Stay Healthy & Safe!!!
The Saga Continues……
Looking more and more apparent that the COVID-19 issue is not going away anytime soon… With a great number of people choosing not to use masks and proper social distancing, this insidious virus will just not go away on its own… Even on November 3rd as many people like to think!! We have all seen the data and numerous statements made from the professional medical community for everyone to “mask up”., but we can always lead the proverbial horse to water, but you can’t make them drink…Let’s all please do our share!!
On the mortgage front, RATES ARE AT HISTORIC LOWS!!!! Almost all rates will be with a 2% as the first digit for conventional home loans up to $510K—up to $765K slightly higher. Please contact us to review your current mortgage program and see if we can lower the rate or shorten the amortization period to take advantage of the interest rate environment. Even if one is super strong financially, this makes good economic sense to refinance.
The real estate market is surprisingly robust with sales occurring at all price points. Multifamily underwriting is more stringent, but still available for strong borrower’s and excellent properties. Financing is available for B and C apartment projects, but naturally the rate is higher. Please make sure to take advantage of the low mortgage rates for any 2-4 unit investment properties. 30 year fixed rates in the 3%’s are a gift!!
Commercial real estate is a different story. Credit is available for the “right” transaction, but at reduced loan to values and microscopic underwriting… Everyone is aware of the complex retail issues.
As always, we are available to discuss your personal or client financing needs. Have a happy and safe, healthy July and look forward to connecting soon!! We welcome your contact.
Gloria Shulman and Curtis Cohen and all of us at Centek
Special Report: Coronavirus and Rates
This is today’s reprint from MBS Quoteline which is one of the major sources in the Real Estate industry
As the number of reported cases of the coronavirus around the world has increased, the list of school closings, work interruptions, event cancellations, and other consequences has grown. This decline in economic activity has been brutal for stocks but good for bonds, pushing mortgage rates to record low levels.
One commonly heard question is why mortgage rates have not fallen as much as government Treasury yields. There are two main reasons. First, mortgage-backed securities (MBS) have prepayment risk while Treasuries do not. When people refinance, their loans are removed from MBS. This makes MBS less valuable to investors relative to Treasuries during periods of declines and more valuable during periods of increases. In other words, mortgage rates rise and fall more slowly than Treasury yields due to the basic properties of prepayment risk. Second, the large mortgage companies which purchase loans and set mortgage rates have the capacity to process only so much business at one time. Currently, there is more demand for loans and refinancings than these firms can handle, so they have less incentive to pass along the lowest possible rates to customers.
Another question is why Tuesday’s 50 basis point rate cut by the Fed didn’t cause a similar decline in mortgage rates. This answer is much simpler. The Fed sets only short-term rates, and all of those did drop by roughly 50 basis points. However, long-term rates such as mortgage rates are set and influenced by a wide range of factors and are not tied to movements in short-term rates.
Please reach out to review your current loan scenarios…
Residential and Commercial
We wanted to reach out to everyone this morning about the current financial environment.
As we all know, the financial markets are being trampled as a result of the potential of the Coronavirus pandemic. We certainly hope this is a transitory situation and either a vaccine or some of other form of containment is implemented…
As a result, interest rates have declined to all time market lows. Please reach out to inquire about reducing your existing mortgage rate and payment.
Hoping there is a quick resolution to the problem…
Gloria, Curtis, Ted and Coby and all of us at Centek
A lot of action to start 2020!!
An emotional Sunday for all with the passing of Kobe Bryant and everyone involved in this horrible tragedy. Also another emotional overlay– the anniversary of the Liberation of Auschwitz. A flurry of geopolitical events from the Middle East to Washington, D.C.!! Whichever side of the aisle you’re on, a lot of moving parts…we are just about to enter the early state primaries with California’s only about 6 weeks away! Needless to say, this year’s election results will have a profound effect on every one of us. It will be extremely interesting to see how the political landscape develops into November!!
On another front, which is driving the market to a fair amount of volatility, is the Coronavirus. In addition to the human toll and the belief and sagacity of the Chinese Government report, the impact on the international markets is leading to lower rates!!
The above dynamics are rippling through the financial markets. The stock market has risen too all time highs, and the bond market has enjoyed the dovish tenor of the Federal Reserve! Interest rates have been declining, and mortgage rates have reached very attractive low levels!! The spread between adjustable-rate mortgages and fixed rates has almost evaporated. We firmly believe in either reducing one’s current fixed rate amortization schedule into a lower one, with payments being in the same general area on a monthly basis. We can tailor the repayment time period to fit into a comfortable repayment schedule. In many instances, we can reduce the repayment period by years with little or no increase to your current monthly payment. This is another exceptional opportunity for debt consolidation of all types—including student loan payoffs and upgrades to properties etc.
The shadow banking world has brought us a whole menu of alternative mortgages utilizing bank statements or asset-based lending for both primary and investment properties. Albeit, the rates are higher by approx. 1.5 -2%, but these programs represent a method to obtain mortgage financing that has not been available in recent years. This is a wonderful vehicle for a multitude of self-employed people that just didn’t fit within the box with their tax returns.
The real estate market remains buoyant with some slight pockets of decline, but the overall market remains healthy. The wealth affect is significant in our California world. It seems that people are readily spending money. With that said, we must acknowledge that the homeless issue with the heavy percentage of mental illness must be deal with.
We think outside the box, have a broad base of resources built over 35 years of high-quality business and are experts with the most complex tax returns. As always, we welcome your contact.
All the best,
Curtis, Gloria, Ted & All of us here at Centek Capital
As we hit the full stride of the summer season, the interest rate complex has heated up and is boiling over!!! Since the beginning of the year, interest rates have made a dramatic U-Turn…The pundits were talking about rates going thru the roof, but the herd mentality was wrong! The 10 year Treasury note has declined from 3.25% in January all the way down to piercing the 1.85% level!! The roof became a trapdoor!! The Federal Reserve cut their benchmark Fed Funds rate by 0.25% on Wednesday which at first received a muted response, but rates subsequently pivoted and became the catalyst for lower rates in conjunction with President Trump’s tweet on Thursday morning adding additional tariffs to on $300 Billion of Chinese goods!!
What does this mean, it means it’s time to analyze your current mortgage interest rate and determine if you would like to lower the monthly payment or perhaps shorten the amortization period to pay off the loan quicker. In addition to the conventional suite of loan products, we are now excited to offer bank statement programs and asset-based lending options. These are ideal programs for self-employed and retired people whose tax returns look light. Albeit, these rates are typically 2-2.5% higher than conventional rates, many of our self- employed clients have utilized this excellent avenue for both primary and investment property loans. Finally, one of our institutional lenders has rolled out a very aggressive reverse mortgage program that does not have a dollar amount limitation. As many of us know, this can be an alternative solution for clients who don’t quite fit into conventional qualifying.
The real estate market, as well as our overall local economy, remains quite strong with pockets of slight softness in certain housing markets. On the whole, demand remains stable for real estate acquisitions.
As always, we are available to run “What-If” scenarios, and our clients know after 35 years of experience, we “Think outside the box.” Have a happy and safe August and Stay Tuned!!
Gloria Shulman, Curtis Cohen & All of us at Centek