Some Argue Mortgage Rates Won't Jump

If you're in the car business, counting on your year-end bonus, you may be worried.  If you're in the mortgage business, you're cracking your knuckles and rolling up your sleeves.  It seems that bond traders have already "baked in" the pricing for the December rate hike to mortgage backed securities.  We may have a strong December yet. Click HERE for the article.

The Easterbrook Team

916.850.6050

EasterbrookTeam@spmc.com

3 Tax Code Change Affecting Homeowners – and Our Industry

Republicans in the House and Senate have unveiled their plans to reform the tax code and they're looking to chop some tax benefits of buying and selling a home.  Here's a look at some of the potential tax changes in play that could impact homeowners:

1. Reduce the mortgage interest deduction from $1,000,000 to $500,000.  Eliminate the interest deduction from 2^nd homes and 2^nd mortgages.  This will have the biggest impact in areas near the coast on both sides of the US. 

The new Bill would require homeowners to itemize their deductions. The Tax Policy Center estimated that the percent of filers who claim the deduction would fall to 4% from 21% if the standard deduction doubles.

This will have the biggest impact on resales and construction in areas near the coast on both sides of the US.  It will definitely affect the Sacramento, El Dorado, and Placer Counties where a high percentage of homes are in the $550K+ range. 

1. Eliminating state and local tax deduction is in the Senate’s plan.  The House’s plan would not eliminate this deduction, but it would cap it at $10,000.  According to data from ATTOM, a little more than 4 million Americans have a property tax bill above that threshold.

Both proposals could serious hit homeowners in high tax states like New Jersey, Connecticut, New York, and (yup, you guessed it) California.

1. Limit tax breaks for sellers.  Some of the suggested changes would also mean homeowners could get hit with a bigger tax bill on the sale of their primary home.  Current law allows sellers to generally exclude $250,000, or $500,000 for those filing jointly, from capital gains when selling a home as long as they've lived in it for two out of the past five years.  
   Both the House and Senate want to increase the live-in time period to five out of the last eight years. The Senate bill allows for some exceptions to the time requirement, like if a seller is leaving due to a change in jobs or health care.   
   This would have a clear impact on mobility by creating a direct and likely unexpected tax bill for owners of homes, as well as reducing gains these home owners expected to be part of their retirement portfolio.  It also will result in selling less homes…

What is our take on the Bill?  We know that the budget isn’t balanced.  We’re not convinced that this is the way to do it though.  Why? The new tax Bill strikes at the very core of our industry – the monetary benefit to owning a home.  The proposed tax laws would also affect many other industries.  When a home is purchased, a significant amount of revenue is generated from the tax on the home purchase, the landscaping and new light fixtures at Home Depot, and the contractor that installs the new counter tops in the kitchen – all that is lost when a potential homeowner decides to wait on purchasing because it isn’t affordable.

Along with the proposed changes, a thorough study must be done on the unintended consequences of eliminating laws that encourage home ownership.  We’ll read it and write another article on the results.  Stay tuned – this affects all of us. 

Borrowers Increasingly Dissatisfied with Online Banking

More and more customers may be heading online to purchase mortgages, but overall satisfaction with electronic mortgage processes is majorly declining, according to J.D. Power’s 2017 U.S. Primary Mortgage Origination Satisfaction Study.

According to the study, individuals find online mortgage purchasing procedures slow and tedious, with overall satisfaction falling 8 points in 2017. The average time for starting and completing mortgage applications has risen to 36 days, a significant increase from last year. 

Even so, the number of people who use online methods for acquiring mortgages has increased since 2016. Forty-three percent of customers applied for mortgages digitally in 2017, up 26 percent from last year. Still, however, the study reports overall satisfaction for these mortgage acquisition methods has fallen 18 points on a year-over-year basis.

“A critical element of satisfaction is setting expectations, and this tends to be a weakness of technology,” said Craig Martin, director of J.D. Power’s mortgage practice. Instead, customers prefer face-to-face interactions with loan representatives who verbally assist their clients and offer updates on the status of their loans. 

Among the study’s key findings in customer perception on electronic mortgage purchase processes is a lack of trust, which many customers did not claim to feel through a computer screen. Overall satisfaction is “substantially lower among customers who do not work with a human to complete their application,” according to Martin.

On the Easterbrook Team, we strive to meet all the touch points that borrowers are seeking: speed, accuracy, trust, and direct communication.  Give us a call today and we will "make the loan process easy" for you. (916) 805-6050 or homeloanworkshop.org.   

To Pay or Not to Pay!

Should You Pay Off Your Mortgage?

If you are planning on paying off your mortgage, you won't be alone.  Nearly half of the borrowers last year between the ages of 65 and 69 had their homes paid free and clear.  If you have the means and are considering paying off your mortgage, there are 3 compelling reasons to do so:

1. Increasing Your Net Worth - although a home is usually an excellent investment, by not paying a mortgage with your assets, they can be allocated to other investments that gain interest and increase wealth.
2. Reduce Interest Expense - relating to reason #1, paying a mortgage will drain your assets.  A typical $200,000 30 year mortgage at 4%, will cost you $145,000 in interest over the life of the loan.
3. Reduce Debt Stress - for many, having a mortgage looming over their head can be very stressful.  Not having a mortgage can give many homeowners a feeling of safety knowing that if there is an interruption in the flow of income, the house will not be put at risk.   

Whether you are planning on keeping your mortgage in place, planning on accelerating the payments, or considering paying it off, we on the Easterbrook Team are happy to consult with you to find solutions that meet your retirement needs.

916.850.6050

What to Expect When Qualifying for a Mortgage

To qualify for a home mortgage today, you’re still going to need to meet minimum standards. These include:
• A favorable credit score. Fannie Mae requires a minimum credit score of only 620.
• An appropriate debt-to-income (DTI) ratio. Your DTI number signifies your total recurring monthly debt payments (such as credit cards, student loans and mortgages) versus your gross monthly income. Fannie Mae’s new DTI ceiling is 50 percent.
• An acceptable loan-to-value (LTV) ratio. Your LTV represents the loan’s size compared to the property’s value. Fannie Mae’s maximum LTV is a generous 97 percent.
• A reasonable loan limit. Fannie Mae’s maximum loan limit in most states is $424,100.  In Sacramento, El Dorado, and Placer Counties, Fannie Mae currently allows borrowers to take advantage of a high balance loan amount of $488,750.

Call The Easterbrook Team

916.850.6050

EasterbrookTeam@spmc.com

The Bank of Mom & Dad!

The Bank of Mom and Dad is a Lifeline for Many Millennial Home Buyers

According to Zillow, 20 percent of homebuyers today receive a monetary gift or loan from family or friends. As well, nearly one-quarter (24 percent) of buyers combine two or more sources to finance their down payment.

Translation: Millennials often need financial assistance from their parents to buy a first home.  Of course, call the Easterbrook Team for guidance before accepting money.  To get some preliminary instruction, here are some guidelines: CLICK HERE for the article.

The Easterbrook Team

"We Make the Loan Process Easy"

916.850.6050

EasterbrookTeam@spmc.com

Another Reason to Buy a Home in Folsom!

Ever Ride Your Bike from Folsom to Lake Tahoe?

Some of the world's best cyclists will do just that on May 17th, 2018 in the Amgen Tour of California bike race.  Come join the Easterbrook Team to cheer on the bike riders as they start on this brutal leg of the 600 mile race.  Want to see the itinerary - CLICK HERE for the Press Release.   

The Easterbrook Team

916.850.6050

EasterbrookTeam@spmc.com

Difference Between Homeowner's Insurance & Mortgage Insurance

Homeowners insurance covers your property itself. Each insurance plan is different, but it typically protects damage to the structure of your home and your personal belongings, and liability in the case of a lawsuit.  Private Mortgage Insurance (PMI) protects your lender if you stop making payments on your loan. It typically comes in the form of a monthly payment that is added to your existing mortgage payment, and is usually required for those who make a down payment of less than 20%. Want to know more? CLICK HERE for article.

Call The Easterbrook Team Today!

916.850.6050

"We Make the Loan Process Easy!"

EasterbrookTeam@spmc.com

How To Make You More Secure Online

Our friends at Popular Science magazine have given us 15 ways to keep you safe online, protect your phone, and protect you from scams - CLICK HERE for article.

The Easterbrook Team is your source for mortgage lending.

916.850.6050  EasterbrookTeam@spmc.com

How to Buy a Duplex with Less Than 5%

A duplex is a property with two units on one parcel. It’s traditionally a way to get into the investment real estate game, because you get shelter for yourself, plus rental income and extra tax breaks. The rent can offset or even completely cover your mortgage and other costs.

The owner-occupied unit can be treated as a primary residence. The rental unit can be treated as investment property. The rental side can be depreciated and write-off related repairs and improvements.  Always ask a tax professional for details.

Buy a Duplex with a VA Loan - VA guidelines allow qualified borrowers to purchase properties with one to four units and zero percent down. One unit, however, must be your primary residence.  Buying a duplex with the VA program can be very advantageous. First of all, purchasing with nothing down is extremely attractive. Also, you’ll get residential mortgage rates and not investor financing rates, and eligible borrowers can benefit under the VA’s unique qualification system.

Buy a Duplex with an FHA Loan - The FHA, like the VA, does not make investment loans. It requires all financing in its basic 203(b) program to be secured by a primary residence. You have to occupy the home.

That said, you can use the FHA program with 3.5 percent down to buy property with one-to-four units, so a duplex is okay as long as you occupy one of the two units.

The Easterbrook Team wants to hear your hopes and dreams of homeownership and real estate investment.  Call us today for an appointment.  We are located at 806 Bidwell Street in Folsom, California.  Our phone # is (916) 850-6050.

Interesting Part of New Tax Proposal

Refi now to secure the rate on your $500K+ loan so you can deduct the full interest. 

The Easterbrook Team is your source for mortgage lending.

916.850.6050  EasterbrookTeam@spmc.com

Amazon Camperforce

Have you two heard of this? Amazon Camperforce.  It's a large group of homeless RV'rs that traverse the US working odd jobs.  It's a thing.

Meet the CamperForce, Amazon's Nomadic Retiree Army

Many older Americans are living a desperate, nomadic life

The Easterbrook Team

916.850.6050

EasterbrookTeam@spmc.com

Do You Know Who Jeff Bezo Is?

Jeff Bezos’ guide to life!


This is a great article about the founder of Amazon, Jeff Bezos.  The interview was done by Jeff's brother, so it includes some insight into one of the richest guy in America.


To Read the Article Click Here!



The Easterbrook Team
916.850.6050
EasterbrookTeam@spmc.com