As home loan interest rates pull back again, the market starts to pick up!

This morning the Orange County register reported home loan mortgage rate declines for the sixth consecutive week. This brought the average 30 year fixed interest rate to 6.341% with one point.

With renewed optimism, the real estate market seems to be picking up a little. I personally have noticed buyer call volume tripling over the weekend. If this continues, it might be a happy Christmas after all.

Real Estate Mortgage Interest rates fall back a little!

Last week, real estate mortgage interests rates pulled back a little, giving homeowners a chance to refinance out of those risky adjustable rate mortgages. I always say that the only people those option arms are good for, are people that don't need the money. When you can cover the note, there is no risk in taking a riskier loan. Its not life or death for people with money. They just shift an asset to cover the debt. But for home owners on a tight budget, taking a high risk loan can lead to disaster. If the mortgage ticks up just a little, it can put the home owner is serious peril. In the end there is no substitute for buying within your means. I am not saying that everyone needs a 30 year fixed home loan. Quite the contrary. What I am talking about is going with a home loan based on your income growth, time line for occupying the home, and budget. For most people a 5 to 10 year fixed mortgage is adequate. And if you cant afford a traditional amortized note, then interest only options are fine especially for the first 5 years when your paydown would be very little anyway. You can always pay more if you have it and the extra payment will go to paydown the principle on the loan.

So once again. If you have an adjustable rate mortgage or option Arm, don't let it go neg. am on you. Lets refi it now while you have the opportunity. I am sure that you will not want it to eat into your hard earned home equity. Call me to get connected with my prefered lenders. They have terrific rates and will not put you in a high risk loan.

What's going on in the Capistrano school district?

Just read the headlines about the DA seizing the superintendents assistants computers. They are not saying why, but it doesn't look good to me. Anybody know what's up?

Did you know that you can loan money to your IRA?

It use to be that only short term loans of 3 days or less could be given to an IRA to help it weather short term cash flow issues. New rulings by authorities have changed these rules. You can now give a loan to your IRA for an unspecified period of time so long as it is interest free and unsecured and is for ordinary operating expenses or expenses incidental to the operation of the IRA. For additional details, please consult my expert team of self directed IRA coordinators. As with all things IRA and government related, you want to be especially sure that you understand the limitations of these ruling so as not to trigger any unknown tax consequences.

New IRA tax law creates incredible opportunity and wealth!

According to Pensco trust, A new bill has recently has been signed into law that will enable current IRA (individual retirement account) holders to convert traditional IRA's to a Roth IRA. The new law will become effective in 2010. What is special about this new law is that it has eliminated the $100,000 income cap. Prior to this new law, only individuals with and annual adjusted gross income less than $100,000 could participate. The new law eliminates the cap.

This is a great opportunity for investors as they will be able to convert traditional IRA money who's annual contribution limit is much higher than roth, into a roth. Once converted, all of the proceeds that the self directed Roth IRA earns will be tax FREE! This is unbelievable!

To fully take advantage of this new law, Pensco is recommending that individuals start contributing after tax income now to a traditional IRA and in 2010 to convert it. In case you are wondering why the government is doing this, it is to cover projected losses in revenue in 2010. The conversion of some IRA's should cover these losses.

Don't miss out on this opportunity. This is the big one. For more information, please give me a call and I can direct you to self directed trust companies and CPA's that will get you positioned to make millions. Comments?

Orange County Buyers Scared of Market Changes

In the last 4 months Orange County buyers have noticed that things have changed and this has really caused apathy in the market. I personally get hundreds of inquiries and the vast majority express the desire to buy but reluctance due to uncertainty.

As for my feelings on these changes, I feel they were long over due. And now that they are here, new opportunities are presenting themselves more than ever before. The Orange County Register reported yesterday that Notice of Defaults are up over 86%. Inventory is up more than 5 times last years levels, and buyer volume is less than half off what it was. So what does this all mean

Well, for one, I happen to be a contrarian. So I like to buy when others are not. It typically gives me more bargaining power and a better selection.

The next question, is it really time? And only you can answer this one. I will tell you that having assisted many families over the past 8 year, If you are a move up buyer, it probably doesn't matter. What??? That is right, when it comes to your primary residence, you are just trading paper equity. In the end, most families make the decision based on getting the location, size and amenities they want, and being able to afford the payment. Affording the payment will have more to do with your personal income stream and the difference between your current interest rate vs your future interest rate. The market has a way of leveling out all other factors.

Its usually first time home buyers that have the most exposure. and for them, time frames play a big factor in the purchase decision. If a first timer plans to stay in the property or keep it for a long period of time, then in the long run, he can expect to sell the property for more than he purchased it for. However, if the time line is short, market fluctuations could lead to short term losses. Buying a home is a costly process, one has to carefully consider if buying makes more sense than renting. A large part of this decision is both life style and tax consequences of not buying. Sometimes if you don't buy, you guarantee a tax loss. So buyers will often take their chances in the market rather than guarantee a loss.

So if your are thinking of buying in our current market, contact me for a custom consultation prior to making a permanent decision.