September 12, 2016
Interest Rates Remain at Historic Lows… But for How Long?
The interest rate you pay on your home mortgage has a direct impact on your monthly payment; The higher the rate, the greater your payment will be. That is why it is important to look at where the experts believe rates are headed when deciding to buy now or wait until next year.
The 30-year fixed mortgage rate has fallen half a percentage point since the beginning of the year and has remained at or below 3.5% for the last 11 weeks according to Freddie Mac’s Primary Mortgage Market Survey.
The chart below shows how far rates have fallen this year (on the left), and uses an average of the projections from Freddie Mac, Fannie Mae, the Mortgage Bankers Association and National Association of Realtors (on the right). As you can see, interest rates are projected to increase steadily over the course of the next 12 months.
How Will This Impact Your Mortgage Payment?
Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.
According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.0% over the last year and are predicted to be 5.4% higher next year.
If both the predictions of home prices and interest rate increases become a reality, families will wind up paying considerably more for their next home.
Even a small increase in interest rate can impact your family’s wealth. Let’s get together to evaluate your ability to purchase your dream home.
September 11, 2016
Honoring the memory of those killed and injured on 9/11/2001 and the first responders and families whose lives were forever changed.
September 9, 2016
Thanks, Jeremy Colonna, with Matchpoint Funding!
DO You Know Lender Guidelines for Fannie Mae, Freddie Mac and FHA?
Whether FHA, FNMA or FHLMC, appraisers are obligated to note any and all conditions that could impact habitability or marketability of the subject property regardless of the loan product. To illustrate, these guidelines are directly from the selling guides for Fannie Mae, Freddie Mac and FHA.
If It's Broke, You Gotta Fix It.
As you can see above, the guidelines and language are remarkably similar. In fact, all three very clearly state that if the appraiser notes the appraisal with any conditions which are detrimental to the habitability (Health and safety issues) or marketability of the property being acquired, the condition needs to be inspected and found to be safe or corrected by a licensed professional. Simply put, whether getting an FHA or conventional loan (Jumbo too!), there is no way to circumvent the opinion of an appraiser about whether or not the property is in suitable condition for the loan product.
September 6, 2016
Watch Out For This New Scam
By Priya Anand, MarketWatch
Phone scammers are calling taxpayers and pretending to be Internal Revenue Service officials who need to verify personal information such as Social Security numbers and banking details.
When criminals typically call taxpayers posing as IRS agents, they demand money over the phone for taxes they claim are due. The IRS said in March it has begun receiving reports "in the last few weeks" of phone scams that use a slightly different tactic: They don't ask for money, and instead request personal financial information, pretending they need to verify it.
The IRS said in February that it had seen a 400% increase in phishing and malware schemes aimed at stealing taxpayers' personal information this tax season, and warned taxpayers and preparers not to click on tax-related emails. The agency received nearly 1,400 reports of phishing and malware schemes to steal taxpayers' personal information from January to mid-February, up from 455 last year.
The IRS began accepting tax returns on Jan. 19 and the deadline to file is April 18. Here are the scams taxpayers should watch for this time of year:
'Click on this link to update your tax information' or 'Download this attachment of your tax refund receipt.'
Don't click on email links that claim you must update your tax records with the IRS, or that there was a processing error with your return. Cyber thieves circulate malicious links that direct users to websites that mirror IRS.gov, but they could infect your computer or request your personal information. The IRS says it never emails taxpayers for personal information. Typically, agency employers don't call either, but if you receive a call, the IRS provides instructions online as to how to determine its legitimacy. The agency usually reaches people through mailed letters. The IRS also recommends taxpayers make sure they have security software, such as antivirus, downloaded and up-to-date on their computers to better protect against malware.
'Hello, I'm calling from the IRS. You owe us money and if you don't pay now, we will arrest you.'
The IRS will never call you asking for money. Typically, the agency will send a letter in the mail to reach a taxpayer. Fraudsters can rig caller IDs so the number that appears looks like it is an IRS line, and this often compels victims to provide financial information immediately.
Phone scams in which crooks pretend to be government officials requesting you pay taxes have surged in recent years, the IRS says. Since October 2013, more than 5,000 victims have collectively paid IRS-impersonating phone scammers $26.5 million, according to the Treasury Inspector General for Tax Administration.
Taxpayers who receive these fraudulent calls can report the caller's number online.
'To donate to this charity, please give me your financial information.'
Scammers impersonate charitable organizations or make up a nonprofit cause in hopes of attracting donations. Before donating, look up the charity in the IRS database of tax-exempt organizations to determine if it is legitimate, and if your donation is tax-deductible. Never send cash, and keep records of any payments for tax purposes.
'Your return has already been filed.'
Millions of Social Security numbers have been breached through health and medical care providers, government agencies and other organizations. The reality is that Social Security numbers are a nine-digit password we use to unlock our financial lives — except they can't be changed, even after they are compromised. If you file paperwork and receive a notification from your tax preparer or the IRS that a return has already been sent in under your Social Security number, follow the IRS guide to identity theft or visit identitytheft.gov, where you can fill out a questionnaire that will provide advice catered to solving your specific problem.
This article was licensed through Dow Jones Direct.
© 2016 Dow Jones. Prepared by WSJ. Custom Content Studios. All Rights Reserved.
September 1, 2016
Good info regarding credit, from Bank of the West
Are you hurting your Credit?
Your credit history is one of the most important factors of your financial life, determining everything from loans you'll qualify for, the interest rate you'll pay on them, and possibly whether you'll be approved for a bank account, an apartment, or a job. The way potential lenders judge your credit worthiness is by reviewing your credit score — that three-digit number that measures how likely you are to repay a debt on time. While it's important to know how to build up your credit score, you also need to know what actions could hurt it.
1. Don't make late payments
Even the most conscientious people sometimes run late. While friends and family may go easy on you, don't expect your creditors to. Your habits around bill payment account for 35 percent of your credit score. While paying just a few days shy of the due date may not brand you as a poor credit risk, habitual tardiness will — and the greater the delinquency, the worse its effect on your score.
2. Don't let unpaid debts reach collections status
If you haven't paid the bill for an unsecured debt, such as credit card or medical bills, or even an old utility bill or library fine, you leave the creditor in a jam. After a certain period of delinquency, he can no longer count your debt as an asset, and will charge it off its books — an action that goes to a collection agency, then is reported to credit bureaus. Don't let the name fool you. A charge-off doesn't mean the creditor has cancelled the debt and let you off the hook. On the contrary, this black mark on your credit reports alerts future lenders that you promised to pay back a debt and didn't.
3. Don't maintain high balances or max out your cards
Just one lengthy illness or a break in employment could cause even good cardholders or people with formerly strong credit scores to default on their debt. And lenders know this. That's why factors related to amount of debt you owe constitute 30 percent of your score. Carrying a sizeable debt load compared to your available credit on even just one credit card can indicate that you are overextended — and a potential risk.
4. Don't exceed your limit
Your credit limit, along with your current balance for each line of credit, appears on your credit report and affects your credit score. If you have abused your credit privileges by regularly exceeding your credit limit, lenders may charge an over-the-limit fee, increase your interest rate or even close your account.
5. Don't close accounts with zero balances
Paying off lines of credit is a huge accomplishment. Once you pay them down, however, don't close them. Removing the temptation to run the balances back up may sound like a good thing, but it may backfire. Your credit score takes into account the percentage of credit you've used in relation to your total available credit, otherwise known as your utilization rate or balance-to-limit ratio. Closing an account increases the ratio of your existing balances to total available credit, which is an indicator of greater credit risk.
6. Don't close old credit cards
If you still choose to close accounts, make sure they're your newest. While a closed account with positive information can stay on your report for up to 10 years, it will no longer impact another credit-bolstering component of your credit score — that is, the length of your credit history, which accounts for 15 percent of your score.
7. Don't apply for multiple credit accounts
While establishing a credit history is a positive move, you may see a dip in your credit score when you open a new account. That's because each new debt represents a risk, since a lender can't know why you obtained the credit or how you will handle it. Will you go on a shopping spree you can't afford or will you use the credit carefully and pay your balance as agreed?
As a consumer, you are entitled to a free credit report once every 12 months from each of the three credit bureaus: Equifax, Experian and TransUnion. You can get all three at annualcreditreport.com. While the reports are free, you have to pay a small fee to get your credit score.
Sources: myfico.com, experian.com, credit.com
This content was explicitly created as Dow Jones confidential information for Bank of the West by WSJ. Custom Studios and is owned and copyrighted by WSJ.CS. It is not transferable; any use of this concept, including without limitation creation of any derivative work therefrom, without the express written consent of WSJ.CS is strictly prohibited.
August 11, 2016
In a recent post, CoreLogic looked at the correlation between stocks and the sales of upper-end properties ($1 Million+ sales price). The report revealed:
“The powerful ‘wealth effects’ generated by the rapid rise in equities between 2009 and 2015 drove a large rise in the sales of homes that sold for $1 million or more.
Historically, sales of homes priced $1 million or more averaged 1.2 percent of all home sales. The spread between high-end sales and equities widened during the housing bubble but then moved more closely in unison. By the time the equity markets had peaked in May 2015, the $1 million or more share of the market had nearly doubled, averaging 2.2 percent for the remainder of the year.”
This makes sense. As people see their wealth increasing, they feel more confident in their purchasing power. And, of course, that would also impact their decisions regarding real estate. The stock market dipped earlier this year and there was quite a bit of anecdotal evidence that the upper-end market was beginning to soften.
As we can see in the chart below, the market is again flourishing. That may rejuvenate the luxury market as we move through the rest of the year.
As we proceed through 2016 and enter 2017, the strength of the stock market will be a key factor in the strength of the luxury market. If the stock market falters, look for high-end sales to slow. If the market advances, as it has shown signs of doing most recently, the high-end market will advance.
August 10, 2016
Really a hard day Monday, having to put my 16 year old Pug, Buster, to sleep. He had many health issues but was the best dog ever. R.I.P Buster Mathison. We love you!
At Home in Orange County
July 27, 2016
According to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.
Bankrate asked Americans to answer the following question:
“Which would be the best way to invest money you did not need for more than 10 years?”
Real Estate came in as the top choice with 25% of all respondents, while cash investments (such as savings accounts and CD’s) came in second with 23%. The chart below shows the full results:
Sterling White, co-founder of Holdfolio, gave one reason as to why real estate may have ranked so high.
"Houses are tangible. You can physically see and feel the product. So you know where your money is going."
July’s poll also found that for the “26th consecutive month, Americans’ sense of financial well-being improved when taking into account debt, savings, net worth, job security, and overall financial situation.”
There are several reasons, both financial and non-financial, as to why homeownership makes sense. It is nice to see that Americans have returned to a belief in homeownership as the best investment.
July 25, 2016
Recycle Your Designer Kitchen
You bought a home but hate the expensive kitchen. You'd love to rip it out but it seems like such a waste. Don't demolish it, recycle it. Did you know that a company called, Renovation Angel, will help you do just that?
Since 2005, Renovation Angel has recycled over 4,300 kitchens, including a five year old kitchen from a North Las Vegas mansion with an original price tag of $400,00!
Steve Feldman, Founder and President, claims that a luxury kitchen may have more value in removal savings and tax deductions than a six year old Mercedes. Donors receive thousands in tax savings, free white glove insured removal-pack-transport, and reduced disposal costs.
Kitchens that qualify are first inspected by an experienced professional. Homeowners are given a proposal that outlines the financial upside. Next, a free insured white glove removal process begins that removes, packs, and transports. Most kitchens can be completed in one day. The client receives all the donation paperwork.
Although based in New Jersey, the company is already operating on the West Coast. Projects include renovations in Beverly Hills, Rancho Santa Fe, West Hollywood, San Francisco, and Corona del Mar.
For more information, visit renovationangel.org
July 19, 2016
If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.
Answering the following 3 questions will help you determine if now is actually a good time for you to buy in today’s market.
1. Why am I buying a home in the first place?
This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.
For example, a recent survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”
This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the four major reasons why people buy a home have nothing to do with money. They are:
- A good place to raise children and for them to get a good education
- A place where you and your family feel safe
- More space for you and your family
- Control of that space
What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.
2. Where are home values headed?
According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months.
What does that mean to you?
Simply put, if you are planning on buying a home that costs $250,000 today, that same home will cost you an additional $13,250 if you wait till next year. Your down payment will need to be higher as well to account for the higher home price.
3. Where are mortgage interest rates headed?
A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.
Steps To Take: Find out your current credit history & score. You don’t want to start out with any surprises. 1 Contact a professional to help you develop a spending plan & determine how much you can afford. 3 Consult with your lender to review your income, expenses & financial goals to determine the type and amount of mortgage you qualify for. 4 Talk to your lender about applying for a mortgage & getting a pre-approval letter. This letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change) & demonstrates to home sellers that you are a serious buyer. 5 Start gathering all of your documentation: Income Verification (W-2 forms, tax returns, employment), Credit History & Assets (such as bank statements to verify your savings)