This is a collection of blog posts we have done regarding the lending industry, interest rates and anything else that falls within the financing realm of a real estate transaction.

What a year!

We saw rates climb consistently throughout the year to as high as 8%, only to fall back to the 6% range by the end of the year. Thank goodness.

We also saw the supply of homes remain very tight in the 1 to 2-month range, even as the rates climbed. As of this afternoon, we have 546 homes for sale in Placer County and 337 in contract. That is only 1.6 months of inventory!

Many homeowners were simply uninterested in leaving their existing low rates throughout the year. The good news is that with rates falling recently, we may see more homeowners willing to make a move after holding off the past year.

The biggest surprise of all for many of the experts was the increase in home prices, due to the lack of supply. The median home price…

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Over the past two years rising interest rates have had a massive impact on the real estate market.

 For numerous years we saw record-low interest rates spur demand, which led to record sales volumes and impressive yearly gains in home values.

 Since rates began to rise, we have seen a sharp decline in demand, but somewhat unpredictably, we have also seen a decrease in the supply of homes that has been greater than the decline in demand.

 The combination of these factors has led to a market where we simultaneously have a low supply of homes, leading to stable and even rising home values, while at the same time, the cost to finance those homes has increased at a record pace, due to the 20- year high-interest rates.

 The questions we are now…

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The new California Dream for All program offers a unique opportunity for California residents to partner with the state in an equity share down payment assistance program.

For qualified buyers, the state will contribute up to 20% of the downpayment needed towards the purchase of a home. Leaving the home buyer to finance the remaining 80%, oftentimes without private mortgage insurance because of the assistance.

The combination of only having to make a payment based on 80% of the home’s value, combined with the possible removal or lowering of the private mortgage insurance, will allow buyers to have payments considerably lower than traditional low or no downpayment loan programs.

When the home is sold in the future, the initial 20% of the downpayment…

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As interest rates have risen over the past year, it has become progressively more difficult for home buyers to qualify to purchase homes in the same price range that they could afford at lower interest rates.

Fortunately for veterans, VA loans offer a great way to help offset this rise in rates by allowing them to assume the loan of another veteran at that loan's existing rate.

What is Loan Assumption?

Loan assumption is a process where a new borrower takes over an existing loan, including all the terms and obligations associated with it. In the case of a VA loan, loan assumption can be a great option for individuals who want to buy a home but may not qualify for their own VA loan at current rates, or for someone who would just like the lower…

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For most currently listed homes, buyers are firmly in the driver’s seat during negotiations.

While there are limits to what is possible, it is common for us to be able to negotiate with sellers on both the asking price and terms.

The home in this video is an example of that.

We were not only able to negotiate a reduction in the sale price, but we were also able to negotiate a considerable seller credit towards my client's closing costs, which they will use to do a 2-1 buydown of the interest rate on their loan.

This buydown will lower their interest rate by 2% in the first year and 1% in the second year. In the third year, the competitive fixed rate will kick in for the remaining term of the loan.

There are other buydown options available for…

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The California Associtaion of Realtors recently released the following infographic to help put into perspective how great the interest rates are right now.

If you bought an $85,000 home in 1980 with 20% down payment and an average interest rate for that decade of 12.7%, your payment would be the approximately the same as it would be for a $200,000 home at today's rates hovering around 3.5%.

Your principal and interest payment for the $85,000 home at 12.5% in the 1980s would be $900. The total cost over 30 years would be $326,000 with $241,000 in total interest paid.

Your principal and interest payment for a $200,000 home at 3.5% today would also be $900. The total cost over 30 years would be $323,000 with $123,000 in total interest paid.

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