You Marry the house you Date the rate
Good morning,
I have heard a lot of conversation over the last 2 weeks while out on broker tour about rates, rates, rates (and picky buyers).
It is all about Mindset, and what you believe, if you tell every buyer rates are high they will believe that, ( and so will you) or if they listen to the news they will think rates are at 7%, they are Not. SF, Marin, East Bay and South Bay are in jumbo markets, ( we can offer jumbo rates on any loan over 647k) rates on jumbo loans are better than conforming . The media is talking about conforming loans when they talk about rates over 6 or 7%. If your under 35yrs old, then a 5.25-5.5% rate sounds high, but if your over 35, 5.25-5.5 sounds good. We did hit 4.8 in Nov 2018 which is close to where the arm rates are now.
You Marry the house you Date the rate. This is the best time to buy a home, less competition, less likely to pay over asking, and more availability. If you have been in the business for a while you know that in San Francisco the value will go up, it might not be 10-20% per year, but it will go up. This is where you need to use the data that is available to you as a Realtor ( and set you apart) to show the client the stats on the appreciation of values over the last 20-50yrs . When you buy a car the value drops 10% the minute you leave the dealership and everyone is ok with that. But if you buy a home and it drops everyone freaks out, why is that? Clients need to be educated more now on the value of home ownership: forced retirement, they don’t have to worry about being evicted/moving, set payment, tax savings etc. The value may drop, but it will go back up, are you buying this for a long term investment or a quick turnaround?
You Marry the house you Date the rate
I believe rates will come down within 12-18months, we have an inverted yield curve meaning the 2yr treasury is higher than the 10yr treasury, this points to signs of recession. Rates drop in a recession. But let’s say they don’t, a 5.25 rate is still a good rate, the value will go up, it always has in the Bay Area.
We have great loan programs that we can offer your clients: 15% down, interest only loans, non-occupant coborrowers with blended ratios and we have less reserve requirements ( compared to most other lenders) that can be all retirement, which is huge right now with the stock market down (a few banks want a percentage of the reserves in cash)
I have been in the mortgage business since 1991, now is the time to have an experienced loan officer that can help educate your clients on various things, it is not just about the rate anymore.
Feel free to call me anytime if you want to discuss the interest rate environment or ways to help your buyers make the decision to move forward with purchasing a home now.
Thank you
Marta
Fri, Oct 14, 9:42 AM
Marta McLeod
Marta.McLeod@unionbank.com
Private Mortgage Banker
Assistant Vice President
Retail Home Loans
Union Bank
350 California Street
San Francisco, CA 94104
M: 510-508-4220
NMLS ID #484750
