VA is the Way
Loan programs are varied in their individual benefits, but for veterans there is a clear choice that stands out among the others – the VA loan. The VA loan offers the best rate, the highest loan to value, and lower fees than other loan programs on a veteran’s primary residence. We’ve had the benefit of working with many veterans over the years and derive a lot of satisfaction from getting them in homes.
The Servicemen's Readjustment Act, passed by the United States Congress in 1944 created the VA loan as a benefit for all of the veterans that were returning home from World War II. The VA is actually a guarantor of the VA loan – not the actual lender. VA backs the veteran to allow qualified lenders to issue a low interest rate/high loan to value loan. A testament to VA’s success – over the history of the program, 18 million VA home loans have been insured by the government.
VA is true 100% financing. Currently in Sacramento, El Dorado, and Placer Counties, VA allows 100% financing up to $474,950. If a borrower is buying above $517,500, then VA will allow 75% for the difference over this amount. As an example of a $600,000 purchase, VA will allow 100% up to $517,500 and 75% of $82,500, for a down payment of $20,625 – that’s only 3.4% down! No other financing option can match a down payment that low.
VA has a lot more flexibility with credit than most other loans. They have shorter wait times after foreclosure and short sale than conventional loans. They allow for lower FICO scores and higher debt to income ratios. VA has a unique qualifying method. In addition to a standard debt to income analysis, VA requires that the veteran and their family have a certain amount of money left over each month to pay for expenses. This is one of the reasons that VA loans have one of the lowest foreclosure rates.
Another great benefit to VA is that there is no mortgage insurance, saving the veteran a lot of money over the life of the loan. There is a funding fee, but some veterans are exempt. Just ask us.
VA requires that the home the veteran is purchasing is of sound condition with no dry rot or termites. They require a clear pest report before they will loan on the property.
Veterans eligible for VA will have 90 consecutive days of active service during wartime, or have served 181 days of active service during peacetime, or 6+ years of service in the National Guard or Reserves. Also, if you are a spouse of a service member who has died in the line of duty or as a result of a service-related disability , you may qualify for a VA loan eligibility. To start the process, you’ll need your Certificate of Eligibility. There are a few ways to obtain the C of E, but the easiest way is to call us and have us access the VA portal for you. The Easterbrook Team makes the Loan Process Easy.
What was the most popular phrase the year that you were born? Interesting that many words that are part of our lexicon were "hip" back in the day. In 1948, the newly formed Fannie Mae was all the buzz. Check out the list
Check it out: CLICK HERE!
Economist to Watch
Have you heard of Diane Swonk? No, we hadn’t either. Watch her here take on a British commentator over Brexit and how it relates to the US economy.
Ms. Swonk is really a very interesting person. She is dyslexic, which she says is to her credit. Among being self-aware and an economist, she has a net worth of over $2 Billion – all the more reason to check her out.
Wednesday August, 1st, 2018
The Federal Reserve upgraded its assessment of the U.S. economy today, but decided to skip another interest rate increase for now.
In a widely expected move, the central bank's policymaking Federal Open Market Committee voted unanimously to keep the target range for its benchmark rate at 1.75 percent to 2 percent.
However, the committee is widely expected to approve an increase at the September meeting, and a tweak in the language from the post-meeting statement could be a nod toward more monetary policy normalization.
The statement said the labor market has "continued to strengthen," language consistent with the June meeting.
Don’t Worry, We’ve Got This
Whether online, on the phone, or in person, when you first apply for a home loan and submit your loan application, the Easterbrook Team will provide you with a list of items needed to complete your loan file. Your credit report will be run at this time. In a completed loan application, there is information provided by you and information provided by third parties. Your paperwork will include items such as your pay check stubs covering a 30 day period and your last year’s W2 forms. If you’re self-employed, you can expect to provide the last two years of both personal and business returns along with a year-to-date profit and loss statement. Once you submit all of your documentation to accompany your loan application, it can get a little quiet on your end. But that doesn’t mean nothing’s happening. Far from it.
The lender then proceeds to order necessary third party documentation. There are multiple service providers that help complete the loan application so the loan file can be submitted to the underwriter who ultimately approves the loan. Your appraisal is ordered. Title insurance is needed so a title insurance policy is ordered, and so on. You will be provided an estimate of who all these other people are and what they’re going to charge for their services. Once completed, the file goes to underwriting.
The underwriter will review the application and determine whether or not the documents and the application submitted conform to the guidelines included with the selected loan program. Once the loan meets these guidelines, loan documents are prepared and sent to your settlement agent. But sometimes, in fact most times, there will be “loan conditions.”
There are two types of loan conditions, a “prior to document” condition and “prior to funding” condition. A “prior to doc” condition means the underwriter needs something else before loan documents can be ordered. This stops the loan process. But it’s not something to be afraid of. It doesn’t mean there’s something wrong and you can’t close on your home, but it’s more likely the file is missing something important. Maybe there’s an old lien on the property that hasn’t been released or maybe the underwriter wants to see one more comparable sale in the appraisal.
A prior to funding condition means the loan papers can still be delivered to the title settlement agent but the lender won’t deliver the funds for the mortgage until this condition is fulfilled. For example, credit documents within a loan must be no older than 30 days. That means a pay check stub submitted might be more than 30 days old and you need to provide a copy of your latest.
All this paperwork and communication may seem daunting, but on the Easterbrook Team we do it every day. Don’t worry, we’ve got this. And as our slogan says, “We Make the Loan Process Easy”.
Yes! We have an exciting new conventional loan product called the Freddie Mac VLIP Mortgage (Very Low Income Purchaser). On a VLIP Mortgage, qualified borrowers will receive a credit of 2% to be applied toward Lender Paid Mortgage Insurance LPMI. LPMI means that the borrow will have no monthly mortgage insurance! This is a special loan for home buyers with qualifying income less than or equal to 50% of the area median income. Rates are excellent, 620 minimum FICO. Call the Easterbrook Team for Details at (916) 850-6050.
As we have said many times on The Easterbrook Team, having a home is your best investment vehicle. In retirement, having a home opens up additional options that renting retirees can only dream of. A reverse mortgage is a unique loan for 62 year and older home owners that works just the opposite of a traditional “forward” mortgage. Instead of paying your monthly mortgage payment from your savings, it is paid for with the equity in your home.
Reverse mortgages generally are not used for vacations or other “fun” things. The truth is that most borrowers use their loans for immediate or pressing financial needs, such as paying off their existing mortgage or other debts. Or they may consider these loans to supplement their monthly income, so they can afford to continue living in their own home longer.
Homeowners that take advantage of a reverse mortgage can obtain a single disbursement option, a fixed monthly cash option, a line of credit option, or a combination of all three, depending upon the borrower’s equity and age.
If you know of someone considering the reverse option, have them call us at (916) 850-6050 to provide them with options. We’d love to help them and be part of the solution to their retirement plans.
We have the official reverse mortgage consumer booklets approved by HUD!
The National Council on Aging is a respected leader and trusted partner to help people aged 60+ meet the challenges of aging. This booklet will help you understand the benefits and challenges of this funding option. Stop by our office to pick up a copy or you can email us for a PDF copy.
Inquire today to start your reverse mortgage!
Why is your 401(k) an attractive source for short-term loans? Because it can be the quickest, simplest, lowest-cost way to get the cash you need. Receiving a loan is not a taxable event unless the loan limits and repayment rules are violated, and it has no impact on your credit rating. Assuming you pay back a short-term loan on schedule, it usually will have little effect on your retirement savings progress. Since you are borrowing from yourself, your 401K plans traditionally allow you to borrow up to $50K or half the vested value on your 401K (whichever is less).
Borrowing your down payment funds from your 401K can be a very good investment. The benefits of buying a home (equity appreciation, forced retirement, tax benefits) greatly outweigh the small expense of a 401K loan.
Borrowing against your 401K can potentially allow you to obtain a better loan as well. Down payment assistance programs are a great option for those that don’t have any other resources for the down payment, but they are costly with higher interest rates and fees than traditional loans.
Most lenders, including Sierra Pacific, do not count 401K payments against your debt to income ratio, allowing you to borrow more on your home. If you are borrowing at the maximum of your qualifications, however, it may not be a good idea to take on additional debt.
A recent article by a very reputable online magazine described borrowing against your 401K as “sabotaging your retirement”. Ahem…your home is your most important retirement vehicle.
A word of caution though – using your 401K for acquiring a depreciable asset (big screen TV, jetskis, you get the picture) can be damaging to your retirement plan. It can also lead to serial use of your 401K as a checkbook, which your 401K was never designed to do.
Don't be scared away from a valuable liquidity option embedded in your 401(k) plan. When you lend yourself appropriate amounts of money for the right short-term reasons, these transactions can be the simplest, most convenient and lowest cost source of cash available. Before taking any loan, you should always have a clear plan in mind for repaying these amounts on schedule or earlier.
The national debt clock tracks the U.S. debt, which topped $21 trillion on March 15, 2018. The clock is physically located at One Bryant Park, west of Sixth Avenue between 42nd and 43rd Streets in New York. Real estate investor Seymour Durst created the debt clock on February 20, 1989. He first put it up at Sixth Avenue and 42nd Street. That's when the national debt was nearing $2.7 trillion and 50 percent of gross domestic product. Durst said, “If it bothers people, then it's working.”
Why the clock is important to real estate and mortgage is that as our debt increases and the dollar is devalued, foreign interest in our Treasury bonds will diminish. Interest rates are based on bond pricing. The rate of return must be increased on bonds that diminish in value as the debt increases and foreign and domestic investment in our bonds decreases. This raises rates.
How do we fix the debt? We'd like to hear your thoughts.
Let’s face it – we are in the home buying business and have a vested interest (no pun intended) in you saving your money to buy a home, but…we also have lived from paycheck to paycheck like most people. On the Easterbrook Team, we also have a vested interest in making the word a better place and ultimately making YOU happier.
This article is a great place to start on your road to financial recovery. Step 4, automating your savings, is a simple revelation that will change your life. So, go ahead, free yourself from those financial bonds and make YOUR world a better place – CLICK HERE.
We’ve been Yelped – in a good way. We have been very fortunate to have worked with some of the most awesome agents and buyers. Many have told us how they feel about the process on Yelp. We invite you to share your experience too. Thanks in advance for sharing: CLICK HERE.
We’ve been testing the public’s interest and availability for the Home Loan Workshop. We’ve found that 6pm on a Thursday afternoon is a little difficult for some folks. We’ve changed the times to 5pm and 6pm on Saturday to accommodate people’s busy schedules. We’ve also increased the regularity of the popular classes. Send your buyers to the website if they want more information – http:homeloanworkshop.org.
Fannie Mae and Freddie Mac have been allowing PIW’s (property inspection waivers) on eligible properties. This completely takes the appraisal equation out of the transaction. With a PIW there is no worry of a low appraisal or delays waiting for an appraisal to be completed.
Since 2009, Fannie & Freddie have been collecting information from the appraisals that were being conducted and submitted into the UCDP (Uniform Collateral Data Portal). Desktop Underwriter is using this information and releasing automatic underwriting findings to include the mortgage transaction to be completed without an appraisal.
Not all properties are eligible, but many we are finding do. One way to strengthen a purchase offer is to have us run Desktop Underwriter before the offer is submitted. A PIW could tip the scales in the buyer’s favor against multiple offers.
On the Easterbrook Team, we are always thinking of ways to help our agents do more business with greater ease and customer satisfaction.
There is good news in the housing industry. A majority of US households have a positive attitude toward housing. Based on two recent surveys by the Federal Reserve Bank of NY and Charles Schwab:
· 49% of Americans feel wealthy when they own a home.
o 62% also defined wealth as spending time with family – we like that.
o 55% indicated that wealth means having time to themselves.
· 65% of all respondents think that buying property in their zip code is a “very good” or “somewhat good” investment, compared to 60% in 2016. Only 10.6% said housing was a “bad investment”.
· For agents wanting to target the ideal homebuyer, the favorable view on housing was particularly pronounced among younger, more educated (bachelor’s degree or more), and higher-income (annual income of $60,000 or more) households.
· Renters who want to buy a home continue to perceive obtaining a mortgage as difficult. Renters continue to report a strong preference for owning homes, although it weakened relative to the previous two years, the survey found.
· How much is enough? Respondents said that they believe:
o $1.4 million is enough to be considered financially comfortable.
o $2.4 million is enough money to be considered “wealthy”.
To read the entire article, Please Click Here!
There are many castles currently on sale in France for less than a median priced home in the Bay! Here is an article that lists 10 affordable castles currently for sale – CLICK HERE or should we say CLIQUEZ ICI. This is a great article about an Australian couple that actually bought a chateau and is restoring it to its former glory (CLICK HERE).
There’s a tidal wave of epic proportions of home buyers that is coming – directly from the southwest of us. Real estate analysts predict that one third of the home buyers currently planning to buy real estate in the greater Sacramento, El Dorado, and Placer Counties areas are from the Bay Area. North State Building Industry Association reports that they’ve checked with builders and guesses the one-third figure may be conservative at some new subdivisions.
Bay Area residents are blowing up Sacramento home developer websites, clicking through floor plans, watching promotional videos and signing up for email blasts, according to the New Home Company – a firm that is building in El Dorado Hills, downtown Sacramento and Davis.
The reasons are obvious: The median price of a Bay Area home hit $850,000 in April, according to CoreLogic, a real estate data company. That's a $100,000 increase in one year. In San Francisco, the median price hit $1.3 million. That often buys no more than a 1,600-square-foot house! In contrast, the April median sales price for a resale home in Sacramento County was $357,000. And the median for a new home was $433,000.
As we reported in the Easterbrook Team newsletter last week, a recent survey reported that 46% of the Bay Area residents say they want to move out of the region within the next few years. They cite the high cost of living, high housing costs, traffic congestion and homelessness.
By contrast, Sacramento, El Dorado, and Placer Counties offer relative affordable housing, excellent employment opportunities, recreation, and a great central hub with an easy commute to the wineries in the foothills, Lake Tahoe and Donner Lake, and an easy drive back down to the Bay (if the former residents feel homesick).
What can you do to ride this wave?
· Gear up! If you don’t have a web presence, now would be the time to jump in. No website? Call us, we have recently helped several agents and even helped build one Realtor’s site from scratch for him.
· You can also build your online presence by affiliating with activity magnets such as Zillow, Realtor.com.
· Facebook is still a powerhouse! You can directly advertise homes and real estate services to Bay Area residents.
· Open Houses – what better way to present yourself as the Sacramento Ambassador than to connect face to face with folks up from the Bay?
Do you have any ideas to capture the wave of buyers coming soon? Let us know. Also, let us know how the Easterbrook Team can help you with your business. We’d love to partner with you and help your real estate business grow!
The Easterbrook Team 916.850.6050 EasterbrookTeam@spmc.com
The two phrases used very loosely in the mortgage business are “pre-qualified” and “pre-approved”. Pre-qualified meaning an interview has been done with the potential homebuyer and based on the conversation a dollar amount and loan type are established for the buyer. Pre-approval takes the process one step further and verifies income, asset, and credit document to verify their accurateness. These statements alone usually mean little, because they are (or should be) accompanied by the phrase “subject to underwriting approval”. They are only backed by the reputation of the loan officer that offered them.
Sierra Pacific Mortgage is changing this loose practice of merely stating that a potential homebuyer is qualified by providing an underwritten approval prior to a buyer making an offer on a home. As an underwritten buyer, a home purchaser can now offer with confidence knowing that they have certainty on the loan piece of the transaction. Agents also recognize the value of having a pre-underwritten buyer in a competitive marketplace. Anything that can make a homebuyer’s offer standout in the eyes of the listing agent and seller should be taken advantage of in a multiple offer scenario.
Call the Easterbrook Team in Folsom to start the pre-underwriting process. Not only are we “Making the Process Easy”, we are creating certainty in homebuying.
A Bay Area Council survey released June 4, 2018 found that 46% of San Francisco Bay Area residents plan to leave the area soon. San Franciscans cite the Bay Area's high housing and living costs as the largest reason for wanting to move. According to a new report from the real-estate company Redfin, Seattle is the top out-of-state destination for Bay Area residents. Other areas includeSacramento, California; Austin, Texas; Portland, Oregon; and Las Vegas.
The survey cites that 21% of those planning to move would like to move “anywhere cheaper”. It seems that a good marketing campaign is in order to lure Bay Area dollars in our direction.
On the Easterbrook Team, we have been reporting this phenomenon for the last 5 years on our blog. The affordability index cites that only 12% of the residents can actually afford the median home of over $1.5M.
Are you curious to see the entire survey? CLICK HERE
When you want speed and efficiency, you go to the source. The nationwide hub for Sierra Pacific Mortgage is based in Folsom. SPMC is a direct lender and one of the top 25 lenders in the USA! From processing to underwriting to document drawing and funding, SPMC is fast and responsive.
It is no coincidence that the Easterbrook Team is also based in Folsom. As a nationwide direct lender, we can provide you with the personalized service you require and power you need to close your transactions fact.
An upscale home in Sacramento's Fab 40s neighborhood, made popular by its appearance in the opening shot of the film "Lady Bird," hits the market Monday with a listing price of $3.895 million. The expansive brick house, about 6,500 square feet in size, sits on a more than half-acre property at 45th Street and Folsom Boulevard in East Sacramento. It has six bedrooms, six and a half bathrooms, a pool house, library, wine cellar and more. To see the SacBee article, CLICK HERE.
Many economists and the Federal Open Market Committee are very concerned about inflation – you should be too. At today’s current inflation rate of 2%, the value of a dollar will fall by half in 29 years. The average APR for credit cards is 16.71% and expected to rise to 19% by the end of 2018. If it sounds like you are being squeezed from both ends, you’re right. Rising prices and rising rates can paint you into a financial corner. How can you hedge against inflation?
1. Invest in hard assets. Real estate is the ultimate hard asset and often appreciates most in times of inflation. Rents are also pressured by inflation and will generally rise. As a home owner with a fixed rate mortgage, you can control your own financial destiny instead of supporting someone else’s.
2. Convert your adjustable loan to a fixed rate. Periods of low or declining inflation favor adjustable rates over fixed rates when you borrow money for real estate. The opposite is true during times of inflation. To hedge against inflation, “disARM” yourself and you’ll sleep easier.
3. Pay off revolving debt. It will take 100 months (8.3 years) to pay off a credit card at current rates if no additional debt is added. To elevate your credit score, it is important to use your credit cards – but pay them off monthly to avoid balances increasing and to avoid paying interest. If you already own a home, use the equity to pay off debt. You can substantially reduce your monthly outgo by paying off debt with your equity. Typically the cost of paying off debt with a mortgage is only a fourth of the cost of credit card payments.
Realtors are the neighborhood hosts that introduce new homeowners to neighborhoods by profession. One excellent piece of advice that they can provide their buyers to thrive in their new home is to be neighborly.Neighborliness usually delivers big benefits. Here are three excellent reasons to get to know your neighbors.
Studies show improved health and educational outcomes for those living in mutually supportive neighborhoods.The “Roseto Effect” was named after Roseto, Pennsylvania. That was the site of a half-century study that explored the medical advantages of living in a supportive, closely-knit community. And it found such environments had a significantly lower incidence of heart disease and other stress-related illnesses. A good starting point toward neighborliness is to participate in an online community. One such online site, Nextdoor, provided these findings:· 93% of homeowners say it’s important to look out for each other.· 67% of homeowners say that they feel safer when they know their neighbors.· 35% of those that know their neighbors report that they have shared information about crime and safety with them.· 79% of those that use an online community talk with their neighbors in person at least once a month.Who would have thought that it would be in your best interest to go out of your way to say Hi? Good luck with your community building.
All top producing Realtors have a top-notch team surrounding them. A good contractor, home inspector, and transaction coordinator are invaluable. Few team members, however, are as important to keeping a transaction together as a good lender. Here are 3 things to look for.
1. Look for Expertise: Look for a direct lender with direct lending capability and a loan officer with extensive experience. The mortgage process has become very complex. Knowing how to apply that knowledge to a large suite of products like FHA, VA, conventional, first time homebuyer programs, and move up products is critical to keeping your business running efficiently and keeping your buyers happy.
2. Look for In-House Capabilities: A good in-house underwriting team can review loans within 24-48 hours. Dedicated in-house loan processing is so important to keep the loan process flowing smoothly with a priority on YOUR loans. That means you can reasonably expect a loan commitment in seven days or less.
3. Look for an Array of Products: There are many federal, state, and local programs available that can put homeownership within reach. Make sure your buyers have access to all of them. Make sure that your lender has the knowledge and confidence to use them.
On the Easterbrook Team, we are constantly striving to “Make the Process Easy” for our borrowers and Realtor partners keeping up on all the newest loan products and working to process them with quickly and efficiently. If you are looking for a lender, a second opinion, or just want some loan advice about a new listing you have, call the Easterbrook Team at (916) 850-6050.
OK, not all acronyms are good, like when the FBI comes knocking on your door. The good acronyms we are talking about today are LPMI (Lender Paid Mortgage Insurance) combined with FHLMC (Freddie Mac) or FNMA (Fannie Mae) – the two big GSEs (Government Sponsored Entities). Together they are a thing of beauty for your high FICO (720+) buyers.
Private mortgage insurance (PMI) is required on conventional loans over 80% loan to value. LPMI removes the monthly mortgage insurance for the life of the loan. It’s done by slightly raising the interest rate and having the lender pay for the mortgage insurance upfront. Not only does the typical high FICO buyer save more on their monthly payment, but we have had two buyers lately qualify for the house they really wanted where they would not have with standard mortgage insurance.
FHLMC, or Freddie Mac, has a great purchase program called Home Advantage. FNMA, or Fannie Mae, has an excellent purchase program called HomeReady. These products go up to 97% and offers reduced mortgage insurance rates. Combine them with LPMI and you’ve got a winning combination! Home Advantage and HomeReady are not a first time home buyer programs, but guidelines require that the buyer not own another home at the time of purchase. Call us for details.
There has been some confusion surrounding the new tax laws enacted December 22, 2017. We were told that the sky was falling, and they were right – but it was just a Chinese space station that didn’t hurt anyone – kind of like the changes to the tax laws.
The IRS sent a memo out recently (click here for memo) that read:
· “Taxpayers may only deduct interest on $750K of qualifying home mortgage deduction.”
· Taxpayers may deduct qualifying interest if it was ”used to buy, build or substantially improve the taxpayer’s home that secures the loan.”
· “Despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labelled.”
It’s easy to forget how good we still have it when rates on a 30 year fixed rate mortgage were in the low 3’s. One of the most significant ways the Fed stimulates the economy is lower and raise rates based on a variety of factors, such as the unemployment rate (which is currently at record lows). Since the US economy has had a good run lately, the Fed has started to steadily increase the rate at which lenders borrow money. We pass the cost on to the borrower in the form of higher interest rates.
As 30 year fixed rates climb back into the 5’s however, ARMs will be a tool that many buyers will consider to lower their monthly payments. Call the Easterbrook Team for other options as well.
It’s pretty tempting – that that lower rate on the ARM in a rising interest rate market. Is it a good idea? That depends…read on.
An ARM starts with an initial period that has a fixed interest rate. Different loan terms vary and the low rate can usually last from one year to ten years. After the introductory period expires, the interest rate moves up and down with another interest rate called the index. Most ARMs have one of three major indexes: one year treasury yield, COFI, or LIBOR. ARMS also have limits, or caps, that restrict the amount rates and payments can change.
Home ownership percentage has dropped to its lowest rate since 1965. Rates are decent, there's an incredibly strong job market, but renters continue to struggle coming up with a down payment. Rents have gone faster than any other component of the Consumer Price Index, which hasn't helped, student debt payments impact many, and other bills add up. Interestingly, in areas around the nation, a mortgage payment is less expensive than a rent payment. There's general agreement that potential buyers are more than capable of affording a monthly mortgage payment but saving for the down payment is a problem.
EASTERBROOK TEAM gives your buyers a leg up: John and Patty are down payment coaches. We can assist your buyers with a wide variety of programs to assist them, such as: conventional HomeReady and Home Possible, CalHFA MyHome, ZIP, grant, and more. We can investigate funds that buyers didn’t even know they had available to them, such as 401K borrowing, gift, and asset conversion. Get them in front of us and we’ll get them excited about jumping over their home ownership hurdles!
Driving Your Retirement Vehicle Home
A 401K should be on the radar of any W-2 employee that wants to have a comfortable retirement. A 401K builds and earns interest tax free for retirement years. Taxes are paid on withdrawals in retirement years when income and taxes are lower. But a 401K has some other benefits that many people are not aware of.
Having a nest egg is like having a safety net. Most 401K plans allow for a hardship withdrawal before 59 and a half. With the security of knowing that there is money set aside in case of emergency, there is less fear in asking for a raise or taking a chance on a good opportunity that presents itself.
The number one hidden benefit to having a 401K is that it can be borrowed against. The 401K is still earning interest when borrowed against. Most plans allow the interest paid to go back into the retirement account – which actually benefits the retirement account. For more information about borrowing against a 401K, CLICK HERE.
The average 401K balance is just under $100K. Most 401K plans will allow a loan of up to $50K or 50% of the vested balance – whichever is less. The loan does not affect credit, nor is it taxable. From a lending standpoint, the payments on the loan do not count against a borrower’s debt to income ratio.
Borrowing against a 401K can often be the difference between home ownership and renting. A larger down payment using a 401K loan could also be the difference between paying a higher rate of interest or higher mortgage insurance rate on a home. Considering the rate at which housing increases, borrowers can leverage and maximize the benefits of their retirement savings to live the American Dream of home ownership. Call the Easterbrook Team today for more information.
More housing news from Zimbabwe. Dr. Smelly Dube won three awards for her achievements in housing development, which is cool. "A rose by any other name would smell as sweet". The article then took another fast turn like a comedian switching topics - According to the Zimbabwe Association for Housing Finance “providing proof of incomes from informal business activities continued to be problematic for increasingly cautious lending institutions.” Sounds like 2006 all over again. Here's the article: CLICK HERE.
Mortgage News Update
The Bad: the Fed announced March 21st 2018 that it would raise interest rates .25%.
The Good: the market over compensated for this increase and had it built into pricing. It is interesting that we have a pricing improvement when the Fed increased the cost of money.
We cannot predict what is going to happen days from now – things like a stock market crash, a world event – such a missile scare or worse. We can identify what is currently happening in the market. The Easterbrook Team subscribes to a service that provides up to the minute alerts and information that allows us to provide borrowers with information they need to make decisions about locking their loan.
Among the more weighty decisions when getting a mortgage is when to lock in the interest rate. Even small fluctuations can affect your monthly mortgage payment, and create a huge difference in the interest over the term of the mortgage. If you or your clients are shopping for a home, here are some realities to shape your decision about when and how to lock in a mortgage rate. The Easterbrook Team can help.
Rates are near historic lows, but are rising. Many homeowners today will barely, if at all, remember the days when mortgage rates ran into the double digits. In 1981, mortgage rates hit a peak of nearly 19%. Since then, the overall trend has been to declining rates, including in the period since the housing crisis in 2008, when rates have consistently been below 6%. It’s been more than 25 years since the average annual mortgage rate was in double-digit figures, and it was only just so in 1990--at 10.13%.
Because our economy has been improving, rates have been back on the rise again since March 2017, following the first hikes in the federal funds rate since 2015. Further, the Fed chairman has all but announced that rates will continue to rise in 2018, and analysts also predict that will be the case. That makes it unlikely now that you’ll lock into a mortgage, only to see rates drop before the lock expires.
The lock term is flexible. At a time when rates are dropping, it can make sense to lock later in escrow to limit the time in which more favorable rates may materialize. When the trend is reversed, however, as is the case today, there’s a stronger case to lock in early, and for a longer period, rather than a shorter one, to minimize the likelihood that rates will rise during the lock period. The customary rate lock is for 30 or 45 days, but you can also double or even triple that period fairly easily. The longer the lock, the higher the interest rate will be. We may recommend considering the longer period in the current environment if you have a long escrow – typically over 30 days.
Peace of mind is priceless. Another aspect to consider about locking is the fact that every day the loan is not locked, the media is constantly reminding us of the volatility of rates. This can create a great deal of anxiety. With all the other aspects of purchasing a home, locking a loan, especially in a rising interest rate environment, can put your mind at ease and help you focus on the excitement of purchasing your new home.
Genworth and MGIC are pushing back on Fannie and Freddie's new 50% DTI - said to be reevaluating underwriting standards with the intent of bringing back a 45% DTI - OUCH! When you think about it, it's no skin off Fannie and Freddie's back to offer even 100% financing when they're not the one insuring the loss - for the article, CLICK HERE.
How Much Do You Need, Really?
How much you need to buy a house, that is. Assets will be the topic and how they fit in the homebuying process. We will also discuss creative solutions for those that are “asset challenged”. We will provide handouts and be available for questions too. John and Patty are seasoned Mortgage Loan Officers, experienced in all facets of home loan financing.
Call us to find out more 916.850.6050
For Houston-based Realtor Ellis Young, a traditional “For Sale” sign just won’t do. Instead, Young likes to add uncanny and hilarious phrases — the latest being, “Not Haunted.” But Young got a little more than he bargained for when a couple neighbors wrote a Facebook post calling Young “unprofessional,” and then sent the post to ABC 13 in Houston.
“You can’t do it the same old way. You’ve got to spice it up. You’ve got to look different. You’ve got to keep it fun,” Young explained to ABC 13. Young has also featured signs like “Harvey Tested”, “Gluten Free House”, and “Backyard Included” to get potential buyers to turn their heads.
It’s hard to ignore an idea that has gone viral nationwide. We hope it translates into sales for him.
Sacramento County's median price for resale homes rose by nearly 14 percent in January 2018 compared to the same month last year, though the number of sales slumped from December in a typical seasonal pattern, CoreLogic reported Thursday. For video and article in the SacBee, CLICK HERE.
Useful Mortgage News…Mostly
Fact: In January of 1985, 30 year fixed mortgage rates were more than 13 percent. By January of 2012, rates had dipped to under 4 percent.
What’s happing right now with rates? Even with slightly higher consumer borrowing rates, housing loans are still a bargain compared to past years and decades. Economist David Clark...
"...certainly mortgage rates have gone up, but they're still in the neighborhood of 4 percent. By historical standards, that is low. If you look at 30-year fixed rate mortgage where it stood at the beginning of January, it was just under four percent at 3.95 percent. By February it had moved up to 4.38 percent..."
Clark says by historical standards that rate is still low...
"....it's because the Federal Reserve has started moving up short term interest rates. They have a federal funds rate that they set is at 1.5 percent now. It was at 0.75 percent this time last year. The reason they've done that is that they're concerned about inflation...."
He says those Federal Reserve moves caused some sharp adjustments in the stock market. That also pushed up the long term rates. He says when lenders are providing 30 year loans they want to know what is happening with inflation. Clark says the moves by the Fed now are designed to keep inflation under control.
Tip: Want to know where rates are on any given day? Check the price of gas at your favorite intersection – there is a direct relationship between gas prices and inflation – CLICK HERE. Or call us. We’re always here to help…and put your business pedal to the metal!
Putin’s Interest Rate Woes
Vladimir Putin proclaimed this week that Russia must get interest rates below 7% to solve the country’s housing problem. We always thought that their housing problems were because half the country is living in poverty. He solved that problem in the same speech – he ordered the minimum salaries to be increased. But won’t artificially raising incomes cause inflation, thereby rising interest rates? Maybe Putin can outlaw inflation in Russia too.
Since the housing collapse 10 years ago, the U.S Federal Reserve has maintained a loose monetary policy, keeping interest rates low and providing easy access to credit.
With the economy nearing full employment and corporate America raking in record profits, the Fed’s policy is tightening. After years of a fixed 30-year mortgage interest rate below 4 percent, that rate is now in the mid-4’s for most lenders. It’s only a matter of time before rising rates affect the housing market.
For prospective homebuyers, rising rates are putting pressure on finding a home. According to a recent survey by Redfin, 21 percent of respondents said rates passing 5 percent would increase the urgency to buy a home, 27 percent said they’d slow their search to see if rates come back down, and just 6 percent said they’d cancel their search for a home altogether because of rising rates.
A sense of urgency is justified because the lower the rate a homebuyer can lock into, the easier it will be to make a monthly payment. For some buyers, raising rates mean they may not qualify for the home they planned to buy.
According to a recent economic model by CoreLogic, home mortgage rates may increase 15% in 2018.
How a rate hike will affect home values is not as clear because there are so many other factors at play – a new tax law passed in December 2017, a growing economy where more people are employed, and the X factor – inventory – which, according to experts, is supposed to shake loose this Spring, adding much needed supply to our market.
What we DO know on the Easterbrook Team is that everyone needs a place to live. Our job as lenders is to provide a happy loan experience for the home they want. Get ‘em in, get ‘em qualified, and let’s get ‘em closed and happy in their new home. Let’s not let rates be a barrier to our borrower’s dreams.
Franklin Delano Roosevelt, commonly known as FDR, was born January 30,1882. He was an American statesman and political leader who served as the 32nd President of the United States from 1933 until his death in 1945. He had brilliant quote about real estate that is as true back in the WWII era as it is today. This quote captures the essence of real estate - smart and safe.
Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world. - FDR
It's free and life changing! We'll talk about how to get out of the credit mess that many of us find ourselves in and that many of us are better off than we think when it comes to credit. Give us a call. 916.850.6050
For those of us in the mortgage and real estate business, it seems like every time that we meet a new buyer or go on a listing presentation, it feels like we're on a job interview - because we are! We are being judged by prospects before they "hire" us to become their mortgage or real estate representative. We can learn from those that do the hiring for the workplace to better attract and keep our future clients. One of our favorite websites, Lifehack.com, has a great article on the 5 attributes that employers (prospects) are looking for in an employee (you) - CLICK HERE.
One day approvals are real!
The process of getting approved for a mortgage can be very stressful for a borrower in the best ofcircumstances. Until a formal approval has been issued, everyone involved in the process (agents, buyer, seller, and even the loan officer) is collectively holding their breath for underwriter’s anticipated “APPROVED”.
Fortunately, we can all exhale now that we have Day One Certainty. Day One Certainty is Fannie Mae’s new process that saves paperwork, time, and – most importantly – approves the buyer upfront for conventional loans! Yes, it is now possible to get an approval upfront on a conventional loan without having to go through the traditional underwriting process that has slowed down the mortgage process for decades.
We love our underwriters, don’t get us wrong, and they now have a solid approval that they can streamline their process with as well. Day One Certainty leverages data already at our disposal to automatically verify income, assets, and employment history. In addition, certain loans are eligible for an appraisal waiver – speeding the process up more and saving the borrower the expense of an appraisal.
Agents, with our new tool at your disposal, you can provide added assurance when presenting an offer that the buyer has been preapproved.
If you like a more balanced market with more inventory, more sales, and a little slower pace to the frenzied 2015-2017 markets that we just survived, you are going to like 2018 even better. The folks at Nerdwallet have come up with their predictions based on what we now know about the new future of the real estate market. We’ll see interest rates rise, affecting some buyers by pricing them out of the market. As we are still sorting through tax reform, it looks like it will be positive for most people, putting more money in their pocket. For the entire article, CLICK HERE.
Every year, we get an email from someone who took less than a minute to enter their name or name of relatives, friends, etc. They will tell us that they found some money for someone dear to them.
Maybe some State Agency just found some money for you.
When you find the money, please take a moment to let us know. Then, we will keep giving the alert each year.
Doesn’t 2018 feel like you are clickity-clacking up the first rise on a roller coaster getting ready for a big thrill ride? There is definitely a lot of movement in the market. The experts agree that we’re in for a solid year in 2018. Ryan Lundquist, Pat Shea, and Dean Wearli weigh in on what to expect for the coming year in the way of appreciation, inventory, and how the Bay Area is influencing the Sacramento, El Dorado, and Placer County areas. Check out the article HERE.
Speaking of the Bay Area, 17,000 people commute daily from Sacramento to the Bay Area to work. It’s no wonder - it is infamously expensive to live in the Bay Area. Median home prices range from $700,000 in Oakland to $1.6 million in Mountain View, according to tracking firm Zillow.com. The median home price in Sacramento is about $300,000. To read the article, click HERE.
If you are thinking of moving to Zimbabwe, you may consider renting. To purchase a home, a buyer can expect to put down a 25% down payment and pay at a rate of 12% over a 10 to 15 year period. If you are thinking of moving there, you should know that the economy isn’t too great, everyone is asking for bribes, the roads are poorly maintained, but we hear the wine is cheap. This is a plus because the water quality is abysmal.
US existing home sales jump to 11-year high
Reuters reports that U.S. home sales increased more than expected to 5.6 percent in November. Existing home sales hit their highest level in nearly 11 years - since December of 2006. This is the latest indication that housing has bounced back after almost stalling this year.
Despite the recent gains, existing home sales remain constrained by a chronic shortage of houses at the lower end of the market, which is keeping prices elevated and sidelining some first-time buyers, who accounted for 29 percent of transactions last month. Economists and Realtors say a 40 percent share of first-time buyers is needed for a robust housing market.
You can read all the details HERE. Our experience on the Easterbrook Team mirrors this article with our current amount of purchases closing now and in the New Year for Sacramento, El Dorado, and Placer Counties. We have created HomeLoanWorkshop.org to keep up with demand and provide an educational outlet for potential homebuyers. For reservations, call (916) 850-6050 or visit the website HERE
The Fair Isaac Corporation – developer of the FICO score and a pioneer in the field – groups credit score results into five basic tiers.
These numbers have a very real meaning to lenders. According to Fair Isaac, only 1 percent of those with credit scores of 800 and above are likely to become delinquent. To get more information, check out the article: CLICK HERE. The Easterbrook Team focuses on the best home loan value for every individual borrower. Call us at (916) 850-6050.
First-time home buyers purchased 601,000 single-family homes compared to 567,000 during 3Q’16, an increase of 6%, resulting in the highest quarterly purchase volume since September 30, 2000, according to the Genworth Mortgage Insurance First-Time Homebuyer Market Report
for the third quarter of 2017. It was the highest level of first-time home buyer demand since the third quarter of 2000. First-time home buyers accounted for 40% of all single-family homes sold and 56% of all purchase mortgages financed. Have the Easterbrook Team show you all your options to buy for 2018. Call us at (916) 850-6050.
First time homebuyer demand surged to its highest level in 17 years during the third quarter of 2017, according to the First-Time Homebuyer Market Report from Genworth Mortgage Insurance. The report, which is drawn from a data set of 21 million first-time homebuyers over a 24-year span, showed first-time homebuyers purchased 601,000 single-family homes in the third quarter. This is up 6% from 567,000 homes during the third quarter of 2016, and the highest quarterly purchase volume since the third quarter of 2000. Check out the article CLICK HERE. The Easterbrook Team focuses on the best home loan value for every individual borrower. Call us at (916) 850-6050.
The winter holidays are a time for celebration, and that means more cooking, home decorating, entertaining, and an increased risk of fire and accidents. Check out the article and make your holiday season a safe and happy one - CLICK HERE. The Easterbrook Team is working during the holiday season - call us at (916) 850-6050.
Commercial real estate experts predict that in the near future automated vehicles could dramatically change the landscape of how urban areas are utilized. The biggest impact will likely be felt by a reduction in the use of parking within the urban area and more space devoted to shopping and office space. Check out the article HERE. What are your predictions? The Easterbrook Team would love to hear from you - call us at (916) 850-6050.
When you buy a home, you’re in it for the long haul. You’ll have a mortgage payment for 15, 20 or 30 years, after all, so it’s smart to shop around to find the best mortgage lenders out there. Keep reading for tips on how to shop around.
Finding a mortgage lender involves more than just getting a good interest rate; you want to work with the best mortgage companies, staffed by professionals who will guide you through the process.
and what it means to you…
Following the FHFA announcement last week, HUD announced Friday that they were raising their maximum loan limits for Sacramento, El Dorado, and Placer Counties. The 2017 limit for conforming was 422,100. For 2018, it is now is $453,100. For high balance, we now can take a single family FHA loan all the way up to $517,500. For duplexes, the maximum loan is $662,500 – that’s right! An owner occupied homebuyer can buy up to $686,500 with only 3.5% down payment.
Call the Easterbrook Team for all your lending solutions. Also, check out our website for classing coming soon for homebuyers in January at HomeLoanWorkshop.org.
This one didn't surprise us, but it is interesting. One reporter said, "the fraud is so rampant, it's mind-bending".
We’ve scoured the Internet, and there seems to be a consensus on the following:
1. Inventory shortages will drive the housing market. There are 12 percent fewer homes to choose from nationwide than there were a year ago, and 51 percent of for-sale properties are in the top one-third of home values, which are out of reach for first-time buyers.
2. Builders will turn their focus to entry-level homes. Housing starts have been well below the 50-year average of 1.2 million, builders are expected to finally hearken to the call of first-time and lower- to middle-income buyers yearning for more affordable options.
3. New homes will lead the pack for growth. Experts predict that new home starts and sales will increase 7% over 2017
4. Millennials will move to the suburbs. Although most millennials would prefer to live in urban areas, they can’t afford to live in these areas. 25- to 34-year-olds will begin moving to the ‘burbs in search of more affordable home prices.
5. Many homeowners will remodel rather than sell. Low inventories will force many homeowners, despite having high confidence about being in a seller’s market, to stay put. Homeowners will invest in their existing home to make it feel new.
6. Homes prices will continue to grow, but at a slower pace. 2017 has been full of record-breaking home price growth, with economists calling it nearly unstoppable. Home prices are expected to climb 4.1 percent in 2018 — 1.1 percentage points higher than the “normal” annual appreciation closer of 3 percent, but slower than the current annual pace of 6.9 percent.
7. Rates will continue to rise, but at a slower pace. Here’s an interesting fact: rates are actually lower in December of 2017 than they were in December of 2016! You wouldn’t hear this from the main stream media. The Mortgage Bankers Association expects rates to be at about .375% - .75% from where they are right now – CLICK HERE for article. The nice thing about rates is that they are usually in balance with the economy. Where, if the economy is doing well, rates will be higher. If there are more people with jobs and disposable income, there will be more homes sold.
We would love to hear your predications. We would also welcome the opportunity to show you what The Easterbrook Team can do to help make your 2018 your best year ever.
Home buyers today are faced with a fundamental choice: should they buy a home in an established neighborhood? Or is it better to go for a never-lived-in home in a new development? Each has its advantages and drawbacks. Here are some of the top decision points.
An “older” home—a better term would be “resale home”—will typically be in a neighborhood that is well-established. Many of the neighbors may've lived there for decades. The character of the neighborhood may be evident: for example, do most of the other homeowners have teenagers, or small children, or are many nearing retirement age?
Older homes were built when land was less expensive, so they tend to have larger lots than today’s newer developments, which places larger homes on small lots, with very little space between buildings.
Trees, lawns and other vegetation will be mature compared to new developments, which can seem comparatively sparse and open.
Want more new and used comparisons? CLICK HERE for the article.
This article is one of the most interesting that we've read lately. Today’s home buyers primarily want their real estate agents to be helpful, according to a new study from Open Listings. The study, which looked at the volume of certain keywords across five-star agent reviews on its proprietary platform, found “helpful” appeared the most out of all terms tracked. The #1 trait isn't knowledge, communication, or a record of past success - HELPFULNESS is the #1 desired quality for new homebuyers. To find out what #'s 2,3,4, and 5 are, CLICK HERE for the article.
Nothing peaked our interest more than this piece on choosing a lender. We didn't write it, but we could have. If your real estate agent suggests that you use an in-house lender, should you automatically assume that the lender is looking out for your best interest. First know that there is no obligation to use them. What is the reason for having an in-house lender? Several. The first is an MSA (mutual service agreement) that some real estate offices and lenders share. There are incentives paid to the real estate company for every loan transaction they fund together. This often results in higher costs to the consumer. The money paid to the real estate company has to come from somewhere.
This does not mean, however, that the in-house lender is automatically disqualified as your best option. Just know that you do have other options. Check online reviews. Ask friends and relatives that recently purchased. Ask them how their experience was and if they could get a recommendation. For the whole article, CLICK HERE.
There was a big shakeup at the CFPB. A battle for the soul of the Consumer Financial Protection Bureau (CFPB) played out Monday inside a federal building in Washington. The real estate industry watched with fascination as White House budget chief Mick Mulvaney sought to wrest power from the agency’s acting director. Click HERE for article.
Bring holiday cheer to neighbors in need by participating in the Annual Christmas Toy Drive. The toy drive is organized by Folsom's Citizens Assisting Public Safety (CAPS), in partnership with the Folsom Police and Fire Departments and the Folsom Police Foundation. Toys and gifts collected are delivered to Folsom families in need by Folsom Police and Fire personnel in the days before Christmas.
Help make the holidays special for local families in two ways:
Make a wish come true. Select an ornament from the trees in the lobby of the Folsom Police Department or Folsom Fire Department Station 35 to fill the specific wish of a child. Return the ornament and new, unwrapped gift to the Police or Fire Department.
Bring a gift of your choosing for a child, teen or adult. New, unopened and unwrapped toys, as well as new clothing or gift cards, may be dropped off at the Folsom Police Department or at the Folsom Fire Department Station 35.
The Folsom Police Department is located at 46 Natoma Street and Folsom Fire Department Station 35 is located at 535 Glenn Drive. Donated gifts can be delivered between 7 a.m. and 4 p.m. through December 8. For more information contact Jessica Hess at 916-351-3409 or firstname.lastname@example.org.
Only about one in six borrowers of conventional mortgages have used a 15-year mortgage so far in 2017. No doubt many borrowers shy away from the shorter home loans when they learn that it requires a payment that’s considerably larger. In the long run, though, a 15-year mortgage saves money. The cons include, the buyer has more equity tied up and will qualify for a less expensive home than if they’d stretch the loan over 30 years. Our friends at Builder Magazine wrote a nice comparison between the benefits and drawbacks. Check out the article HERE. Looking to buy or refinance? Now may be the time to do it as opposed to waiting until next year. Call the Easterbrook Team at (916) 850-6050 or email us at email@example.com.
The future of the mortgage-interest deduction and other federal housing incentives has proven to be one of the hot spots in the debate over tax reform. But while Realtors and some industry groups say Republican proposals to scale down tax perks meant to spur homeownership could severely damage the market, other analysts say mortgage subsidies should be restructured or eliminated altogether. Check out the article HERE. Looking to buy or refinance? Now may be the time to do it as opposed to waiting until next year. Call the Easterbrook Team at (916) 850-6050 or email us at firstname.lastname@example.org.
The Federal Reserve has announced that they will start to unload their massive $4.5 trillion balance sheet of bonds. The Fed began buying bonds in 2009 to ease the mortgage crash. What does this mean to the everyday consumer? Higher rates across the board. We will see rates go up from credit cards, to car loan, to home equity lines and of course mortgage rates. Check out the article HERE. Looking to buy or refinance? Now may be the time to do it as opposed to waiting until next year. Call the Easterbrook Team at (916) 850-6050 or email us at email@example.com.
Here’s an important question for anyone who is hoping to buy a home next year but who isn’t quite confident about qualifying for a mortgage: Is it true that lenders have eased up on certain key requirements, making it simpler for first-time buyers and others who can’t pass all the strict tests to get approved? The Washington Post writes that the good-news answer is yes. A recent survey of banks and mortgage companies by giant investor Fannie Mae found that a record number of lenders report that they have relaxed at least some requirements for mortgage clients. Click HERE for article.
If you're in the car business, counting on your year-end bonus, you may be worried. If you're in the mortgage business, you're cracking your knuckles and rolling up your sleeves. It seems that bond traders have already "baked in" the pricing for the December rate hike to mortgage backed securities. We may have a strong December yet. Click HERE for the article.
Republicans in the House and Senate have unveiled their plans to reform the tax code and they're looking to chop some tax benefits of buying and selling a home. Here's a look at some of the potential tax changes in play that could impact homeowners:
The new Bill would require homeowners to itemize their deductions. The Tax Policy Center estimated that the percent of filers who claim the deduction would fall to 4% from 21% if the standard deduction doubles.
This will have the biggest impact on resales and construction in areas near the coast on both sides of the US. It will definitely affect the Sacramento, El Dorado, and Placer Counties where a high percentage of homes are in the $550K+ range.
Both proposals could serious hit homeowners in high tax states like New Jersey, Connecticut, New York, and (yup, you guessed it) California.
What is our take on the Bill? We know that the budget isn’t balanced. We’re not convinced that this is the way to do it though. Why? The new tax Bill strikes at the very core of our industry – the monetary benefit to owning a home. The proposed tax laws would also affect many other industries. When a home is purchased, a significant amount of revenue is generated from the tax on the home purchase, the landscaping and new light fixtures at Home Depot, and the contractor that installs the new counter tops in the kitchen – all that is lost when a potential homeowner decides to wait on purchasing because it isn’t affordable.
Along with the proposed changes, a thorough study must be done on the unintended consequences of eliminating laws that encourage home ownership. We’ll read it and write another article on the results. Stay tuned – this affects all of us.
More and more customers may be heading online to purchase mortgages, but overall satisfaction with electronic mortgage processes is majorly declining, according to J.D. Power’s 2017 U.S. Primary Mortgage Origination Satisfaction Study.
According to the study, individuals find online mortgage purchasing procedures slow and tedious, with overall satisfaction falling 8 points in 2017. The average time for starting and completing mortgage applications has risen to 36 days, a significant increase from last year.
Even so, the number of people who use online methods for acquiring mortgages has increased since 2016. Forty-three percent of customers applied for mortgages digitally in 2017, up 26 percent from last year. Still, however, the study reports overall satisfaction for these mortgage acquisition methods has fallen 18 points on a year-over-year basis.
“A critical element of satisfaction is setting expectations, and this tends to be a weakness of technology,” said Craig Martin, director of J.D. Power’s mortgage practice. Instead, customers prefer face-to-face interactions with loan representatives who verbally assist their clients and offer updates on the status of their loans.
Among the study’s key findings in customer perception on electronic mortgage purchase processes is a lack of trust, which many customers did not claim to feel through a computer screen. Overall satisfaction is “substantially lower among customers who do not work with a human to complete their application,” according to Martin.
On the Easterbrook Team, we strive to meet all the touch points that borrowers are seeking: speed, accuracy, trust, and direct communication. Give us a call today and we will "make the loan process easy" for you. (916) 805-6050 or homeloanworkshop.org.
Should You Pay Off Your Mortgage?
If you are planning on paying off your mortgage, you won't be alone. Nearly half of the borrowers last year between the ages of 65 and 69 had their homes paid free and clear. If you have the means and are considering paying off your mortgage, there are 3 compelling reasons to do so:
Whether you are planning on keeping your mortgage in place, planning on accelerating the payments, or considering paying it off, we on the Easterbrook Team are happy to consult with you to find solutions that meet your retirement needs.
To qualify for a home mortgage today, you’re still going to need to meet minimum standards. These include:
• A favorable credit score. Fannie Mae requires a minimum credit score of only 620.
• An appropriate debt-to-income (DTI) ratio. Your DTI number signifies your total recurring monthly debt payments (such as credit cards, student loans and mortgages) versus your gross monthly income. Fannie Mae’s new DTI ceiling is 50 percent.
• An acceptable loan-to-value (LTV) ratio. Your LTV represents the loan’s size compared to the property’s value. Fannie Mae’s maximum LTV is a generous 97 percent.
• A reasonable loan limit. Fannie Mae’s maximum loan limit in most states is $424,100. In Sacramento, El Dorado, and Placer Counties, Fannie Mae currently allows borrowers to take advantage of a high balance loan amount of $488,750.
According to Zillow, 20 percent of homebuyers today receive a monetary gift or loan from family or friends. As well, nearly one-quarter (24 percent) of buyers combine two or more sources to finance their down payment.
Translation: Millennials often need financial assistance from their parents to buy a first home. Of course, call the Easterbrook Team for guidance before accepting money. To get some preliminary instruction, here are some guidelines: CLICK HERE for the article.
Ever Ride Your Bike from Folsom to Lake Tahoe?
Some of the world's best cyclists will do just that on May 17th, 2018 in the Amgen Tour of California bike race. Come join the Easterbrook Team to cheer on the bike riders as they start on this brutal leg of the 600 mile race. Want to see the itinerary - CLICK HERE for the Press Release.
Homeowners insurance covers your property itself. Each insurance plan is different, but it typically protects damage to the structure of your home and your personal belongings, and liability in the case of a lawsuit. Private Mortgage Insurance (PMI) protects your lender if you stop making payments on your loan. It typically comes in the form of a monthly payment that is added to your existing mortgage payment, and is usually required for those who make a down payment of less than 20%. Want to know more? CLICK HERE for article.
Have you opened a new location, redesigned your shop, or added a new product or service? Don't keep it to yourself, let folks know.
Our friends at Popular Science magazine have given us 15 ways to keep you safe online, protect your phone, and protect you from scams - CLICK HERE for article.
A duplex is a property with two units on one parcel. It’s traditionally a way to get into the investment real estate game, because you get shelter for yourself, plus rental income and extra tax breaks. The rent can offset or even completely cover your mortgage and other costs.
The owner-occupied unit can be treated as a primary residence. The rental unit can be treated as investment property. The rental side can be depreciated and write-off related repairs and improvements. Always ask a tax professional for details.
Buy a Duplex with a VA Loan - VA guidelines allow qualified borrowers to purchase properties with one to four units and zero percent down. One unit, however, must be your primary residence. Buying a duplex with the VA program can be very advantageous. First of all, purchasing with nothing down is extremely attractive. Also, you’ll get residential mortgage rates and not investor financing rates, and eligible borrowers can benefit under the VA’s unique qualification system.
Buy a Duplex with an FHA Loan - The FHA, like the VA, does not make investment loans. It requires all financing in its basic 203(b) program to be secured by a primary residence. You have to occupy the home.
That said, you can use the FHA program with 3.5 percent down to buy property with one-to-four units, so a duplex is okay as long as you occupy one of the two units.
The Easterbrook Team wants to hear your hopes and dreams of homeownership and real estate investment. Call us today for an appointment. We are located at 806 Bidwell Street in Folsom, California. Our phone # is (916) 850-6050.
Refi now to secure the rate on your $500K+ loan so you can deduct the full interest.
The Easterbrook Team is your source for mortgage lending.
Have you two heard of this? Amazon Camperforce. It's a large group of homeless RV'rs that traverse the US working odd jobs. It's a thing.
The Easterbrook Team
According to the NAR, nationwide, people skills topped the list of important skills for a residential real estate agent (86%) followed by self-motivation (84%) and negotiation skills (73%). For California agents, negotiation came in at the top of the list, followed by analytical reasoning.
They still are paying a mint for housing, but Wall Street professionals are not into big showy homes as they have been in the past. The new trend is a practical size home of approximately 1,600 – 2,100 square feet, but location is everything. “Median” priced homes (around $6M) in Greenwich near the financial district have gone up 34% year over year lately.
The VA loan offers the best rate and terms to the veteran. Call us and we'll guide you through the process. Here's an article on the 5 top benefits to going VA. But seriously, just call us and we'll guide you to a fast approval on the home of your dreams. On the Easterbrook Team, "We Make the Process Easy"
Brett Gripe said he wants to rebuild after losing his house in Larkfield’s Mark West Estates neighborhood to the Tubbs fire.
“I think so. Still, it’s too early to tell,” said Gripe, a retired police officer who teaches at Santa Rosa Junior College’s police training academy and referees youth sports. He and his dog escaped from the fast-moving fire thanks to a family friend who knocked on his door at 1:30 a.m. on Oct. 9 to wake him up and tell him to flee.
As part of the recovery process, Gripe has had several phone conversations with officials at his insurance company, Safeco. He’s also been in touch with his mortgage lender, Exchange Bank, where he had just recently refinanced his home loan.
Mortgage lenders are urging the thousands of displaced homeowners like Gripe to reach out to them in the aftermath of the devastating wildfires so fire victims can begin the process of either rebuilding or moving on, leaving behind the home they once had.
“Most of us haven’t been through anything like this before,” Gripe said. “I have lived in Santa Rosa most of my life. Hopefully, they will rebuild the neighborhood.”
While homeowners do reach out to their insurance agents right after natural disasters, mortgage lenders may be an afterthought. But those banks also play a critical role in the recovery process and can aid loan holders as they start down a path that will be new and foreign to the vast majority of them. Most notably, the homeowner is still responsible for their mortgage and property taxes as they go through the claims process.
“People really need to reach out. At Redwood, we want to help people,” said Diane Berthinier, senior vice president of lending at Redwood Credit Union, which had customers who lost their homes. “Everybody is here to help.”
Mortgage holders could be eligible for immediate relief, depending on their circumstances. Redwood, for example, is willing to defer mortgage payments if borrowers are financially strapped as a result of the fires. “There are a lot of people living just paycheck to paycheck,” she said.
Wells Fargo Bank is offering a 90-day relief period for its mortgage customers in areas where residents are eligible for individual assistance by the Federal Emergency Management Agency, said spokesman Ruben Pulido. Homeowners outside those areas could be eligible for relief and should contact the bank. The company has 53,000 home lending customers in Northern California who could have been affected by the wildfires. To read more, here's the article: CLICK HERE.
The Easterbrook Team is your source for home loan mortgages.
"We Make the Loan Process Easy!"
Complaining is inevitable, but when it becomes habitual, it can negatively affect your mood and those around you. The folks at Success Magazine have a great article about the different types of complainers (Superior Steve, Donna Downer, Venting Veronica, and Blaming Bobby) what happens when you force yourself to quit complaining for 30 days. Check out the article HERE.
The Easterbrook Team
"We Make the Loan Process Easy!"
Although homebuyers are relying more and more on online resources to get information, a new study from Fannie Mae shows they still place more faith in real estate professionals and other personal interactions. With the market moving more toward fully digital mortgages, it may appear as though consumers would like more digital interaction and less person-to-person. A new report from the Fannie Mae Economic and Strategic Research Group shows buyers do, indeed want more online resources during their mortgage-shopping experience. A survey showed respondents want to use mobile devices nearly twice as often in the future.
The Easterbrook Team has solutions for today's buyer. Both Patty Aguon and John Easterbrook have online applications, loan calculators, and other tools to assist homebuyers, but they have a policy of accommodation that allows borrowers to meet face to face with them when after hours and on weekends. We strive to live up to our slogan - "We Make the Loan Process Easy".
You probably didn’t think to run a credit check on your spouse before you got married. After all, love reigns supreme, right?
The Easterbrook Team is your source for credit repair. We can review and determine which avenue to take to better your score. Give us a call today!
"We Make the Loan Process Easy!"
Closing costs vary from lender to lender, title company to title company, and mortgage broker to mortgage broker. The following information will try to explain in a general format the basic closing costs associated with a mortgage. Cost will be broken into two categories, non-recurring and recurring fees. Non-recurring fees are fees that only show up once when you get a loan. This explanation will break up the non-recurring fees as lender fees and title fees. In this way you can see who is charging what and what to look out for. After the loan closes you will not see these charges again until you apply for another loan. Recurring fees are fees that you see monthly, but are actually charged to you daily, such as interest on the loan, property taxes, homeowner association fees, and homeowner insurance.
The Easterbrook Team is your source for mortgage lending. Contact us today!
"We Make the Loan Process Easy!"
For the past several years there has been a strong push in the mortgage servicing industry to move borrowers to mortgage escrow accounts (or impounds). A recent analysis by CoreLogic (Click Here for Study) shows that currently almost 80 percent of all borrowers are paying their taxes and insurance through escrow accounts. California is up 12% from last year.
For the consumer, it brings peace of mind that their PITI payment will cover their total real estate obligation and that they will be automatically communicated with in the future as tax or insurance rates change over time. Especially during the on-coming holidays, not having to deal with a large tax bill is welcome. We on the Easterbrook Team we recommend that if our borrowers are in doubt, they should definitely take advantage of this free service.
The Easterbrook Team is your source for mortgage lending.
"We Make the Loan Process Easy!"
Call us today! 916.850.6050
There is great news for potential homeowners – existing homeowners are paying their mortgages on time at a rate higher than any time in 10 years (Article CLICK HERE). Why? Lower default rates lead to loosening of underwriting guidelines. Fannie Mae signaled this in late July by increasing their debt to income ratios on conventional loans, citing lower default rates as a major factor (Article CLICK HERE).
The Easterbrook Team is your source for mortgage lending.
"We Make the Loan Process Easy!"
Our friends at Success Magazine have a great article about 10 habits to drop if you want to be successful. We really like this article because it is short, to the point, and has some easy to accomplish goals. The 10 habits aren’t just work habits, but will also enrich your life outside work. Click here for the article.
The Easterbrook Team
"We Make The Loan Process Easy!"
Renters showed a substantial growth in optimism in September, saying now is a good time to buy a home, according to Fannie Mae’s Home Purchase Sentiment Index – see article.
Renter’s shift to saying now is a significant change from August, when Americans agreed it was the right time to sell, but not to buy a home.
This balance of sellers listing their homes and willing buyers could make for an excellent 4th quarter for housing.
If you are looking to buy, contact The Easterbrook Team today!
"We Make The Loan Process Easy!"
Many people define the American dream as owning your own home, not to mention a comfortable lifestyle, healthy children, and a secure retirement. But the ability to afford a home—let alone all those other things—depends entirely on where you live and your level of income. This makes apples-to-apples comparisons across the country extremely difficult. How can you easily compare real estate locations and income levels for the entire population? Take a look at our new map to find out.
The Easterbrook Team is here to assist you with your American Dream!
"We Make The Loan Process Easy!"
Reverse mortgages may be one solution to the pressing problem of senior housing that many aging homeowners will soon face, says the Department of Housing and Urban Development in a recent publication. And there’s potential for research that would further examine the benefits of Home Equity Conversion Mortgages (HECMs) by comparing those who have taken HECM loans with similarly positioned households that have not, HUD says.
Contact The Easterbrook Team if you are interested in mortgage financing or to discuss a reverse mortgage.
"We Make The Loan Process Easy"
Fraud in connection with home mortgages is on the rise, ranging from little white lies about the intended use of the property all the way up to much more sophisticated schemes.
Give The Easterbrook Team a call for your home loan needs!
Their income was less than years past. In order to qualify, the borrowers were able to omit the credit card payments in the debt-to-income computation, provided the debt on these cards could be paid off through escrow.
Woop woop! You just paid off all your credit cards. It's not just a dream. Let us help you make it happen. Call The Easterbrook Team Today! 916.850.6050
"We Make The Loan Process Easy"
When you decide to buy a home, it’s all too easy to jump into your home search without being prepared — after all, you’re eager to start looking at homes and find one that suits you. But rather than jump headfirst into the search, a savvy home buyer will do their research and prepare themselves before they start looking.
Here are 5 things you should know before you start looking for a home:
Traditionally, retirement income was often characterized as a three-legged stool consisting of Social Security, defined benefit pension plans, and retirement savings. With the traditional pension plan all but extinct in America, that stool has become a bit wobbly. Fortunately, there’s another leg that’s often overlooked: your home. Here are some ways that you can use it to give your retirement a leg up:
Forbes reports that the mortgage is the biggest asset in retirement. The Easterbrook Team agrees.
The Easterbrook Team is your source for home loan lending. Contact us today!
"We Make The Loan Process Easy!"
Benjamin Harris is a visiting associate professor at the Kellogg School of Management at Northwestern University and previously was the chief economist to former Vice President Biden.
The Easterbrook Team is your home mortgage source. Please call us today!
Mortgage rates barely budged this week as the impact of the recent hurricanes began weighing on the economy.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average bumped up to 3.85 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.83 percent a week ago and 3.42 percent a year ago.
Contact The Easterbrook Team to discuss your home mortgage needs.
"We Make The Loan Process Easy!"
HomeStreet, the parent company of HomeStreet Bank, announced a restructuring of its mortgage banking segment that will eliminate 133 jobs by the end of the year.
The Easterbrook Team is your source for mortgage lending.
"We Make The Loan Process Easy!"
For home buyers, home sellers, refinancers and fixer-uppers, the end of 2017 could get a little weird. In housing, the fourth quarter tends to be predictable — but not this year. Here are three housing and mortgage trends to watch for in the fourth quarter of 2017:
The Easterbrook Team is your home loan lender source. Contact us today to discuss refinancing or purchasing a home.
"We Make The Loan Process Easy!"
Technology is transforming everything; it is changing the way we communicate, the way we access goods and services, and even the way we purchase homes. Soon, more and more consumers may increasingly find themselves being offered technology that allows them to access, sign, and submit mortgage closing documents online. We believe that “eClosing” can leverage technology in the mortgage closing process by providing consumers with more time to review closing disclosures and transform the way consumers relate to the overwhelming process of closing on a home.
The Easterbrook Team is your source for your home loan needs. Contact us today to discuss your homebuying or refinance needs!
JEFFERSON CITY, Mo. -- The State Treasurer is encouraging Missourians to consider a college savings plan called MOST 529.
Eric Schmitt (R) tells Missourinet it’s aimed at helping people save for a child’s higher education, adding that it offers federal and state tax benefits.
The Easterbrook Team is your source for your home loan needs!
My husband and I are looking to buy a home, and instead of using the money from our current home sale as a down payment, we were considering investing it instead. Or would it be wiser to use our extra cash to bring down our new mortgage? Worth noting: We’re relatively young (considered millennials). Which will make us better off financially: investing our excess cash or putting it toward the house, having a lower mortgage balance, and saving on interest?
To discuss your homebuying or refinance needs, contact The Easterbrook Team today!
Rates may ease next week, in line with this week’s move in Treasury yields
Rates for home loans jumped to a six-week high as bonds sold off in the wake of hawkish comments from the central bank and expectations for tax reform, mortgage provider Freddie Mac said Thursday.
Call The Easterbrook Team for your home loan needs. 916.850.6050
Everyone hears that spring remains the best time of year to sell your house. And that might be true in many areas. But fall continues to grow as a very popular time – and the best time in some places to sell your house.
If you are in need of a realtor or to discuss your buying and selling home loan needs, contact The Easterbrook Team today at 916.850.6050
Calculating ROIs for your investments and debt paydown can help you make wise capital-allocation decisions.
The following is part of our 21 Days to Improve Your Financial Life special report.
Investors spend a lot of time thinking about how much to allocate to various investment assets--stocks, bonds, and cash, mainly, as well as peripheral assets like gold. That's an essential decision, of course, as those asset-class choices will be among the primary determinants of how our investment portfolios behave.
The Easterbrook Team is your home loan source. Contact us today! 916.850.6050
My husband and I finally have saved up enough money to try to buy a home, but when we went to talk with a lender, he said that my husband's credit score is too low. The lender suggested that we buy the home with me only. My husband is very upset with this suggestion and thinks this is a shady idea. We really want our own home. Can you offer any advice?
The Easterbrook Team is your home loan source. Contact us today!
Here are three common "obstacles" to buying a home, and why they may not be as bad as you think.
Ninety-three percent of American adults believe that owning a home is part of the American dream, and 81% believe that owning a home increases financial stability, according to a recent survey by NeighborWorks America. Unfortunately, many Americans have misconceptions about what is necessary to be able to purchase a home.
The Easterbrook Team is your source for your home loan needs.
Give us a call today!
Equifax just announced today that the hack was worse than earlier reported by 2.5 Million to a total of 145.5 million consumers affected!
On Monday, the credit-reporting agency announced that cyber security firm Mandiant had completed the forensic portion of its investigation into the breach, in which hackers stole the personal information of millions of consumers. When the breach was announced Sept. 7, Equifax estimated that 143 million consumers were affected by the breach. However, the review determined that about 2.5 million additional consumers were “potentially impacted” – for a total of 145.5 million.
The Easterbrook Team is your home loan mortgage source.
Sac Bee reports why Sacramento doubled the national growth rate last year. Pat Shea of Lyon Real Estate comments.
The Sacramento region’s rebounding housing market, which had collapsed during last decade’s downturn, helped drive economic growth last year to more than double the national average, economists said Monday.
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Millennials want less human interaction. Baby Boomers want more interaction face to face.
More mortgage borrowers are using the internet to find a lender, and that applies for borrowers of all ages, according to a survey by sales accelerator Velocify.
To discuss your home loan needs call The Easterbrook Team today!
Here are some of the most common reasons mortgage applications get rejected.
Applying for a mortgage can be a daunting process for new homebuyers. The best way to prepare for it is to know exactly what lenders want from you -- as well as what they don't want. With that in mind, here are nine of the most common reasons mortgage applications are rejected.
To discuss your home loan strategies please contact The Easterbrook Team today!
First thing's first: mortgage rates didn't have nearly as bad a day as US Treasuries. The latter serve as a general benchmark for the former, but can take cues from different sources with varying levels of intensity.
To discuss your home loan mortgage needs, please contact The Easterbrook Team today!
WASHINGTON, DC – Facing constrained mortgage demand and a negative profit margin outlook, more lenders say they have eased rather than tightened home mortgage credit standards, according to Fannie Mae’s third quarter 2017 Mortgage Lender Sentiment Survey®. Across all loan types – GSE Eligible, Non-GSE Eligible, and Government – the net share of lenders who reported easing credit standards over the prior three months reached a new high since the survey’s inception in March 2014, after climbing each quarter since Q4 2016.
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Mortgage rates improved moderately today, making this the 4th straight business day without any new weakness (aka “higher rates”). It’s necessary to include “days that haven’t been bad” in that tally because two of them merely saw rates hold flat. That’s about as much of a victory as we have been able to hope for ever since Septembers abrupt little rate spike began just over 2 weeks ago.
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Email is a popular medium at several stages of the mortgage process. But it takes a back seat to other channels, depending on the age of the person, according to "Digital Mortgage Experience: a study of Shifting Borrower Expectations,” by Velocify.
The Easterbrook Team is your home loan source. Call us today! 916.850.6050
Finding the best solution for your dime
Chamapign, IL - 25% of Americans who consider themselves retired continue to pay a mortgage. As retirement approaches, eliminating a house payment can seem like an obvious goal. But is paying off a mortgage the right answer? It depends.
Daly Andersson with Busey Wealth Management breaks down the numbers.
The Easterbrook Team is your home loan source. Call us today! 916.850.6050