How to Win a Bay Area Bidding War in 2026

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Bay Area bidding war strategy for 2026 homebuyers

Bay Area bidding war strategy for 2026 homebuyers

How to Win a Bay Area Bidding War in 2026

Winning a Bay Area bidding war in 2026 comes down to five things: knowing a home’s real value, deciding how far over it to bid, structuring an offer a seller trusts, getting fully preapproved, and being able to close on time. Here’s each, fast.

The market. San Francisco’s median hit a record $1.7M in March 2026, up 14%+ year-over-year. Typical homes sell ~15% over asking; the hottest go 30% over. Santa Clara draws ~5 offers per home and closes in ~9 days. In San Mateo County, ~75% of single-family homes sell above asking.

Quick read by area:

  • San Francisco — ~$1.7M median; ~15% over asking typical, ~30% at the top; ~14 days on market.
  • Santa Clara — ~5 offers per home; ~9 days; single-family near 107% of list.
  • San Mateo County — ~3 of 4 single-family homes over asking; ~107% sale-to-list.
  • Palo Alto / Menlo Park / Los Altos — ~8 days to contract; under 2 months of supply.
  • Condos & outer areas — softer, more inventory, room to negotiate.

List price is bait. Bay Area agents routinely price below expected value to draw a crowd and trigger offers — common enough in the East Bay to be nicknamed “egregious underpricing.” Offering 10% over a price set 15% low can still be a deal. “Over asking” tells you nothing about whether you overpaid.

Comps tell the truth. Value = what similar nearby homes recently sold for in the last few months. A good comp is recent (closed within 90 days, and a great one sold in the last 30), close by, similar in size and condition, and — critically — fed by the same school. School assignment moves Bay Area prices 3–4% per step up in quality, which on the Peninsula or South Bay can mean six figures. Note: comps lag the market by a month or two, so in a rising market assume true value sits slightly above the latest comp.

How much to bid in a Bay Area bidding war

Common guidance is 1–3% over list, or staying within 7% of fair value, or adding ~1% per expected competing offer. Treat these as rough guides, not formulas — none is well-validated. The real rule: your number rises with competition (offers made) and is measured against comps, never the list price.

Escalation clauses. These auto-bump your bid to beat rivals by a set increment up to a cap. They work but reveal your ceiling, and many sellers reject them for plain “highest and best.” If you use one, avoid round numbers ($5,500 beats $5,000) and require proof of the competing offer.

Terms win close races. When offers are near each other on price, certainty decides it. A financed offer that closes in 2–3 weeks, from an obviously ready buyer, can beat a higher price from a client who isn’t preapproved and can’t close in 2 to 3 weeks.

Contingencies. A contingency lets you exit and keep your deposit if the inspection, appraisal, or loan goes wrong. Waiving strengthens an offer — ~1 in 5 buyers nationally waived appraisal or inspection late last year, more here — but trades away protection. Waive the appraisal and a low appraisal comes out of your pocket; an appraisal gap clause caps that exposure. Waive inspection only after reading the seller’s pre-sale reports. In California, backing out after removing contingencies can cost your deposit, capped at 3% of price. Do your homework, then waive — never the reverse.

The cash myth. Cash dominates above ~$3M but is rarer below it than people think — ~1 in 5 purchases in Oakland and San Jose late last year, under the national rate. SF financed buyers almost all use conventional loans. You don’t need cash. You need to look as certain as cash.

Getting preapproved is how you win a Bay Area bidding war

Three tiers: prequalification (a guess, near-worthless in a war), preapproval (application + credit pull + docs), and fully underwritten / “TBD” approval (an underwriter clears your full file before you pick a house). The 2nd and 3rd options let you credibly promise a fast close and shorten or waive the loan contingency. Valid ~90 days, works on any property. Get fully underwritten before you shop — highest-leverage move available, and most buyers skip it.

Cost of waiting. Every over-asking sale becomes a comp that lifts the next home’s value, so prices you skip today are usually lower than what you’ll face later. And the math is gentler than it feels: at current rates, +$10,000 in price is ~$63/month. With rates expected to ease toward 6% in 2026, you can refinance the rate later — but the price is locked for good.

The buyers who win a Bay Area bidding war aren’t the richest. They’re the ones who knew the home’s value, sized up their competition, and showed up ready. That’s preparation, and it’s in your control.

Get fully preapproved by us today. If you need the name of a great realtor in your area, let me know as well — I work with the best ones.

Rob McCarthy — Senior Mortgage Advisor 650-465-8957 · rob@101loan.com CA DRE #01165697 · NMLS #121019

The Federal Reserve Cuts Commercial Lending Rates…Why did Consumer Lending Rates Go up Then?

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In the September Federal Reserve meeting that finished yesterday, the Federal Reserve cut its benchmark interest rate by 0.50 percentage points vs .25 as originally planned.  This makes the first rate cut in 4 years.  This shift is expected to eventually lower borrowing costs across various consumer loans, including mortgages, auto loans, and credit cards but first lowers commercial lending rates.

With the federal funds rate now between 4.75% and 5.00%, consumers might see gradual reductions in loan rates, although the pace will depend on broader economic conditions like inflation and employment trend.

Why Did Rates Go Up Yesterday?

The Fed’s rate cut sent signals out to the market, that the central bank is focused on stimulating economic growth by making borrowing cheaper.  When the Federal Reserve lowered rate by .5 instead of .25, it forced the 10-year Treasury yield to increase from a low of 3.60% to 3.74% causing consumer rates to go up to levels we saw several weeks ago due to following reasons:

  1. Inflation Expectations: Lower rates can lead to higher inflation over time, which reduces the value of long-term bonds like the 10-year Treasury. As investors anticipate rising inflation, they demand higher yields to compensate for the potential decrease in purchasing power over time.
  2. Economic Growth Optimism: A rate cut can also signal confidence in future economic recovery. If investors expect stronger growth, they might shift from safe assets like Treasuries to riskier investments (stocks, corporate bonds). This sell-off in Treasuries pushes yields higher.
  3. Bond Supply and Demand: The bond market is influenced by supply and demand dynamics. If there is a significant selling of longer-term bonds, yields will rise. This can happen if the market believes that the Federal Reserve’s policy will eventually lead to inflationary pressures or more aggressive borrowing from the government.

Clients we had locked on purchases and refinances are happy we locked as we’ve seen this before in other markets over the last 30 years.  Remember, a Fed Drop does not always lower real estate rates.  Often it increases them in the short term like it did yesterday and takes a while for them to trickle down.

For a rate quote or loan comparison on either a purchase or refinance, please contact us.  In addition, if you’d like us to track rates for you, please let us know.  Thanks.

Big Day For The Federal Reserve, the Stock Market and Interest Rates…

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The Big Question…Will They or Wont They?  What will the Federal Reserve do or say at the conclusion of today’s big fed meeting?  Were waiting on Pins and Needles!

 
Its been almost 2 years where the Federal Reserve has aggressively increased rates to control inflation which is finally at 2.5% from 6.5% to 7% several years ago.
The Fed Meeting which starts tomorrow, is predicted and already built into the consumer rate market, that rates will be decreased by .25.  If the Federal Reserve does more, rates will drop even further compared to where they are now.  If the Fed only drops rates by .25, rates will most likely stay flat or possibly climb, but if the Fed doesn’t lower rates, then we will see rates climb.
There is lots of talk on the street about what my occur but with inflation now at 2.5%, the Federal Reserve is now worried about going into a recession and the easiest way to prevent this, is to lower the cost of money by lowering the federal funding rate which then lowers consumer lending rates.
 
This is what we are hearing right now…
 
We will update you once we hear from Jerome Powell, the Federal Reserve Chairman.
BTW…Here is Today’s Residential Rates…

6.125% at 0 Points – 30yr Fixed Jumbo loan at $1.150M & above at 75% ltv (APR – 6.319%)
5.990% at 0 Points – 30yr Fixed Conforming loan at $766.1k > $1,149M at 75%ltv (APR – 6.184%)
5.750% at 0 Points – 30yr Fixed Conforming loan at $300k > $766k at 75% ltv (APR – 5.944%)

Rate Notes: 15 year fixed rates are approximately .75 lower in rate than the rates above, depending on loan amount, fico and if purchase or refinance.

Additional Notes: Interest rates and loan programs quoted are subject to change without notice or until locked and approved by lender.  Above rates are for owner occupied property on purchases assuming an 800 mid fico within the Bay Area.

BTW2...Conforming Loan Amounts may be Going Up from $766,550 to $802,650. That would be a nice increase of $36,100.  In addition, most likely the high balance conforming loan limit will be increased as well to $1,203,975 from $1,149,825.

For a customized quote or for anything financing related, please contact me.

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

650-465-8957 c  hello@101loan.com 

CA DRE #01205444  NMLS #326829

101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

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 60 banks with over 300 “Five Star” Reviews on Yelp, Google and Linkedin.
  5. Over 30 years of lending experience with over $2b in closed loan volume.

So What Does a Interest Rate Cut Mean to You?

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We now know now due the recent report released by Fed Chairman Powell, the Federal Reserve intends to drop the Federal Fund rate which will lower commercial lending rates (ie: the prime rate) in September if the economy continues to slow.
 
This will stimulate the economy by lowering the cost of commercial lending that businesses use to acquire property and pay for good and services.
 
This rate drop will take some time to trickle down to consumer rates that consist of mortgage and auto loans but knowing the Federal Reserve is pretty committed to doing a rate cut, is great news for consumers!

Consumers that will Benefit from the Rate Cut include:

1) Anyone Purchasing a Home.
2) Anyone looking to Refi property to Lower Payments & Consolidate Debt.
3) Anyone purchasing an Investment Property.
4) Anyone in need of Reverse Mortgage Financing.
5) Anyone in need of Construction Financing (Owner or Spec)

Some clients are not waiting to refi (if they can save money now) as they realize, the Federal Reserve Rate cut, could take several months to eventually affect consumer rates.

Currently Residential Rates are as Follows:

  • 6.375% at 0 Points – 30yr Fixed Jumbo loan at $1.150M & above at 75% ltv (APR – 6.560%)
  • 6.125% at 0 Points – 30yr Fixed Conforming loan at $766.1k > $1,149M at 75%ltv (APR – 6.319%)
  • 6.000% at 0 Points – 30yr Fixed Conforming loan at $300k > $766k at 75% ltv (APR – 6.194%)

Note: Interest rates and loan programs quoted are subject to change without notice or until locked and approved by lender.  Above rates are for owner occupied property within the Bay Area.

For a customized quote or for anything financing related, please contact me.

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

650-465-8957 c  hello@101loan.com 

CA DRE #01205444  NMLS #326829

101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

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 60 banks with over 300 “Five Star” Reviews on Yelp, Google and Linkedin.
  5. Over 30 years of lending experience with over $2b in closed loan volume.

Seize the Moment: Why Waiting for the Fed to Drop Rates Could Cost You

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In the world of mortgages, timing is often seen as everything. Many homeowners are currently sitting on the sidelines, waiting for the Federal Reserve to lower interest rates before refinancing. But is this really the best strategy? Let’s explore why waiting for the Fed to act might mean missing out on significant benefits that refinancing can offer right now.

The Fed and Your Mortgage: It’s Complicated

First, it’s important to understand that while the Federal Reserve’s actions do influence mortgage rates, they don’t directly set them. Mortgage rates are more closely tied to long-term bond yields, which can move independently of the Fed’s decisions. Waiting for the Fed to drop rates doesn’t guarantee lower mortgage rates, and here’s why that matters:

Why Refinancing Now Could Be Your Best Move

1. You’re Missing Out on Immediate Savings

Every month you wait is a month you’re not benefiting from potentially lower payments. Even if rates drop further in the future, you’ll have missed out on months or even years of savings. Remember, refinancing isn’t just about getting the lowest rate in history – it’s about improving your current financial situation.

2. Home Values are High Right Now

In many areas, home values have increased significantly. This means you likely have more equity in your home, which could allow you to:

  • Eliminate private mortgage insurance (PMI)
  • Qualify for better rates and terms
  • Access cash through a cash-out refinance

Waiting for rates to drop could mean missing out on leveraging your home’s current high value.

3. Debt Consolidation Opportunities are Available Now

If you have high-interest debts, refinancing now could allow you to consolidate these into your mortgage at a lower rate. The longer you wait, the more interest you’ll pay on these high-interest debts.

4. You Can Always Refinance Again

If you refinance now and rates do drop significantly in the future, you can always refinance again. By refinancing now, you start saving immediately and still leave the door open for future opportunities.

5. Shorter Terms Might Be More Accessible

With potentially more equity in your home, you might be able to refinance to a shorter term (like from a 30-year to a 15-year mortgage) without significantly increasing your monthly payment. This could save you tens of thousands in interest over the life of your loan.

6. Protection Against Potential Rate Increases

While everyone hopes rates will drop, there’s always the possibility they could rise. By refinancing now, you protect yourself against potential future rate hikes.

7. Improved Loan Terms

Refinancing isn’t just about the interest rate. You might be able to remove a co-signer, switch from an adjustable-rate to a fixed-rate mortgage, or negotiate better terms. These benefits are available now, regardless of future Fed actions.

The Cost of Waiting

While waiting for rates to drop might seem prudent, it comes with hidden costs:

  • Continued higher monthly payments
  • Missed opportunities to eliminate PMI
  • Accruing interest on high-interest debts that could be consolidated
  • Lost time building equity (if refinancing to a shorter term)

Your Financial Future Starts Today

Remember, the best time to refinance is when it makes financial sense for your unique situation. Don’t let the pursuit of a “perfect” rate prevent you from improving your financial health today.

By refinancing now, you’re not just changing your mortgage – you’re opening doors to better financial wellbeing. You’re freeing up cash flow, potentially building equity faster, and taking control of your largest debt.

Take Action Now

Ready to explore how refinancing could benefit you today? Reach out to us so we can help you understand your options. We can show you exactly how much you could save by refinancing now, versus the potential costs of waiting.

For more info, please contact me below or go here, to complete a short refi questionnaire.

Best Regards,

101 Loan
Senior Mortgage Advisor
www.101Loan.com  hello@101loan.com
650-465-8957 c
CA DRE #01205444  NMLS #326829
101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

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 60 banks with over 300 “Five Star” Reviews on Yelp, Google and Linkedin.
  5. Over 30 years of lending experience with over $2b in closed loan volume.

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

Rates Finally Go Lower!

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It’s been over 20 months since interest rates started climbing as the Federal Reserve did everything to control inflation. This resulted in one of the worst lending climates for residential and commercial lending and real estate in the the last 30 years aside from the 2008 recession.

In January of 2023 we had over 200,000 licensed loan officers in the United States and in just 12 months, we lost almost half of that number due to rising interest rates and the lack of real estate and loan closings.

As a mortgage professional that provides Residential, Commercial, Reverse, Construction and Hard Money lending, I individually went from  10+ closings per month, to just a little over 2 closings per month which was dismal when compared to my past performance.

Per Barry Habib, an expert in the lending community, 2 closed loans or more was considered in the 99 percentile of loan officers in 2023.  Most loan officers closed 1 per month or less in 2023 and some haven’t closed any loans in 2024.

Unfortunately this year hasn’t been much different or better. I know so many loan officers and realtors, that were forced to sell their homes or change careers. Thank god for savings and keeping your eye on the ball or I would have been in the same boat as so many others.

Now let’s talk Interest Rates…
Our business (lending and real estate) can fuel the market if we are going strong.  While jobless claims went from an expected 14,000 to over 249,000 this month, (which is tough for those recently laid off), its great for the bond yield that has significantly dropped since October of 2023 which was at 5.0% and now at 3.8% putting pressure on the Federal Reserve to lower rates especially with inflation flattening and cooling off.
Will the Federal Reserve Drop Rates?
No one really knows, but the Federal Reserve also knows, if they don’t lower rates, it will stall the economy and put a negative impact on the Dow Jones and Nasdaq and worse yet, further increase the cost of living which is out of control and why gas prices, food prices, and utilities are the highest we have ever seen.  Again, no one is certain what the Federal Reserve will do nor the impact the elections will have on interest rates, but this I know, rates are much lower than just 6 months ago.  See below…
Current Rates on Purchase or Refi:
 
Jumbo Rates… ($1,149,830 or More in Loan Amount)
  • 30 Year 6.125% at 1 Point (with an APR of 6.291)
  • 30 Year 6.375% at 0 Points (with and APR of 6.569)
  • 30 Year 6.625% at 0 Points/0 Fees (with and APR of 6.819)

Note: Above based on a 75% ltv or less with a mid fico score 780 or higher.

Conforming Rates…($1,149,825 or Less in Loan Amount)

  • 30 Year 5.875% at 0 Points (with an APR of 6.069)
  • 30 Year 6.125% at 0 Points / 0 Fees (with and APR of 6.394)

Note: Above based on a 75% ltv or less with a mid fico score 780 or higher.

If your like a customized quote, go here.  Any questions, please contact me.

Best Regards,

101 Loan
Senior Mortgage Advisor
www.101Loan.com
650-465-8957 c  hello@101loan.com
CA DRE #01205444  NMLS #326829
101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

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 60 banks with over 300 “Five Star” Reviews on Yelp, Google and Linkedin.
  5. Over 30 years of lending experience with over $2b in closed loan volume.

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

The Housing Market is on the Move…

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Back in March of this year, we provided a report that shows where housing inventory was on the Peninsula, South Bay and Santa Cruz area. This month we have updated this report for your review.

As you may know housing inventory locally or abroad considers several factors that include:

  • Interest rates…(See below for current rates)*
  • Lending Guidelines (Ability to Qualify for Financing)
  • The Economy (Locally and Nationally)
  • Cost of Living (Up in the last 3 to 4 years)
  • Infrastructure of the Area**
  • The Stock Market with Dow pushing over 40k
  • Job Growth
  • Inflation down to 2.97

*Interest Rates are finally dropping.  If you were to purchase a property to occupy and put 25% down and had a 740 mid fico or higher, you may qualify for the following:

  • 30 yar fixed at 6.875% at 0 Points
  • 10 year ARM at 6.625% at 0 Points
Note: APR on 30 year is 7.03 and 6.72 on 10 year Arm. Rates subject to change.
**Infrastructure for these purposes is defined as the abundance of land and buildable space, population in the area, number of large, mid and small cap sized companies local to one area and support services (schools, hospitals)

Housing Inventory is as Follows…

Santa Clara County as of July 12, 2024:

Active Listings – 1028 Houses – priced from $32,800,000 (same property as in March) to $444,000.   614 Condo/Townhome – priced from $2,849,000 to $290,000 (Listings are up by 429)

Contingent Properties – 84 Houses – priced from $16,000,000 (same as in March–these Buyers are waiting for entitlements for the land) to $799,950
65 Condo/Townhome – priced from $1,988,888 to $399,000

Pending Properties – 644 Houses – priced from $11,555,000 to $520,000 and 253 Condo/Townhome – priced from $3,388,000 to $429,000

DAYS ON MARKET – AVERAGES House – 29 and Condo/Townhomes – 38

Summary: Inventory up by 429 properties

In March of 2024, Santa Clara County was at 1213 listings (801 homes, 282 condos and 130 townhomes) and pending sales of 900 (603 in homes and 297 in condos and townhomes.

Provided by:
Dawn Thomas – Broker Associate and Founder
The Dawn Thomas Team
650-215-5990 c   Dawn@siliconvalleyandbeyond.com
DRE# 01460529

San Mateo County as of July 12, 2024:

Houses –

518 Active, 35 Contingent, 255 Pending, 12 transactions fell through, 110 price reductions, 88 Average Days on Market (ADOM)

Condos –

215 Active, 20 Contingent, 34 Pending, 8 TFT, 69 price reductions, 99 ADOM

Townhouses –

61 Active, 6 Contingent, 25 Pending, 1 TFT, 12 price reductions, 36 ADOM

Summary: Inventory up by 429 properties

In March of 2024, San Mateo County, there were 579 listings (91 of which are off market and only available to Realtors) and pending sales of 332 (51 contingent, 287 pending.

Provided by:

KIERSTEN LIGETI
Broker-Associate
THEAGENCY
#01298631
c: 650-766-8319
KPLuxuryHomes.com

Santa Cruz County as of July 12, 2024:

For Single Family Homes…

The median sales price for Single family homes in June 2024 throughout the County of Santa Cruz is up slightly from $1,362,500 in May to $1,413,000 in June.

The average days on market is up from 27 days on market in May to 28 days on the market in June. The number of active listings in June is up to 345 in June up from 344 in May. The number of new listings for June came in at 202, down from 232 in May.  And the number of closed sales came in at 112 in June which was a one property increase in sales volume from the 111 homes that sold in May. The sales price to list price ratio for single family homes came in at 99.0% in June. which is down just barely from 99.3% sales price to list price ratio in May. As for months of inventory, this number is tracking at 3.1 months of inventory, meaning if no other properties came on the market, our Santa Cruz housing inventory based on buyer demand would be sold out in 3.1 months. A neutral market, meaning equality between buyers and sellers is 6 months of inventory and we are not there yet.

For Condos and Townhomes…

The median sales price for June 2024 came in at $830,000 which is up almost $100,000 from the median sales price in May 2024 which came in at $735,000. The average days on market came in at 20 days on market, down from 27 days on the market in May.  The number of active listings in June 2024 for condos and townhomes was 89 in June up from 78, the month prior. And the number of sold condos/townhomes was down from 39 in May 2024 to 27 in June 2024. The number of new listings for condos and townhomes right here in Santa Cruz was up from 47 in May, to 60 in June. The sales price to list price ratio came in at 98.4%, in June, which is down from 99.2% sales price to list price ratio in May. And… our months of inventory for June 2024 came in at 3.3 months, up slightly from 2.2 months of inventory in May.

Summary: Inventory up by 151 properties

In March of 2024 in Santa Cruz County – There were 283 listings.

Provided by:

Shemeika Fox
Fox Realty Group, Inc.
(831) 588-2334
Sfox@YourSantaCruzRealEstate.com
YourSantaCruzRealEstate.com
DRE: 01479629

Important Note: Housing Inventory does fluctuate but historically over the last 10 years, supply has not kept up pace with demand causing overbidding on many homes sold with the exception was 2023 where residential real estate came to a standstill due to rising interest rates from January of 2023 at 3% to 7%+ (+or- .5%.)

Conclusion…

It appears housing inventory is increasing in some areas but still not to a place, where supply equals demand.  Currently its still a sellers markets where sellers have the power but that could be changing if inventory continues to rise and if demand from buyers also increases, prices will continue there way up.  More inventory also means, buyers have more to choose from and if inflation stabilizes and the federal reserve starts easing rates, buyers will pay less in rates and payments and buyer confidence will increase fueling the housing market.

In the lending industry, we all feel we won’t see rates in the 2% and 3% range but should see them in the mid 5’s.  This would be most welcomed  by sellers (that need to buy after) and buyers and lenders and any business that has been negatively affected by high interest rates in the last 12 to 18 months.

Expect to start seeing rates drop in q3 and q4 of this year (per my crystal ball) especially if the Dow and Nasdaq have recurring corrections.  Currently the 10 year treasury is at 4.22 a decent drop since July 1st when the yield was at 4.48% and even lower when compared to 4.63 back on 5/28/24 which means rates should be dropping which they have a tad, but nothing to write home about.

In Closing…if you’re…

Selling...and would like to understand your options, please reach out to us here, by completing the following inquiry.

Trading Up or Down…please go here.  In addition, I have a great presentation (Age in Place or Right Size) on the topic which I would be more than happy to share with you.

Buying for the First Time…please go here to learn about your options and purchase power.

 

Any Questions, please contact me at 650-465-8957 or at Rob@101loan.com.

Best Regards,

101 Loan
Senior Mortgage Advisor
www.101Loan.com
650-465-8957 c  hello@101loan.com
CA DRE #01205444  NMLS #326829
101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

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 60 banks with over 300 “Five Star” Reviews on Yelp, Google and Linkedin.
  5. Over 30 years of lending experience with over $2b in closed loan volume.

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

 

Happy 4th of July

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As we come upon July 4, Independence Day, we tend to forget what the meaning of this great day and what sacrifices have been made that allow for our great way of life. This day is deeply symbolic of American values that include freedom, democracy, and patriotism.  Here is a closer look and something to reflect on…

Freedom…

Independence Day marks the birth of the United States as a free and independent nation. The Declaration of Independence eloquently articulates the colonies’ desire to be free from British tyranny and oppression. This document asserts that all men are created equal and endowed with certain unalienable rights, among them life, liberty, and the pursuit of happiness. The celebration of July 4th is a reminder of the importance of these freedoms and the ongoing commitment to protect and expand them.

Democracy…

The Declaration of Independence and the subsequent American Revolution laid the groundwork for the establishment of a democratic government. The principles of self-governance, representation, and the rule of law are central to the American democratic system. Independence Day celebrates the creation of a nation where the power rests with the people and their elected representatives, emphasizing the importance of civic participation and the democratic process.

Patriotism…

Patriotism is a strong element of Independence Day celebrations. The day serves as a time for Americans to express their love for their country and reflect on the sacrifices made by previous generations to secure and preserve their freedoms. Through various traditions like displaying the American flag, singing patriotic songs, and honoring military service members, Independence Day fosters a sense of national pride and unity.

The Journey Toward Independence

Independence Day also serves as a historical reminder of the struggle and determination of the American colonies in their quest for independence. The journey involved significant challenges, including military battles, diplomatic efforts, and the enduring spirit of revolutionaries who sought to create a nation founded on principles of liberty and justice. Celebrating July 4th is an opportunity to remember the resilience and courage of those who fought for independence and to reflect on the ongoing journey to uphold these ideals in contemporary society that we face now.

I’d like to wish you a Happy 4th of July and hope you get the opportunity to share it with family, friends and loved ones and remember those who have passed that helped you be the person you are today!

Happy 4th of July!

 

Best Regards,

101 Loan
Senior Mortgage Advisor
www.101Loan.com
650-465-8957 c  hello@101loan.com
CA DRE #01205444  NMLS #326829
101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

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 60 banks with over 300 “Five Star” Reviews on Yelp, Google and Linkedin.
  5. Over 30 years of lending experience with over $2b in closed loan volume.

How to Choose a Lender?

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When choosing between an experienced loan officer who provides great service and competitive rates versus a lender with the lowest rates but lacking in service and experience, the decision hinges on several key factors:

Purchase Loan

For a purchase loan, the stakes are often higher due to deadlines and the complexity of the transaction. Here’s why an experienced loan officer is crucial:

Pros of an Experienced Loan Officer:

  1. Transaction Management: They can expertly manage the timeline and ensure all documentation is in place, reducing the risk of delays that could jeopardize the purchase.
  2. Problem-Solving: Experienced officers are adept at handling unexpected issues, which are common in purchase transactions.
  3. Communication: Effective communication with real estate agents, sellers, and other parties is vital for a smooth closing process.
  4. Competitive Rates: While they may not offer the absolute lowest rates, competitive rates combined with superior service often provide better overall value and peace of mind.

Cons of a Low-Rate, Low-Service Lender:

  1. Risk of Delays: Lack of experience and service can lead to delays, potentially costing you the deal or leading to additional expenses.
  2. Stress and Uncertainty: Poor service can result in a stressful and uncertain experience, which is not ideal when purchasing a home.
Recent Story…
Recently a client was going to go with Chase on a preapproval but after speaking with me, I was not only able to provide a lower in rate and fee but provided a plethora of information on affordability, tax benefits and how to reduce their closing costs.  

They made an offer with a 17 day closing and per their agent, our offer was accepted due to the fact that we called the listing agent on behalf of the buyer’s offer to convey the buyers financial strengths and that a 17 day closing was no issue. This Friday we close (6/28/24) !

Refinance Loan

For a refinance loan, while service and experience are still important, the urgency is typically lower compared to a purchase loan. However, there are still significant advantages to working with an experienced loan officer:

Pros of an Experienced Loan Officer:

  1. Tailored Advice: They can help you determine the best refinance options based on your financial situation.
  2. Smooth Process: Ensures a smooth and efficient process, minimizing disruptions and delays.
  3. Problem-Solving: Can handle any complications that arise, ensuring you get the best terms possible.
  4. Competitive Rates: Offers a balance of competitive rates and excellent service, leading to overall better terms and satisfaction.

Cons of a Low-Rate, Low-Service Lender:

  1. Potential for Errors: Lack of experience can lead to mistakes that could delay or derail the refinance process.
  2. Lack of Guidance: You might miss out on the best refinancing options or opportunities without expert advice.
  3. Increased Stress: Poor service can result in a more stressful experience, even if you eventually secure a lower rate.

Conclusion

While the allure of the lowest rates is strong, the value of an experienced loan officer who provides great service and competitive rates cannot be overstated. The risks associated with poor service and inexperience, particularly in a purchase loan scenario, can lead to significant financial and emotional costs.

For Purchase Loans: Prioritize an experienced loan officer who offers competitive rates and excellent service with solid reviews on Yelp and Google and referred by your trusted Realtor. The complexity and time-sensitive nature of purchase transactions make the expertise and support crucial.

For Refinance Loans: While lower rates are appealing, the benefits of an experienced loan officer still play a significant role in ensuring a smooth process and securing the best terms for your situation.

Ultimately, balancing competitive rates with exceptional service and expertise will typically provide the best overall value and experience in both purchase and refinance scenarios.  101 Loan has over 34 years of experience in lending, has closed over 2000 loans, has access to over 60 banks at competitive rates and offers a streamlined process to actively close any purchase or refinance whether its a residential or commercial loan.  For more information, please contact us.

Best Regards,

101 Loan
Senior Mortgage Advisor
www.101Loan.com
650-465-8957 c  hello@101loan.com
CA DRE #01205444  NMLS #326829
101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

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 60 banks with over 300 “Five Star” Reviews on Yelp, Google and Linkedin.
  5. Over 30 years of lending experience with over $2b in closed loan volume.

Renting vs. Owning…A Cost Analysis

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Renting a home can often be more expensive than owning a home in the long term due to several financial benefits associated with home ownership especially if the home is sold after 10 years.

Let’s break down the key factors to illustrate why this might be the case:

Assumptions…

Appreciation Schedule

Assuming a 7% annual appreciation rate over the last 10 years for a home in the Bay Area:

  • Initial Home Value: $1,500,000
  • Appreciated Value After 10 Years: $2,950,726.50

Mortgage and Refinancing

Assuming a 20% down payment and an initial interest rate of 7%, refinanced to 6% after 6 months:

  • Initial Mortgage: $1,200,000
  • Initial Interest Rate: 7%
  • Refinanced Interest Rate: 6%
  • Loan Term: 30 years

Tax Write-Off

In a 32% tax bracket, the mortgage interest is tax-deductible, providing substantial tax savings.

Rent vs. Buy Scenario

Comparing the cost of renting at $6,000 per month with a 2.65% annual inflation rate over 10 years versus owning.

Renting Costs

  • Initial Rent: $6,000 per month
  • Annual Rent Increase: 2.65%
  • Total Rent Paid Over 10 Years: Approximately $812,218

Homeownership Costs

  • Monthly Mortgage Payment:
    • Initial 6 months at 7%: $7,983.63 per month
    • Remaining term at 6%: $7,238.39 per month
  • Total Mortgage Payments:
    • Initial 6 months: $47,901.78
    • Subsequent 9.5 years: $825,837.42
    • Total: $873,739.20

Tax Savings

  • First Year Interest Payment: $84,000
  • First Year Tax Savings: $26,880
  • Subsequent Years Interest Payment: $72,000 per year
  • Subsequent Years Tax Savings: $23,040 per year
  • Total Tax Savings Over 10 Years: $234,240
  • Net Mortgage Payments (after Tax Savings): $639,499.20

Sale of the Home After 10 Years

  • Appreciated Home Value: $2,950,726.50
  • Original Purchase Price: $1,500,000
  • Capital Gain: $2,950,726.50 – $1,500,000 = $1,450,726.50
  • Capital Gains Exclusion for Married Couple: $500,000
  • Taxable Capital Gain: $950,726.50
  • Capital Gains Tax (20%): $190,145.30

Summary of Costs and Benefits

Renting Costs (Over 10 Years)

  • Total Rent Paid: $812,218

Homeownership Costs (Over 10 Years)

  • Total Mortgage Payments: $873,739.20
  • Total Tax Savings: $234,240
  • Net Mortgage Payments (after Tax Savings): $639,499.20
  • Capital Gains Tax: $190,145.30

Financial Outcome After Selling the Home

  • Net Proceeds from Sale: $2,950,726.50 (Appreciated Value) – $1,200,000 (Remaining Mortgage Balance) – $190,145.30 (Capital Gains Tax) = $1,560,581.20

Conclusion (Including Home Sale)

When considering the sale of the home after 10 years:

  • Total Cost of Renting: $812,218
  • Net Cost of Owning (including mortgage payments and tax savings): $639,499.20
  • Net Proceeds from Home Sale: $1,560,581.20

Owning a home not only becomes more cost-effective compared to renting over 10 years but also significantly increases the homeowner’s net worth through appreciation and equity building. The net proceeds from selling the home further amplify the financial benefits of homeownership, making it a far more attractive option for long-term wealth accumulation.

For more info, please contact us.

Best Regards,

101 Loan
Senior Mortgage Advisor
www.101Loan.com
650-465-8957 c  408-377-4123 o
CA DRE #01205444  NMLS #326829
101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

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 60 banks with over 300 “Five Star” Reviews on Yelp, Google and Linkedin.
  5. Over 30 years of lending experience with over $2b in closed loan volume.

Note...Above info is for educational purposes and not to be construed as wealth planning or tax planning advice.  For more info, please contact a professional to confirm the above and how it will impact or affect you.