My last realtor had an Jeep and I convinced him to get an 4xe while the rage was on😂
I get it that no one has a crystal ball, but what economic factors could determine whether interest rates drop over the next few months?
The rate on my 30 year mortgage is 2.625%. I would be a fool to refi and take cash out at current rates. However, I am hoping to take out a home equity this year, but only if rates come down substantially. I am okay playing the waiting game.
I can’t see them coming down substantially. I think maybe 75 bps at most and then level for a long long time absent an event that requires low rates. Stocks at all time highs, real estate as well. Low rates would just increase inflation more making everything even more unaffordable. Unless that’s the plan…
I wouldn’t touch that mortgage. If anything just take out a heloc if necessary.
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I agree - I think Jim is spot on. I wouldn’t anticipate any drastic movement in the near future (assuming no catastrophic events).
the crash is coming sooner rather than later. unfortunately, it might be another year or two. the stars are already starting to align. ragnarok will be upon us soon brothers.
I prefer Götterdämmerung personally
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WIth rates above 7%, I think I am just going to hold off.
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I am not sure if we can post links here, but the fed already said that its going to be maximum 75bps this year.
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It’s possible to get introductory rates under 6%
TBH, anything over 5% will be a pass for me. I don’t need to make any home improvements since I am in a newer home. But, I wanted to take cash out for some exterior improvements like a sizable shed, hardscape project, etc.
Last time I posted on this thread I believe it was regarding the CalHFA California Dream For All 20% down payment assistance. Revised guidelines have been announced and it will be kicking off again in the spring.
If you’re unfamiliar with the shared appreciation program you can reach out to me and I can explain more. Here are the main changes from last year;
One person going on the loan must be a California resident
You must be approved and registered during the registration window (start and cutoff date TBD). This will put you in the lottery which will likely start getting pulled in April/May. They estimate 2,400~ people will be able to use it. They won’t pull all 2,400 at once, it will come in phases so that way the market is not flooded with 2,400 shoppers at once. If you are selected you will have a set period of time to utilize your reservation and get a home under contract
Assistance is capped at 20% down or $150,000, whichever is less. Since this is shared appreciation, you pay back proportionately whatever amount of assistance you take. So if you only take 15% assistance, they only take 15% of the shared appreciation. The conforming loan limit is $766,000, that means $916,000 would be the maximum purchase price with zero down payment from the buyer. Buyers can additionally put up to 5% of their own funds down in addition to the assistance, taking the purchase price theoretical maximum to $965,000~. Income permitting.
Everyone going on the loan must be a first time buyer (no home ownership in the last 7 years)
At least ONE person going on the loan must meet the definition of a first generation home buyer. That means one person going on the loan, their parents cannot currently own a home (only considering ownership in the United States) thus making them a first generation home buyer. The parents could have owned a home in the past but they cannot currently own a home. Again, only looking at ownership in the United States. If the parent is deceased they cannot have owned a home at time of death.
Regarding the income limits, they vary based on the county to which you are purchasing. They are only counting gross income for the loan applicants, they are not looking at the whole household’s income.
Credit score must be at least 680 for all applicants, although there is an exception 660 credit score for lower income tiers.
You can refinance the first mortgage one time and the 20% assistance will resubordinate, ONLY once. You must have made at least 12 on time payments.
Permanent resident and non-permanent resident guidelines follow the same Fannie Mae conventional rules
Income limits:
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How are these income limits upheld? 2022/2023 Tax returns?
Depends on your type of earnings. But it “should” be calculated like any other Fannie Mae conventional loan.
If you are self employed, last two calendar years
If you are salary, current salary
If you are full time, hourly rate x 2080 hours
If you are part time, last 24 months
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How is this appreciation decided? What if someone bought a house, then created a few ADUs on the land which doubled its value. Can they then pay off the government exactly what they borrowed assuming they didn’t refinance during that time?
This is getting a little bit granular, but assuming you didn’t split the parcel, and you improve the parcel significantly, then that would work against you in this case. But there’s one way you can get around it without selling the house.
Let’s say you bought a $500,000 home and took 20% Dream assistance. You will have a 400k first mortgage and a 100K silent second (Dream For All 2nd). You only make a mortgage payment on the 400k for 30 years. The 100K is completely silent and accrues no interest. This means you have an 80% loan to value and a 100% combined loan to value, CLTV.
Your obligation to pay back the $100,000 and 20% of the shared appreciation CAN be halted early if you so choose, prior to you selling or paying off the first mortgage.
So let’s say in 5 years you were going to improve the home with an ADU and a swimming pool, you could request a payoff at month 60 for the 100K Dream lien. They would then send an appraiser out to get fair market value on your house (it would make sense to do this before you significantly raise the value)
If the home appreciated to $550k, so $50k appreciation, in those five years, your total payoff would be $110,000 to Dream For All. ($100k assistance payback + $10k to the shared appreciation portion)
Keep in mind during those five years you did not pay any interest on the $100,000 second loan and you also did not have mortgage insurance as a result. At 6% interest that’s a total of $30k an interest rate savings, you could estimate another $2,500 a year in mortgage insurance savings.
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Thanks! So that is how it works. Maybe not a good idea to buy something that needs fixing. I thought the value of the house would be fixed until you refinance or sell.
Yes good point, not worth buying a home that you are going to double in value. The best thing is to buy a home that you plan to be in for a while and can enjoy as-is.
Not paying interest on 20% of your loan and no mortgage insurance is a huge draw to this program. Not to mention your pre-approval in most cases is 20% higher, which is the main struggle for first-time buyers.
Are they only looking at homes owned in CA? What if someone owned a home in another state (but doesn’t own it anymore) during that 7 year period?
They are looking at any homes that were owned by the applicants in the last 7 years. They look only in the United States. They do not count manufactured homes that are in a park, but they do count any real estate they were on title to in the last 7 years in the US.
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Following up on this - I just completed my tax return. I was able to deduct $43k from my homeowners stuff. Resulting in a nice $10k refund 
!
- Mortgage interest: $18,708 (reduced from $19,704 due to >$750k balance)
- Points: $15,009 (reduced from $15,808)
- SALT Cap: $10k
Used TurboTax up until I saw the fee they charge for Premium. So I used it as a go by and did it all in FreeTaxUSA. I’ll be looking forward to tax season every year now!
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