Real Estate

Delia Fling
TransPac Financial

Manage Expectations, The Time is Now!

“Things are never as good as they seem nor as bad as they seem”. Heard that one before? From my many years of experience in financial markets this is one of the truest axioms out there. Those who bought homes 3 years ago did in fact buy at the top of the current real estate cycle. However, as we all know (or at least should know) real estate is a long-term investment and an illiquid one at that, (unfortunately another conveniently forgotten fact). We Californians have been distracted away from these truths because of the unprecedented active real estate market in our state, mostly propelled by investors, and significant inflows of population California dreaming. Things got out of control when expectations changed from long term to short term gain. This subtle change of expectation was urged along by the “I want it now” popular attitude. I promise you, if everyone who bought a home in the last few years believed it was a long-term investment with a long term financing package to go with it, there would be a minimal downturn in the real estate market.

Then we have those who treat their homes like ATM machines. You know who you are; you used that money on depreciating “toys”, (boats, cars, etc.) Unfortunately most of those loans need to be refinanced because they where only fixed for 3 or 5 years before adjusting. Again, short-term expectations cause a problem. If those were 15 or 30-year loans, homeowners could wait this part of the cycle out. On the contrary, these homeowners have a predicament, their properties aren’t worth what they need be for refinancing; the payments are no longer affordable, and so they are being forced to sell them short. Short sales happen when real estate is sold for less than the mortgage debt. Short sales cause even more problems for the seller and for the rest of us. Simply they drive real estate values down even further. If you in fact withdrew equity out of your real estate and put it into liquid investments (stocks, bonds, annuities) or businesses, I applaud you. You have your PhD in financial literacy. These folks took their money out to make more money and have access to it to boot! These are the people who we are to depend on, to help get us out of this mess. You see, they have the where with all to go out and buy real estate for investment at the current dirt-cheap prices. This will help increase demand, which should start stabilizing real estate values.

Sacramento Real Estate has been making headlines again. Per the National Association of Realtors, Sacramento has the dubious distinction of having had the largest national price drop in median home prices. The median home price in Sacramento is down 29.2% to $258,500. That’s down from $365,300 from the first quarter of 2007. Does anyone hear a bell ringing?

Interest rates are at artificially depressed levels, and home prices are extremely low, reasonable expectations would be to buy now...and laugh all the way to the bank.

Here at TransPac, we invite you to explore reinvesting some of your liquid reserves back into real estate. Let us give you a complementary analysis of your potential purchases. Our expectations are solid and realistic!

Delia Fling is a Mortgage Planner with TransPac in Citrus Heights. Comments or questions can be directed to her at deliaf@transpacllc.com or call 916-284-0066.

Karla Hawe
Mortgage Consultant

Getting the best Interest Rate on Your Home Loan?
A Qualified Mortgage Consultant Can Help Boost Your Credit Scores

Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower’s income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It’s important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it’s safe to assume that as the consumer’s credit score goes down, interest rates will go up.

If you have already taken out a mortgage loan with a higher interest rate because your credit score was a little under par, you will really appreciate the value in doing a little work to improve your credit score. Refinancing from a loan you received when your credit scores were low to a loan with high credit scores, can save you literally thousands of dollars in financing fees over time.

A qualified mortgage consultant, such as myself, will guide you through the nuances of the process of improving your credit score to refinance and save money. First and foremost, I would want to review the terms of the existing mortgage loan to determine if you have a pre-payment penalty clause written into your contract.  If you were to sell the home or try to refinance before the pre-payment penalty expires, you would most likely have to pay a 3 percent fee back to the lender to compensate for the high risk and cost incurred to provide that financing.

There are five factors that make up the credit score and I can coach you through some basic strategies to improve your credit score. Once your credit scores have improved, it’s time to refinance at a better interest rate.

It is important to work with a mortgage consultant who can give you a roadmap to follow and a strategy for success in building personal wealth. Please feel free to call me for a free credit consultation. You can contact me, Karla Hawe at 916-923-5900 or karlah@bwcmtg.com.

Ed Wacaster, CMPS

The Mortgage Manager

This is definitely the time to be putting some serious thought to buying real estate. With all of the programs available today to help First Time Home Buyers with Down Payment Assistance, not to mention government loan programs as well, today is the right time to try. But be smart about it and find a true professional before you jump into something.

The key to successful home ownership and the happiness that is supposed to come with it, can only come with a transaction done correctly and efficiently. In order for that to happen you need to have the right people in your corner, watching out for your best interests. Can you imagine how much lower the foreclosure rate would be if people had used the right professional when they decided to use that person for a mortgage? What would the media have to talk about? They would have to go hunting for something different to scare the jeebers out us.

I’m going to repeat myself here:. You need to have a relationship with your Real Estate Agent and your Mortgage Professional much like the one you have with your Doctor and Dentist. I’m not putting us on that type of pedestal, but if you don’t have that relationship established, you are open to being ripped off big time by someone who could destroy your future. There are too many good professionals in the real estate industry to open yourself up to such treatment. If you don’t know a good professional yourself, ask someone you know if they would use the person who helped them buy their home, and with their mortgage again. If not, ask someone else.

Be careful of cleverly worded radio ads and direct mail. Most of the time those companies will do a mortgage for you, and you don’t want to use them again. The really good ones do very little advertising and are worth their weight in gold. When I had my radio program last year, I was shown a loan file from a competing show. The host of that show was going to send his kids to college on one loan. Making money is one thing; greed is just that, greed.

So, get in the game, but be careful. I am not the only out here that cares about my clients. I have many good friends that I would refer to if I weren’t in this business, and they’re just that, really good friends, and really good people.

You can contact Ed Wacaster, CMPS at 916-677-0996 or www.EdWacaster.com

Assessed Value Drops On 85,000 Sacramento County Residential Properties

Reflecting the fact that much of the residential real estate market has been in a decline since mid-2006, Sacramento County Assessor Ken Stieger announces that the Assessor’s Office has reviewed the market values of residential properties in Sacramento County and will be reducing the assessed values for over 85,000 properties on the 2008-09 property tax roll. These decreases are often referred to as Proposition 8 reductions, reflecting the 1978 ballot proposition that authorized them.

Generally speaking, properties purchased in 2004 and later are affected. Most decreases will range between 10% and 30%.

The majority of the remaining residential properties in the county, some 300,000-plus parcels, will continue to be assessed under Proposition 13 provisions and will not be receiving notices. If a property was purchased prior to 2004, it is unlikely to receive the Prop 8 decrease in assessed value.

In the next few weeks, the Assessor’s Office will send letters to the owners of these properties, notifying them that the assessed value of their property will be reduced for the 2008-09 property tax roll. The letter will advise affected owners of their new Proposition 8 assessed value and will also include their Proposition 13 factored value for comparison. The Prop 8 assessed value will be reflected on the tax bills issued in October of 2008.

Proposition 8 value reductions are temporary. Once a property receives a Prop 8 reduction, its value must be reviewed as of January 1 each year to determine whether the current fair market value remains less than its Proposition 13 base year value plus inflationary adjustments. The Prop 13 value is typically the property’s acquisition value plus inflation factors for intervening years. The lower of these two values is the value used for property tax purposes.

Since the reduction Proposition 8 value represents the property’s current Fair Market Value, it can fluctuate from year to year without limitation, to reflect changes in the real estate market. When the real estate market recovers and the market value exceeds the Proposition 13 factored base year value, the property’s Proposition 13 value will be restored.

The anticipated decrease in assessed value for the 85,000 properties should approximate $6 billion, and will result in a revenue decrease equal to 1% of that amount, or $60 million. The lower amount of property taxes in the County will impact local schools, cities, and special districts

Assessor Stieger also wishes to alert the public that property owners may receive solicitations from private businesses and individuals offering assistance in this process for a fee. While property owners are certainly at liberty to use these private companies, they can apply for this reduction themselves at absolutely no cost simply by writing a letter or otherwise contacting the Assessor’s Office.

Taxpayers may visit the Assessor’s website: www.assessor.saccounty.net for more information or call the Assessor’s Proposition 8 Customer Service Line at (916) 875-0455.

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