Silicon Valley mortgage blog, Yulin Lee, mortgage advisor in Palo Alto

Cashing out After an All Cash Purchase - Watch out!

2009-07-23T13:32:00.000-07:00

Since I have heard several people mentioning this scenario, I thought I would share the current state of things in the lending world. First the scenario:

A buyer looking to purchase a home, for whatever reason (maybe it's a multiple-offers, or maybe they are trying to negotiate a better deal by closing faster with cash), they have decided to purchase the property with all cash. The thinking is that they would purchase first, and then right away take cash out from the property. This would be no different from getting a loan in the first place, other than taking a 2-step approach vs. 1 step.

What's the significance here? Well, according to IRS (please double check with your tax consultant), you can only deduct mortgage interest from your tax liability based on the acquisition indebtedness, unless the cash out is done within 90 days of the initial purchase. So, most people think the scenario described above would help them accomplish their goal of getting a good deal while not losing any tax benefits.

The problem here is that most lenders today have a 6-month seasoning requirement on cash-out transactions, meaning the owner would have to wait for 6 months before they can do the cash-out.

So, for those who are contemplating doing the above, be sure to check all fronts before jumping in.

The Real Effects of HVCC

2009-06-19T17:52:00.000-07:00

The HVCC (Home Valuation Code of Conduct) law that became in effect on May 1 was designed to "protect" consumers by creating a process in which the appraisal reports are done based on unbiased opinions and without any influence from realtors and loan originators. Under this law, loan originators are no longer allowed to have any direct contact with appraisers during a real estate purchase transaction. The orders are processed through an independent 3rd party company.

With all its good intention, the real effects we have seen under this new process have been quite detrimental to consumers. The average cost for an appraisal has increased by about 40%. The average cost used to be around $375 for a property under $1mil value, an equivolent report today costs around $500. That's real cash taken from consumer's pocket.

For refinance borrowers, especially those whose equity in their house may have eroded to just around 20%, the new process has become an expensive exploration. In the past, we could at least call an appraiser to get a rough estimate of the approximate value without having to go through a full inspection (thus not incurring a cost to the consumers). Under the new law, because we can't have any direct contact with appraisers, the consumers will have to spend the $500 upfront to find out if refinance is a possibility.

There are many other holes in the new process that create new challenges during a transaction. I just hope that the regulators are listening to what people saying, and make some real senses out of this honorable idealistic quest.

Conforming Loan Limits for 1-4 units

2009-06-16T09:21:00.000-07:00

I was just asked about the latest conforming loan limits for 1-4 units residential properties. I thought it would be helpful to post this for anyone else who may be looking for the same information. Here it is:

Units General High-Balance
Permanent Temporary (til end of 2009)
1 $417,000 $625,500 $729,750
2 $533,850 $800,775 $934,200
3 $645,300 $967,950 $1,129,250
4 $801,950 $1,202,925 $1,403,400

Rising Mortgage Rates Eroding Affordability

2009-06-13T19:21:00.000-07:00

Mortgage rates have been rising for the last 2 weeks. Rates are more than 1% higher than their lowest level. For example, we had seen conforming loans as low as 4.375% for a 30-yr fixed. This past week, they had been hovering in the high 5% range.

How has this change impacted borrowers? Well, many refinance clients who were trying to time the "lowest" market or were hoping for even lower rates (aka below 4%) are now jittery. Did they miss the boat? Maybe. While we may see some improvements in the coming months, it is unlikely that we'll see the same low level of rates that we had seen earlier this year. According to the latest news from the Fed, it doesn't sound like they are ready to purchase additional mortgage-backed securities. With Fed's buying winding down and more investors coming into the market, they will sure demand higher returns than a mere 4% on a 30-yr securities.

What about the home buyers who have been sitting on the fence waiting for the price to drop more and rates to go down further? What has happened in the last 2 weeks in the mortgage market should be a good reminder of the corrolation between home price and mortgage rates. Here's the numerical comparison: 1% increase in rates is equivalent to around 15% change in purchase price. So, here's the question: Rates can go up by 1% in a matter of days, based on what we have seen. How likely are the home prices to go down by 15% in a matter of days? The reality is that the rapid rising rates are eroding the affordability of home ownership. So, for all those buyers out who need to buy a new home this year, remember to focus on the big picture. The long term financing costs outweigh the cost of the purchase many folds.

Can Mortgage Rates Stay Low?

2009-02-09T11:45:00.000-08:00

The Fed's been at it again, offering words that sound encouraging at first blush, confirming that their buying program of Mortgage Backed Securities is in full swing and will continue as needed. Of course, the media will pick this up and offer their own interpretation, saying "Good news, the Fed's words on continuing their purchasing program mean that rates will continue to drop lower, and remain low into the summer..." But is this really what that means? Not so.

Here's the truth:
Yes, the Fed has been buying Mortgage Bonds, but if you look at what they are purchasing, they are buying a lot of FNMA 30-yr 5.5% and 5.0% Bonds...which won't have much of an impact on present interest rates. Why? First, see the Fed's purchases for yourself by hitting this link: Direct Link to View Fed Mortgage Bond Buying - http://www.newyorkfed.org/markets/mbs/index.html.

So why is the Fed buying these Bonds? Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates.
Stay with me here...
With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary. Bottom line, the Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates. In other words, in order for the mortgage rates to go lower to a level where as the news said, "everyone gets 4% - no question asked", the Fed would need to be buying coupons with 3% - 3.5%. Hmm.....

Here's the most important part:
Sometimes I talk to clients who are in a situation where it makes sense to refinance right now, and save $250 per month for example. But when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision to save the $250 per month right now, in the hopes of gaining another $30 per month in additional savings with a lower rate than where we stand presently. Now clearly, rates could turn higher, and this window of opportunity could pass them by entirely.

The clincher is this:
Even if those clients ultimately are correct in timing the market, and eventually grab that lower rate and save another $30 per month - think of what they have lost by waiting. While they delayed, they lost the savings they could have gained by taking action sooner - or in the example used, $250 - for every single month they waited. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.

Bottom line is rather than trying to time the market, it's more crucial to evaluate your scenario within the whole context of your overall financial well being.

Market Timing or Long Term Planning? How To Buy Your Next House In This Market

2008-10-13T17:09:00.000-07:00

Life has been interesting being a mortgage professional in the past 12 months. Most people I run into seem to have the same curious question: “how are you doing? How’s business?” Maybe secretly, deep down inside, they were expecting to hear me crying and spilling out horror stories about how the sky is falling - just like the rest of the reporters you hear in the media. But the truth is “It’s not that bad”. Actually, I should qualify it by saying “It’s not that bad for people who can truly afford to buy”.

The credit crisis has certainly changed the landscape of the lending industry, but for the better! While it may be more difficult to get a loan these days, it’s becoming an easier market for buyers who are financially positioned to buy. For one, people with 20% down payment don’t have to compete with other buyers with no money down. The economic downturn that we are experiencing right now truly underscores one thing that we believe to be the core of what makes people successful – Planning!

Looking for that perfect house (one that fits your commute requirements, the right school district for your kids, long term appreciation concerns, and maintenance issues, etc) is one thing, but how does such a purchase fit into your overall long term financial planning is another. Culturally, we have not been trained to think that way. For example, for a younger couple who may have had a couple of kids and progressed through their careers, at some point, they get “the hunch” that they can/need/should move up to a larger home. So, the buying process is generally around finding a house that meets their logistical needs. But, what about the financial needs? With increased income, they can probably qualify for more now. But as I always tell my clients, Qualification is different from Affordability – there is a big difference. For most people, signing up for a bigger mortgage payment often means needing to cut back on something else. It is a perfectly fine thing to do, as long as that honest conversation is taking place, and a specific plan is put into place.

Because I often get asked the same kinds of questions from different buyers and the lending guidelines constantly changing, I thought it’s time to do another seminar to specifically address the important questions that home buyers should be asking, especially in this market. It’s on Thur Oct 16th, at 6:45pm at my office in Palo Alto. If anyone is interested, feel free to contact me at blogposts@yulinlee.com or 650-799-8768.

Change is the Only Constant

2008-09-17T10:16:00.000-07:00

Boy, just when we thought things may settle down a bit after Fed's takeover of Fannie and Freddie, the fiascals at Merill Lynch, AIG and Lehman just reminded me that we are still in the middle a major shift, not just in the financial industry and but also in the relationships between consumers and service providers. When companies like AIG with 150+ years of history and brand recognition go down in no time, you really start to wonder what the new paradigm will look like, and what kind of trust and relationship we will have with our service providers going into the future.

A year ago when the mortgage industry started experiencing the credit crunch, we started a marketing campaign called "A Scent of Change", which was a series of seminars that were meant to educate our clients about the major changes we were seeing in the lending industry. At the time, we had planned for that campaign to go on for about 6 months. But now, 12 months later, that theme still seems to be applicable. What does that teach me?

There are always external factors that will be thrown at us, which we can't control. But what we CAN do is focusing on the fundamentals so that we don't get blown away by the unexpected. For me, it's about taking care of my clients, building long term relationships, and keep working at my short-term and long-term goals - One Piece At A Time!

We can't time the market in stock prices or mortgage rates, but we CAN time progress in our own journey to success IF we have a plan!

Mortgage Rates Lowered by Government Takeover

2008-09-08T15:45:00.001-07:00

Another big day for the mortgage industry. On Sept 7, Treasury Secretary Paulson announced plans to place Fannie Mae and Freddie Mac in a conservatorship governed by their regulator, the Federal Housing Finance Agency (FHFA). As part of the announcement, both companies’ chief executives will be replaced and the government will provide up to $200 billion in capital to restore the firms to financial health.

What does this mean? Essentially, both Fannie Mae and Freddie Mac are effectively government agencies now, from being private companies that were established in 1968 and 1970 resepectively. What's the implication for the consumers? And, why did the mortgage rates go down are a result?

As the U.S. government steps up to gaurantee both Fannie & Freddie's maturing bond payments, more investors are becoming interested in buying their bonds. With more investors buying their bonds, there will be more liquidity into the market to extend mortgages to consumers. More liquidity = lower rates. Yeah!

With what has just happened to Fannie and Freddie, and the fact that the conforming Jumbo limit of $729,500 going away by the end of this year, it makes it a really good time to refinance or buy your next home, especially if your loan amount is in the range between $625K - $729,500. For more detail info and a free consultation about how to take advantage of the current situation, you know where to find me!

Housing and Economic Recovery Act of 2008 - A Few Nuggets For You

2008-08-12T14:16:00.000-07:00

The recently passed housing rule signed by President Bush includes numerous changes, but I thought I would share a few with you here (for a full version of the bill, go to http://www.thomas.gov/ and search by bill number for HR 3221, and make sure to view the "EE R" version which is the final version) :

A new agency was created to regulate Fannie and Freddie with much broader powers - Federal Housing Finance Agency. Fannie and Freddie now has unlimited government line of credit for 18 months - This will help ease the liquidity crunch we've experienced in last 12 months.
Loan limits will be set to $625,500 for high cost areas, including the Bay Area. The limits will adjust again in 2010 based on FHFA home price index. If prices decline, there will be one year lag on downward loan limit adjustments. - This means that if you have a loan amount between $625,500 - $729,500 now, and are considering refinancing or buying, you should do something now before year end to take advantage of the Conforming Jumbo rate.
Hope for homeowners - new FHA program - current lenders to write down mortgage balance to 90% of current appraised value, but the borrowers will have to share future equity appreciation with government. - This one seems great at first glance, but a closer look will reveal that it can still be costly to the borrowers and the eligibility standards are pretty strict. For more information on how this might apply to you, contact me for a consultation and I will go over the details with you.
Tax Incentives - 1st time home buyers will receive tax credit of 10% of the purchase price of the home not to exceed $7,500. However, it phases out if modified adjusted gross income exceeds $75,000 single or $150K for married filing jointly. There is a recapture of credit over 15 years. - Essentially, this is a free loan from the government.

For more questions, feel free to contact me.

Where is the Mortgage Rate going?

2008-08-11T11:24:00.000-07:00

Everyone seems to be interested in where the mortgage rates are going because there are still so many people out there who are either looking and waiting to buy or refinance their existing ARM rates that have adjusted or about to adjust. For those of you who waiting for rates to improve, you may be disappointed by the recent activities in the mortgage market.

Freddie Mac has announced that it is increasing the Market Condition delivery fee rate from 25 to 50 basis points. Additionally it will be implementing additional risk based pricing adjusters, for LTV, Credit score and other risk factors. Freddie is also modifying several other delivery fees for Alt-A, A-minus products to equate their pricing with the risk in those products.

What does this mean in plain English? Freddie Mac is one of the agencies that buys conforming loans from lenders who originate mortgage loans. This statement means that Freddie will increase their fees for buying certain type of loans, and in turn, this increase will get passed to consumers in the rates they will be getting.

So, my advice to those who are still waiting is to get your paperwork together and get moving. At the minimum, talk to a mortgage planner to understand all your options.

How Does the Current Financial Market & Politics Affect You?

2008-07-25T10:54:00.000-07:00

This is certainly an interesting time that we live in. With all the turmoils that we've seen in the mortgage industry, the housing market, and the rollercoaster rides in the equity market, everyone is looking at the Federal government to see what it's going to do. Well, there is a new housing bill that was passed by the House and is going to the Senate in the next few days. It is expected that the Senate will pass the bill, and President Bush seems to be willing to sign off on it as well.

This bill addresses issues and concerns for many people. Check out the link below with details of the proposals in the bill and you might find some nuggets:

http://www.nytimes.com/2008/07/25/business/25money.html?_r=2&partner=rssuserland&emc=rss&pagewanted=all&oref=slogin&oref=slogin

How Much Do You Need to Retire?

2008-07-23T11:38:00.001-07:00

It's been a long time since I blogged. It's good to be "back".

Lately, I have had quite a few conversations with others about how much do we really need to retire? What I'm finding is that most people don't REALLY know. Some may have vague ideas, and others have no clues. This is pretty concerning given the current economic condition and how it's impacting people in many ways, not only today, but their future.

I attended a dinner presentation last night with the Financial Women's Association group. The topic was "Lessons Learned". The speaker was a well established financial planner who primarily focused on women clients. Some of the points she shared was pretty interesting:

Many people confuse "security" with "safety" - for people who have a lot of fear and want "security", they tend to pick "safer" investments. Let's take CDs as an example. The average return on CDs are 3%-4%, which barely keeps up with inflation. If you take taxes into account, you will most likely end up with negative growth.
Many women tend to have the attitude of "waiting for that prince charming" - aka have someone else take care of them.
Others take the "Alice in Wonderland" approach - finances are just too complicated for me to understand, so I'm going to avoid it as much as I can.

The reality is times have changed, and there is no more pension or social security that we can count on. So, my call to everyone is Take Responsibility for your own finances. The CEO of my company was recently interviewed by The View from the Bay. She's got some messages for you. Check it out:

http://abclocal.go.com/kgo/story?section=view_from_the_bay/consumer_finance&id=6266121

Having a Millionaire Mind

2008-06-03T22:21:00.000-07:00

This past weekend, I attended a 3-day seminar called The Millionaire Mind Intensive by Peak Potentials. It was awesome and life changing. While the focus was on learning about our money blueprint, most of the principles can be applied towards other areas of our lives.

The one concept that I particularly liked was that most people feel they have to become a millionaire (or I should say multi-millionaires in this day and age) before they can reach financial freedom. But it is not necessarily so. To be financial free means that you have enough passive income to cover your living expenses. Now, if you can acquire or build businesses that generate passive income exceeding your expenses, then you are financially free without necessarily having to have millions of assets stashed away.

The other benefit of attending this seminar was the fact I got to meet some like-minded great people. Having a network of people who are focused on similar goals is one of the components of becoming successful.

I highly recommend reading the book Secrets of The Millionaire Mind.

Selecting Your Student Loan

2008-04-11T11:15:00.000-07:00

As college acceptance letters arrive these days, families are celebrating the good news. But also, some of the start to worry about how to finance college.

Indeed, the student lending market has experienced two dramatic blows last year:

Amid the subprime mortgage crisis, funding for all kinds of loans has dried up.
The College Cost Reduction and Access Act of 2007 cut government subsidies to issuers of federal student loans.

In order to help you finding the financial resources to finance college, here are some great tips.

Start federal
With smaller fees, lower interest rates and better terms than private student loans, federal loans are still the best option for most borrowers.

Check your state
More than 30 states have programs to provide federally backed and other education loans to residents or in-state students at competitive rates.

Avoid private student loans
With lenders feeling pinched, expect a big marketing push for their higher margin product, the private student loan. But experts agree that those loans should be a last resort because they carry high variable rates and fees.

Look at your home equity
Don't forget you can refinance your home (if you own one)! You could use a part of the equity of your house to finance college. You will get access easily to the money, and will have a more favorable interest rate than most of the student loans have.

Need to know more about how to use your mortgage to finance college? I will be pleased to advice you.

Senate to help in housing crisis

2008-04-02T12:49:00.000-07:00

Senate leaders are working on a package of legislation to help the homeowners on the edge of foreclosure. The fact is that around 4.2 million mortgages were either past due or in foreclosure while 2007 was coming to its end, and 3 million more may deault in the next few months.

The rescue proposals include:

$10 billiion in tax-exempt bonds to refinance subprime loans
$4 billion to local governments to buy foreclosed properties
$15,000 tax credit for purchases of foreclosed homes or newly built homes that have been sitting vacant.

The main goal of this effort is to transform risky subprime mortgage that borrowers can't afford into traditional 30-year loans.

Home prices down record 11%, 13% for San Francisco

2008-03-25T11:07:00.001-07:00

Home prices have declined from 10.7% in average nationwide between January 2007 & January 2008. This is the biggest drop since the index has been created in 2000.

Thus, this is the best time right now to consider investing in real estate, whether in the Silicon Valley or in other states, as both prices and rates are low.

The question now that people often ask me: When will it hit the bottom? People want to invest while the price will be the lowest.

Let's not forget that we are in an atypical situation, where the market has meltdown. A real estate investor should not focus on waiting for the bottom, but investing right now as conditions are more than friendly. Also, you have to think about the mortgage market, and see what loan program will fit you the most.

You have questions about real estate investment? Thinking about purcasing a home in Palo Alto or in the Silicon Valley? Feel free to contact me and let's discuss about the possibilities.

(Source: CNN Money)

US Treasury Secretary Henry Paulson blaming the lack of financial knowledge

2008-03-12T09:41:00.000-07:00

US Treasury Secretary Henry Paulson is stopping by the Bay area on Thursday, where he will meet with Bay Area leaders to push homeowners to get educated about how the financial industry works.

US economy has encountered a lot of problems these past few months with the sub-prime crisis, a historically low dollar and the stock market struggling meanwhile. Treasury Secretary Henry Paulson acknowledges that the sub-prime mortgage mess continues to be the biggest drag on the nation's economy.

He says nevertheless that both bankers and borrowers are to blame.

"What got us here was some very bad lending practices, some unethical lending practices, financial fraud. But also the other issue is there are a good number of people who signed a mortgage contract and didn't understand it," said U.S. Treasury Secretary Henry Paulson.

The best way to understand how mortgages work and how they fit into your overall finances is to contact me and schedule a free mortgage planning session.

(source: ABC7News)

HUD Raises FHA Loan Limits

2008-03-06T10:25:00.000-08:00

At last, after much anticipation, HUD finally published the new FHA loan limits for the high cost areas. For more detail info, check out this site. Since the new loan limits are based on the median housing pricing, the actual loan limits vary by county in which the property is located. As for the direct impact on consumers, we are still waiting for the lenders to "accept" the FHA limits, and implement them both in their program offerings as well as the backend support systems. In other words, if you are looking for a FHA loan right now, you will not see the new loan limits in place yet. I will update you as we get updates from the lenders.

Now, do not confuse this with conventional conforming loans. OFHEO has not weighed in. Once they do, FNMA & FHLMC will make their announcements, and then lenders will make theirs. I do not know about potential pricing hits, and will certainly keep you updated as things progress.

California to Retrain Laid-Off Mortgage Workers

2008-02-25T10:49:00.000-08:00

Just saw an interesting news today - California Governor Arnold Schwarzenegger has announced a re-training program to assist many of the people who got displaced by the mortgage market meltdown. As a mortgage professional, I can certainly feel the stress many people are going through, and I am glad to see that the government is taking some measure to assist those in need.

For those of us who are still committed to the industry, I do see tremendous opportunities both in terms of continually improving the kinds of services we provide (a cleansing process) and the type of quality products we will be able to offer to those who are financially ready to take on more assets and liabilities.

It's the best time to invest!

Mortgage Industry Embraces CMPS Institute Certification

2008-02-14T12:00:00.000-08:00

I invite you to read this interesting article about the CMPS institute. In this changing market, where a lot of people have been misadvised, it is important while you choose your mortgage consultant to make sure you are working with a highly qualified person.

Certified Mortgage Planning Specialist (CMPS) is a certification I obtained by going through an extensive training, based on five main key areas:
* Financial Market and Interest Rate Analysis
* Cash Flow & Debt Analysis
* Real Estate Equity Management
* Real Estate Investment Planning
* Mortgage & Real Estate Taxation Concepts

As a CMPS professional, I will be pleased to help you not only with your transactions, but also how to integrate the mortgage into your overall financial planning and maximize your real estate investments.

Multi-Unit investment seminar

2008-02-14T11:41:00.001-08:00

On Feb 12 I hosted a seminar with Mario Pinedo on the topic of Multi-unit investing. We had a great turnout, with a large and diverse audience. With the amount of interest and the kind of feedback we have received, it was evident that that this is timely topic that interests a lot of people. This is the time for true investors to take advantage of the current market condition and build wealth for the long term.

Our seminar started with going over the different investment opportunities, and how to evaluate properties. We then reviewed issues around financing: type of loan programs, various lending guidelines, and most importantly, how to choose the right program with the right payment for the right reason.

Multi-unit investments can seem complicated. There are indeed a lot of components and moving parts to deal with in order to ensure the success of the investment. That is why I always believe in having a team working together, whether it is for my personal investments or my clients'. With the right realtor, he/she will be instrumental in helping you identify areas of opportunities and specific properties that match your criteria. An experienced mortgage planner with investment background can help you strategize on the financing options and ensure that they are in sync with your overall financial goals.

The important thing to remember is that it's a great time to be investing right now, and I do have time to help you and your families and friends.

Conforming Loan Limit Going Up

2008-02-08T14:18:00.000-08:00

Yesterday the US Senate passed an expanded version of HR 5140 an economic stimulus package that includes a temporary increase in the conforming loan limits from $417,000 to as high as $729,750 in high cost areas.

So, how do you know whether you are in the "high cost areas"?

1. You must know the formula. If 125% of the local area median home price exceeds $417,000, the temporary loan limit would be that 125% of the median home price with a cap of $729,750.

2. You must know the median home price in your area. According to HR 5140, the Secretary of Housing and Urban Development will publish the median house prices within 30 days. In the meantime, you can check the Wall Street Journal who had published median house prices recently, and you can reference this information to get an idea of which areas will exceed the $417,000 limit.

What does all mean to you? Well, if you currently have a mortgage with a balance between $417K and $729,750, depending on where you are located, you can potentially refinance your mortgage into a conforming loan. Why is that interesting? Well, because the spread in rates between a conforming and jumbo loan is about 1.25%. For some folks, this can mean huge savings in their monthly mortgage payments.

Call or email me for a free mortgage review to determine how this new law that's about to pass can pontially benefit you.

2008 Economic Forecasts

2008-01-23T15:24:00.000-08:00

I attended a breakfast briefing last week at the Santa Clara University. The topic was on the Economic Outlook for 2008. The talk was refreshing considering that we're being bombarded by the gloom & doom news in the media. The speaker, Mario Belotti, an well respected Macroeconomics Professor at SCU. Here're some of the stats and key points that he shared with us, and in turn, I would like to share them with you:

The Fed will do everything possible to help the financial markets
Banks have been able to find funds (ie. Citigroup got $7.5 billion in funding from other sources, and other banks received $12 bil)
Prediction for 2008 is 1%-1.8% growth rate, and Q1 being 0%
Consumer confidence is down, but consumption is still up, and he doesn't expect that to change
Consumption was up, and disposable income was up too, so consumers are not solely relying on cash withdraws from home equity
If we combine equity and income, consumption should have been at 8%-10%, but in reality, it was about 3%-4%
Gas pricing have gone up and gotten a lot of attention, however, the total gas consumption as a % of disaposable income was 2.8%, and other energy resources was about 2%. 5 years ago it was about 8% combined.
According to Mortgage Bankers Association, for the week ending Jan 11, 2008, mortgage application was up by 28%, highest in 4 years (increase in purchase transactions 11%, refinance was up by 43%)
2007 created 1.5 million new jobs
Manufacturing sector was down, while the service sector was flat, this is about 80% of the economy
Declining value of the dollar increases US export volumes. In 2007, export went up 12.5%, while import went up 6%, and he expects 2008 to be about the same
Business spending are expected to be up 4%-5%
The expected 1.8% growth rate in 2008 is about 50% of the potential growth in a healthy economy, which is about 3%

Amongst many other stats, the main point here is that we may be not growing at the rate that we would like to see, things may not be as bad as the recession that everyone is talking about. The lessons I took away were:

Instead of relying on what we get fed by the media, it's always a good idea to dig into the numbers ourselves (being a numbers person talking...)
As in any situation, you can see the glass half full, or choose to see it as half empty. The question is how do you make the best of situations that's beyond your control?
Things may not be as bad as the media has been portraying, and it's up to us to find new opportunities. That's the question I ask myself everybody: who can I help the most in the current market?

Galettes des rois Party

2008-01-18T14:08:00.000-08:00

You can find the pictures of our Client Appreciation Party we held in our office on Thursday, January 10.
This was a great occasion to celebrate la galette des rois, a French tradition.

From the Middle Ages, the Epiphany has been celebrated with a special Twelfth Night Cake: la galette des rois, literally the King's cake. The cake contains a lucky charm (une feve) which originally was a bean, a symbol of fertility. Whoever found the charm in their slice of cake, became King or Queen and had to buy a round of drinks for all their companions.

You can find all the pictures by clicking on the link below.
http://www.flickr.com/photos/22933988@N07/sets/72157603743530632/

Home Equity - A little humor goes a long way

2008-01-01T15:31:00.001-08:00

Humor is the best medicine to stress. So, here it goes.

But seriously, in the face of declining home values, what is an average consumer to do with protecting and building home equity?

Is making additional monthly payments towards the principal the right thing to do?

If you are like most Americans who have been taught to pay down your mortgage as fast as you can, then you would probably answer "Yes" to the question above. However, time has changed and we are living in a different world now (compared to 50 years ago) and the laws and economic environment are based on a new set of rules.

While our goal remains the same in that we want to be "debt free", how we go about achieving it can be quite different. The concept of "building equity" by paying more each month towards the principal is flawed. The cash that you put in was your asset or "equity" to begin with, so the simple act of shifting your cash asset to your home is not really "building equity". You build equity through appreciation. In the case of investment properties, you also build equity by having your tenants paying down your mortgage.

Now, there are ways to save on mortgage interest payments via new innovative mortgage programs. The concept is to leverage your existing non-interest bearing checking & savings accounts to offset your mortgage balance, effectively reducing the interest incurred by your mortgage. As with most other things, this program is not for everyone. It has its pros & cons. For a free consultation to see whether this is something for you, feel free to send me an email or give me a call at 650-625-0203.

Demystifying Real Estate Investing

2007-11-28T15:26:00.000-08:00

Overcoming the misconceptions that keep you from investing in real estate

Most people who aren’t investing in real estate are being stopped by doubt and fear. They may want to invest in real estate, but each time they consider taking action, they come up with an obstacle or a core belief that keeps them from moving toward their dreams.
According to The Millionaire Real Estate Investor by self-made millionaire and real estate investor Gary Keller, most successful real estate investors have had to overcome certain beliefs that later proved to be unfounded. Some of these beliefs center around the way they view themselves as investors, and the others are focused on beliefs about investing. By addressing these doubts and fears, and recognizing that they’re unfounded, you’ll eliminate the major barriers to becoming a real estate investor.
Personal Myth #1: "I don’t need to be an investor. My job will take care of my personal wealth."
Truth: History indicates that few jobs pay enough to create true financial independence. Financial wealth building depends on another vehicle.
Personal Myth #2: "I don’t need or want to be financially wealthy. I’m happy with what I have."
Truth: Financial wealth offers greater opportunity to care for yourself and others, and that is something most everyone wants and needs.
Personal Myth #3: "I can’t do it."
Truth: You don’t know what you can or cannot do until you actually try.
Investing Myth #1: "Investing is complicated."
Truth: Investing is as complicated as you make it.
Investing Myth #2: "All the best investments require knowledge most people don’t have."
Truth: Your best investments will always be in areas that you can or already do understand.
Investing Myth #3: "Investing is risky. I’ll lose my money."
Truth: Investing and gambling are not the same thing. Investing, by definition, is not risky.
Investing Myth #4: "Successful investors can time the market."
Truth: Timing isn’t about being in the right place in the right time. It’s about being in the right place all of the time.
Investing Myth #5: "All the good investments are taken."
Truth: Plain and simple, every market, in every time, has its share of good investments.
There’s nothing more powerful for keeping you out of action than fear and doubt. By seeking the truth, rather than relying on unfounded beliefs that lead to fear and doubt, you can overcome your greatest obstacle and get closer to achieving your dreams.
If you’re interested in investing, but you have doubts about whether or not investing fits in with your current financial program, it’s best to consult with a qualified and reputable Mortgage Planner who can assess your financial situation and put you on a plan that targets your goals. As with any financial program, gaining clarity on the facts is always the best place to start.

Eight Quick Credit Improvement Tips

2007-11-17T20:50:00.000-08:00

As the mortgage industry continues to evolve, one thing for sure is that your credit history will be one of the most critical factors in obtaining home loans. Here're are 8 quick tips on how to improve and maintain a good credit history:

If possible, get a business credit card - most people don't realize that over 90% of business credit cards do not get reported to personal credit reports. If they are not reported, they are not scored, period.
Settle for deletion, or at least zero out all unpaid collection accounts less than 24 months old - when payment is made on a collection account that is less than 24 months old, the score will either stay about the same or increase a few points. Settling in exchange for deletion is ideal, but not always possible. Given the fact that the collection account will keep selling to other collection agencies in the future, it is best to deal with it while it is still young.
gets rid of all past due amounts on non-collection/charge-off accounts and make sure to pay before the due date until after the loan closes to be safe - credit scoring software penalizes for keeping accounts past due, so past dues destroy a credit score.
Get rid of your late payments - contact all creditors that report late payments on their credit and request a good faith adjustment that removes the late payments reported on their account.
Ask for a credit limit increase on your credit cards and either pay-off if possible or at a minimum evenly distribute the balances you are carrying on the revolving debt - credit scoring software likes to see borrowers carry credit card balances as close to zero as possible and also see that they have been trusted with a lot of credit - which is why increasing their limits is good.
Do not close your credit cards - closing a credit card can hurt your credit score, since doing so affects your debt to available credit ratio.
Keep old credit cards active - 15% of a credit score is determined by the age of the credit file. Fair Isaac's credit scoring software assumes people who have had credit for a longer time are at less risk of defaulting on payments. Therefore, even if old credit cards have horrible interest rates, closing those cards will decrease the average length of time a client has had credit.
Pay down Negative Amortization mortgage balances below the original amount borrowed to increase the score - most people don't realize that owing more than the original amount borrowed on a loan is a negative event to the credit score.

If you need more specific information on any of these tips, feel free to contact me.

Citizens of the World

2007-10-25T14:21:00.000-07:00

I recently went to an YMCA International Conference in Mexico City. What an experience to have met so many people from all around the world! It was an eye opener in that it made me to take a step back and get out of our daily routines and worries and look at the world at a much broader and higher level.

I love the Y because of what it does for our community, but the conference also gave me an opportunity to see what other Y's are doing all around the world. Some are very focused on working with migration issues, and others are involved in local political causes such as bringing equality to women.

Mexico City was great - love the architectures of the museums and government buildings in the downtown and historic centers. We also visited the Pyramid at Teotihuacan - the tequila at the gift shop was great :-) and the climb up the pyramid was a great workout! A definitely must for all tourists.

September 22nd, A Scent Of Change Is In The Air

2007-09-20T11:34:00.000-07:00

This is a time of change! The mortgage industry has been going through turmoil. The real estate market has seen major changes since the boom days where instant appreciation of 20% - 50% was the norm. While we all enjoyed the good old times, reality is settling in.The question is: Are You Ready For the Change?

Are you ready to challenge some of the assumptions we have always had about money?

Are you ready for some unconventional advice?

Are you ready to stretch your comfort level in order to achieve financial freedom?

If you answered Yes any one of these questions, take action now!Invest one hour of your time with us to learn how mortgage planning can create a positive impact on your life. This could be the most counter intuitive lesson you’ll ever learn.

Click here to RSVP to this seminar.

Mortgage Interest Deductibility

2007-09-15T13:43:00.001-07:00

As I am working with clients and helping them with mortgage planning, one of the things that comes up often which most people aren't aware of is the deductibility of mortgage interest. The big misconception is that you can deduct all of the mortgage interest paid on your primary and/or second home, up to $1 million in first mortgage plus $100K in home equity.

This is only partially true. Mortgage interest is deductible when it is incurred to purchase, construct or substantially improve any qualified home. The key here is "acquisition indebtedness". Why is this important? Well, it is important because knowing this rule will help you strategize on how much downpayment you should put in a house. Let me give a specific example:

If you purchase a $1mil house, and put 50% down. Your loan would be $500K, and you can deduct all the mortgage interest paid. A few years later, you decide that you need to pull some equity out to do home improvement. So you do a cash out refinance with a new loan amount of $800K. Now, most people think that they can now deduct all of the interest paid on that $800K. Not true! You can deduct whatever was remaining from the original $500K loan, plus another $100K.

Although it may not be obvious, but one small adjustment in your home financing strategy can yield huge different results in your long term financial planning. So, the next time you are ready to purchase a home, look for a mortgage planner who understands the issues and works closely with CPAs and financial planners to ensure your total success.

Annual Mortgage Reviews Bring Borrowers Closer to Achieving Financial Goals

2007-09-10T22:35:00.000-07:00

In a time of change and uncertainty, it is imperative that we become more diligent about our finances. Panic or complain never help the situation.

Yearly reviews are a great way to keep on track with your financial goals. You’re probably already meeting with your financial advisor and other asset manager for quarterly or annual reviews, and you should do the same with your Mortgage Planner as well. An annual mortgage check-up is an ideal way to make sure your mortgage is still having the maximum positive impact on your overall financial plan.

A lot can happen in one year. The market can take turns that can open up new opportunities, such as reduced interest rates, new loan products or changes in home values. Furthermore, your personal and financial situation could be mildly to radically different than it was just 12 months prior. Perhaps one or more of the income earners got a raise or lost a job. Maybe you received an inheritance. Even a minor, one-year change in one of your kids’ college plans could impact your financial situation in a way that would benefit from an adjustment in your mortgage strategy.

Periodic reviews serve several purposes. First, they establish a consistent path toward achieving your financial goals. Secondly, they ensure that you stay on track with your goals. Sometimes plans need minor adjustments, but without the knowledge that comes from a thorough evaluation, those minor adjustments may go unnoticed. Often, by the time an adjustment becomes apparent, you may have already lost valuable time and/or resources that could have been spared with a few minor modifications along the way. Finally, periodic reviews help to keep you accountable toward your commitment to achieve your objectives. Without accountability, it’s very easy to let your savings and investment actions fall by the wayside, especially when unexpected expenses arise. Knowing that you’ll be discussing your action steps will help to keep you committed to your goals.

Consider scheduling a periodic review with your Mortgage Planner in conjunction with your asset manager’s review. In addition to saving time, you’ll also gain the advantage of your own personal management team for your financial asset-building program.
Remember that getting clarity on your financial situation is never a waste of time. If you find that your current financing is more desirable than the financing that is available in today’s market, you’ll know that your Mortgage Planner did a great job advising you last time. If you find that your changing circumstances have dictated that a new loan will better suit your new situation, your Mortgage Planner can bring you one step closer to achieving your financial goals.

Start blogging young!

2007-09-01T21:11:00.000-07:00

I am Yulin's daughter and I'm reading my mommy's blogs. My mommy is teaching me how to blog. I'm interested in Harry Potter, and I've read to the fourth book.I wish I could be a wizard too. Casting spells sounds SO exciting and flying on a broomsticks! I've always wanted a blog.

Written by AML.

What does college funds have to do with mortgages?

2007-09-01T20:37:00.001-07:00

I went to a baby shower today. Looking around the room, most people were in their mid 30s - early 40s, with small children. Conversations came up around real estate and the mortgage market, something else came to mind that most of these people probably don't see - the connection between their mortgages and their plans on college education funds for their children. People asked me what are the rates? Will they go down or up? When should they refinance? While these are important question, the other important questions I would like to ask my clients are: what is your overall financial goal(s)? What kind of college saving plans do you have?

You see, it's all about cash flow management and the optimization of your available resources. Most people want to pay down their mortgages, and then save for college funds using after their after tax dollar. But what if we re-position your equity so that you can maximize the benefit of mortgage interest deduction while having more available funds to invest and save for college funds?

As a Certified Mortgage Planning Specialist, we help clients with running scenarios and evaluate various options. There is no fixed formula as each person/family has their unique needs and goals. If you are wondering what it would take to save for college and having affordable mortgage payments, give us a call.

How to Select a Mortgage Professional

2007-08-29T22:12:00.000-07:00

How to select a mortgage professional? This could be a million dollar question!

I just went through 3 days of intensive training (7am - 9pm daily) and got certified as a "Certified Mortgage Planning Specialist" by the CMPS Institute. So, what does the CMPS training program entail? Well, mortgage professionals received education on mortgage related tax laws, investment strategies, financial planning concepts and more. The idea is not to turn mortgage professionals into experts in those other areas, but rather that we become knowledgeable enough so that we can better assist our clients in choosing the appropriate mortgage program that fits their overall financial goals.

As consumers, we've been trained to "shop" for mortgages by rates and fees. We were taught that mortgage is a necessary evil if you want to become a homeowner. But, how many people have actually stopped and wondered how much money will a wrong mortgage program cost them in the long run?

The other aspect of becoming a CMPS member is that it is a reflection of those of us who are truly professionals who are committed to continually educate ourselves and sharpen our skills so that we can help clients adapt to new market conditions. In this turbulent market, many people are getting out of the industry because there is no longer a quick buck to be made. I was told recently that 60% of loan agents in 2006 are gone now, and I expect more to drop off in the coming year.

This really begs the question: who are you going to use the next time you are looking for a mortgage? What criteria will you use to select the right person? Here are 4 simple questions your lender absolutely must be able to answer correctly. If they don't know the answers, RUN. DON'T WALK. Run to a lender that does!

1) What are mortgage interest rates based on?The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.

2) What is the next Economic Report or event that could cause interest rate movement? A professional lender will have this at their fingertips.

3) When Bernanke and the Fed "change rates", what does this mean. and what impact does this have on mortgage interest rates?The answer may surprise you. When the Fed makes a move, they can change a rate called the "Fed Funds Rate" or "Discount Rate". These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call.

4) Do you have access to live, real time, mortgage bond quotes? If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday's newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday's paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!

Be smart... Ask questions. Get answers! More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life. but we do this every single day. It's your home and your future. It's our profession and our passion. We're ready to work for your best interest.

A New Trend in Vacation Homes

2007-08-24T14:27:00.000-07:00

As I was driving through the mountains in Tahoe last week, I realized a new trend taking place. Although the housing market in the Tahoe area seems to have cooled off, there are still quite a bit of new constructions going on. I can't help but notice that the new houses are getting bigger and bigger (4,000 - 5,000 square feet, 3 or 4 car garages). Now, many people actually need that much space in a vacation home?

As a real estate professional, I undoubtedly love to flip through the real estate magazines everywhere I go. It was no different this time in Tahoe, and I noticed another interesting thing. I saw a lot of sales of fractional ownership of high-end luxury homes. The new trend started to emerge in front of my eyes. Statiscally, the average number of days that people use their vacation homes is about 28 days in a year. Housing prices in Tahoe have appreciated a lot during the last 5 years. A typical vacation home costs $500K - $1mil today. From a pure financial perspective, it's not necessarily the best way to utilize your money on something with such a low utilization rate. But with the fractional ownership (typical 1/6 or 1/7), you get to own and enjoy a piece of the luxury living at a fractional price. For the same amount of investment money, you can potentially own multiple vacation homes at different destinations. Now, that's the way to live!

Has the Tsunami passed us?

2007-08-17T11:20:00.000-07:00

Given what has happened in the mortgage industry and the world economy in the last few weeks, we're truly in a historical time. Most of the recent activities in the capital market have been driven by fear, and everyone has been looking to the Federal Government for re-assurance. Today, the Fed has finally lived up to the expectations by announcing .5% rate cut in the Fed Discount Rate.

What does that mean for the consumers and homeowners? Well, we haven't seen a direct impact yet as the mortgage prices and rates are unchanged today. Indirectly, the Fed's move has sent a positive message to the lenders that the "liquity crisis" may be over, at least for now. With the lower cost of money, lenders will now able to borrow money again to loan to consumers. Many economists are expecting further rate cut later in the year. However, the one thing that consumers need to understand and keep in mind is that while rates may improve a bit in the coming months, general lending guidelines will definitely continue to be tighter and stricter. This unfortunately means for some consumers, they will have more difficulty obtaining a loan, whether it's a purchase or refinance.

A scent of change is in the air

2007-08-15T21:52:00.000-07:00

With the recent mortgage market meltdown, everyone is trying to make sense of what's really going on. some people don't think much of it, others are overwhelmed by it. It's a mess, both in terms of the market conditions and people's understanding.

As a mortgage professional, it is our job to educate the clients as well as realtors. Realtors whose job is on finding clients their dream homes aren't necessarily up to date on the latest state of the mortgage industry. But things are different now. Realtors must be fully aware of where their buyers stand financially given the current credit-tightened market. So, I ran a seminar today, aimed at helping realtors getting better understanding of the financial world.

So, what did I talk about? Well, first of all, when there is a crisis, there is usually an opportunity. It is up to those who look for it. Once the dust settles, I believe there will be lots of opportunities for the true investors. So hold onto your cash- cash is king in this day and age! Additionally, more than ever before, it is critical for realtors and mortgage profesionals to work closely, hand-in-hand.

I plan to continue running these informational seminars in the next couple of weeks, bringing up-to-date information to my clients and realtor partners.

It Takes a Village!

2007-08-14T22:27:00.000-07:00

I spent most of my day today at our in-house bank, observing their operations. It was quite an experience. As a mortgage planner, I spend all of my time trying to understand my clients, their needs and concerns. But, rarely we think about that's only half of the equation in terms of completing a mortgage transaction. The other half is the back end support that we receive from the lending institutions. I'm proud to say that our company has built a solid infrastructure to enable us to deliver the top services.

My processor and I were blown away with the amount of detail work that's involved at every stage of a loan transaction. The staff at our deal desk literally goes through pages and pages of guidelines to help structure loan scenarios. I'm talking about guidelines for 10+ different lenders. These people have acquired an amazing amount of knowledge. We spent quite a bit of time with one of our doc drawers watching her drawing a set of loan docs for a client. Again, there are so many little but important details that she has to catch to ensure that the loan docs are drawn accurately. Watching how others work certainly makes you more appreciative and humble.

The Power of Leveraging and Partnering

2007-08-13T23:20:00.000-07:00

I was at a spa event yesterday, and saw the true power of partnering. The spa package I received included manicure, facial, massage, hair, and make-up during a course of 4 hours. I was also fed and wined in-between sessions while being comfortably wrapped in a nice robe. Not bad for a lazy Sunday.

Now, typically, when I think about getting a full service spa treatment, my natural instinct would be to look for a spa with the full fledged services and facilities. But this event was different. It was organized and staffed by a group of independent service providers. Watching them moving clients from one station to another, all well-coordinated with an easy flow (although I'm sure there were a ton of preparation work done behind the scene), it's amazing how by working together with complimentary business partners, a small business owner can effectively market their services without a big fat budget.

I build my own business by referrals and am a strong believer in partnering with others. Focusing on how to provide extra value to customers is the cornerstone of my business practice, and it was very satisfying to see others who are also succeeding in doing so.

The Million Dollar View

2007-08-12T15:49:00.000-07:00

I was at a party yesterday, and once again, was reminded of the expression "The Million Dollar View". The party was at a friend's house who lives in the hills. After a long drive through a windy road, a couple of houses emerged. As we entered the house, it didn't look much from the outside, other than being in the middle of a mountain valley. But once we went through the house and stepped onto the backyard, we immediately saw the breathtaking view. It was one of those moments when you say to yourself: it's worth spending the extra money to get a view.

As a real estate professional, we are often asked questions about what to look for when purchasing a property. My personal experience and opinion is if it's within your budget limit, always go for the one with a view. This is true for both primary home and investment properties. I learned my lesson when I bought an apartment unit a couple of years ago. I had the choice of getting a unit on the 2nd floor or the 25th floor. The 25th floor unit asked for a little bit more money, and at the time, I thought since I will be renting it out, I don't care about the view. So, I opted for the cheaper one. As it turned out, the 2nd floor unit is a little harder to rent because the potential tenants also care about "having a view". And I'm sure that it's true for the resale value as well.

Anyway, it was a great party with great music and great company. To top it off, we had a chance to watch the sunset and then the night lights flickering in the background as we watched the band playing. It's a good life.

2007-08-09T14:03:00.000-07:00

This is my first blog entry, and it's pretty exciting. This is something I've been wanting to do for a while, but kept putting it off. Why do I want to blog, you may ask? Well, the first selfish reason is that while I read a lot, I haven't been writing much in the past 10 years. So, often times, when I do need to write, it feels "rusty". Blogging a good place for me to pick up writing again.

But more importantly, I want to connect with people, like-minded people! By profession, I help clients with mortgage planning and building wealth through real estate investments, but, I'm really in the people business. I love to hear those stories & dreams from those I work with.

This is certainly an "exciting" time to be in the mortgage business! With rising foreclosure rates and lenders going bankrupt, I'm often asked the question "how is your business?". "Business is going well..." and before I get to finish my sentence, I usually get this surprising unbelievable look as if I was joking. Well, that's an understandable response. The thing is mortgage industry is just like any others, we have peaks and valleys. It's been a great few years with all those creative financing loan programs, but the party is now over. Back to the basics! Does this sound familiar? It wasn't too long ago when most of us thought any internet stock we buy will eventually go up to $400/share one day... The lesson I learned is the key to survive and thrive in any business, you need to stick to the fundamentals.

What am I supposed to do as a mortgage professional in this day and age? Well, guidelines may change and rates may fluctuate, but my focus remains the same - provide life value to clients. This may sound a little fuzzy, what the heck does it really mean? More than ever before, it is time for consumers to understand and utilize their mortgages as a financial tool, as opposed to a pure debt instrument. Everyone goes through life changing events at various stages of their lives. As a mortgage planner, it is my job to coach and ensure that my clients get into a financing program that is in sync with their short term cash flow situation & long term financial goals.

If you are in the market for getting a mortgage, either for purchasing a home or refinancing, and if you want to shop around, be sure to select someone who will take the time to ask you a few questions. Often times, people get attracted to an unbelievable low rate or fees, but remember: "there is no free lunch". This may sound like a cliche, but it is unfortunately true. If someone quotes you a really attractive rate without even seeing your application, you can be sure that their heart is in the commission, not in your best interest.

So, what to do as a consumer in this market? Well, first of all, don't get discouraged by what you see in the media. As we all know, media has a tendency to sensationalize everything. We are certainly going through a turbulent time, but it's for the better in my opinion. I consider the current state of the market as a "weeding" process. You will certainly see some fluctuations in the housing market, but if your main goal is to own a house called "home" and you plan to be there for at least 3-5 years, why do you care if the price may go down in the short term? I think this is the most common fear buyers have today. The real estate market has its own cycles. Just as in an up market, the perceived appreciation on your property is only a paper gain until you actually sell it. In the long run, real estate is still one of the best investments you can have to build wealth.

OK, enough babble for the day. I hope you enjoyed the reading, I invite you to come back often. I'll be back, that's for sure.

2006-08-31T09:55:00.000-07:00

This is a test blog post. Check back often!!!