Posts Tagged: ‘Mortgage Rates’

Home Affordability Via Loan Rates

April 9, 2015 Posted by Andre Hemmersbach

Interest rates are the key factor in home affordability, not the home sales price. Home buyers mistakenly think that high real estate prices are keeping them from affording a mortgage payment, however, the biggest variable in home buyers affording a home are mortgage interest rates. (See chart below)

Given an annual income of $70,000 between a husband and wife, at the industry standard of 38% debt-to-income (DTI) ratio a couple could afford a mortgage loan of $525,700 at a rate of 3%. For every 1% increase in mortgage rates the borrower’s affordability drops another 10%. If rates were to merely raise 3% a borrower could not afford more than a home loan of $369,700.


Rate Affordability Chart


Please call me for a free consultation to see what size home loan you qualify for.



Big Rate Drop Thanks To Oil Prices

January 8, 2015 Posted by Andre Hemmersbach

Big Rate Drop Lower Gas Prices

Lower Gas Prices Big Rate Drop


Look at the big rate drop that the mortgage market has served up if you thought that the good news was the $25 you were saving at the pumps. Lower oil prices are deflationary and that has been great news for the big rate drop in the mortgage rates over the last 3 weeks. Coupled with weak economic news out of Europe and another Greek Currency hiccup the change in oil prices have really moved the home loan rates in the right direction is you are looking for a home loan to purchase a home or are currently in a mortgage over 4.25%.

Rates on a 30 year fixed rate have dropped to below 3.625% on the very best borrower profiles (APR 3.689). Many of my clients are also considering a term reduction to really kick up the savings. Refinancing from a 4.25%, 30 year fixed rate taken out last year to a new 20 year fixed rate at 3.375% will save a borrower over $131,000 in interest over those 20 years.

If you would like to see if a refinance would make financial sense, please call me I would be happy to perform a free review your current mortgage through my proprietary mortgage calculator.


The Federal Reserve’s Monumental Task

August 9, 2013 Posted by Andre Hemmersbach

Through financial news reports and various investment magazines I have been made aware of a coming moment in time somewhere in the future when the Federal Reserve will have to make an important decision to do something about their Quantitative Easing Program. Well many believe we are on the eve of this great day in the upcoming September 18th Fed meeting. Just the mere mention of slowing the program down by Federal Reserve Chairman Ben Bernanke has sent the fixed income market into turmoil since May 22nd. The program’s name itself “Quantitative Easing”, sounds safe enough and does not conjure up any visions of impending doom but the manner in which the Fed “unwinds” the program could have major ramifications. Because the Fed indirectly controls interest rates for credit cards, cars, business and home loans it also has a big influence on the well being of our and the world economies. The link below will take you to a speech given by President Richard W. Fisher of the Federal Reserve Bank of Dallas and voting member of the Federal Reserve of the United States, that in my opinion is the best and most simple explanation of what the Fed has done and now must do. It clearly explains and depicts with charts the monumental task that faces the Federal Reserve over the next few months and years.

If I can be resource to you, your family or friends on any matters of Real Estate, I would be honored to help. I can be reached in my office at 310 540-1330.

Have a great week!



June 5, 2012 Posted by Andre Hemmersbach

To get the best mortgage deal:

 1.      Compare apples to apples.

·        Shop loans on the same day comparing the term, rate, points and the total fees as rates are like stock prices….they change by the  hour. Always get a written GFE “Good Faith Estimate.” Remember even though your GFE it is in writing your terms are not set in stone until you are locked and approved (See bullet #3).  Receiving a GFE as part of your quote is the law!

·        Compare the APR. The APR or “Annual Percentage Rate” was devised by federal regulators as a way for consumers to shop terms of financing. It is an adequate method of comparing loans but know that it can be manipulated. For instance, even loans with the same start rate, same points and fees can have different APR’s. On an
Adjustable Rate Mortgage (ARM) or intermediate ARM an APR can fluctuate as much as 1.5% depending on the margin and index of the loan. On fixed rates mortgages, APR’s can be manipulated because by law, only certain fees have to be included. Loan Officers can legally quote small or no prepaid interest which would falsely lower the APR and your real closing costs (See bullet #3.) Receiving an APR as part of your loan quote is the law!

2.      Make sure the program you pick meets your short and long term financial goals. Even within the same program families (Fixed verses Fixed or ARM verses ARM) there are other considerations. No Cost, No Cost / No Fee or interest only payment programs can save you upfront closing costs, payments or give you security but may cost you thousands of dollars in the long run. Some of following questions should be asked by a good loan officer to determine whether the product fits your financial goals and situation:

§  Holding term

§  Tax bracket

§  Financial goals as they relates to retirement, college funding or risk philosophy

§  Principle reduction pay-downs

§  Alternative investment options including 401K, stocks and bonds.

3.      Use a DRE “Department of Real Estate” Licensed Loan Officer that has been seasoned, comes highly recommended and you trust implicitly. For Licensee information you can check using the Department of California web site at: (click on the yellow link in the middle of the page titled “Real Estate License Lookup”, you will have to enter the loan officer in the following manner: last name, first name. Try my name: “hemmersbach” and “andre”. It will give you information on how long your loan officer has been licensed and if they are in good standing) Some institutions, Federally Chartered Banks and Savings & Loans for instance, do not require their employees to be licensed, this means you could be dealing with someone who is inexperienced, could not pass the exam or just does not feel that educating or licensing himself is important.

4.      PLEASE use me as an unbiased third party opinion to review any Good Faith Estimates, Lender Approvals or Loan Documents even if you have decided not to use my services on your current transaction. I offer this service free of charge and as method for improving the reputation and goodwill in the Lending Industry. I would be honored to assist you!

The reasons I feel that my services, programs and rates are better than anyone else out there on any given day:

 §  My Degree in Finance makes me qualified to look at, explain and help you understand your choices of lending programs and how they will affect your financial goals.

§  My 21 years of experience in the Mortgage Banking industry means I have the experience and knowledge to get you approved and funded with the least amount of hassle possible.

§   I am licensed through the California Department of Real Estate since 1988 and am in good standing.

§  American California Financial is one of the most respected and oldest brokerages in the Los Angeles area, guaranteeing you that we will be here for your questions, advice and future transactions.  

§  We are approved with over 60 different institutions, which means you will get the most competitive rate and program available.

In deciding to buy a home you are making one of the smartest long term financial decisions a person can make. You will also, in all likelihood, be creating the largest debt of your life. The above items are a short list of things to consider when researching your financing options. Make sure you are seeking the guidance of a trusted advisor!


Ferderal Reserve Paves Way For Lower Rates

January 26, 2012 Posted by Andre Hemmersbach

Wednesday’s Federal Reserve statement made mortgage rates drop right back to the record lows from several weeks ago. Since we hit that low, traders have been looking for some sort of clear direction on where the market would move next. The lack of rate positive news had made rates steadily creep higher over the last 3 weeks. Yesterday the Fed released a statement confirming they would continue to buy bonds and keep rates low until 2014. This statement coupled with low inflation reports are starting to make Quantatative Easing #3  ( QE3 ) rumors perculate through the bond market.

The market reacted positively with mortgage rates moving all the way back down to previous records. Strange as it may seem some investors were caught off guard with the big drop in rates, as the Fed’s actions are actually inflationary. Gold prices closed up over $35 dollars an ounce yesterday confirming that some investors believe inflation will be an issue. The reason the move to lower rates  is surprising is that  inflation is the mortal enemy of low rates and usually short-term moves by the fed like the one mentioned above would be trumped by longer term inflation fears.  

What does this mean to you? Don’t fight it!  Wall Street typically trades on rumors and sells on news. So the rumor of the Fed continuing to make money easily available is good for rates today but as soon as it is confirmed look for rates to spike.

Take advantage of today’s historically great affordability and low rates. If you have been thinking of buying a home, your new mortgage payment could be lower than the going rents in your market. If you already own a home with a good mortgage or have paid on your current mortgage for a long time, please let me help you look into a shorter term mortgage. It could save you thousands of dollars over the life of you loan.

Please let me be of assistance in helping you answer questions about financing your home.