Category Archives: Mortgage

Money Monday: Home construction loans

How does a home construction loan work?

home construction loans

“Whether it’s to renovate a kitchen, tear out a wall or two to expand a room, or add on to the property, when deciding on a home upgrade…The most common way to secure funds for upgrading a home is to tap into its equity, or accumulated market value.” (BHHS California blog. “How Does a Home Construction Loan Work?” 15 August 2018.)

Read about home construction loans on BHHS’s blog here.

Money Monday: Affordability for renters and homeowners

“Affordability is a much more pertinent issue for renters than homeowners, according to new research from CoreLogic, a real estate data firm. Since 2005, the monthly cost to rent a single-family home has risen significantly, while the monthly principal-and-interest mortgage payments of homeowners dropped slightly.

“CoreLogic’s national rent index jumped 36 percent in December 2018 compared to December 2005. On the other hand, the typical mortgage payment fell 4 percent over that same period…” (REALTOR Magazine. “Report: Do Homeowners Fare Better Than Renters?” 18 April 2019.
https://magazine.realtor/daily-news/2019/04/18/report-do-homeowners-fare-better-than-renters)

Read it on REALTOR Magazine.

Money Monday: How buyers purchased their home

Here is a look at how recent buyers purchased their home:

  • Median purchase price – $235,000
  • Obtained a mortgage – 88%
  • Down payment amount – 10 percent
  • Down payment sources – savings (59 percent); sales proceeds from previous home (38 percent)
  • Received down payment help from family/friends – 16 percent
  • Obtaining a mortgage was not difficult/easier than expected – 66 percent

Money Monday: February mortgage rates

Fixed mortgage rates sank to a 10-month low this month.

Photo by 401kcalculator.org

“According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average dropped to 4.41 percent with an average 0.4 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.46 percent a week ago and 4.32 percent a year ago. The 30-year fixed rate hasn’t been this low since early April.”

“The 15-year fixed-rate average fell to 3.84 percent with an average 0.4 point. It was 3.89 percent a week ago and 3.77 percent a year ago. The five-year adjustable-rate average drifted down to 3.91 percent with an average 0.3 point. It was 3.96 percent a week ago and 3.57 percent a year ago.” (Washingtonpost.com. “Mortgage rates tumble to 10-month low.” 7 February 2019.)

Read the rest of Washington Post’s article here.

Money Monday: The differences between fixed-rate and adjustable-rate mortgages

If you’ve never bought a home before, the whole process can seem a little confusing. One of the first things you have to figure out is whether you should get a fixed-rate or adjustable-rate mortgage. Most people choose the fixed-rate mortgage without even thinking about it, but there are situations where an adjustable-rate mortgage may be a better fit.

mortgage rates and property taxes

Read CNN’s “Should I get a fixed- or adjustable-rate mortgage?” article to find out the differences between the two and to figure out what’s best for you personally when buying a home.

Money Monday: Leasing your home

The new American dream: Leasing your house

Source: The Orange County Register

In Southern California, detached, single-family rentals increased 29 percent over the last decade — vs. a 13 percent increase in apartment units, according to the most recent U.S. Census data.

Making sense of the story:

• The tally jumped to 736,400 rental houses in 2016, equal to one out of every four houses in the region. The increase matches trends elsewhere.

• California had a 27 percent gain to 1.8 million rental houses in the most recent decade. Across the nation, detached, single-family rentals jumped 30 percent to 12.5 million in 2016.

• Renters are moving into houses for space, for schools or for privacy, a recent survey by U.C.
Berkeley’s Terner Center for Housing Innovation found. Landlords, on the other hand, range
from small investors to gigantic hedge funds but also include retirees hanging onto their old
houses because they’re in high demand.

• The change could be contributing to a nationwide shortage of homes for sale. It also has
numerous implications for family wealth and for policymakers, since there now are 7 million
more renters in American than a decade ago, and nearly 414,000 more in Southern California.

• The Terner Center study found that while 80 percent of single-family tenants want to buy a home in the next five years, more than 90 percent have financial obstacles to buying.

• Nearly 27 percent of single-family renters who had been homeowners had lost a home to foreclosure. Other factors include student and consumer debt, difficulties in qualifying for a mortgage, or not being able to save for a down payment.

Read the full story: www.ocregister.com/2018/06/29/the-new-american-dream-leasing-your-house

Money Monday: Interest rate impact

As interest rates increase, it affects home buyers’ monthly payments, as well as the amount of income needed to qualify to buy a home.

This infographic is from the CALIFORNIA ASSOCIATION OF REALTORS. 

California Real Estate Market Update

Last year in Q3, there were slightly lower home prices. That and the steady mortgage rates helped a few more Californians to purchase a home.

  • The median price of a Californian home in Q3 2017 was $550,990.
  • The median price for a condo or townhome in California was $449,720.
  • The minimum annual income needed to qualify for the purchase of a median-priced single-family home was $111,260.
  • The minimum annual income needed to afford the monthly mortgage payments on a median-priced condo or townhome was $90,810.

This infographic is from CAR.org.