Real Estate

Delia Fling
TransPac Financial

Opportunity Is Knocking…Are You Answering?

Whether you are a first time homebuyer, investor or in need of a refinance, RUN, don’t walk, to your lender. If you are a regular reader of my column, you know I don’t mince words. Now is the time.

The Federal Reserve has been on a mission to keep the credit markets awash in liquidity to help them through problems far more serious than just coping with the sub-prime bubble. The Federal Reserve is the headliner in the Greatest Show on Earth, and their tight rope act is without a net. The force of inflation is being virtually ignored so as to take care of an economy that is “recessioning” (verb t.). Visualize with me that the FED is doing this stunt not with a pole for balance, but rather with a fire extinguisher in its hand. Each consecutive extinguisher blast is another interest rate cut or one of the various market “interventions” whose purpose is to calm the “yippie” credit markets. If the FED succeeds with this strategy, and we hope they do, the economy will start growing more rapidly. If that happens, the need for this accommodative monetary policy will disappear. That means interest rates will start going back up. More prosperity means more disposable income, some to buy houses...result - housing market rebounds.

In the meantime, the side affect to this strategy will be inflation. With interest rates forced down so aggressively to keep our credit markets from freezing up causes a problem. The pressuring down of rates much more than would normally be necessary to stimulate the economy has a boomerang effect. The stimulus will be stronger than anticipated. Prices will rise - and could rise rapidly. This will warrant a significant reversal in interest rates back up. Don’t be fooled – this could happen within a year not a decade.

What does this mean? Interest rates are not going to stay low long. Real estate values will start stabilizing as inventories lighten up. Today’s opportunity will be in the near distant past.

If you want to take advantage of the current markets, call us for a complementary credit and home valuation. Opportunity is all around you; are you listening?

Delia Fling is a Mortgage Planner with TransPac in Citrus Heights. Contact her at deliaf@transpacllc.com or 916-284-0066 for more information.

Karla Hawe
Mortgage Consultant

Getting the best Interest Rate on Your Home Loan?
A Qualified Mortgage Consultant Can Help Boost Your Credit Scores

Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower’s income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It’s important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it’s safe to assume that as the consumer’s credit score goes down, interest rates will go up.

If you have already taken out a mortgage loan with a higher interest rate because your credit score was a little under par, you will really appreciate the value in doing a little work to improve your credit score. Refinancing from a loan you received when your credit scores were low to a loan with high credit scores, can save you literally thousands of dollars in financing fees over time.

A qualified mortgage consultant, such as myself, will guide you through the nuances of the process of improving your credit score to refinance and save money. First and foremost, I would want to review the terms of the existing mortgage loan to determine if you have a pre-payment penalty clause written into your contract.  If you were to sell the home or try to refinance before the pre-payment penalty expires, you would most likely have to pay a 3 percent fee back to the lender to compensate for the high risk and cost incurred to provide that financing.

There are five factors that make up the credit score and I can coach you through some basic strategies to improve your credit score. Once your credit scores have improved, it’s time to refinance at a better interest rate.

It is important to work with a mortgage consultant who can give you a roadmap to follow and a strategy for success in building personal wealth. Please feel free to call me for a free credit consultation. You can contact me, Karla Hawe at 916-923-5900 or karlah@bwcmtg.com.

Ed Wacaster, CMPS

The Mortgage Manager

Well it’s that time of year where I break out my crystal ball and find out that I broke it when I hit with my baseball bat at the age of 10. Why am I just noticing this?  Oh yeah, I bought a new one a few years ago from a lady with a big fat honker that had a wart on it the size of a Chevy. This one should work just fine.

As I look inside I see nothing but fog. Darn! This one is just as broke as the first one. Why did I buy this one again? Someone please, tell me why? Okay, back to the technical analysis to see what I can glean from them.

What the technical side of the housing market is telling me, is this: We haven’t hit bottom yet. But! It is possible we could see the bottom this year if things and organizations can get their act together in time to turn things around this year. Is this going to happen? I have no idea. It could if congress keeps to themselves and allows the market to work itself out. But if they get involved, not much good will happen and it could push back the anticipated turn up in the housing market. Big Ben and his board of Governors can only work within a narrow area so as to keep us out of a recession. Speaking of the impending recession, we need to look at market data to determine where the recession is, and quit listening to the news media. Thus far, the only recession that is in full bloom is on the news. Is there a disconnect here, or is it just me?

Looking at the Core Personal Consumption Expenditures, for instance, is one of the main economic indicators the Fed uses to gauge inflation. Right no it stands at 2.2%. The Fed really likes this number between 1% and 2%. Anything over 2% and the Fed begins to worry about inflation on the horizon. Keep in mind, the Feds main focus is to keep inflation in check, not bailing out the banks or anyone else for that matter. As to a rate decrease at he next Fed meeting, we’ll watch and see, but if they do lower rates, it could trigger a higher Core PCE. This is going to be a year in which watching the economic indicators is going to be a high priority.

You can contact Ed Wacaster, CMPS at 916-677-0996 or www.EdWacaster.com

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