Mortgage Interest Rates Remain Low

Concerns omortgage rates 7-26ver Europe and China and their economic growth has created a positive impact on mortgage interest rates. On Friday the key employment date, which remains at about 5%, had little effect on mortgage rates. The speculation is that there is a 10% chance that the Feds will raise rates at their June meeting.

Over the past week we have seen economic news from Europe and China that the European Union has cut its growth forecast for the eurozone for 2016 and 2017. China’s PMI manufacturing index fell to a level that suggest the industry is contracting. When global economic growth slows it means less inflation for the American economy which is good news for interest rates.

 

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Speak with Val Oliver about Reverse Mortgages!!

Key Factors That Determine Your Reverse Mortgage Payout

The first step is to call me for an evaluation: Valerie Oliver 650-773-0247 NMLS 483490 CalBRE 00935469

When the idea of the reverse mortgage loan was first conceived in the early 1960’s, people quickly began to recognize that the concept was a brilliant answer to a common challenge.  Many senior homeowners wanted access to their home equity to help fund retirement while remaining in their home—and a reverse mortgage loan could help them do just that.  In addition, the loan proceeds would pay off any existing liens, thus eliminating the homeowner’s monthly mortgage payment.  The benefits were, and to this day still are, very appealing. But among many questions borrowers have, a popular one always surfaces first:

What amount of money can I actually get from a reverse mortgage?

This question is understandable, since borrowers are primarily interested in a loan that provides an amount high enough to help them. Read the following to learn how reverse mortgage loan proceeds are determined.

How Much Does a Reverse Mortgage Pay?

How much money you can access from a reverse mortgage will be calculated by a formula that takes into account the following key factors:

  • AGE – You must be at least 62 to qualify. And because part of this calculation is determined by the estimated length of the loan, the older you are when you take out a reverse mortgage, the more cash you will have access to.
  • HOME VALUE – Your home’s current appraised value will help determine available loan proceeds. The higher the value, the higher the potential for cash.
  • INTEREST RATES – Current interest rates affect how much money you receive. The lower the interest rate, the higher your available funds.
  • FINANCIAL OBLIGATIONS – may also lower the amount you will receive. For example, if you have an existing mortgage balance left, it must be paid off first from your loan proceeds before you receive the rest.
  • DISTRIBUTION TYPE – The type of distribution you choose, whether it be a lump sum, a partial sum, a line of credit, or a monthly disbursement, can affect your loan amount. The line of credit option typically gives you the highest possible proceeds, while the lump sum may give you the lowest.

Reverse Mortgage Loan-to-Value (LTV)

So what percentage of your home’s value can you actually access?  Since there are a number of factors that determine how much of your equity you may access with this loan, there is no specified reverse mortgage LTV that you can expect.  However, reverse mortgage professionals are equipped with tools to do this calculation for you, so we recommend calling your lender to learn what your reverse mortgage loan to value could be.

Reverse Mortgage Loan Limits

One important detail you may not realize is that there are loan limits in place for this financial product.  Although there isn’t an exact reverse mortgage maximum loan amount, there is a limit for how much of a home’s value a reverse mortgage can borrow against, which will in turn affect the maximum loan amount possible.  For the government-insured Home Equity Conversion Mortgage (HECM), the maximum reverse mortgage limit you can borrow against is $625,500, even if your home is appraised at a higher value than that. There is a jumbo product that goes over $625,500.

How Much Equity Do I Need to Have?

Many senior homeowners with an existing mortgage want to know if they are still eligible for this loan product.  The answer is yes, it may be possible.  In general, homeowners who are over the age of 62 with 50-55% or more equity in their home have a good chance of qualifying for a reverse mortgage.  However, if there is still a significant mortgage balance remaining, then payout may be minimal.  Because loan proceeds will always go towards paying off existing liens first, a reverse mortgage provides borrowers with the most disposable cash if the home is either paid off or the remaining mortgage balance is low.

Your exact reverse mortgage loan amount is most accurately identified by speaking with a reverse mortgage professional.  This professional will educate you on the reverse mortgage process, understand your specific situation and will help calculate your reverse mortgage quote by considering all of the factors above.  If you are ready to find out how much money you can get from a reverse mortgage and learn more about this flexible retirement planning tool, call Valerie Oliver at 650-773-0247. Your reverse mortgage professional will be standing by to take your first step toward learning more about if a reverse mortgage is right for you.

Sources:

Bird, Beverly. “How Much Equity Do You Need for a Reverse Mortgage?” Finance.Zacks.com. Demand Media. ND. Web. 4 June 2015.http://finance.zacks.com/much-equity-need-reverse-mortgage-6367.html

Gallagher, Mary. “What is the Loan to Value Ratio for a Reverse Mortgage?” Ehow.com. NP. ND. Web. 4 June 2015.http://www.ehow.com/info_8146990_loantovalue-ratio-reverse-mortgage.html

Plaehn, Tim. “What Percent of Value Can You Borrow on a Reverse Mortgage?” EveryDayLife.com. Demand Media. 4 June 2015. http://everydaylife.globalpost.com/percent-value-can-borrow-reverse-mortgage-41748.html

Sherman, Fraser. “Reverse Mortgage Lending Limits”. HomeGuides.SFgate.com. Demand Media. ND. Web. 4 June 2015. http://homeguides.sfgate.com/reverse-mortgage-lending-limits-9369.html

“FHA Reverse Mortgages (HECMs) for Seniors.” HUD.gov. U.S. Department of Housing and Urban Development. ND.  Web. 4 June 2015.http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/hecmabou

“Reverse Mortgages: Understanding the Basics.” EDIS.edu. University of Florida IFAS Extension. ND. 4 June 2015. http://edis.ifas.ufl.edu/fy1105

Posted in Elderly, Equity, Financial News, Home Financing, Love, Mortgage Rates, Mortgages, Rates, Real Estate, Real Estate Mortgages, Retiree, Retirement, Reverse Mortgage, Reverse Mortgagee, Seniors, Stay at Home, Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Reverse Mortgages-a good option!

From the desk of:                                                                        Call TODAY

Valerie Oliver                                                                    650-773-0247 

I am a loan officer who helps homeowners find the right solution in home financing. I have been in the mortgage business for over 30 years and I can listen to your needs and help you come up with a solution. If the youngest person in your household is 62, a Reverse Mortgage may be the answer for you.

 

Peace of Mind

with NO PAYMENTS

while RETAINING OWNERSHIP!

With a Reverse Mortgage you can PAY BILLS,

TAKE A VACATION,

possibly LOWER YOUR TAX BILL

Or Purchase a Home

and ENJOY YOUR LIFE a little more.

With a Reverse Mortgage you DO NOT give up any ownership of your home.

There are a lot of myths out there!

Call to get the real information!

 

Valerie Oliver

650-773-0247

Nmls 48340

CalBRE: 00935469

Posted in Finance, Home Financing, Mortgage Rates, Mortgages, Rates, Real Estate, Real Estate Mortgages, Realtor, Realtors, Retiree, Retirement, Reverse Mortgage, Reverse Mortgagee, Reverse Mortgages, VA, VA Mortgage, Veteran, Veterans | Leave a comment

Feds Raise Interest Rates

The lenders had already raised rates in anticipation of this .25% hike.

 

The Fed meeting was essentially the only focus for investors over the past week. Financial markets experienced a great deal of volatility both before and after Wednesday’s highly anticipated Fed announcement. The net result for mortgage rates was that they ended the week a little higher.

 

 After holding the federal funds rate near zero for seven years, the Fed announced on Wednesday a widely expected rate hike of 25 basis points. According to the Fed statement, there has been “substantial improvement” in the labor market, and the economy is on a path of “sustainable improvement.” Regarding future policy, Fed officials expect that economic conditions will warrant only “gradual” increases in rates. The statement also noted that the Fed does not expect to reduce its holdings of MBS and Treasuries any time soon. While there has been a wide range of forecasts about what “gradual” means for future rate hikes, investors overall were pleased that the Fed does not appear to be in any rush to take additional steps to tighten monetary policy.

 

The Fed’s dual mandate includes striving for maximum employment and stable prices. There is little disagreement that the labor market has been steadily improving. Inflation has remained below the Fed’s desired rate, however. In the statement, Fed officials expressed that they were “reasonably confident” that inflation would rise to their target level.

 

One widely followed indicator released on Tuesday, the consumer price index (CPI), showed that core inflation in November continued its steady climb seen this year. Core inflation excludes the volatile food and energy components. Another measure important to the Fed, the core PCE price index, has shown little indication of a pickup in core inflation. The November reading for core PCE will come out next week.

 

 

Next week, Existing Home Sales and revisions to third quarter GDP will be released on Tuesday. Durable Orders, New Home Sales, Personal Income, and the core PCE price index, the Fed’s preferred inflation indicator, will come out on Wednesday. Mortgage markets will close early on Thursday and will be closed on Friday in observance of Christmas. Mortgage markets often are more volatile than usual during the last two weeks of December due to lighter trading volumes.
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Rates are GOOD!

Have you ever missed out on an amazing deal, missed a great opportunity to buy a stock just before it went up, or held a stock too long? We’ve all been there and we’ve all kicked ourselves for not taking action sooner.

Well, don’t let it happen to you again. Mortgage rates are still really low right now but the window of opportunity is getting smaller with each passing week. As we’ve seen in the news recently, the Fed wants to start raising short-term interest rates. Their decision to postpone a rate increase earlier this month contributed to a decrease in rates recently, but rates will start to rise again as soon as the Fed takes action or signals that it intends to take action.

If you are in the market now for a new mortgage or if you think you will be in the market for a new mortgage next year – Let’s talk.

There are many new programs that weren’t available a few years ago. 

If you’re thinking of buying or refinancing your home, a second home, a vacation home or an investment property – Give me a call today. (Valerie 650-773-0247)

We want to help you get a mortgage! Click here to begin the application process, or call me at 650-773-0247 to contact us and discuss your situation.

Please consider sharing this information with your friends and family.

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Too many questions??

Samuel Oliver and Mom Baby 001

My kids say I ask too many questions. I do. I try to help them when they don’t want my help. When I was their age my mom had no idea what I was doing. There was no email, texts, cell phones or any way to easily communicate besides phone. No wonder they needed Religion in those days. You had to pray that the kids would be ok and then let it go. You had no choice but to write letters and make calls once in a while. When I was 21 I traveled in Europe. I thought I was going to stay a year and ended up staying for almost three years. I called home once a month. I would pick up my letters from home at the American Express office. My mom would write me long letters. She said she would get up in the middle of the night when she couldn’t sleep and write. She wrote about the neighbors, people that I went to school with, church members, my family and menus. I remember saying to a boy I had met that I was going to tell her to stop writing all this news because it didn’t interest me. I read one of the letters to him and we laughed. He gave me some good advice. He said not to tell her that. She enjoyed writing the letters. It was cathartic for her to write while I was lost to Europe and she had no idea if I was ok. Now my 20 year old is in Europe and he is travelling all over the place in between school obligations. I want to know his itinerary. Is that unreasonable? I have to start praying I guess and let go. (A little)

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Greece Steps Back From Brink!

Monday, July 13, 2015 10:30 AM

visit-Greece-580x330

Greece is being pulled back frm the economic and financial edge. Over the weekend EU leaders agreed to give Greece €86B ($96B) for new bailout loans. The carrot depends on Greece accepting an increase in austerity cuts that last week Greek voters voted against. The deal is characterized as a total surrender to Greek creditors. “The deal is hard,” Mr. Tsipras said after the summit, warning that the measures required by creditors will send the country’s economy further into recession. No relaxing though; by Wednesday the Greek Parliament has to pass the overhauls and increase sales taxes. “The agreement was laborious. It took time but it was done,” said Jean-Claude Juncker, the president of the European Commission. Greece did get consideration to restructure its debt, making it easier to pay; likely won’t be enough to ease the pain though. Greece will suffer more oversight in the future; the EU micro-managing its debt payments and debt issues ; its debt is going to increase even more. Greece has already defaulted on its payment to the IMF, a payment to Treasury bill holders due last Friday and today another IMF payment will go unpaid. One cliff avoided, others still loom for Greece.

Europe’s stock markets rallying, US stock index futures trading early this morning had the key indexes higher. US interest higher. The 10 early today up to 2.47%, +6 bps frm Friday’s 10 bp increase. MBS prices on Friday down 30 bps and early this morning down another 30 bps. At 9:30 The DJIA opened +145, NASDAQ +44, S&P +16; 10 yr at 9:30 2.45% +4 bp, 30 yr MBS price down 23 bps frm Friday’s close and -17 bps frm 9:30 Friday when lenders set morning prices.

With the move away from the cliff in the EU, time to re-focus on US domestic data. The calendar this week is full of key reports (see the calendar below). On Wednesday and Thursday Janet Yellen will testify to Congress at the semi-annual required law known as Humphrey/Hawkins law. The Fed will release its Beige Book, Fed staff’s report frm the 12 Fed districts. June housing starts and permits. This is also earnings season, markets keen to see Q2 data and the potential to hold profits after Q1 actually was a plus for most public companies.

After weeks of news frm Greece and the EU that peppered markets daily, the reaction so far this morning to the bailout news hasn’t lifted markets that much. Interest rates higher and stocks better but neither had the reaction many would have expected. Nice to see progress but it isn’t over by any means. Comments frm leaders of the EU and EU finance ministers that maybe Greece will have to temporarily leave the Union haven’t gone unnoticed. Several parliaments, including the one in Athens, will have to give their blessing before negotiations can formally begin. Euro-zone finance ministers will meet later Monday to discuss how to meet Greece’s short-term financing needs and avoid a dangerous default to the European Central Bank.

By 10:00 MBS prices have improved and only off 16 bps frm Friday’s close after starting down 33 bps early this morning. The 10 hit 2.47%, now at 2.44% up just 3 bps frm Friday. Markets are now turning to this week’s economic data and Yellen’s testimony beginning Wednesday. The yield on the 10 yr note have increased about 25 bps over the last two weeks, mortgage rates up about 15 bps. Techs are bearish nw. The 10 yr has some support at 2.48% to 2.50% that may hold if this week’s data is softer than estimates. We suggest using any potential price gains to lock. Overall the economy is improving, last week in her speech in Cleveland Yellen referred to a rate increase this year, saying when the Fed does begin it will be “subtle” and slow.

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Brotherly Love- Ed and I when we were little. Always together!

Val and Ed 1954 Christmas

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Financial News

 

Monday, May 11, 2015 10:30 AM

A slight bounce on Friday after the April and March jobs data, but as noted Friday afternoon it didn’t hold. The 10 dropped to 2.10% on the reaction Friday morning but at the end of the day at 2.15% down just 3 bps. 30 yr MBS FNMA jumped 41 bps on the employment data but ended a little lower at +33 bps. We noted Friday that the trade was not positive although a little better, this morning in early trading the 10 up 4 bps to 2.19% and 30 yr MBS price at 9:00 -17 bps.

There are no scheduled data today but later this week April data will get a lot attention, the first month that economists, traders and investors can excuse weather for any weakness in various data points. News over the weekend, China cut base lending rates again, the third time in six months. The cut designed to help state-owned businesses that are choking on debt and dragging growth down. The cut isn’t likely to help small businesses that China is counting on for sustainable growth. Recently China lowered bank reserve requirements to help small businesses. Why should US markets care? Because China can influence the outlook for the US economic growth. The German finance minister said a referendum in Greece on the country’s international bailout program may be a good idea, a very risky idea as previously Angela Merkel in the past that a vote would automatically be a vote on whether or not Greece would stay in the euro-zone. Why should US markets care? Because the Greek debt issues may have a huge impact for all of the EU if other debt reddened countries decide to renege on debts owed to the IMF and Europe’s banks could send the region back into deep recession. Meetings return in Brussels today.

At 9:30 the DJIA opened +2, NASDAQ +11, S&P +1; 10 yr 2.19% +4 bp and 30 yr MBS price -20 bps frm Friday’s close and -28 bp frm 9:30 Friday).

Last Wednesday and Thursday the bellwether 10 yr, leader of MBS movement, ran to 2.25% the high of the year and matching the high in early March prior the rate decline. It’s a double top in the rate level; will it hold? Will yields back down after the swift increase in rates hear and lead by Germany’s 10 yr bund? The simple answer, its data dependent; increasing optimism of global growth is anathema for fixed income investments, obviously weaker outlooks will keep the Fed and other global central banks from worrying too much about inflation and increasing rates.

Still bearish; all our work remains negative. Possibly markets may be starting a new range for treasuries and MBSs; for the 10 2.25% to 2.00%; MBS price frm 102.64 to 100.45. After the spike higher in rates the last two weeks we would like to see a consolidation, the relationship between price (or yield) and time is important now.                                                                                                          

  • Tuesday,
    • 10:00 March JOLTS job openings (5.158mil frm 5.133mil in Feb) (still March data)
    • 1:00 pm $24B 3 yr note auction
    • 2:00 pm April Treasury budget (+$153B)
  • Wednesday,
    • 7:00 am weekly MBA mortgage applications
    • 8:30 am April retail sales (+0.2%, down frm +0.9% in March; ex auto sales +0.5%)
      • April export and imp[ort prices (exports +0.1%, imports +0.4%)
    • 10:00 am March business inventories (+0.2%)
    • 1:00 pm $24B 10 yr note auction, a new 10 yr
  • Thursday,
    • 8:30 am weekly jobless claims (+11K to 276K)
      • April PPI (+0.2%, ex food and energy +0.1%)
    • 1:00 pm $16B 30 yr bond auction, a new 30 yr
  • Friday,
    • 8:30 am Empire State manufacturing index (5.0 frm -1.2)
    • 9:15 am April industrial production (0.0% frm -0.6% in March; manufacturing +0.2%)
    • April factory use (78.4% unch frm March)
    • 10:00 am U. of Michigan consumer sentiment ndex (95.8 frm 95.9 at the end of April)

     

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Interest Rates Have Risen a Little Today! :(

Mortgage News:
By Karen Brettell
    NEW YORK, March 26 (Reuters) - U.S. Treasury prices fell and
benchmark 10-year note yields rose above 2 percent on Thursday
after the government saw tepid demand for a $29 billion sale of
seven-year notes, a day after a weak five-year note auction.
    The seven-year notes priced higher than they traded before
the sale despite earlier weakness as dealers and investors
prepared for the auction. The bid-to-cover ratio was the lowest
since May 2009. 
    Demand for seven-year notes has been muted in most auctions
for the past year, though it is less usual for a sale of
five-year notes to also go badly.
    "This is the 10th of the last 11 that has stopped with a
similar tail. ... seven-year note auctions in general haven't
been going super-well for some time now," said Thomas Simons, a
money market economist at Jefferies in New York.
    Seven-year notes were last down 11/32 in price to
yield 1.79 percent, up from 1.72 percent late on Wednesday.
Benchmark 10-year notes fell 17/32 in price to yield
2.00 percent, up from 1.92 percent.
    Treasury yields fell after the Federal Reserve last week cut
its inflation outlook and growth forecast, and many economists
pushed back their expectations on when the U.S. central bank is
likely to begin raising interest rates to September.
    But the selloff on Wednesday afternoon and Thursday still
leaves yields below where they had traded before the Fed
meeting.
    Tom Tucci, head of Treasuries trading at CIBC, said he
expects the Fed to pause after any initial increase to gauge how
markets respond to it. 
    "The question is will the market allow them to do it? The
labor force, they think, gives them a little bit of a window,
but inflation doesn't and that's been the battle they've had for
quite some time now," said New York-based Tucci.
    Inflation has remained stubbornly low even as the employment
picture brightens. Weakening economic data in the past few weeks
has also added to concerns that growth may be slowing.
    Gross domestic product data for the fourth quarter released
on Friday will be closely watched, though it won't have
information on growth in the first quarter.
    The next major release for the market will be next week's
employment report for March.
    "GDP is older data at this point; next week it's employment
at the end that has the focus," said Jefferies' Simons.
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