Ok we are a little over 2 months now since California shut down (March 16) so what is going on with interest rates? Interest rates are great let’s just start there. Interest rates are in the low 3’s and high 2’s currently. So what is driving interest rates, you would think the answer would be easy, however it is far from easy. There are many different factors that will determine what your interest rate will be and it will vary from person to person based on there credit scores, down payment or equity, cash back verse no cash back, loan size, loan program, fees waivers, and list goes on. If you hear an advertised interest rate that is really low it probably does not pertain to you or what you would want from your home loan. Interest Rates are also geographical meaning that depending where you live in the United States will determine your base interest rate. So how are rates calculated and how do they vary from lender to lender.
First lenders across the nation give California a little higher interest rate than the rest of the nation to begin with. This is due to the fact that California home loans tend to pay off faster than other parts of the nation. This affects interest rates in that the longer a borrower will hold on to their current mortgage the more interest a lender can accumulate over time. In California people tend to move more often that other parts of the country making the amount a lender can make on interest over time less so in order to compensate they raise the initial interest rate a bit. So if you are hearing, on the news, that interest rates across the nation have come down and they give you an average rate you can rest assured that California will be on the high side of the curve.
The next determining factor or factors that determine the interest rate you will get is your credit score(s). When a lender is pricing your loan, they have to use the low mid-score of a married couple and the mid credit score if you are single. When your Loan Officer (MAE Capital Mortgage) prices your loan with lenders across the country we will have to have your credit score and the amount you are putting down and other factors in order to get the rate that fits you specifically then we will shop for the best loan scenario. It also makes a difference if you are choosing a mortgage that will pay off bills in other words if you take cash out of the equity of your home on a refinance it will also increase the interest rate a bit. When you hear a lender advertising that they will pay off all your bills with a refinance know that is costing you a little bit more to do that. I would not discourage this just be aware of the increased costs even if you have 800+ credit scores the interest rate will be a bit higher.
If you are one of those who love to shop around to find the best interest rate you had better be prepared to give your exact credit score, down payment or equity position that is accurate as a bare minimum. Here at MAE Capital that is exactly what we do on every one of our loans as we are Mortgage Brokers that hold both a California Department of Real Estate License as well as the National Mortgage Licensing System (NMLS) license in order to be able to offer rates from lenders across the nation. Not all lenders are created equal so be aware that rates will vary from mortgage company to mortgage company and that has to do with their overhead requirements. The more people a lender has to employ the higher the cost for that lender to originate a home loan. A Mortgage Broker will have less overhead, in most cases, than a Mortgage Banker or a Bank who will underwrite and fund their own originated loans. The reason why a Mortgage Broker will have lower rates is the fact that they can shop the entire nation for lenders with the best rates and programs where Banks and Mortgage Bankers will only have their own set programs offered by there company. Mortgage Brokers also get what is called a wholesale rate verses a retail rate and that low rate is pushed to their/our customers.
The type of loan you choose will have a different rate than other loan types. A loan type is a FHA Loan, Conventional Loan, VA Loan, Jumbo Loan, Non-traditional loan, Private Money Loan, USDA Loan, CALHFA Loan, and more. All of these loans will have different rates associated with the risk they carry the higher risk loans, such as Private Money or Hard Money Loans carry the highest rates. Again, if you hear an advertisement for an interest rate or program know that what you hear is not what you will actually get, in most cases. For example; we have a lender that we sell loans to that has a program out now that has interest rates in the 2’s, but you have to have the perfect scenario in order to qualify for that program such as 750 mid credit score down payment or equity greater than 20% of the value or purchase price of that home, if you fit the parameters you win and get the rate. But if you are trying to take cash out of your home to pay bills off then suddenly you don’t and most people only hear what they want to and when they hear rates are in the 2’s they tend to pick up the phone and call around. Another factor that is currently changing the interest rates is the fact that many people have listened to the media and have stopped making their mortgage payment during the pandemic this not only hurts them but it hurts those with good credit and never being late on a mortgage. With people not making their payments during this pandemic it is hurting those that are, and are making higher interest rates. You see lenders have priced in the profit from collecting mortgage payments for the origination of a new loan before the pandemic and now they simply are not so we are experiencing higher rates because of this. One phone call to MAE Capital Mortgage Inc. and we will be able to run your credit while we have you on the phone and will be able to give you an accurate interest rate. I hope this blog helps people to navigate through all this and we are here to help. Give u a call to get your pricing today at 916-672-6130.
I have heard that some people are worried about the future value of their homes amidst this pandemic. I am hear to tell you that in my 35+ year stint in the mortgage and Real Estate industry and with my degree in economics I have never seen anything like this. I saw the stock market crash in 1987, the financial meltdown of 2006-2010 and various different corrections to the markets over the years. This was sudden and could not have been foreseen, unlike these other crisis’ this one came when an otherwise healthy world economy was doing well. Shutting down the economies across the world is something we have never seen before and really hope to never see again in my lifetime. It is going to take a bit to get the economies up and running again not for lack of desire to get up and running again but the fear of catching what has been advertised as a deadly virus, whether you believe it or not.
We all know the toils and the riffs of this virus and I am not hear to tell you what to believe but to show you facts from an economic point of view of the housing market. The housing markets are all dependent upon demand, demand to buy and sell. If we look at Real Estate from a demand side you can see in some areas have pent up demand, meaning that buyers have been sitting on the proverbial sideline waiting to buy until the virus threat has subsided. This holds true for potential sellers as well. The homes that are being listed during this time come with several guidelines in order to show them, so buyers and sellers may be set back with the showing guidelines. The changes to show homes are that a Realtor and the people looking at a house must wear mask and gloves, the Realtors has to call the listing Agent to obtain a special code to show a house so it can be tracked from the central Metrolist computer system. These are new rules and are not too bad to show a house and home sellers should be comfortable that there won’t be any residue, if you will, from people looking at their homes.
I think the biggest challenge the Real Estate industry will be to get potential home buyers qualified for a home loan coming out of this crisis. Interest rates are great and that will not be the problem it will be the job losses that may hold down demand for buyers to buy. Also those folks that let their credit go during the crisis will inhibit some potential home buyers from buying a home. An economy is dependent upon people working and when a mass number of people found themselves suddenly laid off from great paying jobs those people will not feel comfortable going out and buying a home very soon after they go back to work. On the other hand those that have been working from home and may live in a city may want to move out from the big cities to get away from overcrowding and may be looking to move to the outlaying subdivisions figuring working from home away from the big city may be a better alternative. That would create listings in the cities and demand for housing in the suburbs.
Home prices or values are based on demand and that will vary from town to town and city to city. Housing prices have not been affected yet by this pandemic, other than Real Estate sales as everything else during this crisis basically stopped or paused as a better hopeful word to use. To view the Real Estate Industry as paused is far easier to digest than to say it has stopped, as it has not stopped. We are, in fact, we are starting to see the pent-up demand from both sellers and buyers. As the shelter in place orders drag on, especially in California, people are beginning to push back from the order and go out and look at homes and list homes for sale. We have seen an increase in this activity in the last couple of weeks and our clients are telling us that they are more than ready to get moving rather it be buying or selling. No one knows what will happen with jobs but it is a fact that the longer this goes on the more job loss there will be as employers just can’t keep all the staff they had if the demand for their product has not come back.
So time will tell what will happen for sure, but I have some ideas and areas in the economy that I have been watching to get a handle and a pulse on the market. I see pent-up demand to hit first with an initial push to buy homes and sell homes. Once this initial demand wears off it will depend on the job market to dictate who can buy and who can’t. The more people that have jobs and feel comfortable with buying a large purchase such as a home will help the overall economy. Home buying and selling also creates jobs in home improvement areas such as contractors and home improvement stores. We have already seen a increase in demand at home improvement stores, but not sure yet if that is to improve their home to live longer in or to improve it to sell it. I also see that those folks that have been locked up in their homes in the cities getting tiered of the small confined space and may want to move to the suburbs where there is more space for a family to move around. I see Real Estate sales as gaining momentum as we are slowly released from the stay at home orders or as people become more frustrated with them. NO matter how you feel about all this virus stuff Real Estate will be bought and sold during all this and after all this.
I don’t see values declining the way they did during the financial crisis of ’08-10 as the reason for that decline was the weakness in financial markets and lack of liquidity. Meaning that the reason for the decline in values during that crisis was due to the evaporation of products that allowed people to buy a home with little or no money at all and when it was determined that the holders of those mortgage notes were not solvent a massive sell of occurred. Once the financial markets started to fail during that crisis and people ended up with negative equity in their homes they just let them go to foreclosure. Since then we have put some stops in the lending world that requires people to actually fully qualify to buy a home before the can buy a house, unlike the prior crisis. So in this health crisis we are not seeing anything like the financial crisis as people that own home now had to qualify for it and are more financial stable than before. However, we do have to look at all of those people that have lost their jobs during this crisis. This will be the single biggest factor in this health crisis verses the financial crisis. So the longer this goes on the longer it will take to see what will happen to values, but in my opinion, I think initially we will see an increase in demand then a slight drop off in demand until we get back to a more full employment situation like we were before this crisis. I see a steady or flat Real Estate market moving forward as people always need housing. I do not see a large decline in values, especially in California, as I see the types of jobs to where people make enough money to qualify to buy a house still here as those folks are working from home where in the last crisis we had jobs evaporate not shift like we see here. The future remains to be seen but I like to be an optimist on this as I believe people are resilient and will come out of this stronger and smarter. As usual if you need help with qualifying for a home loan or buying or selling Real Estate call us we are here for all of your Real Estate needs (916) 672-6130.
Ok enough is enough we need to open this economy back up. Despite what people say about the virus it has already played out in California in December January and February. You see every year in California the sun starts to shine more intensely in April and as we move towards summer. It has been widely publicized that the Coronavirus will not survive for long in hot environments. I personally traveled to Australia over the Holidays through the end of December and into January. Upon arrival in Australia I started to feel ill but I was on vacation, so I was not going to let a little cold get the better of my vacation. This mystery cold/virus had me not feeling well with a cough and infected eyes for 2 weeks and by the time we had traveled to the hottest portion of our trip ( Cairns Au.) the illness had subsided. As you know it is Summer in Australia that time of the year so it was warm the whole time. Then a month after I got home in February I got sick again almost the same thing but this hit hard and the cough was more severe and I had a fever and I coughed for a month until it went away the end of February. Then we heard about the virus from China and we were told to shelter in place in March and by that time it had already gone through California. The media neglects to show you a map of the world and how a contagion replicated itself and how it travels the world. If you look at a map you can see that the West coast of the United States, California, Oregon, and Washington would get this virus way before New York would, so it stands to say that California already has developed a herd immunity or it is just too warm for the virus to exist long enough to infect more people. This is not to say it won’t come back and then will we know what to do or do this all over again?
That said, we have to start to believe in in each other again and know that we will get sick and people will die from this virus and many other things that we get ourselves into as a free society. So how do we get the economy going again with people working from home and or laid off and non-necessary business’ that have been closed for so long how do we get it moving? This is going to be tough as the people that have been making money during this have to go out and spend it locally and if they are scared to go out and spend many small business’ will be forced to declare bankruptcy if they have not already. The Travel business: when will people start to trust air travel again, hotels, rental cars, air bnb? There are so many little avenues within the economy that depend on each other, so when you spend your money on travel you are supporting so many others than just the airlines. Restaurants: how are they going to look? Is the government going to make it a law that you must sit so far apart in a restaurant, or have a barrier installed and will consumers want to visit busy restaurants again? If laws are imposed on restaurants to not accommodate as many people, at a time, they will be forced to raise their prices to offset the increased space requirements or shut their doors. Restrictive laws will further inhibit growth and may force many of our favorite restaurants to go out of business. Banking: as you know you can’t go into your bank’s lobby as they are closed. Will they open up the lobby’s again or will they have realized that the consumer has changed they way they can do banking, will we see more virtual banks and less people working in a bank? All of these little things and so many more will play in as the economy opens again.
Do you feel comfortable with your job or your financial situation? That will be the most important question moving forward to open the economy. If you don’t feel comfortable spending, you won’t, and if there are many more people just like you the economy will not open as everyone hopes it will. The United States and capitalism are both all based on consumer spending, without it we have a stagnant economy. On the other hand, is there a pent up demand? Consumers that have been scared of going out now have the green light to move about so they go out in hordes and buy up things at a fevered pace. If that is the case the economy will quickly get back to some sort of normalcy.
Either way the Real Estate and the Mortgage Industry will need time to get back to normal as well. If consumers are tired of the house they have been locked in for the last month and a half they will seek out a new house for their family. If one family that decides to sell their house and buy a new one that will help Realtors, Mortgage Companies, Title Companies, Appraisers, Home inspectors, termite companies, sign companies, credit reporting companies and home improvement stores. So, if people don’t sell and buy after this is over you can see all these industries effected. However, there is another little problem that will arise out of all this and that is employment. The people that have lost their jobs during this crisis will not be able to buy a new home, in most cases, until they have gone back to work or can pay cash for a house. Households may have had one of the two workers laid off and may not have the ability to save for a down payment or may not feel comfortable so they will hold off until they feel comfortable again. Another concern people’s credit may have been hurt by this not allowing them to qualify for a home loan. People that have not made their mortgage payments will not be able to refinance to the low interest that will be there to stimulate the economy when this is over. People that did not make their rent or car payments may not be able to buy a home for 12 months after the crisis.
Not to be a downer but it will take some time to get back to Real Estate as normal. I heard from CAR (California Association of Realtors) that Realtors may not be able to show homes and that virtual tours are going to be the “new normal” of selling homes. This means people will not be able to see the home they are buying in the inside until they can do a walk through at the end of the transaction. This may see the demise of Real Estate transactions at the end from homebuyers seeing the house for the first time and may not like it. This will be interesting to watch unfold as people get more “used to” the new normal.
Let us conclude this with some positive news with the Mortgage industry. Interest Rates are the good news here with them staying down. Although there is still a lot of confusion in the Mortgage industry things are getting done. Now that we have figured out how to work with large companies that have their workers working from home we can navigate through the process as well or better than most in the industry. Here at MAE Capital we are booking new refinances every day. People can apply from their home on their computer or they can download our App and do it from their phone. As far as delivering documents to us you can scan the documents directly from your phone using an App like Cam Scanner. Our experienced Loan Originators can work virtually from anywhere so you will be taken care when you apply for your refinance with us. We look forward to working with you.
Your options for making your mortgage payment and paying your other bills during this Covid-19 crisis can be very confusing, but if you make a mistake navigating through all this your credit will suffer. That is why I have written this to inform you of what to do with your credit during this crisis. First and foremost, make your mortgage payment if you can! Why? There are many reasons for making your mortgage payment during this Covid-19 crisis, but the biggest reason is your future. If you put your house into forbearance, or pause your payment, or not make your payment at all, your credit could suffer and prevent you from getting a refinance or any credit when this all subsides.
If you are considering not making your mortgage payment because you have been laid off or have been put on leave during this crisis there are some steps you have to do to ensure your credit moving forward is not disrupted. The very first thing you need know is that when the Government tells you that you can defer your mortgage payment up to 12 months you have to realize that there are no rules for this and it has never been done before so take caution as private industry are the ones who are servicing your mortgage not the government. The rules have not changed with respect to the way mortgage servicers collect your mortgage payments and then forward their portion on to the secondary markets to pay for the bonds created by mortgage backed securities. Sounds confusing and it really is but know that if you just stop making your mortgage payments your credit will go bad as your mortgage company will continue to report your payment history to the credit bureaus.
“But the Government said we can defer our payments up to a period of 12 months.” Yes, they did say this, however, the Government doesn’t speak for private industry even if they want to. So that said if you find you can’t make your mortgage payment because you just don’t have the money you should call the company where you send your mortgage payments to and see what they can offer you as an option. The mortgage servicers will work with you, but you must do your part in helping them. When you call them, you will be asked some questions about your employment, savings and such, and then offer you some options. The first option you will probably hear about is the Forbearance option. Forbearance is where the mortgage servicer will allow you to defer your mortgage payments. Note the word that is used here “defer”, is where you will still owe what you have missed and it is added to the end of your loan and you will be charged interest on the payments you miss. This could extend your loan term by a year or 2 depending on how long you “defer” your payments. Another option I have been hearing about is the straight payment “pause” for 3 months. This is where if you have 250 payments left at the time of the pause and after the 3 months on pause you will start making your payments again with 250 payments left. Both of these options may be noted on your credit report and may hinder you from obtaining credit when this is all over, so you have to ask. This is very important that you ask the servicer how they will report to the credit bureaus, if they report it as deferred or in forbearance you will NOT be able to refinance under current guidelines, you would if the payments were just “paused” and not reported as “paused”.
Another situation that you will be hearing about as this crisis moves forward is the fact mortgage companies are not currently getting government aid to cover the costs of the servicer paying their bonds when they are not getting your mortgage payments. The consequences of this could be catastrophic for the mortgage industry to the extent of the 2008-2011 financial crisis. We are currently seeing servicing premiums not being paid in the interest rates that are being offered to consumers and the interest rates are higher as a result. If a majority of people don’t make their payments then Wall Street will be hit with nonpayment of bonds created by FNMA, FHLMC, and GNMA and that will hurt most people’s retirement accounts that have mutual funds that are heavy with these securities. I know you say” but that won’t affect me”, but you would be wrong you would feel it in higher interest rates and fewer financing options in the future.
As for not paying your revolving accounts or installment accounts you need to contact your creditors on these as well. If a creditor does not hear from you that you can’t make your payment they will report your payment as late on your credit report. You have to remember that government does not control private industry, so if your elected officials says you don’t have to pay your bills DON’T BELIEVE IT, you might be able to get a temporary reprieve from paying your bills but you have to contact each one and make arrangements to have your payment held for a period of time. Also make sure that if you do defer your payments that it won’t hurt your credit. Again, you must ask each creditor in order to get a reprieve if they even will. If they don’t give you a reprieve you will be obligate to continue to make payments and if you don’t then your credit will get hit.
Let’s talk credit again, as this is what could be what get’s you in the end. I can’t reiterate enough how important it is to check with each of your creditors before stopping payments as if you do stop making payments without telling your creditors your credit will be hurt and it could take a long time to recover and you could miss the low interest rates that are going to be on the other side of this crisis. I am going to simply go over the steps and options for you here, so if this is all you see I hope it will save your credit in the end. The options and steps you will have to do to defer or pause any creditor’s payments are as follows.
These are the options you will be offered so be prepared and talk like you know what is going on as most lenders will try to get the most out of you they can. Be honest with yourself and if you can make even a portion of the payment it is in your long-term best interests to make the payments if you can. Do your part and help others by making your payments. I truly hope this helped you to navigate the payment options for creditors. We are also here for any of your home loan and Real estate questions so go to our site for more information at www.maecapital.com
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.
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.
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.
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.
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.
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
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.
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:
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
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.
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:
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.
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:
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.
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