Rates Keep Falling & Will Fall More; Timing The Market

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Rates fell again primarily in response to negative economic data, including revised data that showed the economy shrunk more than we thought in Q1 along with more recession indicators and predictions. The 10 Year Treasury, which correlates closely to mortgage rates, hovered near 3.5% only a few weeks ago – but it is now under […]Read More

Why The Fed Desperately Wants to TANK the Housing Market!

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One of my favorite macro pundits, Alfonso Peccatiello (former $20 billion fund manager who goes by “Alf”) recently tweeted this: “The biggest group of consumers in the US owns houses, not stocks. And this is why taming the animal spirits in the housing market is paramount important for the Fed. And they will succeed…” He […]Read More

Huge Opportunity From High Rates!

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Grizzled Escrow Officer Sets Me Straight! While aimlessly wandering the hallways lamenting the industry slowdown, I ran into a very grizzled escrow officer who runs the title company next door. She is one of those utterly fearless women who has been around forever and has literally seen it all. She handled George Washington’s escrow when […]Read More

2nd Mortgage vs. HELOC (Home Equity Line); Which Is Better?

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Yesterday’s blog, 5 Reasons to Get a HELOC, was inspired by a question from my nephew – as he is a perfect candidate for a HELOC. He is in his early thirties – and he has a family to support, about a half-million in equity, a very low rate first mortgage, an excellent job, and […]Read More

5 Reasons to Put Less Money Down

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What If Rates Don’t Fall? WRAP-AROUND MORTGAGES

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“… I remember my first mortgage back in 1982, when my rate was 15%!” said every boomer ever… “… I remember my first mortgage back in 1982, when my rate was 10%!” said my law school professor… The above two comments are huge reminders that homes still sell in even the highest of interest rate […]Read More

Barry Speaks! Fed Disdain; Recession & Low Rates Coming; Housing Will Be Fine

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Barry Habib reminds us that it is inflation that is driving higher rates, but that it will peak in October and start to fall for two reasons: (1) today’s higher rates are destroying demand across the board (I again suggest watching the video for his full explanation); and (2) supply chains will be untangled and working by then, eliminating shortages.Read More

Why Housing Prices Will Double In 6 Years; No Bubble Here…Part 37

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Interestingly, Barry Habib (MBS Highway Founder), Ken McElroy (famous real estate investor), and some dude on Reddit all recently made the case for much higher housing prices – DESPITE HIGHER RATES. And all of them were responding to all of the housing bubble fears we see everywhere now on social media and in the press. […]Read More

If Property Won’t Appraise, Change Financing!

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We have a buyer who is willing to offer $450,000 for a property with 10% down. The problem is that, according to her agent, “the property will never appraise for more than $380,000, because there are no comparable sales anywhere above $380,000.” Read More

Why “Timing The Market” Never Works

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Dear Hedge Fund, Why are you still buying up houses in droves when the market is obviously going to crash? That was the letter I wrote to a hedge fund yesterday, and boy did I make them feel stupid… Or not, because I might not have actually written that letter. 😊 But here is my […]Read More

Is The Fed Trying to Tank The Housing Market – Or Just Slow It Down?

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Agents in many of the markets we work in are telling us that they are now finally seeing a slowdown in the market. One agent who lists high-end homes in the Bay Area told me that he “used to tell sellers to remodel their kitchens, update flooring, repaint walls, and spruce up landscaping before listing […]Read More

A Home Is Your Castle Against Rising Inflation

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My title is the exact headline from this recent WSJ column by economist Laurence Kotlikoff. The first line of his column was this: “Mortgage rates are up to 5%, and some fear a valuation bubble. Even so, it’s a good time to buy.” I have been beating the “houses-equal-inflation-hedge” dead horse for years now, but […]Read More

17 Day JUMBO Financing – With No Contingencies & Super Low Rates!

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I often blog about how jumbo rates are as much as 1% LOWER than conforming rates and explain why too. This recent blog is just one example. Our Jumbo Niche I obsess with jumbo financing not only because it offers astoundingly low rates, but also because it comprises as much as 75% of all financing […]Read More

17 Ways to Lower Debt Ratios and/or Garner More Funds

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I blogged recently about 8 Ways to Lower Debt Ratios When Rates Are Climbing – and I got numerous additional suggestions from a friend who owns a mortgage bank (Apex Mortgage) back east. Some of the ideas were so good that I felt compelled to update my blog to “17 Ways.” Several of the ideas […]Read More

8 Ways to Lower Debt Ratios When Rates Are Climbing

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With rates rising so quickly, “debt ratios” are becoming a major issue for many borrowers. Hence, I am repeating this past blog where I set out various ways to lower debt ratios in order to still qualify in a market with rising rates. Also, in case anyone is interested, I explain what debt ratios are […]Read More

Why There Is Still No Housing Bubble

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Everyone Thinks Higher Rates Will Kill The Housing Market We shared this blog, Higher Interest Rates Did Not Slow Housing Appreciation; Why?, with our database in our monthly newsletter a few weeks ago, and I got this response from a past borrower: “You really think that if the Fed raises rates seven or eight more […]Read More

Bridge Loans Explained (Buying Before Selling Current House)

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We often have buyers come to us who want to buy a new residence before selling their current residence. If they do not have enough cash for a down payment, we often just recommend that they get a home equity line of credit (HELOC) against their current home. HELOCs are awesome because they are usually […]Read More

8 Ways Parents Can Help Their Kids Buy Homes

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Parents frequently ask about the best options for helping their kids buy homes, so I thought I’d set out a few in this blog. If kids have sufficient income to qualify themselves and only need cash, a willing parent should simply “gift” the necessary funds for the down payment and closing costsRead More

Cryptocurrency & Mortgage Financing – Things To Be Aware Of

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We recently had a borrower liquidate funds after a flurry of trades – resulting in demands for YEARS of bank statements by the underwriter (because she’s required to “source” every dollar that goes into a transaction)Read More

How To Estimate PMI (Private Mortgage Insurance)

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An agent asked for this blog in December, and I am finally getting to it but should have done so much sooner because it was a great request! As an aside, if any readers would like to see me blog about something in particular, please feel free to email your requests, as I greatly appreciate […]Read More

Intangible Benefits of Homeownership; How To Win Hot Market Battles

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This is a quick reminder that we love to help get offers accepted in hot markets by: (1) pre-approving clients so they can waive contingencies; (2) closing very fast – in 14 calendar days for conforming and FHA loans; 21 days for jumbo; (3) calling listing agents to tout the strength of our clients.Read More

Can Borrowers Be On The Loan and Not On Title?

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We often have “title only” buyers, or buyers who want to be on the property’s title but who do not want to be on the loan. This is often the case with spouses, where one spouse might have credit issues that adversely impact financing terms. The spouse with good credit will be the only one on the loan (assuming she has enough income to qualify on her own) but both spouses will be on title.Read More

Desktop Appraisals Coming Soon

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Desktop Appraisals Are Coming! An appraiser recently charged us $2,000 for a basic appraisal in suburbia with a slightly larger lot and a moderately short time frame – because we could not find anyone else, and he knew it. BUT – with refis drying up and appraisals getting waived or easier, that appraiser is not […]Read More

Why Rising Rates Will Not Crash The Housing Market!

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Rates rose another 1/8 to 1/4 percent over the last few weeks and are now almost 1% higher than 2020’s lows. (as a sidebar, they are about where they were last March…so they are not THAT high) But, whenever rates do start to rise in a hurry, I invariably see pundits explaining how rising rates […]Read More

Credit Inquiries – Way Too Much Concern

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On Friday, I blogged about the difference between consumer credit scores and mortgage credit scores: Does Credit Karma Lie To You? In that blog I pointed out why we need to run credit for every borrower and why we can never rely on the credit scores that borrowers give us verbally. In response, several agents […]Read More

How Millennials Power The Housing Market – 6 Conclusions

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“Millennials Are Super Charging The Housing Market” This was a front page headline in the WSJ recently. The millennial surge is something we have all seen coming – but there are some fascinating conclusions, nonetheless. Millennials consist of the generation born from 1981 – 1996, and they surpassed baby boomers as the largest generation alive […]Read More

3 Biggest Reasons To Buy Real Estate

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The 3 biggest reasons to buy real estate now are: Increasing Rents: Rents are skyrocketing and will only continue to shoot up with inflation. Buying now allows homeowners to permanently fix their housing payments. Locking In a Low Rate: Rates remain extremely low but will inevitably climb as inflation signals get stronger and stronger. Buying […]Read More

This Is Why Every Renter Should Consider Buying Now

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WHY OUR CONDO IS THE PERFECT INFLATION HEDGE My wife Heejin and I own a rental condo in Scottsdale – with a small, fixed-rate mortgage and quickly increasing rent, as Scottsdale is one of the hottest markets in the country. It is a perfect example of why real estate is such a great inflation hedge. […]Read More

Alternative Financing Options: Interest Only; Rental Income Only; Asset Depletion; Bank Statements

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“ALT A” LOANS In the 1990s, a lender called Headlands Mortgage pioneered what were then called “Alt A” mortgages. The loans allowed borrowers to qualify for competitive mortgages without having to go through the rigmarole of a “full documentation” qualification. In that high-rate era, “Alt A” interest rates were very close to the rates associated […]Read More

No Income Verification Loans: DSCR

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I’ve mentioned this “horror story” a few times in my blogs. In 2005, I was at a Christmas party where a wholesale rep from SunTrust Bank was bragging about his “no down payment” (100% LTV) “NINA” Loans for investors. NINA stood for “No Income/No Asset” verification. Borrowers only needed a 680-credit-score and they could buy […]Read More

4 Reasons Why Real Estate Is One of The Best Inflation Hedges!

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INFLATION ON THE HORIZON Major inflation seems all but inevitable in light of our burgeoning supply chain issues, massive government spending, enormous money supply infusions (printing), climbing CPI numbers, and skyrocketing PPI numbers. Because of this, I want to remind everyone why real estate is one of the best inflation hedges available. By “inflation hedge” […]Read More

DANGER: Non-Warrantable Condos! Financing Options?

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WHAT IS A NON-WARRANTABLE CONDO? A non-warrantable condo is one that does not meet the requirements of most conventional (Fannie, Freddie, and jumbo) lenders, and is thus ineligible for the most competitive financing options. To be “warrantable,” a condo must meet a long series of requirements set out by Fannie, Freddie, and jumbo lenders. I […]Read More

Conforming Loan Limit Up to $625,000? Jumping the Gun and Why It Matters

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HIGHER CONFORMING LOAN LIMITS ANNOUNCED EVERY YEAR Every year, usually in late November, the Federal Housing Finance Agency (FHFA) announces the new conforming loan limits for every geographic area for the following calendar year. Shortly thereafter most every mortgage lender follows suit and starts to offer higher conforming loan amounts as well. Two quick reminders: […]Read More

Why Homebuyers Need To Use A Real Estate Agent

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When Homebuyers Represent Themselves In Real Estate Transactions – Bad Things Happen 😊 Many years ago when I was new to the business, I wrote a purchase contract for one of my borrowers for a property in the hills of Oakland, CA. I thought it would be an easy way for her and I to […]Read More

Mortgage Reminders: My Inconsistent Fed Comments; Rent Backs; Owner Occ Ratios; Attached PUDs/Townhomes; 12 Condo Considerations

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Here are a few random reminders. Powerless Fed Vs. Inflation-Causing Fed. In response to my recent blog about the Fed being “Powerless,” I got this comical point from an agent I really enjoy hearing from: “I know they say that great minds can hold contrary thoughts with ease, but how do you square a powerless Fed […]Read More

Still No Housing Bubble – Because Rates Are 3% Lower Than In 2006!

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MBS HIGHWAY HITS HOUSING BUBBLE AGAIN Barry Habib, Founder of the MBS Highway, hates it when the media spreads irrational fear about a housing bubble. He also shares marketing materials that subscribers to his content are allowed to share without attribution to him, but that is anathema to me. Below is a script he recently […]Read More

The #1 Reason Renters Want To Buy A Home

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FIXED HOUSING PAYMENT IS NOT THE BIGGEST INCENTIVE TO BUY In August, I blogged about Rent Vs. Buy Comparisons In the Age of Inflation, pointing out how comforting it is to buy a home and lock in a fixed housing payment when rents have been climbing as much as 30% per year in some markets. […]Read More

Change Jobs, Lose Bonus Income & LOSE HOUSE!

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It is usually 100% OK to change jobs at any time IF … borrowers are NOT dependent upon bonus, overtime or commission income to qualify. If, however, borrowers are dependent upon bonus, overtime or commission income to qualify for a loan (very common in today’s world), changing jobs can be a deal killer! This is […]Read More

Rent Payments & Rental Income To Qualify

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Here is some important info about using rental payment history and rental income to qualify. GREAT NEWS: “DU” USES RENT PAYMENTS NOW On the good news front, Fannie Mae announced last month that its automated underwriting system (DU) will now take into account rental-payment-histories, to make it easier for renters to become homeowners. Here is […]Read More

Rent Vs. Buy Comparison – Follow Up To Responses; ADU Follow Up Too

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Yesterday, I blogged about Rent Vs. Buy Comparisons In The Age of Inflation, and I got a surprising amount of feedback, including the following: “I put 5% down, and my housing payment is $500 lower than my Mom’s rent.” “You are not accounting for maintenance costs!” “Do you guys do ITIN Loans?” “Unsubscribe” 😊 5% […]Read More

Rent Vs. Buy Comparisons In The Age Of Inflation

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$500,000 HOME APPRECIATES $200,000 IN 9 MONTHS My wife Heejin bought a house in Plano, TX, in November for $519,000. We put down 20%, and our PITI is $2,725. The house was rented for $3,700 per month when we bought it, so we could have cash flowed nicely from the start. The tenants moved out […]Read More

Using PMI To WAIVE Appraisal Contingencies

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Many homebuyers do not realize that PMI can be an option for those who might want to make offers with no appraisal contingencies. This, of course, is a great idea, but with a HUGE CAVEAT: BEWARE OF JUMBO! PMI is always a great way to cover appraisal shortfalls on the conforming front. Example: Borrower intends […]Read More

Why Housing Is Actually More Affordable Today Than In 1980!

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WHY HOMES ARE MORE AFFORDABLE TODAY In the midst of my daily excursion into the bowels of Twitter, I saw a great tweet from the Center for Human Progress. It had a link to this excellent article, titled U.S. Housing Became Much More Affordable Over The Last 40 Years. It was fascinating to say the […]Read More