Posts Tagged: ‘Mortgage Rates’

Good Economy is Bad For Mortgage Rates

January 30, 2018 Posted by Andre Hemmersbach

Higher Mortgage Rates In Our Future?

Higher mortgage rates? I thought the economy was doing well? It seems almost backwards but a good economy is bad for interest rates. As the economy picks up steam,

Mortgage money is going to cost more

Money

investors start to worry about inflation. How much will inflation diminish my investment returns? The answer is simple for them. They only buy investments that bring a higher return adjusted for a higher anticipated inflation. Mortgages with lower rates do not get purchased, so rates move up. Simple supply and demand. So while the good news is your retirement account is growing with every Dow increase, the bad news is that any credit you may have or acquire, like a car or home loan, will be at a higher rate.

What does that mean in dollars and cents?

A 0.25% rate rise on a $300,000 mortgage equates to a monthly payment increase of about $44.00 per month and while that may not seem like a lot, these little increases can add up. According to Samantha Sharf at Forbes, in an article for January 3, 2018, mortgage rates are anticipated to top out around 4.5% by the end of 2018.

Please call me for a free consultation. We can discuss if you are in the correct mortgage product or need help restructuring high credit card or soon to be higher Equity Line of Credit debt.

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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.

Chart

Rate Affordability Chart

 

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

 

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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.

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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.

http://www.dallasfed.org/news/speeches/fisher/2013/fs130805.cfm

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!

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3 THINGS TO KEEP IN MIND WHEN SHOPPING FOR A MORTGAGE LOAN

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: https://ui.constantcontact.com/rnavmap/em/ecampaign/www.dre.ca.gov (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!

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