of sales.  This is just one of many techniques we teach and coach you to do at MAE Capital Real Estate and Loan.  We have created a training program that is second to none for Loan Officers and Realtors to learn the details of this business from how to talk with your clients to how to find the best loan product for your client. 

Back to the question at hand and that is how to make commission when you are not closing a transaction?  The way we have addressed this is cutting edge in the Mortgage Industry but has been done in the Real Estate Industry before and that is team building.  Team building is the concept where you recruit others to either come and be on your team or show them this concept so they can build their own teams under themselves and thus you get paid for your team’s production.  You may have heard of the EXP way of doing this in Real Estate but what is new is adding the mortgage component.  As a holder of a Real Estate License and an NMLS license you can do and get paid on both Real Estate Transactions and Loan Transactions legally. 

So, you can keep an income flow even when your personal production is slow by having well trained and aggressive team members.  At MAE Capital we have designed a system to where you will get paid from team member’s production when they close a transaction.  You would also get paid on your team members member’s production.   We call this our Multi-Level Team Leadership Program and you can click on this link and learn more, it works by recruiting Realtors and Loan Officers and getting paid from their production.  For each team member you will receive 5% of the total commission earned on their transaction closed even if you did not assist in the transaction.  Furthermore, you will receive 5% from their team members.   Now you see how you can make money when you are not closing transactions in this business.   The top producing Realtors, in town, are utilizing this system but only with Real Estate transactions our system carries over to the Loan officers as well.  So if you are a top producing Realtor and you are under one of these systems currently and you are not reaping the rewards from the loans you are referring out currently take a look at this and be one of the first top tier leaders.  Imagine if you have Loan Officers on your team and you got a piece of that production.  Yes, you would also get a piece of all their refinance business too.  The only catch is that you must get your NMLS license to get paid.  If you are an MLO and you already have both your DRE license and your NMLS you could hire Realtors under you and get a piece of their production.  This income sharing concept can keep everyone happy in a changing economy. 

If you are a Loan Officer or Realtor looking for a better opportunity in 2020 look no further with our coaching, training and mentoring program you are not alone.  With over 30 years in the industry we can keep you focused on your goals and provide the tools to get the job done.  If you have closed one transaction in this industry you learned the complexities of being compliant and gathering the documents needed to close your transaction.  We teach you how to interact with adversities and how to close transactions smoothly and efficiently.            

If you are looking for something different and fresh in 2020 and into the future give us a call and we will open doors for you that you did not know could open.  Making more money in Real Estate is not always working harder you can also work smarter.  If you are one of those people that believe you are not using your entire potential, then we need to talk.  We are looking for individuals that can sell this concept and that are not afraid to go out and make money.  As a Mortgage Broker and a Real Estate shop you can bundle your services and save your client’s money while you are making a great living with time for you and your family.  Call Gregg Mower today at 916-672-6130 or click here 
Posted by Gregg Mower on November 22nd, 2019 11:36 AM


For most people, purchasing a home is the single largest investment they will ever make. And while many are well-versed in paying a down payment, mortgage and insurance, a lot of homeowners are caught by surprise when faced with another expensive part of owning a home: major repairs. Owning a home comes with the inevitability of things wearing down over time or breaking suddenly, and rather than simply calling the landlord, the homeowner is responsible for paying the costs. If you own a home or are thinking about buying one, these tips can help you to prepare for the major home repairs that will come your way:

 

Saving Up

 

No matter who you are, paying for home repairs ideally will not land you up to your ears in debt. You may be tempted to pull out the credit card or delay paying other hefty bills (e.g., mortgage, student loans, etc.), but this can get you into a lot of financial trouble. The best way to handle major home repairs is to be prepared when they happen. Start an emergency fund that is dedicated solely to covering the costs of such repairs. This can either be done through a savings account with your bank or by keeping an old-school cash envelope at home.

 

Many experts suggest setting aside at least 1 percent of your home’s value each year for repairs and maintenance. For instance, if your home is worth $660,000, you would put $6,600 in your emergency fund every year. Such savings can quickly add up, leaving you in a better position to cover the cost of that roof replacement or plumbing disaster.

 

Refinancing Your Home

 

Another option for paying for a major repair is refinancing your home, which allows you to take advantage of your home’s equity. With cash out refinancing you can get a new loan for your home that has a higher balance. Then, you receive the difference between the two loans in cash. Thus, you can then use the cash to cover the cost of the repair. It’s also worth noting that the new loan could end up coming with more favorable terms than the previous one, making it a win-win situation. Here at MAE Capital we can walk you through this process. 

 

Taking Out a Personal Loan

 

If you don’t have an emergency fund built up or refinancing isn’t an option, you could explore various types of personal loans out there. These days, it’s easy to apply online for a personal loan. Moreover, some loans even start at under 4 percent interest, and that’s much lower than using a credit card.

 

Selecting a Contractor

 

The contractor you use for each home repair can make a big difference in the time and money you spend. For example, if you choose a contractor simply because they offer their services for the lowest price, you could end up with shoddy work; this means you would then have to go through a lengthy legal process to get your money back or pay a different contractor to come and fix the bad repair.

 

To avoid a situation like this, be sure to ask around for referrals and interview several candidates. Check the licensing and insurance of each candidate, look into their job history, and get estimates for the work needed. Then, you will be ready to compare bids and qualifications to determine which contractor is best for the project. Furthermore, you will want to be sure to get a detailed contract in writing before any work has begun.

 

Homeownership comes with the costs of major home repairs, and it will save you a lot of stress and financial trouble if you have a plan when the day comes. Start contributing to an emergency fund today. Look into cash-out refinancing and personal loans to see if those options will work best for your situation. Finally, be diligent when choosing a contractor for each project.

 Article by: Natalie Jones

Photo Credit: Pexels

Posted by Gregg Mower on October 31st, 2019 11:12 AM

Have you been thinking about refinancing your home and not sure if you want to go through the hassle?   Not sure what to expect or afraid you won’t qualify or just don’t know where to start?  These questions are the typical questions Homeowners have today.  But if you think about it, how long will it take out of your day to make that simple phone call or complete a refinance questionnaire?  The answer is about 10 minutes, that’s shorter than a Geico phone call and could save you far more money.  We know you don’t this everyday so we try our best to make it as smooth as possible for you and answer all the questions you have.  So let’s to answer some of your questions in this post.

Let’s start by seeing what your existing interest rate is on your property.  Then let’s take a look at what your home is worth in today’s marketplace, we can run that evaluation in about a minute.  We will also want to know what type of loan you currently have on your property such as a Conventional loan, FHA loan, VA loan or some alternate type of loan to evaluate if you are paying mortgage insurance or not.   The government has lowered the FHA monthly mortgage insurance rates by .5% in 2015 so you might get a double savings.  So a typical FHA loan that was taken out in 2014 with an interest rate of 4 % with a loan balance of $250,000 would be a saving of $140 just on the mortgage insurance savings a month and all you would have to provide is a current mortgage statement, your home owner’s insurance policy, and a copy of your Note.  That is all you would need, no income verification, no bank account verification, no appraisal.  This is called an FHA Streamline Refinance by clicking on it will take you to the detail page.   The FHA Streamline loan only works when you have an existing FHA loan.  If you are a veteran, and have a VA loan on your home, the VA has a similar program called an Interest Rate Reduction Refinance Loan or IRRRL.  If you have a FNMA or FHLMC loan (a conventional 30 year fixed) the similar type of program would be the HARP program.  The HARP program or the Home Affordable Refinance Program is really designed for those home owners that owe more than their home is worth and wish to lower their monthly payments.  If you have equity in your home with a conventional loan on it, you would need to fully qualify again for a new loan. 

Once we determine that a refinance is the right avenue for you we will  continue  by completing a simple refinance form online or we will talk and get some basic information and formulate the best possible scenarios for you.  We will tell you if it is worth your time to do a refinance before you have to gather anything.  The information you send us, either online or over the phone, is secure and will not be used for spam or any other kind of mass marketing.  Refinancing can save you thousands of dollars a year so don’t take this lightly as we don’t and we do our very best to formulate the very best loan scenario for your financial situation that will save you the most over the long run.

What do you need?  If we are not doing a FHA Streamline you will need to gather your Federal income taxes for the last 2 years and W2s, your current mortgage statement, your home owners insurance declaration page, bank statements for the last 2 months, and your last 30 days of pay statements.  Will do the rest for you, like open escrow, order an appraisal and process the paperwork.  It does not matter who your existing lender is, we are completely refinancing that old loan and you will have new mortgage company that you will make your payments to.  You might ask if it would be better to go to your existing lender to refinance your home, and in most cases it is no better and in some cases, I have seen the existing lender charge more and you end up with a slightly higher interest rate.  It is always good to get a few quotes, but make sure you talk with someone who can actually give you an accurate quote.  The interest rate on your new loan is based on several variables such as equity, credit score, loan program, and whether you are taking cash out to pay off a second mortgage or other debt.  So it is always best to have the rate calculated for you based on your situation.  Lenders and Brokers all have to go to the same places to get the rates for you, so rates should not vary that much from lender to lender, but the fees charged can.

So what happens when once you decided to start the process?  Once you have supplied the paperwork we have requested, we are tasked with providing you with disclosures that spell out all the charges and the payment on the new loan.  We will go to an Escrow or Title Company and order a preliminary title report to make sure there are no liens on the property that you did not know of.  We will order the appraisal (if necessary).  We will do all the necessary verifications of your employment, credit, and assets (if necessary).  Once we have everything back we submit the file to underwriting. When the loan is approved we draw the loan documents and send them to the Escrow or Title Company and have you sign them.  Most of the time we can arrange that you sign in our offices, if that is more convenient, or we can have a notary come to your home, or you can go to the Escrow or Title Company to sign them.  Once you sign the documents, they are set back to the lender to be reviewed.  Then the new loan is funded and the old loan is paid off through the Escrow.  You new first payment will be the following month.

What will this cost me?  In most cases we make the new loan where you have no out-of pocket expenses.  This is done either within the interest rate you decide to take or included in the loan amount or both.  This is done upfront before you make a decision to refinance and is part of the analysis we do to make sure it will be a good investment to refinance.  A general rule I like to follow is to find out how long you plan on being in the home and fit the loan that plan.  An example would be if it costs $5,000 to refinance, either included in the loan or paid in cash, and you save $250 a month in your payment, it will take 20 months to recoup that amount to make it worth the refinance.  But if you plan on selling your home in that time frame it is not worth it.  On a FHA Streamline the loan amount can’t be raised so the analysis is easy, if you save money it is worth it to do. 

So how do you get started?  Well that is easy simply give us a call, it is free, and could save your thousands of dollars.  Our phone number is (916) 672-6130 or Click Here and fill in the simple questions and we will contact you.  We can only refinance California properties as that is where we are licensed to do business. 

Posted by Gregg Mower on October 25th, 2019 11:57 AM

FHA Loans were born from the great depression in 1933 when the Federal Housing Administration was established.  The idea of the Government insuring a Real Estate loan, at the time, was groundbreaking.  In today’s world we expect the Government to step in and try to fix things when the economy is sluggish or depressed.  Back then our government was far less apart of the ordinary citizen’s life.  So when the private sector was approached by the Government to insure mortgages that were traditionally insured privately by large down payments was a ground breaking concept.  At the time Banks and Brokers were the only way to get a home loan and they required that a potential home buyer put 25-50% or more down to buy a home.  So when the Government said they would insure mortgages up to 95% of the value of the home, you can imagine how this changed the way Real Estate Loans were originated.  It was designed to stimulate housing growth to get the country out of the grips of the Great Depression.  It worked, along with a whole new age of people relying on the government to help them when things were tough.  Out of the Great Depression we also got a welfare system, unemployment insurance that the government collected from employers to help with displaced workers, and a whole litany of other programs that expanded the scope of the Government.  The Federal Housing Administration (FHA) was designed to be a short-term way to get the housing markets stimulated to get out America out of the depression.  As with most Government Agencies the program still exists today, and you can take full advantage of it. 

Today FHA loans are alive and well and are used still today to get people into homes with a small down payment.  FHA loans are still a viable loan for those that have a small amount of money to purchase a home.  The way an FHA loan works is very similar to Conventional Loans in that a potential borrower must qualify for the loan with their income and current credit.  When we say "qualify" there are several factors that a lender must review in order for a client to “qualify” for any loan.  These factors are but not limited to having shown the ability to handle credit or in today’s word have a credit score that meets the criteria of an FHA loan (550 or better).  Generally speaking FHA loans are more accepting of psat credit issues than that of it’s Conventional counterpart.  If a borrower has a low credit score due to circumstances out his or her control and has shown that they are trying to take care of it and that is the only factor with regards to their financial situation they generally can get approved for a FHA Loan.   In order to qualify for an FHA loan a potential borrower must have a two year history of working that could be multiple jobs or a combination of school and a job and must be able to show that their income will be stable enough to maintain the mortgage payment. Next, a borrower has to be able to prove they have enough money for the 3.5% down payment.  This money can come from savings or can be a gift from a relative or a close family friend, or an approved Down Payment Assistance Program. At MAE Capital Mortgage we can do this for you over the phone.

FHA loans are a federally insured loan, but what exactly does that mean? Simply put there are two payments to the insurance fund a borrower will have to make; One the upfront insurance is 1.75% of the loan amount (Sales Price minus the 3.5% down payment requirement) this is actually added to the loan so you don’t have to come out of pocket for this; Two the monthly payment of the mortgage insurance is a small percentage of the Loan amount every month .(5%).  This insurance makes FHA loans more appealing to lenders and thus lenders have more flexible underwriting guidelines and can get more people into homes utilizing the FHA Loan. 

When talking about flexible Underwriting guidelines your eyes probably just rolled to the back of your head.  Not to worry I am here to help break it down to simple bullet points that you may not have heard of before.  Being evaluated for loan approval seems daunting but that is why we have a team of folks to walk you through the whole process.  Our highly qualified loan originators will walk you through the process.  The Loan Officer will gather your pay-stubs, tax returns, bank statements and W2’s and they will do the analysis for you.  Your Loan Officer will check your credit, check your debt-to-income ratio, and make sure you have enough money verified to close the transaction.  The Loan Officer’s job is to paint your financial picture with your financial information and present it to the underwriter, who will approve your loan.  Our Loan Officers do this every day, multiple times, so they are experts at what it takes to get an FHA loan approved, so when you are looking for expert advice and guidance please let us at MAE Capital Mortgage walk you through this process. 

The benefits of using an FHA Loan are:

  1. You Only need 3.5% for a down payment and that can come from your savings, a gift from a family member or an employer, or a government institution, or an approved down payment assistance program.
  2. Your Credit Score can be as low as 550.
  3. Your Debt-to-Income Ratio can be as high a 50%
  4. Interest Rates are Lower
  5. You can take cash out of your home up to 85% of the value of the house.
  6. You can finance 1-4 units utilizing FHA.
  7. You can buy a house 2 years out of bankruptcy.
  8. There are a few more technical advantages that are there but are a bit too confusing so know that FHA loans give you an advantage if you are not an A-1 borrower and still get great rates.

Now that we have explored the history and the benefits of using an FHA loan you may ask:  “How do I apply for an FHA Loan?”  At MAE Capital Real Estate and Loan, we have over 35 years’ experience working FHA loans, so we should be your logical choice, not to mention our interest rates are better than the rest.  Simply click on this link and you can start the process or call us at 916-672-6130 and we can do it for your over the phone.     

Posted by Gregg Mower on October 22nd, 2019 12:06 PM


When you’re ready to sell your home, you may think about upgrades that will attract buyers. As nice as it is to have all the best features, what’s even more important is for your home to be clean, clutter-free, and staged for wide appeal. This advice may sound obvious, but it’s a process that’s often easier said than done. That’s why we’re here to walk you through prepping your home for sale so it's easier and affordable.

 

Why Stage Your Home?

 

A home is more than just a structure — it’s a place that reflects your style and feels like you. The problem is that you want potential buyers to walk in and feel like they could be at home there. Staging is the process that removes personal items and clutter while highlighting the home’s best features. When you stage your home right, the result is a boost in the number of buyers who want to see more — and who will pay top dollar.

 

Start with a Plan

 

The best plan of action is to tackle it one room at a time, and maybe even use a guide so you don’t overlook anything. Make sure you have all the supplies you need too, like boxes, tape, markers for labeling, and trash bags. This is the perfect time to sort through your belongings so you don’t move anything you no longer need or use. In the process, you will naturally end up packing, donating, or trashing some of the clutter you need to get rid of.

 

Cut the Clutter

 

You may think of clutter as junk mail lying on the counter, but for home buyers, clutter is really anything that makes a space look crowded, small, or that detracts from it in any way. The Huffington Post explains that this is why decluttering to stage your home should be all about taking a less is more approach. Besides the obvious things (like the mail on the counter), pay special attention to decluttering these areas:

 

Storage Spaces

We tend to focus on the wide-open spaces and surfaces when decluttering, but buyers will also look in, under, and around just about everything. This is why Apartment Therapy recommends cleaning all storage spaces, including closets, shelves, sheds, and cabinets. Everyone wants lots of storage space, and keeping these areas neat and clutter-free is how you give the impression that there is plenty of space available.

 

Furniture

Everyone wants their home to be livable, and that often means having lots of furniture for seating and storage. The problem is that buyers are going to notice how large and open a space feels — not how much furniture it can hold. This is why you may need to remove some furniture so that your home has an open and airy vibe. The furniture you do leave should be set up the way it would be used and around a focal point. An inexpensive idea from Forbes is to set up a bar or dining room table for entertaining so buyers will picture having their own meals there.

 

Decor Should be Tasteful, Not Personal

The great thing about staging is that when you focus on the less is more perspective, you realize that you can achieve this goal without spending a lot of money. After all, you’re ultimately taking away more than you’re adding. For example, you can free up wall space by removing personal items like family photos. Then all you really need to add back is tasteful art and mirrors to give the room a lighter and larger feel.

 

Spruce Up Outdoors

Decluttering and depersonalizing inside is necessary, but don’t forget about outdoor spaces. The outside of your home is where first impressions are made. Fortunately, you can get curb appeal by doing a little yard work and a few easy, inexpensive DIY projects.

 

These projects are seemingly small, but sometimes the smallest changes can make the biggest difference. Getting your home ready to sell requires a whole different mindset. This is why it’s all about decluttering and lightening up so buyers see its full potential.

For more information of selling a house click here.

Article by: Natalie Jones

Photo credit: Pixabay

Posted by Gregg Mower on October 10th, 2019 10:26 AM

If you have never purchased a home before you are reading the right article.  This blog will give you some tips and show you the transaction flow of a typical Real Estate transaction.  These are the steps and the tips that will help you move smoothly through the process.

  1. Down Payment Requirement: Unless you are a Veteran you will need a minimum of 3.5% of the purchase price for a down payment, if you have more to put down great. If you put more than 20% of the purchase price as a down payment you will not have mortgage insurance in your monthly payment. If you are a Veteran, thank you for your service, and you will need no money to put down on a home. Know also that your Agent will ask you to put a earnest money deposit upfront when you make an offer on a home. The earnest money deposit goes towards your overall down payment requirement. If you are a veteran you could get that money back when the transaction closes, but make sure your lender know this upfront.

     

  2. Getting Qualified for the Home Loan: The next step you will need to be approved for your home loan unless you have cash to buy the house without a loan which most fist time home buyers do not. To prepare for this you will need to gather income items and bank account information. More specifically you will need to provide your lender with current pay-statements for the last 30 days, and you W2s for the last 2 years. You will need to provide tax returns if you are self-employed in any capacity such as a hairdresser or an independent contractor. You will need to provide your last 2 months of bank statements, investment statements, and retirement account statements to show where the money is coming from for your down payment. If you are getting a gift for you down payment you will need to provide a gift letter from the person gifting you the money and you will need to get a bank statement from them showing where that money is coming from. You will need to provide the lender with a valid picture ID as well. With this information your lender will be able to qualify you for a loan amount and a sales price and provide you with a letter of approval. Here at MAE Capital Real Estate and Loan we do all this for you.

     

  3. Shopping for your Home: After you have been approved for a loan amount and a sales price you now can start looking for home in your price range. It is highly recommended that you obtain a Real Estate Agent that works for you. This means that you want to have an Agent that does not represent the seller of the home you are interested in buying. I know we live in a digital world now where you can shop for house online, which is great as you get to see what is on the market in the area you wish to live in. It is not so great for you to use the Agent who also represents the seller as Real Estate law states that an Agent must look after the seller’s best interests first. Having your own Agent does not cost you a thing either, that is the best part, as when you buy a house the seller will your Agent from total commission already negotiated.

     

  4. Making an Offer on a House: Once you have found the perfect house in your price range you will want to make an offer to the seller to purchase their home. Your Agent will do this for you all you have to do is tell them what you would like to offer on the house. Your Agent should be able to tell you if there are any other offer that the seller has already received and the strategy that you should take to get the house. A good Buyer’s Agent will know exactly what to do in the market you are looking in. You should listen to the Agent as their advice at this stage can save you money and get you the house. The Agent will prepare all the paperwork and you will sign it, usually it will be done in digital signature form sent to you in your email where all you have to do is open and click. Once you have done this the Agent submits the offer to the seller. Be prepared to go back and forth if you have offered lower than the asking price. Once you have agreed on a price with the seller you now are in contract to purchase the house.

     

  5. Inspections: After your offer has become accepted by the seller you are officially “in contract” and within the contract are dates that all the buyer’s inspections must be done by. Your Agent will know the people that can get these inspections done for you in the times set forth in the contract. Inspections are very important especially for a First Time Buyer that may not know anything about houses and how they are constructed. These inspections will tell you the life of things in the home and the condition and if they need repairs. The pest inspection tells you not only if the house has termites or bugs it also tells you the condition of all the wood surfaces inside and out. You roof inspection will tell you the useful life left on the roof and if it needs any repairs. As a First Time Home Buyer you don’t want to buy a house that will require thousands of dollars of repairs after you buy it. Once you have received these inspections you will go over them with your Agent and they will recommend what, if any, work they want the seller to complete before you buy the house. Sometimes Sellers don’t want to do any work and it will your responsibility if you buy the house and sometimes sellers will do all the work you request them to do.

     

  6. Closing: Once all the inspections and work has been done on the house and the lender has everything they need and the loan has been formally approved they will issue a closing disclosure called the “CD” with a summary of the fees in the transaction and the final amount of money you have to bring to the closing Agent. You will have 3 days to review the fees and if they are not acceptable this is the time to get that fixed. If everything is OK on the CD you will have to wait 3 days before you can sign your final loan documents with a Notary. During this time you will have an accurate date to which you will own the house so take this time to move utilities, and set up people to help you move in.

 

This process is the same for every house you will purchase.  It looks an sounds complicated but your team at MAE Capital Real Estate and Loan we will walk you though the process and tell you what you have to do and when you have to do it by.  We try really hard to make a complicated process fairly easy.  We look forward to assisting you with your home buying needs.  Call us today at 916-672-6130 or click here to have one of our team members call you.

Posted by Gregg Mower on September 6th, 2019 2:56 PM

Buying a house is a goal for many people in the United States, with some 79 percent of those surveyed agreeing that homeownership is part of the American dream. There’s no doubt that this is a monumental life event — and the hefty financial investment it requires reflects its significance. If you are purchasing real estate, you want to make sure the property you receive is in great condition. To assure this, part of the buying process involves determining the type of repairs the structure requires. You can even ask the seller to cover certain maintenance works. Find out how it works below.

 

Review the Disclosure Documentation

 

So-called “disclosure laws” require the seller to reveal problems related to the property, such as a leaky roof. This involves the seller filling out template documents answering a series of yes-or-no questions. Topics covered include former renovations and home improvements, as well as any past defects, property line disputes, and pest infestations. This list of disclosure laws by state will help you determine what the paperwork in your area should cover.

 

Check the disclosure forms against city building and zoning reports for the property. If the seller completed improvements without the proper permit or municipal approval, for example, then these may not have been done according to health and safety codes. There are also financial aspects to review; for instance, if the home was repossessed in bankruptcy proceedings in the past, you want to be sure the seller (and not the bank) is the rightful owner according to the property title.

 

Schedule a Home Inspection

 

A home inspection is needed to check for additional issues. Hire a third-party inspector to review diverse property components, including the roof and HVAC system. They will produce a written report detailing any red flags, such as mold in the basement. As the buyer, you are responsible for bearing the costs of a home inspection. According to HomeAdvisor, the average cost is $278 to $390 — but this is just for the report. If problems arise, you also need to factor in repairs. A new furnace can easily cost over $13,000, for example.

 

There are some renovations that you should simply resign yourself to covering as the buyer. Cosmetic issues, for example, are not something you should demand the seller cover. If the deck needs staining, kitchen tiles are cracked, or paint is nicked, handle these improvements yourself once you've moved in. Outdoor landscaping and fence repairs are also something you can add to your own “to do” list. However, there are some elements that you can ask the seller to cover, as discussed in the next section.

 

Negotiate with the Seller on Select Repairs

 

Major home inspection items to bring up with the seller include water drainage problems, wildlife infestations, elevated radon levels, and significant plumbing impediments that interfere with the home's day-to-day use. This list from Clever includes more such points, like lead paint and a leaking roof. When these problems turn up, you should ask the seller to cover them. If the seller is to cover improvements, this needs to be confirmed in writing.

 

When negotiating costs, you can ask the seller to cover repairs up front or request that they reduced the home's sales price, leaving you with the extra funds needed to undertake repairs. This latter option has the advantage of giving you full agency over who does the work. Any larger issues that affect the house's overall safety — such as asbestos removal — should be a priority and addressed before you move in.

 

The above pointers will help you determine which problems exist with a property before you have invested money in it. Unfortunately, a lack of agreement between buyer and seller regarding repairs can lead to a deal falling through. Even major problems in the home inspection may be grounds to keep looking. Don’t get discouraged: You want your dream home to be safe for you and your family. This guide assures your peace of mind.  Please fine more information at https://www.maecapital.com/RealEstate or call us and we can help you with all aspects of buying a home.

Article by: Natalie Jones

 

Photo Credit: Pexels

Posted by Gregg Mower on August 14th, 2019 10:24 AM


It is summer and the home improvement projects are heating up.   Weather you are replacing your kitchen or refinancing your home to a lower interest rate this summer seems to be the time to get these projects done.  The economy is doing great and you are pretty secure with your job, or jobs if you are a 2-income family.  With the economy strong and employment being as strong as it is you should feel comfortable with your financial situation.  You may have projects around the house that need your attention that you have been putting off due to finances or time.  It’s probably is not a better time to get started than now.  If you need to do major projects like a kitchen or bathrooms or even adding on to the square footage and you need money to do it, you probably have the equity in your house or the money your bank account to get this done now. 

If you have decided to remodel your existing home, you will not only be making your home more pleasant to live in, but you will be increasing the value of your home.  If you remodel your kitchen your home could go up 1.5 times the cost to remodel to remodel.  For example, if you pay $30,000 to remodel your kitchen your home would probably increase in value by $45,000 depending on your area, of course.  If you plan on selling after remodeling you will make your home more desirable and will sell on the upper end of the market.  This holds true with bathrooms as well. 

If you re-do you front yard this too will increase the value of your home as it would be more desirable to potential buyers as it is the first part of your home a buyer will see.  A fresh coat of paint makes the curb appeal greater as well.  The back yard is not as important to potential home buyers as it is the last thing people see when looking at homes.  Also, most home buyers will want to put their own personal touch on the backyard anyway.  So, if you are looking to do projects that increase value of your home do the back yard last.  But if you are living in your “Forever Home” a backyard remodel may be just what your family needs. 

Anything you do to your home to make your space more appealing to you is invaluable as this is where you live every day.  In this Real Estate Market know that the money you put into your home will probably stay in your home, at least for the next several years.  I see no major slow down in the Real Estate Market, as far as values goes, for the next several years.  Next Year is an election year and typically the Real Estate Market slows down in anticipation of the what the next administration will do to their employment situation.  I will not predict the outcome of this election, but whoever is elected you will have at least a year after they are elected to screw up the economy, or keep the same course of the current economy.  Whatever the outcome there are at least 2 years of a good Real Estate Market. 

In addition to a strong Real Estate Market Interest Rates have remained low.  So, if you need money to remodel your home now is the time to borrow the money to do it.  The neat thing about a remodel is that your home will generally increase by at least the cost of the remodel and in most cases the value will increase by even more than the cost of a remodel.   With interest rates as low as they are you might not even raise your monthly payment at all by borrowing the costs of the remodel.  How is that possible you ask?  If you bought your home originally with an FHA loan and have a 4.875% rate say 4 years ago the value of your home may have increased to the point where you do not require Mortgage Insurance so when you refinance today with a conventional Loan for say 4.125% with no mortgage insurance the additional money you took may actually keep the payment about the same as it was with your old loan. 

Remodeling your home or just doing simple improvements will not only make your home a better place for you to reside it will increase the value of your home.  Coupled with a low interest rate environment your home, if you were to sell it, would probably surprise you in how much it would sell for.  Or if you have no desire to sell but to make your place more livable for you and your family you will have peace of mind that every dollar you put into your home is still there in the equity of your home.  If you have questions or wish to see these numbers in action, we are here to help.  If you are simply looking to refinance to a lower interest rate, please give us a call we would love the opportunity to assist you.  One of our Loan Officers or Realtors can answer your questions today at www.maecapital.com or call at 916-672-6130

Posted by Gregg Mower on July 22nd, 2019 12:05 PM

The Real Estate business has been done the same way for decades and the only thing that has changed is how we deliver information to our clients.  The internet has made the business easier without a doubt, in the way we can see homes for sale and do research on neighborhoods and schools and crimes in specific areas.  The invention of digital documents has helped with signatures and the delivery of necessary disclosures to our clients.  However, the core business model has not changed for most Real Estate firms.  That model is to market to your clients and potential clients for their business, ascertain what they wish to do buy or sell, then have your clients contact a lender for pre-approval for a mortgage.  Then once the Agent knows how much their client can afford, they then start searching the MLS for homes in their client’s desired area and price range.  Or for listings they determine how much they can afford for their next home, as to not sell a home with no possibility of their client buying another one, in most cases.  If they are working with a home buyer or when the seller becomes a home buyer upon the sale of their existing home, they then find properties in the area they wish to be in knowing what they qualify for from the client’s lender.  Once a property has been identified as a property their client wishes to make an offer on the Agent then contacts the lender for a letter of qualification to be submitted with their offer to purchase.  When the offer is accepted the documentation has to be disseminated to the lender and the Escrow/Title Company and the lender.  Then the Agent arranges inspections and the lender sends out disclosures and orders the appraisal the Escrow/Title company orders the preliminary title report.  When the documentation comes in it has to be shared with all involved.  The Agent will periodically check with the lender for progress reports, but has no say at all in the loan, and the Loan Officer will give updates to all but has no say in the Real Estate transaction at all and may not know if things have changed with the disposition of the property and or contract and inspections.  When the lender has completed their process, they send the legal Loan Documents to the Escrow/Title Company for the buyer and seller to sign.  After everyone has signed and all the monies have been accounted for the loan funds the transaction closes and all the service providers get paid.  This is the way Real Estate Transaction have been done since the beginning of modern times.

When you read this transaction flow you see there a several people and companies involved in making a Real Estate transaction close.  When you have that many people, they all need to be paid and that is why it is so expensive to buy or sell a house.  When you sell a house, you will pay an Agent or Agents, I most cases, 5 or 6% of the sales price and that is well worth not having the liability as a seller alone in the transaction.  A highly qualified Agent will make that money back in many ways such as piece of mind that all the laws of selling your home are being met and all the required disclosures and inspections have been completed and done correctly.  In many cases a good agent will price your home and market your home so that you get the highest and best price for your home thus making you more money than you probably could have trying to sell it on your own or using a cut rate internet real estate firm where you have to do most of the work.  When you are the home buyer in a Real Estate transaction your Agent is paid by the seller out of the 5-6% commission that has been pre-set when the listing was originally taken.  The commission to a buyer’s Agent is usually split between the listing Agent and the Selling Agent (the Agent representing the buyer).   Why this is important I will get to in a bit.

When you work with a lender, in a traditional Real Estate Transaction, they are independent of the Real Estate Company and they get paid from the fees charged and rebates from the Interest rate on the loan.  This may be confusing but usually a lender will make between 2 and 3% of the loan amount to keep it simple.  Again, I will tie this in as to the importance of who gets paid what later.  Remember in the transaction that the lender orders all their own disclosures orders the appraisal and has to communicate to all the Agents and title company.  The lender also needs most of the documents that the Agent has signed such as the contract and any inspections the Agents have had done all the while keeping the Escrow/Title company informed of the progress. 

As you can see the typical Real Estate Transaction still has many inefficiencies and redundancies in the typical transaction.  I offer, as a solution to efficiency, to merge some of these functions together to make the transaction smoother and more cost efficient.  I would merge the Real Estate and the Loan Functions together in order to be more transparent with the information in the transaction.  This would cut time frames down and the client would only have to make one phone call to get the status of the loan and the Real Estate.  This would cut out any miscommunications with the inspections as all eyes could offer advice as the inspections come in.  Not to mention, prior to the contract being written the Agent and the Loan Officer are under the same roof so an efficient plan can be put together to benefit the buyer in an approach to making an offer that will get the buyer the best deal possible coupled with the best financing.  If the Agent also is representing the seller and the buyer and the loan things can really be done efficiently. 

Picture this, as a home buyer, you make one call to a company and you get your home loan pre-approved and you are looking at houses that same day.  Then when you make an offer on a home your Agent and Loan officer already have made a strategic plan for you in the office they both work in, or they are one and the same person.  When you make the offer there is no worry about the financing as your Agent has seen everything the Loan Officer has and vise versa.   In addition, your loan officer is not tied to one lender he or she can find the best financing sources across the country saving you even more money.  The Loan officer can offer tips with financing to negotiate a better price on the home.   Some of the commission from the sale, that we talked about earlier, can be used to buy down the loan interest rate and fees.  Remember the 5-6% commission the seller splits with the buyer’s Agent and the Seller’s Agent, well some of that commission can be used to get you a lower interest rate thus a lower payment. The additional monies can be used to lower your loan costs as well.  If you have the same office collecting 5-6% on both the loan and the Real Estate Commission the company can afford to give back money so that you as a buyer get a lower interest rate and a lower monthly payment than you would have got buy using an Agent from separate firm as the Loan Officer.  The trading of information will also speed up the transaction and make it far more efficient.  As a Home buyer you would only have to meet at one office or talk to the same office to get all your information and within the office the loan and the Real Estate transaction are being completed at the same time under the exact terms of the contract with both the Agent and the loan officer working together and in some cases if the Agent is a Broker he or she can do both the Real Estate and the Loan.

An Example will look like this:  A First time home buyer contacts the Real Estate and Loan Firm and wants to buy a house.  The Agent prequalifies the buyer over the phone or computer and gives them a list of items they need to become fully approved for the home loan. The Agent can run credit and run the information through automated underwriting and receive the approval with the client still on the phone.  The Agent then can determine from the client where they wish to live and provide current listings in that area for the client to view.  The client can ask to see specific houses and the Agent can then arrange to show them with the sellers.  Knowing the client needs and financing options the Agent can make an offer that is the best for the client and provide the approval to the seller with the offer thus making the client's offer more attractive than other offers they may have received.  The client throughout the process only needs to make one call as does the Agent. The agent can get the Loan information and the Real Estate information at the same time. On the other side of the transaction the listing Agent only needs to make one call to get everything they need to keep the seller informed. The Buyer's Agent finds the best lender in the country for their client getting them the lowest interest rate possible as well as contributing to their closing costs lowering their rate and monthly payment.  The buyer gets into their house with very little running around and stress of the transaction. Everyone wins.    

This may sound like utopia, but it is reality here at MAE Capital Real Estate and Loan.  We have perfected this system and we are saving our client thousands of dollars when we represent them as their Realtor and their Lender.  We can save home sellers thousands as well when we represent them as the seller of their home and find their next home for them and do the financing.  The efficiency in bundling these services in incredible and saves our clients thousands of dollars and countless hours tracking down their Agents and Loan Officer.  If you would like to see this in action, please give us a call at 916-672-6130 or click here to email us. We are looking forward to showing you this incredible modern system. 

Posted by Gregg Mower on June 13th, 2019 12:42 PM

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