mortgage alameda: How to Successfully Get a Mortgage in 2019 - 09/09/19 10:51 AM
 
If you've traveled in an airplane recently, you probably went through a security check at the airport.  These security checks are required by a federal law called the USA Patriot Act.  This very same law has a provision that requires mortgage companies, banks, and financial institutions to document your source of funds when you buy a house or refinance a mortgage.  In short, the US government has recruited mortgage lenders in its fight against terrorism!  In fact, lenders are required by law to ask you for:
The exact source of funds used for your down payment and earnest money deposit. … (1 comments)

mortgage alameda: Summer 2019 Guide to Mortgage Rates - 06/03/19 09:20 AM
 
Mortgage rates are determined by the supply and demand for mortgage bonds in the bond market.
Why Mortgage Bonds? When you get a mortgage in the US, your mortgage company is getting the money from Fannie Mae, Freddie Mac or other "securitizers". These "securitizers" get their money by issuing bonds to bond market investors.  These bonds are called "mortgage bonds" or "mortgage-backed securities".  Therefore, the mortgage rate you pay is really determined by the supply and demand for mortgage bonds in the bond market.

The Role of the Federal Reserve As you can see from the chart, the Fed owned … (1 comments)

mortgage alameda: How to Solve Your Negative Equity Problem - 04/08/19 09:18 AM
 
One out of every ten homeowners in America owes more on their mortgages than the value of their homes. You may want to consider the "cash-in mortgage" strategy if you're in that situation. You can use this strategy to reduce your mortgage in order to refinance your loan into a lower payment.  You can also use the strategy to sell the property without having to do a short sale.

Cash-in Mortgage Refinance Using cash to pay down your mortgage may allow you to refinance into a lower interest rate and lower your monthly payments. For example, consider a homeowner who … (1 comments)

mortgage alameda: How Payment History Impacts Your Credit - 03/11/19 09:22 AM
 
Your timely payment history has a 35% impact on your credit score. Paying debt on time and in full has a positive impact. Late payments, judgments, charge-offs, collection accounts, and bankruptcies have a negative impact. If you have had any bankruptcies within the last 7 years, it will seriously affect your ability to borrow or establish new credit accounts.  If you have had any judgments within the last several years, it is very important that you pay off the judgment and get a "satisfaction of judgment" from the court. Any unsatisfied or recent judgments will make a bad dent in your … (1 comments)

mortgage alameda: The Rules of 25 and 72 - 01/28/19 08:31 AM
 
Here are two easy-to-remember formulas that can be very useful as you budget for retirement:
 
The Rule of 25 – How much “critical capital” do I need?
According to this formula, if you multiply the annual income you need by 25, that’s approx. how much money you need to save in order to retire.  This would allow you to live off your retirement assets without dipping into principal.  This assumes your after-tax rate of return during retirement is 4%. 
For example, if I want to generate $60,000 per year in after-tax retirement income, I would need to save a … (3 comments)

mortgage alameda: How the Fed Impacts Mortgage Rates - 12/17/18 09:36 AM
 
The Federal Reserve Open Market Committee (FOMC) meets at least eight times per year to discuss and vote on US monetary policy. The Fed controls the Fed Funds rate, which is essentially a bank's cost of money. When the Fed increases the Fed Funds rate, short-term interest rates such as the Prime rate and LIBOR go up. These are often used to determine interest rates on adjustable rate mortgages, home equity lines of credit, credit card balances, and business loans.
However, interest rates on fixed-rate mortgages are not tied to changes in the Fed Funds rate.  Mortgage rates are determined by the supply and demand for mortgage bonds in … (2 comments)

mortgage alameda: Three Ways to Increase Client Referrals - 11/12/18 05:43 AM
    Many clients today have indicated a willingness to refer you business, but very few actually follow through.  Here are three potential solutions that we can explore together:
 
 
How to Be More Relevant to Your Clients.  Many financial advisors don't spend any time on database marketing.  Other advisors blast their clients with generic newsletters.  What if you could be different?  Here's an idea to consider: personally call just one of your clients per day... every day for the next 100 days.  During the conversation, discover your clients' current life priorities and give them something of tangible value that … (4 comments)

mortgage alameda: How to Get the Primary Residence Capital Gains Tax Exclusion - 10/23/18 07:30 AM
 
In order to understand capital gain, we first need to understand tax basis. Your tax basis is the cost of buying, building or improving a property. Assume you pay $200,000 for a property. You incur $5,000 in closing costs. Then you spend $45,000 on home improvements. In that case, your tax basis would be $250,000. That’s what it cost you to buy and improve the property.
Assume you later sell the property for $500,000. You incur $50,000 in sales commissions, transfer taxes, and other sales expenses. You then subtract your $250,000 basis. Your capital gain would be $200,000.
Once you … (2 comments)

mortgage alameda: Investment Property Math: ARM vs Fixed Rate - 10/08/18 07:03 AM
Here are three things to consider when you're choosing between a fixed-rate mortgage and an adjustable-rate mortgage (ARM) on an investment property:

 
 
1 - Cash-Flow & Rate of Return Considerations
An ARM typically carries a lower interest rate vs. a fixed rate mortgage.  This means that you'll generally pay less interest and have a lower monthly payment vs. a 30-year fixed rate mortgage.  While not super significant in most cases, the savings could add up over time and enhance your overall rate of return throughout your holding period.

 
2 - Time Considerations
How long do you plan to keep the property and … (1 comments)