In short, low rates! Currently, we are extremely low rates across the board.
Here’s an example of what you can expect:
30yr conventional & FHA, primary home= 4% to 4.25%
30yr jumbo = 4.5% to 4.75%
5/1 ARM, conventional= 2.875% to 3.25%
5/1 jumbo ARM= 3.125% to 3.5%
15yr fixed, conventional= 3.375% to 3.75%
We are seeing a lot of refinances with these rates. However, we are also
seeing purchases tick up because of the rates and the abundance of lower
priced homes out there. Perfect for a home buyer!
Why are rates so low? The biggest factor is the poor economy. We are not
out of the woods in this country. Recent unemployment reports and other
economic indicators suggest a weak economy. Furthermore, we are getting
help from Europe. Their economies are worse than the United States’.
Several countries are passing austerity programs only to be met with
violence in the streets, and European banks post anemic numbers. Japan is
not doing well either. It was already weak before the earthquakes and
tsunamis, and those events compounded that country’s issues.
Combine a poor economy here with even worse economies elsewhere,
and investors will turn to safe-havens. The safest haven of all is the United
States and our debt instruments. So, as investors buy our bonds and bills,
the US Treasury doesn’t have to promise high rates of return. Thus, we are
seeing low rates on mortgages and other longer-term investments.
If there is a bright spot with the poor economy, it is the low rates. Now is
the time to take advantage of this rate environment. Call me or drop me an
email about refinancing your home or purchasing another home. We can
also help you if you want to invest in a rental property as rental occupancies
are the highest in years.
Tuesday, September 27, 2011
Friday, March 25, 2011
Spring has arrived! This time of the year often motivates us to clear things out and evaluate our homes. I get a lot of home improvement questions in the Spring. Many of the questions are seeking answers about how to best pay for improvements. Here is my quick outline for you:
1) Define “home improvement” for you. Is it adding cabinets in the kitchen or adding 1000 square feet or painting the outside?
2) Prioritize your ideas and goals. What “needs” to get done should be a the top. “Wants” and “Nice-to-have’s” should be further down the list.
3) Do research. Figure out the cost in terms of money and time to check-off the listed items. If you need to hire someone, remember to add the labor.
4) Be honest with yourself on time constraints. If you plan on remodeling a bathroom yourself, yet all your weekends are planned for 3 months, you are in for a long process. Need it done faster? Consider the trade off of your time-savings.
5) Determine your budget. Assess your cash-on-hand that can be directed towards the list. It’s called disposable cash.
6) Match the disposable cash against the prioritized list. If your list has an item that costs more than the cash you have, you may need to skip that item or
7) Create a savings plan to achieve that item. For example, if adding insulation is #1 on the list, and it costs $400 and you have $100, can you save $50 per month to get it done in six months.
You will find your list moving somewhat at this point. Notice that I have not said the word “finance” nor “borrow” yet. Cash and savings are your preferred method to pay for anything.
If you have exhausted your cash budget and still have things you need or want to get done. What’s next? Borrowing. There are several ways to borrow or finance home improvements. At this point, you really need to look at two things: your itemized list and the money it costs to do them. The costs should tell you how to finance the improvements.
Call me if you need help, but generally smaller items (e.g. insulation, a small deck and gutters) are probably best either saved for, borrow from a friend/relative or on a credit card. Saving is best, but though a credit card has higher rates, it has the lowest closing costs. You need to develop a plan to pay it off. If dad is willing, as him for a loan and pay him 8% interest-- good deal for both of you.
Say the project is bigger. If you have a home equity line of credit and there is credit available, that is where you should go first. No transaction costs and that is one reason you have the line: for the home! By now, you have figured out that stores will extend credit as will some contractors. You should entertain that, but determine what the real interest rate. Nothing is free, not even 0%. You can approach a credit union for a personal line of credit. Those can be had for about 11%for around $5000.
As your mortgage expert, I can walk through refinancing to take cash-out, doing a second mortgage, doing a remodel/renovation loan or even a complete tear-down and rebuild. Which method will depend on your list and budget. I’m a construction lending expert and can quickly point you in the right direction by developing a smart plan.
If you have spring fever for your house, please give me a shout. I’ll provide “no bull” answers to your questions so you can improve your home on budget and on-time.
1) Define “home improvement” for you. Is it adding cabinets in the kitchen or adding 1000 square feet or painting the outside?
2) Prioritize your ideas and goals. What “needs” to get done should be a the top. “Wants” and “Nice-to-have’s” should be further down the list.
3) Do research. Figure out the cost in terms of money and time to check-off the listed items. If you need to hire someone, remember to add the labor.
4) Be honest with yourself on time constraints. If you plan on remodeling a bathroom yourself, yet all your weekends are planned for 3 months, you are in for a long process. Need it done faster? Consider the trade off of your time-savings.
5) Determine your budget. Assess your cash-on-hand that can be directed towards the list. It’s called disposable cash.
6) Match the disposable cash against the prioritized list. If your list has an item that costs more than the cash you have, you may need to skip that item or
7) Create a savings plan to achieve that item. For example, if adding insulation is #1 on the list, and it costs $400 and you have $100, can you save $50 per month to get it done in six months.
You will find your list moving somewhat at this point. Notice that I have not said the word “finance” nor “borrow” yet. Cash and savings are your preferred method to pay for anything.
If you have exhausted your cash budget and still have things you need or want to get done. What’s next? Borrowing. There are several ways to borrow or finance home improvements. At this point, you really need to look at two things: your itemized list and the money it costs to do them. The costs should tell you how to finance the improvements.
Call me if you need help, but generally smaller items (e.g. insulation, a small deck and gutters) are probably best either saved for, borrow from a friend/relative or on a credit card. Saving is best, but though a credit card has higher rates, it has the lowest closing costs. You need to develop a plan to pay it off. If dad is willing, as him for a loan and pay him 8% interest-- good deal for both of you.
Say the project is bigger. If you have a home equity line of credit and there is credit available, that is where you should go first. No transaction costs and that is one reason you have the line: for the home! By now, you have figured out that stores will extend credit as will some contractors. You should entertain that, but determine what the real interest rate. Nothing is free, not even 0%. You can approach a credit union for a personal line of credit. Those can be had for about 11%for around $5000.
As your mortgage expert, I can walk through refinancing to take cash-out, doing a second mortgage, doing a remodel/renovation loan or even a complete tear-down and rebuild. Which method will depend on your list and budget. I’m a construction lending expert and can quickly point you in the right direction by developing a smart plan.
If you have spring fever for your house, please give me a shout. I’ll provide “no bull” answers to your questions so you can improve your home on budget and on-time.
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