The New Jumbo 2 to 1 Buydown…

I have a new loan product that helps developers sell more property in today’s high-rate market.  It’s called 2 to 1 Jumbo Loan and no retail bank offers it.

The concept of this program works like this… Current jumbo rates are approximately 6%.  The buydown (which is priced a tad higher than current market), allows the borrower or seller (builder or developer) to buy down the rate by 2% year 1 so instead of the borrower paying 6.5%, they pay 4.5% for the first 12 months.  Year 2, the borrower pay’s 5.5%, then year 3, 6.5% for the remainder of the loan but will most likely refi in 1 to 2 years when rates go lower.

The cost of the buy down averages between $35k to $40k and put into an escrow account to cover the buydown over the life of the loan but is usually paid by the developer, builder or seller as a way to incent the buyer to purchase and close on the unit.  In return, they get the following:

  • On the price of $2m at 25% down, the P&I payment on the mortgage of $1.5m at 6.5% would be $9481/month.  At 4.5%, the payment would be $7600/month saving the buyer/borrower $1881/month year 1 for 12 months.
  • Year 2, the payment would be $8517/month saving $964/month over month 13 to month 24.
  • Over 2 years, that’s a saving of $34,140 over 2 years.

Note:  Payment above is P&I only and does not include property taxes and property insurance paid monthly.  Above based on a purchase with borrowers having a 780 mid fico and above.  Apr on 6.5% is 6.879.

This program will help more property be sold and we are the only lender in the US currently offering this program.  Let me know if you’d like to discuss this further.

Thanks.

Best Regards,

Rob McCarthy

Senior Mortgage Advisor

www.101Loan.com

650-465-8957 c  408-377-4123 o  408-608-1921 f

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE- 01165697  NMLS- 121019  GMCC NMLS- 254895

101 Loan is an Associate of General Mortgage Capital Corporation

 

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 300 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Note: Interest rates and loan programs quoted are subject to change without notice or until locked and approved by lender.

Making a Strong Offer in Today’s Real Estate Market

This is something I shared with another client making offers.  Just some advice to share with you?

With listing inventory this low in the bay area, you should ask your agent/Realtor what they think the property/listing will sell for vs what its worth.  Many agents list property below market to get multiple offers and higher prices.  Rarely do we run numbers based on list price, we tend to go a good $100k over the value to give a more realistic payment breakdown and sometimes that may still be too low.

For each offer you plan on making, asking your agent what they think the true value of the home is (also known as a CMA) and then how many offers will be made, is crucial to a successful offer in today’s real estate market.  Once you determine the true value, then add 1% to 2% for each offer.  Again, this may not result in the winning offer but it will get you close or at least afford the opportunity where the listing agent counters your offer, meaning your still in the running vs dead last on the offer.

For more info, contact us, your Real Estate agent and be sure to read the article below to see what’s happens when your not successful in ratifying the purchase contract.

See below:

https://101loan.com/blog/chasing-the-2021-housing-market/

Any questions, please contact me.  Thanks.

Best Regards,

Rob McCarthy

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01165697  NMLS #121019

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Rob’s Market Report…The Good, the Bad, and the Ugly

Hope the week is treating you well! 

For us in lending, it’s a world wind!  Never in 30 years have I worked so many hours per week with such concentration for so long since going Shelter In Place on March 17.  We had a short stay on SIP but that didn’t last long with SIP Chapter 2 commencing, where COVID numbers rapidly increased as the state of California and other states throughout the US lifted social distancing rules.

While COVID has impacted un-employment its done little to nothing in the near term to the Dow Jones which closed at 26,828 today and interest rates have gone lower.  Definitely the lowest I have ever seen them in 30+ years of doing lending.

If you, your friends or family haven’t refinanced and have loans below $765k, have them contact us and we will happily quote them.  Most retail banks are taking 90+ days to close a refi while were still at 45 to 50 days from start to finish.  In addition, if your clients just want an idea of what’s available we can usually respond with a rate update within 24 hours whereas retail banks based on what my clients are saying, can sometimes take, weeks for a response.

Its as simple as completing the following questionnaire and forwarding back to me to run a rate search…See below:

Please complete the following refinance questionnaire or go here to complete online https://101loan.com/refinancing-start/.  Once completed, I will research loan options out of 50 lenders and provide a rate comparison for your review based on the best available rates and loan options.  Any questions at all, please contact me.  Thanks.

1)  Provide your property/mailing address, day and evening numbers.

2)  What is the estimated value of your property and is your dwelling permitted with the city?  In addition, is this property your owner occupied or investment property?   Lastly, is the property a house, townhouse or condo?

3)  What are the balance of your 1st Mortgage-      2nd Mortgage-       3rd Mortgage-

4)  What are the rates on your 1st Mortgage-      2nd Mortgage-       3rd Mortgage-

5)  What are the payments on your 1st Mortgage-      2nd Mortgage-       3rd Mortgage-

6)  Do you want cash out?  If so how much?

7)  How long do you plan on owning the property?

8)  Does your loan have a prepayment penalty?  If so, when does it expire?

9)  When did you purchase your home and for how much?

10) What is your annual, verifiable income and what is your estimated FICO score?

11) Which loan programs are you considering?  Fixed and/or Hybrid?

In closing, if you need help with any type of financing, please contact me.  See current market report at http://www.mmgweekly.com/w/index.html?SID=86df7dcfd896fcaf2674f757a2463eba.

BTW…if you missed my last video on Home Insurance, make sure you watch this.  A client of ours out of the area was just quoted over $10,000 on a 3000 sq ft house as they let their home insurance lapse and unfortunately for them, they are in a risky area “burn wise”.  https://101loan.com/market-update-and-insurance-update-fire-season-is-upon-us/

Best Regards,

Rob McCarthy

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01165697  NMLS #121019

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Note: Interest rates and loan programs quoted are subject to change without notice or until locked and approved by lender.

Insurance Update – Fire Season is Upon Us

Happy Friday,

Interesting week…

Things seemed to be improving financially, but then the Dow reacted with news of new Corona outbreaks (down by 5% yesterday but up today by 1.43% as of this morning).  Some good news, unemployment remains much lower here in the bay area compared to other places throughout the US and housing inventory remains low forcing home prices higher.  Great for home owners and investors but not so great for buyers.

Next, I met with my good friend, Bernard Lauper with Risk Strategies to learn what home owners should do if they own property in the suburbs or rural parts of California, as fire season is upon us, noted by the recent brush fires in San Jose and in Los Angeles.  See video at https://youtu.be/72lwrDcIN0o.

Lastly, below are our current rates.  What’s interesting is I shared this with a client, this week, and he conveyed that our 7/1 was super competitive compared with other retail banks and brokers for a few reasons.  Most retail bank are requiring 780+ fico to get the lowest rates, we don’t have that requirement.  Most retail banks require 24 months of liquid assets but don’t count retirement accounts.  We do count them.  Lastly, many retail banks are not doing cashout refi’s on jumbos, 80/10/10’s on purchases, or debt to income ratios over 38%, the list goes on, but we do.  If you want a flexible lender who is still closing purchases in 30 days or less and refi’s in 45 days or less, contact us.

Have a Great Weekend!

Best Regards,

Rob McCarthy

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   rob@101loan.com e

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01165697  NMLS #121019

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

 

As requested, please see today’s best interest rates comprised of over 40 institutional and portfolio lenders throughout the United States.  For a customized quote based on your clients needs, please contact me.  Thanks.

BTW…We are still doing jumbo 80/10/10’s (10% down) and Jumbo Cashout Loans.  For more info, please contact me.  Thanks.

Have a Great Day!

 

1) 30yr Fixed Conforming ($250k – $765,600)
RateDisc. PointsAPR
2.6251.2782.759Details
2.7500.4972.823Details
2.8750.0002.899Details

 

2) 15yr Fixed Conforming ($250k – $765,600)
RateDisc. PointsAPR
2.2500.8132.429Details
2.3750.4052.496Details
2.5000.0002.522Details

 

3) 30 Year Fixed Jumbo ($765.7k and above)
RateDisc. PointsAPR
4.0000.1814.023Details
4.1250.0254.135Details
4.5000.0004.509Details

 

4) 10/1 ARM Jumbo ($765.7k and above)
RateDisc. PointsAPR
3.3752.2503.437Details
3.5001.1253.422Details
3.6250.0003.407Details

 

5) 7/1 ARM Jumbo ($765.7k and above)
RateDisc. PointsAPR
3.1252.2503.270Details
3.2501.1253.237Details
3.3750.0003.205Details

 

6) 5/1 ARM Jumbo ($765.7k and above)
RateDisc. PointsAPR
2.8752.2503.173Details
3.0001.1253.126Details
3.1250.0003.080Details

 

Specialists in Residential, Commercial and Reverse Mortgage Financing

For More Info, please
contact me at:

Rob McCarthy
Senior Mortgage Advisor

www.101Loan.com

650-465-8957  Cell

rob@101loan.com

CA DRE Lic 01165697
NMLS #121019

Over 200 “5 Star” Reviews
on Yelp at:

http://www.yelp.com/biz/101-loan-campbell-3

Recent Market News…

https://101loan.com/blog/

 

 

 

 

 

 

 

 

 

Disclaimer: The above rates are based on 75% ltv or less with a 43% debt to income ratio or less. On Jumbo products, some programs require 9 or more month of PITI reserves. For details, please contact me. For a custom quote, specific to your needs and current financial situation, please contact us. Rates and fees are subject to change without notice or until locked in and approved by lender. 101 Loan LLC – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014. CA DRE- License # 01165697 NMLS #121019. 101 Loan LLC is licensed by the CA Department of Real Estate. Equal Opportunity Lender.

Unemployment Down in Bay Area and Real Estate Staying Strong…

A Very Interesting Week for Real Estate, Unemployment and the Dow Jones!

This week, see why the economy is coming back strong. For more info, see https://youtu.be/7DaDcWhDUdg.

Home Values

Real Estate values continue to stay strong, with multiple offers as Shelter in Place has been modified.

Just this week, we pre-approved over twice as many borrowers as with previous weeks.  Many of my Realtors are reporting buyers coming off the fence and writing offers.  Housing inventory is finally up with Shelter in Place in Phase 2 allowing Realtors the ability to list property.  Inventory is now at 2.8 months but with over 7 Million people residing in the bay area, that isn’t much!  This is great news for sellers, but not so much for buyers where supply and demand are not equal.

Unemployment

Bay Area unemployment wasn’t as high, as some expected, compared to other areas throughout California.  Marin County came in at 11.1.  San Francisco County at 12.6, San Mateo County at 11.4 and Santa Clara County at 11.7.  What is also interesting is national unemployment dropped from 15.3 to 13.3%.  In just one month, over 2.5m people went back to work which is great news for the economy!

Local, National and Global Markets

The Dow closed today at 27,110 due to the following:

  1. Economic Optimism
  2. Overwhelming Policy Response
  3. Corona Virus Uncertainty Abating
  4. Global Yields Increasing

For more info on these, see my weekly report which can be found at www.101Loan.com under Rob’s Corner.

In Closing…Noah Manning with Perspective Realty in the North Bay and myself provided a summary on the above (and more) at https://youtu.be/7DaDcWhDUdg.   (I hope you enjoy it and if you like it, please leave your comments on the channel)

I hope you have a great weekend!

All the Best,

Rob McCarthy

Senior Mortgage Advisor

408-377-4123 o  650-465-8957 c   rob@101loan.com

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01165697  NMLS #121019

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Market Report and What the Unemployment Numbers are Saying…

Please See this Weeks Market Update that will Discuss the following:

  1. Last Weeks Market Review
  2. A Look Ahead – What to Expect
  3. How Zoom has changed the way we do business!

(http://www.mmgweekly.com/w/index.html?SID=86df7dcfd896fcaf2674f757a2463eba)

Next and Most Important…please see April’s unemployment numbers that were just released at 10am this morning.  California’s unemployment rose from 2.9 in February to 5.3 in March to 15.5 in April (https://www.bls.gov/lau/).

Locally though, unemployment (still waiting for the numbers in the bay area), should be lower since we are a tech based economy with large cap companies with lots of  cash in reserves (Example: Apple has 116 Billion in Cash).  Once the bay area updates, I will send another report.

In Closing, the Basic Consensus is as follows:

If our (bay area) unemployment numbers are lower than the average of the state, coupled with low housing inventory and low rates, demand for housing should stay strong.  If unemployment numbers are high, then we could be going into a recession as predicted by analysts throughout the country.  Based on history though, we (bay area real estate) tends to outpace and outperform the rest of the country.   As mentioned, I will update you once I have more info.

BTW…for more news in the future, always go here: https://101loan.com/blog/

All the Best,

Rob McCarthy

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01165697  NMLS #121019

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Cash Out Refi’s Might Go Away?

 First and Foremost…
I just read an interesting report on how lenders may eliminate cash out refinances on conforming and jumbo loans. We have seen the “add” for cash-out refinances get super expensive lately.  It appears the Federal Reserve doesn’t want borrowers pulling equity out of their homes.  They feel home values may go down due to the negative impact of Shelter in Place and Covid-19.
For more info, see quote and link below:
 
“Many lenders have eliminated or restricted cash-out refinances, financing for investment properties and some for second homes as well,” Cohn says. “Jumbo lenders have also tightened their guidelines.”
 
https://www.cnet.com/personal-finance/6-things-to-know-about-refinancing-right-now/ 
 
Next…
A listing agent in the east bay recently posted a great Yelp review on the service we provided her. I just love when we can help Realtors and their clients successfully & smoothly close on purchases. 
To view the review, click here: https://www.yelp.com/biz/101-loan-mortgage-san-jose-2  (See Testimonial from Bette dtd. 4/28/2020)
If you’d like the same care, please contact me.
 
Best Regards,
Rob McCarthy
Senior Mortgage Advisor
www.101Loan.com
408-377-4123 o 650-465-8957 c 408-608-1921 f
101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014
CA DRE #01165697 NMLS #121019
Products/Services/Accolades:
1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

“A Stock Market Loss is Only a Loss if You Sell”

A Stock Market Loss is Only a Loss if You Sell or so Financial Planners tell us!

For those in their 30’s, 40’s or 50’s, those age groups, should have time for the stock market to recover. However, for those much closer to retirement or retired, they may not be as fortunate!

As companies take huge losses with “Shelter in Place” and consumers are pulling back their purchases, analysts feel MORE stock losses are imminent.  The Federal Government stimulus will help in the short term, but longer-term, we are facing a new economic reality and one that we will not like.

If you’re in your 60’s, 70’s or 80’s, making back the market’s losses may only be a hope, and unfortunately not reality. The question to ask is…What are my options now that my fixed costs are the same, but my assets have taken a big hit?

We may have an answer for you. To learn more, please contact me or review the information on my site at https://101loan.com/reverse-mortgage-start/ .

Thank you.

Best Regards,

Rob McCarthy

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o 650-465-8957 c

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01165697 NMLS #121019

“Over 200 “5 Star Reviews on Yelp and Over 30 years of Experience in Lending”

Market Update and What Should Retired Homeowners Due in a Declining Stock Market…

As for Mortgage Rates and the Stock Market…The dust has not settled.  Analysts say this week or next may be similar to the last few weeks with volatility in the market. For now, only loans of $510k or less are low in rate. Loans above $510k are expensive, “rate wise” when looking at refi options. Purchase loans are still low in rate as banks subsidize them. In regards to market volatility for this week, please see the following at https://seekingalpha.com/article/4335928-markets-are-setting-up-for-another-move-down-technically-speaking-for-week-of-3-30minus-4-3.

In Addition…Wells Fargo has announced they will only do jumbo loans for clients with $250k deposited with them and will not be doing conforming loans or government type loans (such as FHA and VA) going forward. We are glad we have access to more than one jumbo lender and access to everything else! Being a broker in this type of market does have its perks with access to multiple lenders, many of which are portfolio lenders and lenders that sell to Fannie Mae and Freddie Mac, giving our clients more loan options!

In Closing…with market devaluations, many of your retired clients may be feeling the pain or fear of seeing their portfolio or monthly income from those assets go lower. As a solution, we have access to Reverse Mortgage Financing that can help them Age in Place and eliminate stress and anxiety with the changing times. For more info, please contact me.  Any questions, please contact us.

With the Federal Reserve Lowering Rates, Why Have Mortgage Rates Gone Higher?

As you know the Federal Reserve lowered rates, specifically the Fed Fund was lowered to 0.  This means the bank lending rate has dropped, lowering rates at the street level at tad, but no-where near where they were weeks ago when rates were lower.

Rates are still up because of the following…

  1. Lenders are slammed with so much business. Their turn times are much slower now.  This has caused them all to increase their rates to handle the volume they currently have locked.  By lenders increasing rates, their incoming business slows down allowing them to catch up.  Once they catch up, they typically will lower rates again.
  2. The Corona Virus has forced employees at banks to work from home, slowing down the virus.  Working remotely unless completely set up for this, has caused a slow down of work efficiency causing work delays.
  3. See my response from a few weeks ago below on what a Fed Drop really does*
  4. Lastly, unrelated to rates, County Offices have closed and many appraisers are staying home and not taking on new business.  This will cause further back-ups for lenders and consumers.  We know this is short term (hopefully only a week or so) but this will delay “most” refinances and purchases from closing in the near term.

Update on Rates from a Few Weeks Ago…

Clients are Asking…Why Have Rates Not Gone Down Today?

As you may know the Federal Reserve lowered the Fed Fund by .5% today.  You may be wondering how this will affect interest rates you are seeing for your home mortgage.

I hope the following sheds some light on the subject:

Typically, a Fed cut has no direct effect on mortgage rates.  The Fed Fund (which they lowered) is the overnight lending rate.  Banks charge this to each other when they have a surplus of reserves (deposits) required by the Federal Reserve.  Banks have to keep a certain amount of reserves in relation to their deposits and so when they get more than what they need, they lend out the surplus to other banks that are short in reserves using the Fed Fund Rate.  So what does this mean to you the home owner?

A fed cut like today’s, lowers rates on bank products like car loans, business loans, credit card rates, home equity rates.  Mortgage loans, however are influenced by Fannie Mae and Freddie Mac, Portfolio Lenders and of course Mortgage Backed Securities and Bonds.  In short, when the Dow or Nasdaq starts falling, investors put their money into MBS’s and Bonds causing mortgage rates to go lower.  When the stock market corrects and starts going back up, these investors quickly move their money back over to equities and mortgage rates we see, typically go up.

Now, the reason we have seen rates drop in the past week or so is due to market uncertainty.  The Corona Virus and its impacts local, national and international markets.  Example, if Apple can’t manufacture cell phones in China due to impact of the Corona Virus, their sales and revenue will significantly drop negatively.  This will affect their stock price and stock market as seen in the last week or so.  The Federal Reserve is worried that this will happen to other industries such as travel, manufacturing, tech, etc so they are being proactive in lowering the Federal Fund Rate.  Eventually this move will filter down to interest rates for home loans, but in the near term it will not as seen last year with 3 Fed Fund drops (last year) only resulting a slight reduction of mortgage rates.

Conclusion…

Rates will definitely go lower, but unfortunately it will take some time to do so based on the factors above.  When rates do drop, we will update you so you can take advantage of the rate and payment savings.  If you would like to get in ready position so you can act quickly when rates do drop, please contact us.

Best Regards,

Rob McCarthy

Senior Mortgage Advisor

www.101Loan.com

rob@101loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01165697  NMLS #121019