Thursday, November 10, 2016

Low Interest Rate Train is Leaving the Station

If you currently are or have been considering refinancing your home loan but have put if off because life happens, your opportunity may be coming to a close. Trump's victory speech in the early hours of Wednesday included a pledge to spend on rebuilding America's infrastructure — a plan that should stir economic growth and mean substantial new debt. These comments might be what the US economy needs to get moving again after 4+ years of relatively flat growth. They are also inflationary in nature. Which is bad for borrowing rates.

This new exacerbates the fact, mortgage application volume fell 1.2 percent last week from the previous week, according to the Mortgage Bankers Association and was down nearly 11 percent in the past four weeks, as rates have already climbed from historic lows.

As of this morning (November 10, 2016), the 10-year note was yielding 2.07 percent, the highest level since Jan. 14, and the 30-year was at 2.86, also a January high in afternoon trading. It was the biggest one day jump in the 10-year yield since Aug. 11, 2011.

"Globally, rates have begun to creep upwards as investors anticipate less aggressive monetary policies from central banks, and U.S. rates are being pushed upwards in response," said Michael Fratantoni, the MBA's chief economist. "Additionally, new data shows continued positive signals regarding the job market and rising inflation, indicating that the Fed is likely to hike in December and will continue increasing rates next year."

In closing, the interest rates in the mid-3’s for government loan programs, such as FHA & VA, could be gone as quickly as months end as upward pressure on the 10yr gains momentum. If, as many expect, President-Elect Trump rolls out the trillion dollar infrastructure plan, we may very well be looking at interest rates in the upper 5% range by this time next year.

Monday, October 24, 2016

Fall Unique Challenges and Opportunities for Your Home

It’s not until Mid-October that signs of Autumn typically arrive in Texas. As the Indian Summer draws to a close, before the leaves fall and the wind turns chilly, it’s a good idea to do some seasonal maintenance on your home. Here are five (5) things to add to your fall “to do” list.

Check for mold. The humidity of summer can cause mold to flourish. Check locations such as around leaky pipes, cabinets, generally areas that don’t get good ventilation. You will want to remove the mold as soon as possible. It’s wise to have this done by a professional.

Have your furnace inspected. It’s smart to have your heating system serviced before you actually need to use it. Experts say that as much as 75 percent of the calls they receive about homeowners without heat are a result of not having the furnace serviced and cleaned. It will also keep your heating costs down and help keep the air in your home healthy. While you’re at it, check the airflow.
Focus on areas like vents, the hood over your stove, dryer vents, baseboard heaters and room fans. Not only is a buildup of dust a fire hazard, but you also want to keep the air flowing and the allergens at bay.

Check and if need be, replace weatherstripping on doors. There could be gaps that you can’t see and that can increase your energy costs. It’s a simple fix that can be done with items found at your local hardware store.

Inspect your insulation. The most important area to check is your attic. You should have the highest concentration of insulation here. See if there are any gaps that need to be filled. You don’t need to check the insulation in your walls unless you notice heating issues.

Make sure your smoke detectors are working. Ensure both smoke and carbon monoxide detectors have fresh batteries. It’s smart to test them also. Both are especially important once your furnace is in use.

Fall is collectively our favorite time of year. We hope you find these maintenance reminders helpful as we all enjoy the seasonal change.

Wednesday, July 13, 2016


It's SUMMER TIME! Many of our Mortgage clients are asking us about financing pools. There are a few different options for this.

For those of you buying a new home and leveraging a conventional loan, Efinity Mortgage offers the Fannie Mae Homestyle program. This allows our clients to finance the cost of improvements (pools included) into the home loan. The original appraisal is completed subject to the improvements being completed. Additional downpayments may be required depending on the final valuation.

If you are an existing homeowner and looking to add a pool to your home, there are a number of different home equity and specific pool financing options for you.

As for the type of pools, many people are not aware there are several different types available.

1) Natural pools
Natural pools are chemical-free, low-tech and affordable alternatives to conventional models. You can build a natural pool with gravel and clay instead of concrete and fiberglass. Aquatic plants keep the water clean instead of chlorine or a filtering system. Plants are also a natural purification system that introduces oxygen and good bacteria into the water. You can also include additional elements like green pool roofs and vertical gardens to increase the health of your pool.

2) Moss-filtered pools
Moss-filtered pools cut down on the need for chemicals like chlorine. Having moss in your pool also reduces water use and decreases how often you need to backwash the pool for cleaning. According to statistics from the University of Maryland, moss systems reduce chemical usage by 40 percent, water consumption by 75 percent, and save about $6,700 annually in bills.

3) Saltwater pools
Like the ocean, saltwater pools use a saline composition to keep water clean without chemicals. Saltwater pools use a mixture of chlorine and table salt to create electrolysis, which gets rid of algae and bacteria. If you want a mild saline pool, clean your chlorine cell once a year to prevent calcium buildup and add salt to the water once a month. Reducing chlorine usage helps to minimize overall chemical consumption.

4) Ozone sterilization
Installing an ozone sterilization system is another enviro-friendly method of cleaning your pool. An ozone system uses electricity to convert oxygen into bacteria-destroying ozone. These systems can reduce the need for chemicals by at least 80 percent, if not altogether. This will save on your pool maintenance costs and help keep the environment clean.

5) Efficient heating
Efficient condensing boilers can help to cut down your pool heating costs by almost 20 percent. You can use alternative heating methods like solar blankets and energy-efficient heat pumps to keep your pool warm. Enviro-friendly heating methods can lower your bills and reduce carbon dioxide emissions. Efficient heating isn’t a type of pool, but it’s a simple way to help your pool remain friendly to the environment and your wallet.

We hope you find this information helpful and feel free to reach out to us with any questions you might have.

Friday, July 1, 2016

Do You "Really" Want to Be a Landlord

This week was pretty unusual for the Efinity Mortgage staff. Seemingly out of nowhere we had several new clients come in requesting financing for investment (rental) properties. As if there was a sign on our door which read "Efinity Mortgage; The Rental King". It's not that we don't finance investment properties but to have several new transactions in a week is highly unusual as the majority (99%) of our business comes from realtors and builders seeking to assist a family in buying a primary residence. All of that said, I do want to share a story of one couple in particular who were kind enough to give me the ok to share their story.

The "Smiths" were existing homeowners and in the process of adding to their family of 5. Mrs. Smith was interested in leaving the workforce and to manage their properties. Noble concept especially since Mrs. Smith was a $200,000 wage earner! You see whether you’re going away on an extended vacation or considering downsizing into a smaller place, the popularity of websites like Airbnb has led many people to believe that there’s a lot of money in home rental. However, before putting your home on the market, it’s important to be aware of some of the factors that go into having a rental property. It may seem like extra money, but it’s the small details that can make it a more complicated process.

An Investment Property and Renting a vacation/second home have very different goals;

Is It A Short Term Solution

Many people plan on putting their home on the market for a short duration of time, but if you’re only planning on renting for 6 months or a year, it may not be as financially lucrative as you think. While tax breaks can go along with rental properties, the money you make off of this kind of investment is taxable so if you’re not in it for a slightly longer haul, you may not see the financial boost you’re looking for.

What Are You Willing To Deal With?

For those who are planning to put a home on the market, they still need some place to live, and this can mean that a certain amount needs to be made each month for the costs of having two homes even out. Before putting any serious considerations into this, ensure that you know it’s financially feasible. It’s entirely possible that you won’t have renters for certain periods of time and you could also run into problems with the renters you find, so you should sit down and put pen to paper to consider the investment potential.

Have You Considered The Maintenance?

Out of sight is often out of mind, but if you have a renter, you’re responsible for anything that goes wrong in the home. From small maintenance duties to sizeable but necessary overhauls, there are many things you’re legally obligated to do as a landlord and you’ll need to be prepared to take on these responsibilities. Since it will be the duty of the owner, in the event you don’t want to do it, you’ll have to hire a contractor who will be able to handle the work for you.

Having a house as a second property may seem like an ideal investment, but this can require you to take on the responsibilities of a landlord and you may even have to deal with problematic rental situations. If you’re searching for an additional property in the near future, contact us for more information. Everyone has different plans and goals and deserve to properly vetted.

Monday, June 20, 2016

Buying a Home and Have Questions?

Wonderful! Congrats on the decision. We have pulled together some helpful tips to get you started. These go pretty much in order, as most in the real estate industry will tell you it is important to stick with this road map to save yourself and others much anxiety.

How Much House Can You Afford?
Buying a new house is a big investment. You want to be sure that you have all the right finances before proceeding. Spend the time to do a serious audit of your finances and determine a budget. Use an Affordability Calculator to estimate how much you can afford on a house based on your income, savings, debt and assets. Any of Efinity's licensed mortgage professionals can also help with this. Check your credit score. Every year you are allowed one free copy of your credit report.

Get Preapproved For Mortgage
Now that you’ve checked your finances, it is time to see what kind of mortgages you qualify for. Many buyers make the mistake of assuming that being prequalified and preapproved for a mortgage are the same. They are NOT. At Efinity Mortgage at time of application we press deeply into your financial situation and certainly through the application process, an extensive financial background check and a current credit score report.

Find the Right Realtor
A realtor or real estate agent is another great person to have as you maneuver the home buying process. They have the in-depth knowledge on home buying and help you negotiate the purchase. This service is free for the buyer because the realtor is compensated by the seller. You can search online for a realtor at Realtor, Zillow, Trulia. Efinity Mortgage also works with a large number of realtors throughout our network.

Find a Home
You’re finally at the step you’ve been waiting for. Be sure to create a checklist of items you need and want in your future home. This will narrow down the endless choices of homes and help you focus on only the right ones. Also, make a list of your neighborhood preferences like safety, commute, type of schools, local shopping and grocery.

Get a Home Inspection
The home inspection is a step that many home buyers tend to skip over but this is a very important step once you’ve found a home you like. A home inspection checks for any damages to the home’s structure or foundation as well as any major or minor fix-ups that need to be done. Once a thorough home inspection is completed the buyer and seller will receive a report from the home inspector.

Make An Offer
Make an offer with the help of your realtor and don’t be afraid to negotiate price. This may take longer than you think but always be ready if the seller says yes.

Close the Sale
Before you close review all the costs associated with both the purchase and the expected monthly payments. No matter how much time and effort we put forth, it is still amazing to us how often clients gloss over these things. Spend the time and know what you are buying.

Thursday, June 2, 2016

When Bill Gross Speaks; We Listen

There are a small group of individuals who speak and grab our collective attention. Bill Gross is one of those individuals. Earlier today he was on CNBC and made some interesting comments. was kind enough to summarize that interview and we wanted to pass it along for our collective audience. Bill Gross: Get ready for an 'entirely different' market CNBC Reporter; Jacob Pramuk | @jacobpramuk Bill Gross has some bad news for investors. In his June investment outlook released Thursday, the widely followed bond fund manager contended that bond and stock returns realized in the last 40 years are "a grey if not black swan event that cannot be repeated." Investors should not expect 7 percent returns on bonds or returns in the high single digits or double digits on stocks, Gross told CNBC on Thursday. "The markets are entirely different and it would pay to travel to Mars as opposed to stay on Earth, because the returns here are very, very low," the manager of the Janus Capital Unconstrained Bond Fund, said on CNBC's "Power Lunch". Gross said easy central bank policy could hold down bond returns. Central banks in Europe and Japan have adopted negative interest rates, while the U.S. Federal Reserve's target rate is at 0.25 to 0.50 percent. German and Japanese 10-year bonds currently have negative yields, while their 30-year bonds yield less than 1 percent. The U.S. 10-year Treasury note yield sat around 1.8 percent Thursday. Gross contended those rate trends can hurt not only savers but also the broader economy. He said Fed policymakers, who have signaled they could hike rates at least once this year, realize they need to normalize policy. "Ultimately, they have to move back up and I think a certain number of Fed governors realize that the normalization process is necessary in order to save business models and to save capitalism basically because capitalism doesn't work at 0 percent and it doesn't work at negative interest rates," he said. Gross added that investors should "basically go the other way" by holding liquid cash. He said they should not buy corporate bonds and resist buying high-yield bonds or riskier stocks. Over the last 24 months, Efinity Financial has been a long proponent reducing market exposure. It's wonderful to see one of Wall Street's leading minds summarize some of the challenges in a direct and straight forward way.

Thursday, March 10, 2016

Why Wait??

Mortgage rates have been historically low for several years, but a surprising number of borrowers are still not taking advantage even though rates fell again at the start of this year. How many? Close to 7 million. After the Federal Reserve raised its target interest rate in early December, the common expectation was that mortgage rates would rise. Refinances had already dropped by nearly a third throughout 2015, as rates inched up in anticipation of the Fed's move. "Global economic shocks then sent investors looking for the safety of U.S. Treasurys, driving down yields on benchmark 10-year bonds. Mortgage interest rates began to fall in defiance of prevailing wisdom, and the "refinanceable" population grew by 30 percent in the first six weeks of 2016," said Ben Graboske, Black Knight Data & Analytics senior vice president. Mortgage interest rates dropped 30 basis points in that time. By the end of February, 6.7 million borrowers could have saved an average of $3,000 per year, representing a total of $20 billion in potential annual savings, according to an analysis by Black Knight. These borrowers have enough equity in their homes and high enough credit scores to qualify for refinances. "It's lack of awareness of the opportunity, and how to act on it," added Graboske. How much does that translate into on a monthly payment? More than 3 million borrowers could save $200 a month or more; nearly 1 million could save $400 a month or more. Mortgage refinance applications have increased in the past two months, but millions of borrowers are still sitting on the sidelines, perhaps unaware of the savings, or just too lazy to go through the process. "There are costs that come into play for sure and there is often the perception of costs," said Graboske. "Still, if you look at this population, we have 1.5 million borrowers that are sitting at almost a full point above what they could be." Black Knight broke borrowers up into rate clusters and found that about 3.4 million borrowers had active 30-year mortgages and interest rates of 4.5 percent to 4.75 percent. Of these, 1.5 million met broad-based underwriting criteria, and would be impacted when rates moved from 4 percent to 3.75 percent. When you look at the 4.25 percent to 4.5 percent rate range, 4.7 million had active 30-year mortgages, 2.1 million of which met underwriting criteria. They become "in the money" if rates drop from 3.75 percent to 3.5 percent. Mortgage rates did move slightly higher in the past week, but not enough to change most of the analysis here. Millions of borrowers are still choosing to pay more than they have to on their home loans. That opportunity is likely to vanish in coming months, should rates rise as expected. Of course, last year most expected mortgage rates would already be far higher than they are now, and that did not materialize. In closing, for many of the current mortgage products out there it may have taken you just as long to read this Blog as it would to start the refinance process. What are you really waiting for?