Archive for the ‘mortgage rates’ Category

San Francisco Real Estate and the Holidays

Happy Holidays from San Francisco!

Happy Holidays from San Francisco!

Are you thinking of buying or selling your home? Perhaps you’re expanding and considering your current home as an investment property and entering it in the rental market? The 4th quarter is historically filled with low-inventory and quiet real estate offices. The holidays are a wonderful time to begin exploring your options.

To begin, set your financial house in order. File tax returns early to ease the process and align with a trusted mortgage lender. Connect with your financial planner to gage stock option sale limits and advantages.

Next, engage a San Francisco realtor. Reach out to friends and family or visit Yelp for community reviews. Most importantly interview a few experienced agents to find a comfortable relationship. Agents will schedule a no obligation initial meeting to discuss your needs and present their skills, strategy and network of professionals to aid in your property transition. A strong realtor is a resource, listening to your interests and priorities to best leverage their knowledge and experience in your market place.

The value of a realtor rests in advising informed decision making, negotiating contracts, competitive advantages and mitigating risk. The holidays are an excellent time to build a relationship with an agent. The limited competition gives agents the extra time and edge to gather property comparisons, market knowledge and customize a team of real estate professionals to represent your interests.

An agent’s thorough preparation prior to sale offers tools to increase the value of your home. A talented realtor will schedule a walk-thru of your property and suggest maintenance and improvement upgrades to maximize your return on investment. An agent will advise on market timing and conditions and design a comprehensive marketing presentation, including home staging, internet marketing, traditional marketing and activate industry networks to improve matching buyers and sellers.

The rental market in San Francisco is amazing. Would you like to be advised on the value of your property in the rental market? According to Colliers Research Report, all rental markets are showing growth of 12% over the past 12 months. This may warrant keeping your current property and expanding to a new one. A seasoned expert will address your lifestyle needs and financial interests to secure a smooth and successful transition.

Beginning the process of buying, selling or renting your San Francisco real estate over the holidays, results in an organized, detailed and opportunistic endeavor. To schedule a no expectation conversation with Zephyr Real Estate Broker and Assistant Sales Manager Rita Roti, please email or call (415)432-2114. Cheers and happy holidays!

Rita Roti is a broker associate / assistant manager at Zephyr Real Estate and can be reached at


Lenders resist the work of a pre-approval… what’s the difference?

From a November 12th NYT article

FOR some people, an important first step in buying a house is getting a mortgage preapproval.

That’s so true, my sellers and I want to see your preapproval letter with your offer.

But prevetting has become more difficult and confusing these days, for borrowers as well as lenders, as a result of lending rules that took effect in January.

The rules from the Department of Housing and Urban Development require lenders to issue a binding good-faith estimate of total closing costs within three days of submission of a formal loan application. The formal application is usually made when a preapproval is written.

Lenders are barred, before issuing this binding estimate, from requesting tax returns, bank statements and the like from a borrower. (In addition to the loan amount, the applicant is asked to provide only a Social Security number, gross monthly income, the value and often the address of the property.)

Many lenders are reluctant to be locked into closing costs amid declining property values, and therefore fewer of them, especially the big banks, are providing preapproval letters for a certain loan amount on a property that often has yet to be formally appraised. The problem is particularly acute for buyers who have not yet decided which property they want.

I get the system is miserable right now, but I know that if I see  a letter from a lender that references anything other than a ratified contract, a pre-liminary title report and satisfactory appraisal, that’s a pre-qual letter, not a pre-approval.  Yes, I always need to pick up the phone and speak with the mortgage broker about the clients, but I expect credit to have been pulled, tax returns to have been requested, the application and the file to be up to date and complete.

If the letter mentions anything about the client needing to submit paperwork, the letter isn’t worth tying up a property with…

Mortgage experts say that borrowers should ask lenders, early on, exactly what their preapproval process entails, and push for a preapproval — not prequalification — especially if the lender is running a credit check for a prequalification.

Ms. Smith says many banks are now issuing prequalifications no different from preapprovals, in that they contain hard credit checks and the like. But by not calling them preapprovals, she said, banks can delay taking a loan application and having to issue a good-faith estimate of closing costs. [More…]

Yes, it’s a catch 22.  But sorry, but I’m not willing to have my sellers tie up a property because the mortgage bankers don’t want to do another step they are now required to complete.  Hey, the escrow officers have to do a lot more work under the new rules too… And it’s not as if the rules are so new, that the good mortgage brokers haven’t found a way to make it work! In the end, sellers need to know that a buyer can finish the deal, not get held up.

On the other hand, if I have a buyer and I get a prequalification letter from their lender, I’ll be on the phone.  First, I’ll be talking to the lender to make sure I understand why it’s a prequalification and not a preapproval letter.  Where is the file at in terms of completeness?

If  I end up having to present a prequalification letter with the offer, you can be sure that I am discussing it with the listing agent first.  A big part of my job is managing expectations and communication, so I prefer to address it directly.

Rita Roti is a broker / assistant manager at Zephyr and can be reached at

Pay Down or Pay off Your Mortgage? There’s a lot to consider…

From Friday’s New York Times came a great article about want you might want to consideration when thinking about paying down or paying off your mortgage.  It came at a great time as I had just been having dinner with friends discussing this very topic.

PAYING off a mortgage or even paying down the balance early might seem enticing to most borrowers. There’s the big savings in interest payments and the freed-up cash flow that can result, not to mention the emotional benefit of wiping out what for most people is the largest financial burden of a lifetime.

With interest rates as low as they are these days it may be easier to make those additional payments. But deciding whether to do so requires a careful balancing of math and psychology, financial advisers say.

Even an extra $25 a month toward the mortgage means having less money for emergencies that might crop up. It also translates into less money to plow into other investments, as well as a lower mortgage-interest tax break, since you’re paying less interest as you pay down the principal (or none at all, if you’ve paid it off).

The most important factor, according to Bill Losey, a certified financial planner and the owner of Bill Losey Retirement Solutions in Wilton, N.Y., is that if you can make more money over the long haul in other investments like stocks than you can by paying off your mortgage early, it’s probably not worth it.

“People look at things in black and white,” Ms. Losey said, “and I see a lot of people who say they want to be debt-free. So they plow money into their house, but don’t save as much. But I hate to see all your assets wrapped up in the equity of your house.” [More…]

Of course, many of us aren’t earning much on our investments anymore.  And some of us never expected to stay in our current properties more than 5-7 years.  Our parents may have paid off their mortgages, but many people in my age range never thought we’d see that day. However,  I do know people who have switched to a 15 year loan period to get their loans paid down faster with less interest.

Also, it seems so simple, but be sure you understand what type of loan you actually have on the property.  I met a young woman this year who had paid down her loan by a large amount of money, thinking it would recast to have smaller monthly payments.  However, it was a standard 30 year amortization loan, so it only reduced her principle and she couldn’t afford her payments after her lost her job!

Of course, you can often cut your interest payments by refinancing into a shorter-term mortgage, rather than paying down your loan early, but you will very likely incur thousands of dollars in refinancing costs. Borrowers considering a mortgage payoff must check whether their loan carries prepayment penalties that could cost thousands of dollars; many subprime loans do.

I had always thought I’d be one of those people who make an extra payment every year to the principle only, so that I could finish off the loan faster.  But many years later, I still haven’t made a single additional payment. But even before doing a simple act such as that, you should think about your situation:

Making extra mortgage payments is ill advised if you have large credit-card balances, which typically carry a higher interest rate. It’s better to pay off the higher-interest debt first.

And if there’s a chance you might lose your job or lose some of your income, pouring extra cash into a mortgage payment may also be a bad idea.

I used to think as the article wraps it up:

If you do have a cash crunch once your mortgage is paid off, you’ll have equity to tap, but in the form of home-equity loan or a Heloc (home equity line of credit), which carries an adjustable interest rate, thus exposing you to higher payments on that loan if the market shifts.

But what this economic environment has taught me is that many of us can’t qualify for a Helco these days!  And what happens if you lose your job and need to tap that equity, do you think just any lender is going let you have a loan without a job?  Even the old trusted ideas need to be looked at through a new lens now days… Then again, if you spend $100 a month or more at Starbucks, maybe you should rethink that too!

Rita Roti is a broker / assistant manager at Zephyr and can be reached at

Bank Offers Home Loans Below 4%

A small bank in the Pacific Northwest is hoping to boost sales for builders who owe the bank millions by offering mortgages to new homebuyers at less than 4 percent interest. Banner Bank began offering the low rates through a subsidiary on March 7 in Portland, Ore., and surrounding markets, and plans to expand the program next month to Seattle and Spokane, Wash., and Boise, Idaho.

In announcing the “Great Northwest Home Rush” program, Banner subsidiary Community Financial Corp. said borrowers with good credit and 20 percent down payments could qualify for 30-year fixed-rate loans with a “note rate” of as low as 3.875 percent. That translates into a 3.973 percent annual percentage rate, or APR, when the best rate available from most lenders is closer to 5 percent. Even prospective homebuyers bringing no money to the table could obtain 4.875 percent fixed-rate loans, the bank said.

The catch is that the loans are available only for properties purchased from a list of several hundred homes and lots developed by about 75 builders who have millions in outstanding loans with Banner. The list includes homes and lots in Redmond and Vancouver, Wash., and several cities in Oregon including Beaverton, Bend and Portland. Read the full story [here]

Bank Offers Home Loans Below 4% [Inman News]
The Great Northwest Home Rush [Community Financial Corporation]
Home Rush Properties List [PDF]
4% Interest Rates for Everyone [SFHomeBlog] 


Voluntary Refinance Best Bet for Bay Area Mortgage Relief

As reported on CBS news, and most recently in the SF Chronicle, the Housing Rescue Plan is expected to widely bypass most Bay Area homeowners. What’s the primary reason?

“Only a small percentage of Bay Area mortgage holders meet the criteria for the low-cost refinances being offered to help stabilize the housing market. To qualify, loans must have been for less than $417,000 if issued more than a year ago, and homes cannot be underwater by more than 5 percent…But that initiative is only available to people who took out so-called conforming loans of less than $417,000 and whose homes are not more than 5 percent underwater – meaning what they owe is not more than 5 percent greater than their home’s value. For instance, someone with a home now worth $300,000 who owes $315,000 could qualify for the refinance – but would be barred if the home’s value dropped further.” Read the full story here.

It’s not all bad news. The new Housing Rescue plan is reportedly dedicating $75 billion to help encourage lenders to cooperate with voluntary refinancing of existing loans that are not eligible for traditional refinancing. The most common reason I’m seeing for that is appraisals that are not penciling out for a new lender. Additionally, a reported $200 billion is dedicated towards helping Fannie Mae and Freddie Mac keep new loans flowing and mortgage rates low.

Bottom line – if you are looking to take advantage of the current interest rates and cannot refinance traditionally – be prepared to spend some time on the phone. There are companies that have sprung up all over the state offering to negotiate with your bank on your behalf, for a fee, but there are just as many people who are falling victim to fraud by such companies. I personally cannot recommend trying that route.

My best advice is to be patient, stay persistent, and if you get a jerk on the line, stay calm and call back to talk to someone else who is either better at their job, or just a more helpful person. I never cease to be amazed how well that works…