Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
Should I just keep renting while we wait to see what happens with the economy?
Since these have been the predominant questions on our clients’ minds, I thought I would take a step back to the basics and look at how to make the best decisions possible in uncertain times.
Are the lights going down on the real estate market? Let’s take a look…
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
When your fantasy of owning a home meets the reality of qualifying mortgage, it can sometimes mean that you’ll need a little help. And in more than a few of those cases, the most elegant solution can be a co-signer, technically known as a “non-occupant co-borrower” within the mortgage industry.
So, who makes a good co-signer and who’s just “bad company?” Let’s learn how co-signers can impact, both good and bad, the three most critical elements of any loan approval; income, assets and credit.
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
Living in a “crowded house” but can’t find a way to buy that perfect new home before selling your existing one? Don’t dream it’s over! There are mortgage programs that are specifically created to allow you to use proposed rental income from your existing home — also known as a “departing residence” in this case — to help with your mortgage qualification. After all, most Americans are working hard enough to afford one mortgage payment, let alone two.
If you’ve been told that you don’t qualify for a new home until you sell your current home, but you otherwise have a down payment saved and ready to go, get in touch and let’s see if a departing residence mortgage is a good fit for you.
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
No doubt about it, since 2022 got underway, mortgage rates have been on a stairway higher and that makes it harder for our buyers to qualify for a mortgage on one hand and even when they do qualify, it puts additional strain on their household budget on the other.
So how can buyers and owners keep their rate and payment as low as possible despite rising interest rates? In this short video, I cover three classic ways to “fight the Fed:”
Paying discount points.
Choosing an ARM over a fixed rate loan.
Considering an interest-only mortgage program.
Wanna buy a home this year but not end up “house poor?” Let’s wind on down the road of some of the most effective strategies.
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
By now, some of us have lost a loved one, friend or community member to COVID-19. Though if the cavalier denialism exhibited by some Americans is an indicator, there are still many who have yet to share the magnitude of such a loss. But even putting one’s head in the sand about the medical realities of the coronavirus cannot spare us the social, emotional and economic impacts.
It’s accepted as true that though we all grieve a loss, everyone grieves in a unique manner. One of the most referenced works on the topic was written in 1969 by Swiss-American psychiatrist Elisabeth Kubler-Ross, in her book On Death and Dying. This philosophy is popularly referred to as the “stages of grief,” and whether comprised of five emotions or seven, it feels increasingly as though we are traveling through ‘stages of the pandemic’ in both our professional and personal lives. Sometimes we mourn the loss of our “past life” in a linear fashion and sometimes we jump along the steps chaotically, but without a doubt we have been presented with an event that has impacted our world and is in the process of shaping our future. If I think back to February or March, and reflect on today, here are some examples from my journey through the stages:
1) Shock and disbelief
Wait, no broker tours, no showing of property? Here we go again a la Lehman, 2008 or 9/11 — investors leaving the market and loan programs being suspended or canceled. Tremendous rate chaos.
2) Denial
No way they will shut businesses down — that’s crazy. What do you mean the kids are not going to go to school? The Junior Warriors basketball season is canceled?
3) Guilt
I should have been more forceful with our clients who were on the fence. How did we get lulled into complacency with credit availability? Why did we let our guard down and not consider existential risks in our assessments of the market?
4) Anger and bargaining
Why are we, here in CA, subject to shelter-in-place while people in other parts of the country are still conducting business as usual? What do these “health experts” really know? Man, I HATE Zoom meetings!
5) Depression/loneliness/reflection
My 85-year old dad is 2000 miles away and I’m not sure when he’ll see his grandson next. I’m not going to see the inside of a bustling conference room for many months. Some of the skills, habits and personality traits I’ve used to build my business are going to be sidelined indefinitely. Put the professional wardrobe in mothballs…
6) Reconstruction and working through
Yes, this is the landscape of our new reality — it is not temporary. Embrace, learn and master the tools and tactics necessary to maintain momentum. Contemplate what it will take to grow in a remote world. Reinvest marketing dollars accordingly. Rethink all iterations of “it’s just the way we do things.”
7) Acceptance and hope
The way we did business is over. What remnants exist are gifts but my mindset must accept that I am in a foreign country now and I need to first learn and then speak their language. I can still think in my native tongue, but the longer I hold out and do so, the more difficult it will be to assimilate. The sooner I embrace the good and bad of the new culture, the sooner I will be open to its wonders.
Months into the COVID-19 pandemic, I can find myself cycling through several or even all of the above stages on any given day. My guess is that most others do as well — unless they are stuck. Maybe they’re stuck in denial. Maybe they’re still pissed off — at their governor, at their clients, at themselves. Then again, maybe some are well on their way of reconstructing their businesses but require help they never previously needed; with new technology, with new tools, with new ideas. My point is that we have all lost a loved one — our pre-pandemic way of life and business. It’s now up to us to move on, yet before we do we must confront the grieving process. Recognizing that is part of a healthy healing process too.
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283
Look, I realize I should be so lucky to think that someone from the Van Halen camp is going to bust me on a copyright infringement for using the image above. So if they come a calling, this is what I would tell them:
I originally wrote this blog post on the 34th anniversary of the release of Van Halen’s 1984 “album.” I was a dark-skinned, plenty-awkward eighth-grader settling in for a long Illinois winter. With no discernible basketball talent, no academic prowess and eliciting zero interest from the cute, middle-America girls who hailed from the Arrowhead subdivision and peopled the halls of our junior high, the basement my Dad built out for us threatened to be a pain cave of epic boredom proportions for at least the foreseeable future. That is, were it not for the crackle of the phonograph needle that succumbed to the majestic OBX polyphonic synthesizer swells of “1984.” Like watching sunrise over the Earth from outer space, that short, haunting prelude to the massive hit “Jump,” would give way to the dawn of a different day for me.
Most of us have a favorite “album,” and again I use this word in quotes because the format for delivering music has evolved so drastically over the years. We can likely all name at least one collection of tunes that formed the audio backdrop for a trajectory change in our lives. Even hearing just a snippet can hearken back to a summer on the beach, an old flame, or the very essence of our youth.
Coming of age for most of us is a painful metamorphosis cocooned somewhere in the silk of our teenage years. But for me, the strains of 1984 literally reached out of my boombox and put an electric guitar in my hands. Then, having summarily equipped me for my calling, those nine songs transformed me, for the very first time, into an autodidact and demonstrated that a dream is meant to be pursued with innocent, if infinitely energized, abandon. No matter how crazy and audacious the goal, when you smell like teen spirit and have little to lose, it’s your once-in-a-lifetime opportunity to give it all you’ve got. You may not end up emulating your hero note for note, but that matters a lot less than the amount of growth you’ll experience for strumming along — with enthusiasm, with passion and with purpose.
Thanks to a career I now love in the mortgage business, I meet a lot of people. As introductions go, I’ll get an occasional, “Are you from California?” “Why no…,” I will answer, and often they’ll next ask how I found myself in beautiful Marin County, just north of San Francisco. “Well, in the late ’80’s, I moved to L.A. to pursue a career as a rock guitar player, like Eddie Van Halen….” Pause….. “What???”
Since the album came out, I listen to the 1984 intro every year on my birthday. First it was on vinyl, then cassette, then CD, then my shuffle and now just my phone. Regardless, it re-centers me with a time and place that are gone, but with an optimism that will never die. I would be willing to bet that most of us have a musical bond to that very pivotal moment in our lives when we became much of who we would be for the rest of our lives. What’s yours?
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283
With so many people refinancing these days, and with the loan process sometimes crossing one or two months’ time, a question we frequently get from those in process is, “Should I keep making my mortgage payment?” The answer is a simple and clear, “Yes!”
But let’s talk about why, because the concept is as simple as it is often misunderstood. In our formative financial years, many of us rented a home or apartment before we made the leap into home ownership. And I’d be willing to be bet that more than a few of us got chased by a landlord about the rent being a few too many days late past first of the month. Herein lies the mortgage payment dilemma when it comes to refinancing. Unlike rent payments, which are due on the first of the month and cover the month ahead, mortgage payments are applied in arrears. This means that you live in the house in August, for example, and you pay for that time (in interest and principal) on September 1.
Now let’s assume you’re refinancing a home and your expected close of escrow is the 10th of August. Let’s also assume that you have not made the mortgage payment on the first of August. Your mortgage has a grace period until the 15th of the month, after which you are assessed a 5% penalty. But back to our closing scenario — the payoff demand on your existing loan, once received by escrow, will include all of the days of interest for July, plus the expected days of interest in August until the close date of the transaction. Your new lender will collect prepaid interest from August 10 through August 31. You will “skip” a September 1 payment altogether (no regular payment with either old or new servicer) and your first payment with the new loan will be due on October 1. Got it? OK, great. But remember, on August 1 and into August AND until escrow closes, you are still responsible for your August payment! If for some reason you don’t close on the 10th and there are delays past the 15th (where you’d incur a penalty) and, heaven forbid, delays past the end of the month where you’d report late to the credit bureaus, the responsibility to have made the August payment falls squarely on you.
The best advice any of us can give on any mortgage transaction is to ALWAYS make your payment if you are unsure of how things will work out or if your lender or closing agent is not responsive or clear on the matter. Until your new loan is funded and closed, you are ALWAYS responsible for making your mortgage payment and the risk of going 30 days late on your home loan is a risk too great to run. Any overpayment, as painful as it might be, is far less damaging than the credit blemish of a missed payment. If you have questions on any scenario, get in touch and we’ll be happy to explain further.
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283
You’ve decided to make the leap and enter the real estate market as a buyer. You’ve been looking at homes online, the temptation has become too strong and you realize it’s time to hit the street and actually start looking at properties. Your Realtor almost immediately informs you that not only will she not participate in your search before she knows you’re pre-approved, but also that in this pandemic day and age, without a pre-approval letter no serious listing agent will even let you step foot in the home for a viewing. And so you reach out to your preferred lender and you get pre-approved for a mortgage. Now, how long will that preapproval be good for?
There are a few elements involved in the lifecycle of a pre-approval so let’s look at some of the ones that typically govern the validity of your profile and the day it may expire:
Credit Report
It’s safe to say that your credit report has a 90-day expiration. Even in cases where a lender will permit 120 days, we have to assume that a purchase timeline might be 30 days. Since it’s largely not in your control, you never want your credit report expiring while you’re in contract. At some point between 75 and 90 days, credit expiration becomes a material factor. Now, if the original credit pull has you with 800 FICO scores and you’ve done nothing that would jeopardize your strong credit rating, it’s highly unusual for your credit report to suddenly become an issue, but a re-pull is warranted if you think you may enter a non-contingent contract when you’re coming up on your expiration date.
Tax Filing Deadline
In 2020, the income tax filing deadline was July 15, but in most years, April 15 is the day by which you either need to file your tax returns or file an extension. If your pre-approval did not include this year’s filing and you’ve since filed your return (including e-file), your pre-approval must be updated accordingly.
End of Year
During January and February, most of us get our W-2 forms, our 1099s, K-1s and other year-end statements of earnings. All of these must be included in your file, so if your property search crosses the end of the year, your pre-approval would need to include the newly released information.
Life Events
If you get a new job, your hours on your current job are reduced or changed, if you get divorced, buy a new car, etc., all of these events could impact your pre-approval. A good way to conceptualize your pre-approval would be to assume that anything that impacts your income, assets or credits could influence your mortgage application. Let us know when these things happen and we’ll make the necessary adjustments.
Your mortgage pre-approval is always a work in progress until you go into contract. We can make any necessary changes and advise on financial aspects in advance too. We’re here to help and ultimately our goal is to build and maintain and strong and ready file so that you have the best chance of winning your offer. We need your help to do that and we, in the industry, can all help by reminding you it’s not over until the keys are in your hands.
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283
A couple of years ago, we found a home we really loved. The market was competitive at the time, but we choked on the list price and thought about going in a bit under it. Our Realtor, someone recommended to us, someone possessing a proven track record in the community and someone garnering much respect among fellow agents, highly advised against lowballing the offer. Eventually, we bid a little over list and got the home. One of the reasons the home was so desirable was the school district. The teachers, overall, have a tremendous reputation and years of experience that just seem to best position the student body to learn in a great environment, test well and excel later on as they go to high school and college.
Back to buying, when we consulted one of the county’s top-rated mortgage professionals about locking the interest rate on our loan, he urged that we get things nailed down and not take needless chances. With a 25-day escrow, he reminded us that there was not going to be much time to pray for a correction if the financial markets moved in the wrong direction and that we could really get burned by trying to control something over which we had no control. Personally, we thought rates might go lower so we were tempted to float things a bit longer, but fortunately we took his advice and landed on our feet. Oddly enough, the financial markets got detrimentally volatile about a week into our escrow, though thankfully we were spared that agony.
The new home needed some work, so we eventually hired a contractor that our neighbors referred with honors. We also decided to kick out the garage to fit a third car. The contracting firm suggested that we replace the aging and failing sewer lateral before pouring the new footprint, since the line ran under it. While this would be a short-term financial hit, it would save us a ton in the long run and it proved to be a smart move, as some of the new appliances would also require more efficient capacity in the plumbing. So the forethought and competency of our contractor proved to be a smart investment all the way around.
In the new garage, we keep a car that we mostly use when we go into the mountains and on road trips. We’re lucky to have a great mechanic who helps us keep the vehicle in reliable running order. If the brakes, belts or fluids need replacing, he gives us good advice and advance notice on replacement and this has always served us well. Yeah, I’ve tried to DIY some car repairs but I have to admit, they have the tools and techniques that promote a far better result. Plus, they can do in two hours what takes me six, and without the busted up knuckles and epic tirades of profanity characteristic of my home projects.
When we hit the hills, we love to fish in mountain streams and are grateful to have a local tackle shop that keeps our gear in top shape. Now I’ll admit we’re a bit of gear junkies ourselves, but these guys know angling hook, line and sinker. The only tough part is that we can’t get out of the store without dropping a few hundred bucks each time we go in. Come to think of it, that’s not the only tough part — every time I step foot in that door I usually fritter away a couple of hours talking the joy of fishing. They are like human encyclopedias. But I guess if you don’t appreciate the finest nuances of the sport, you wouldn’t get it.
Back in March, though, this COVID-19 pandemic thing really threw a wrench in the works and now I feel like we’re trapped in our home and being oppressed by these officious elected officials and misled by the hysterical mass media. These high-minded epidemiologists, virologists, medical professionals and so-called “experts” are telling me I have to wear a mask, I have to avoid indoor gatherings, and I should keep physical distance in public. Well, I’m not gonna do it. I’ll follow my instincts and set my own guidelines and they can just leave me alone. I mean, seriously! Who the hell do these doctors, with their fancy degrees, hours of residency and years of experience think they are? I know better than the experts — in fact, you give me a choice between my gut and their brains and I’ll choose my gut every time. I’m smart and I know what the facts are and besides, if I want to learn about something, I can just read about it on the internet or tune into my favorite network and get their opinions. Experience and expertise are overrated and I can see right through that mask. Especially with matters of life and death.
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283
