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Mortgage Matters 4

Mortgage Matters Radio on KVEC 920 (Aug 23): Lenny Grant, RRM Design Group

Lenny Grant joins Mortgage Matters to talk about the Central Coast’s workforce housing shortage, and the steps that local groups are taking to ameliorate the problem. To learn more about workforce housing, click here.

Continue reading “Mortgage Matters Radio on KVEC 920 (Aug 23): Lenny Grant, RRM Design Group” »

Bishops Peak

SLO County Real Estate Market Overview (Q2, 2014)

San Luis Obispo County is a beautiful place to live and work. The County’s economy is growing. The unemployment rate is sixth lowest in the state (of 58 counties) and the burgeoning local tech and engineering industries are booming. The unique mix of local foods, outdoor adventures, and friendly communities offers a little something for everyone.

Continue reading “SLO County Real Estate Market Overview (Q2, 2014)” »

800px-Rainbow_over_santa_maria_ca

Getting Creative: Specialty Home Loan Solutions From CCL

The home purchase process is rarely simple. Every borrower is unique, and every loan is different. To meet the needs for every borrower that comes through our doors, we make sure to continually expand our loan program portfolio.

Continue reading “Getting Creative: Specialty Home Loan Solutions From CCL” »

Recent Articles

21
Aug
Mortgage Matters 4

Mortgage Matters Radio on KVEC 920 (Aug 23): Lenny Grant, RRM Design Group

Lenny Grant joins Mortgage Matters to talk about the Central Coast’s workforce housing shortage, and the steps that local groups are taking to ameliorate the problem. To learn more about workforce housing, click here.

Continue reading “Mortgage Matters Radio on KVEC 920 (Aug 23): Lenny Grant, RRM Design Group” »

20
Aug

Mortgage Matters Radio: August 16 (NEW)

Guest: Wes Burk (Owner, Patterson Realty)

Central Coast Lending Soundcloud (full episode downloads). August 16, 2014 (link to episode).

 

20
Aug

Mortgage Rate Update (August 20, 2014)

Mortgage rates have dropped week-over-week. On Monday, we reported that our 30-year fixed had fallen by 5/8 of a point since August 13th:

Mortgage rates dropped noticeably since our Wednesday (Aug. 13) update. The APR for the 4.125% 30-year fixed rate moved from 4.182% to 4.140, as the rate “cost” fell 5/8 of a point.

To open August 20th, the 30-year fixed is about 3/8 point more expensive than Monday… but is still down 1/4 point from last week. Across the board, rates are lower.

Read our Market Update column for more on why mortgage rates are so much lower than expected in 2014:

Conventional Loan Programs

August 20 Conventional Mortgage Rates

Specialty Loan Programs

August 20 FHA, USDA, VA Mortgage Rates

Manufactured Home Loan Programs

August 20 Manufactured Home Mortgage Rates

Jumbo Loan Program

August 20 Jumbo Mortgage Rate

Rates Directly to Your Inbox!

If you would like to receive a more detailed Mortgage Rate report, you can subscribe to our “CCL Rate Tracker.” The CCL Rate Tracker follows 10 loan programs and publishes three rate options closest to 1 point, par, and 1 rebate for each program every two weeks and delivers the results in an email. To sign up, please email [email protected] with the text “Rate Tracker.”

Apply Online Today!

When you register for a Loan Center account, you can submit a loan application online and the sensitive information that you provide will be transmitted securely. Your account also enables you to easily modify your loan application and view the status of your loan. Any questions? Call us at 805.543.LOAN or email us here.

About the Loan Programs:

 

NOTE:

  • Mortgage rates assume purchase of a singe-family, detached, owner-occupied, residential property.
  • Mortgage rates assume borrower credit score of 760 and a Debt-to-Income ratio of 35%. Rates for conventional loan programs assume a loan-to-value of 80%.
  • Loan amount is $417,000 for all programs (appraised value of $522,000), except for the high balance ($561,200 loan and $722,000 value), and Jumbo ($700,000 loan and $1,000,000 value)
  • Mortgage rates and APR subject to change.
19
Aug

Down payment guide: How much cash do you need to purchase a home?

20 percent. If you have researched the home loan process, you have likely heard the number 20% and the term “down payment” used in the same sentence.

Conventional wisdom (for the conventional loan program) says that a 20% down payment is required to close on a home loan. For a $400,000 home, the 20% down payment would require $80,000 in cash. This is a large chunk of change, an amount of cash that some buyers are unable – or unwilling – to access.

In reality, the 20% number is simply a guideline. Given the right conditions and the right loan, borrowers can pay as little as 0% down to close on a loan.

In this article, we will go over the low- and no-down payment options for borrowers in San Luis Obispo County, the Central Coast, and California.

Read more »

18
Aug

Mortgage Rates Continue 2014 Tumble: Here is Why

Mortgage rates dropped noticeably since our Wednesday (Aug. 13) update. The APR for the 4.125% 30-year fixed rate moved from 4.182% to 4.140, as the rate “cost” fell 5/8 of a point.

You will often hear mortgage pricing discussed in terms of “points.” Like anything you would buy in a store, each mortgage rate has a “price” associated with it, and this price is expressed in terms of “points”. One point is equal to 1% of the total loan amounts. Two points would equal 2% of the total loan amount. And so on.

4.125 copySo a rate dip of 5/8 of a point on a $417,000 loan translates to a dollar value of $2,606.25. In other words, the fictional borrower would pay $2,606.25 less to obtain a loan with a rate of 4.125%. (For a guide understanding mortgage pricing, click here).

Of course, mortgage pricing is more complicated than that, and varies based on the borrower, the property, and the loan. Borrowers can pay extra for lower rates (and a lower monthly payment) or accept a rebate (cash back) from the lender to accept a higher rate, which can be used to cover closing costs or fees.

On any given day, mortgage rates typically move in small, 1/8 point increments in reaction to markets. The fact that our 30-year fixed rate fell 5/8 of a point in pricing is more significant, and has us seeking out answers.

Why Mortgage Rates are Falling

Any questions about home loans in California? We are The Mortgage Experts: ask us anything! We have a loan program to fit every need. Call 805.543.LOAN or email us today.

“Rates currently have downward pressure due to geo-political stress overseas, weak Q2 earnings for U.S. companies, and the Fed easing out of quantitative easing,” said Jason Grote, co-owner of Central Coast Lending.

When investors are worried or uncertain, they seek out safer investments. U.S. bonds provide one of the safest havens around, including mortgage backed securities (MBS). More activity (demand) in the MBS market will increase MBS prices and decrease yields… which means lower mortgage rates.

Partially, we are seeing this “flight to safety” help keep mortgage rates low, but to add a bit of nuance, let’s take a look at the 10-year Treasury bond.

The 10-year Treasury bond yield is often used as a point of correlation to the 30-year fixed mortgage rate (read this primer to learn why).

In 2014, the 10-year yield has dropped steadily. Larry McDonald (Forbes) and co-author Robbert Van Batenburg (Newedge) published an excellent article on Forbes explaining why the 10-year Treasury Yield has dropped to 2.40% and below, despite consensus 2014 expectations for something more like 3.44% (a full 1% difference!). This issue is an important one, and helps explain why mortgage rates are so much lower than expected.

There is a lot to say here, but we will pick out a few of the most important points:

1) Flight to safety.

As Grote said, turmoil abroad (“geopolitical risk) has sent investors towards safer investments. The only problem: U.S. Government-backed bonds are one of a shrinking number of “low risk” plays.

The alternative flight to safety assets, such as gold, oil or the dollar, have lost their reputation in recent years, due to their diminished resilience in times of turmoil.

Meanwhile, foreign demand for this safety remains sky-high:

According to U.S. Treasury data, the percentage of U.S. debt held by foreign investors was close to 34% of the United States’ total debt load as of April, 2014 vs 31% at the end of 2011.

The United States economy is exhibiting worrying signs, which reinforces the need for safety:

Measured over the same period in 2013, the US economy grew by a mild 2.4% and is expected to grow this year by 1.7%, which is the lowest GDP growth outside of a recessions year since measurements started in 1930.

2) U.S. Demographics and Politics

The baby boomers are retiring and looking for a place to park their money, and finding the U.S. bond market. Meanwhile, U.S. workforce participation continues to drop:

Today, the US civilian labor force is 155 million vs 154 million in 2007, but the US population has grown from 301 million in 2007 to 318 million this year.  Net net, that’s 17 million more Americans with NO change in the size of the labor force.

The authors point out that the aforementioned forecasts that called for a higher 10-year Treasury Yield may have gone off of antiquated expectations for U.S. economic growth:

In developing their interest rate forecasts, it’s like Wall St. is focused on 20th century economic yardsticks in a drastically different post-Lehman world.

There is plenty more to read, including discussion about the effects of financial regulation under Dodd-Frank and Basel III, and the effect that a Republican-led Senate could have on the economy. Read the full piece.

Where Will Mortgage Rates Go?

Moving forward, Grote didn’t foresee any immediate major reasons for mortgage rates to move significantly: “I see rates staying at these low levels for the next couple of quarters.”

The McDonald / Van Batenburg article touched on something important when the authors wrote: “It’s like Wall St. is focused on 20th century economic yardsticks in a drastically different post-Lehman world.” As with the housing market recovery, we are not totally sure what the “new normal” looks like… and we have a ways to go before we find out.

So while buyers might expect rates to remain this low for awhile yet, the economy is more than capable of making unexpected movements. As Grote put it:

“That being said, a bird in the hand is worth two in the bush, so get these low rates while you can.”

 


Central Coast Lending is a California mortgage broker and direct lender based on the Central Coast of California in San Luis Obispo County. Call us at 805.543.LOAN or email us here to set up a free pre qualification. We are The Mortgage Experts: ask us anything!

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14
Aug
762px-Houses_for_sale

Homebuyers: Pre-Approval Offers Leg up on Competition

The real estate market on the California Central Coast is extremely competitive, which makes it important for buyers to put together an offer that demands the seller’s attention.

Read more »

14
Aug

Mortgage Matters Radio: August 9 (NEW)

Guest: Alicia DiGrazia, Realtor (Re/Max Real Estate)

Central Coast Lending Soundcloud (full episode downloads). August 9, 2014 (link to episode).

14
Aug

Luxury Travel on Sale Regularly!

Many of you love travel. I know I sure do. We all work hard and want to enjoy our time off comfortably. In fact, why not pamper yourself?

During the past year, I’ve booked two special trips in very beautiful places. They had great food, accommodations, and wonderful services. I paid about half of the brochure price each time, and would gladly do it again.

Who did I use?

Read more »

13
Aug

Mortgage Rate Update (August 13)

Conventional Loan Programs

Conventional copy

Specialty Loan Programs

Government copy

Manufactured Home Loan Programs

August 6 (Manufactured) copy

Jumbo Loan Program

August 6 (Jumbo) copy

Rates Directly to Your Inbox!

If you would like to receive a more detailed Mortgage Rate report, you can subscribe to our “CCL Rate Tracker.” The CCL Rate Tracker follows 10 loan programs and publishes three rate options closest to 1 point, par, and 1 rebate for each program every two weeks and delivers the results in an email. To sign up, please email [email protected] with the text “Rate Tracker.”

Apply Online Today!

When you register for a Loan Center account, you can submit a loan application online and the sensitive information that you provide will be transmitted securely. Your account also enables you to easily modify your loan application and view the status of your loan. Any questions? Call us at 805.543.LOAN or email us here.

About the Loan Programs:

 

NOTE:

  • Mortgage rates assume purchase of a singe-family, detached, owner-occupied, residential property.
  • Mortgage rates assume borrower credit score of 760 and a Debt-to-Income ratio of 35%. Rates for conventional loan programs assume a loan-to-value of 80%.
  • Loan amount is $417,000 for all programs (appraised value of $522,000), except for the high balance ($561,200 loan and $722,000 value), and Jumbo ($700,000 loan and $1,000,000 value)
  • Mortgage rates and APR subject to change.
11
Aug

Mortgage Matters Radio: August 2 (NEW)

Guest: None

Central Coast Lending Soundcloud (full episode downloads). August 2, 2014 (link to episode).