You are Officially On the Clock

If you have been holding off buying or refinancing your home in hopes of a lower monthly payment or perhaps to leverage some of the appreciation in equity your home undoubtable gained over the last 4-5 years, might I strongly suggest you start that process today. Like, this evening. When you get home. Today, the U.S. 10-year Treasury yield shot higher, taking mortgages and various consumer loan rates with it. There are a couple key reasons for this market movement and why this one has some legs. We are going go focus on two, both of which have little to do with the Fed.

1. The Bank of Japan (BOJ) who has been fighting negative interest rates in a market desperate for a steeping yield curve surprised the markets today (July 23rd) when the Japanese' Government pressed the 10-year Japanese government bond by 5 basis points, to 0.083 percent, the highest since February. The BOJ, which meets next week, announced it would buy bonds to curb the action, and the 40-year JGB also spiked, touching 0.92 percent. All Markets are interconnected. Fixed Income even more so.

2. The fight with China over US-China deficit GDP is just heating up. To understand how and why this affects US Mortgage rates is to simply understand that China is not only one of the largest buyers of US Treasuries, but they are also one of the largest owners of US Treasuries. The US buys over $500 billion in Chinese goods annually. China only buys $130 billion from the US. Quick math shows that a trade war focused on tariffs will hurt the Chinese more. How would they respond, we suggest they do it one of two ways. First by lowering or devaluing their currency (the Yuan). This is quick and they already do this as needed. Second, they slow or worse stop buying US Treasuries. Selling their $1 trillion in US Treasuries would also force bond yields could climb. That’s problematic as Treasury holders around the world, including the U.S. government and (you and I) will see their bond prices drop. Higher yields also make it more expensive for the U.S. government to borrow through new debt issues, while companies that issue corporate debt, would have to pay higher borrowing costs.

With the first already taking flight, we strongly suggest you move date night to another evening and spend some time getting your home loan in order.

30-Year Mortgage Rate Charges Above 4 Percent

2018 has started in a similar fashion to how 2017 finished.

The average 30-year, fixed mortgage rate charged to 4.04 percent this week, up from 3.99 percent the week prior, according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS®). The 15-year, fixed rate averaged 3.49 percent, up from 3.44 percent the week prior, while the five-year, Treasury-indexed hybrid adjustable rate averaged 3.46 percent, the same as the week prior.

“The U.S. weekly average for the 30-year fixed mortgage rate rose above 4 percent for the first time since last summer to 4.04 percent in this week’s survey,” says Len Kiefer, deputy chief economist at Freddie Mac. “This is the highest weekly average for the 30-year fixed rate mortgage since May of 2017. Some may be wondering if this is the last time we’ll see a three handle on the 30-year mortgage rate. Never say never, but inflation is firming, the Federal Reserve’s Beige Book indicates broad-based economic growth, and labor markets are tightening. This means upward pressure on long-term rates, like the 30-year fixed-rate mortgage, is building.”

If rates continue as indicated, the home buying season may come early as potential homebuyers look to jump on the last set of historically low rates. From our perspective; all charts point to several Fed' increases in 2018 and 5% mortgage rates on the horizon.

Why Fall Is the Best Time of Year to Buy a Home

Few people know Fall is arguably the best time of year to buy a new home. The weather becomes cooler, the leaves begin to change, football season begins, and pumpkin-flavored everything is in abundant supply. But there's another great reason to love fall that might be less obvious...it's the best time of year to purchase a home.

Prices Are Typically Lower
The concept that buyers can get a better bang for their buck in the fall has been a popular notion for some time, but two recent reports validated that line of thought with data from actual home sales. According to a report by RealtyTrac, sales prices are typically 2.6% below fair market value during October — a steeper discount than any other month of the year. Another report by NerdWallet found that sales prices drop about 2.96% from summer to fall, which is roughly an $8,300 discount for the median home. It's also worth noting that while listing prices don't decrease much, sales prices do, and that's the price that counts for potential buyers.

There's Less Competition
The majority of people buy a home in spring or summer, when inventory is traditionally high. This gives families time to make their move before the school year starts, but the tradeoff is that buyers are faced with strong competition and often pay higher than asking price during that time. People who buy in fall, however, have less competition, and sellers are more motivated. This means more negotiating power for the buyer, which often results in a better deal.

There's Still Inventory
It's true that the inventory of homes for sale is at its peak during spring and summer, but when you buy in the fall, there's still a decent supply of homes left to choose from. Buying a home in the fall gives you the best of both worlds — lower prices and less competition but still enough inventory to find the home you want.

If you're serious about buying a home, doing so this fall may save you money or help you afford more than you expect. Plus, with interest rates on the rise, the longer you wait, the less buying power you may have. Click here to learn more about the impact that rising interest rates have on affordability. NMLS#1043983

Affected by Hurricane Harvey?

There is little doubt Hurricane Harvey will be remembered for years to come. If you have been affected by this event, there is a good chance you are reading this post on your cell phone and/or not in your home. Where you probably keep all of your insurance documents. We're here to help!

If you happen to remember who your auto or home insurance carrier is; see below. We have provided you a link to all of the possible carriers Efinity Insurance may have partnered with.

If you are a client and do not who does not recall your carrier or unable to reach your carrier directly, please contact our Service Team at 888.638.5030 We'll do everything we can to help start the process.


American Risk https://isi.americanriskins.com
(713) 559-0700
American Strategic https://www.americanstrategic.com/Login.aspx
(866) 274-8765

ASI Flood https://flood.americanstrategic.com/Views/Menu....
(866) 511-0793
Carrier Comparison

Chubb Group https://www.chubb.com/AtChubb/jsp/home.faces
(800) 777-2131

CNA Insurance http://cnacentral.com
(800) 262-4357

Cypress https://cypvprdwa.csc-fsg.com/AgencyLinkC.0/
(888) 462-8021
Cypress Flood http://cypresstx.torrentflood.com
(888) 532-3004

Dovetail http://www.metlifebusinessinsurance.com
(866) 954-1024
Encompass https://login.allstate.com/auth/Login
(800) 262-9262 x1x1

FirstComp http://www.firstcomp.com
(888) 500-3344
Foremost http://www.foremoststar.com
(800) 237-6136 , Auto (888) 888-0080

Gulfstream https://www.gs-agents.com/Production/Main/PISig...
(866) 485-3004
Hagerty http://www.hagertyagent.com
(800) 922-4050

Hartford https://ebc.thehartford.com/
(800) 771-8557
Hartford - Commercial http://ebc.thehartford.com
(800) 447-7649

Homeowners of America (866) 407-9896
Imperial Fire & Casualty https://www.imperialfire.com/
(888) 522-8242

Infinity
Insurance Designers http://insdesign.com/login/
(214) 696-9756

JIBNA http://jibna.com/login.html
(877) 542-6254
Kemper Preferred https://www.agentinside.com
(866) 675-3345 opt. 2, opt. 3

Kemper Specialty https://specialty.kemper.com
(800) 456-1919

Liberty Mutual
http://www.commercialportal.libertymutual.com



Mercury http://www.mercuryfirst.com
(800) 503-3724
MetLife https://ars.metlife.com
(800) 255-0332

MetLife Flood https://www.metlifega.com/tabid/166/default.aspx
(800) 893-6208
MexiPass Global Assurance http://www.mexipass.com/producer-login
(800) 639-4727

National Flood https://www.floodpro.net/Login.aspx?ReturnUrl=%2f
(800) 637-3846
National General https://new.gmacagency.com
(888) 325-1190

National Lloyds https://www.agent.natlloydscorp.com
(800) 749-6419
Nationwide https://aac.alliedinsurance.com/center/template...
Service (800) 282-1446 IT800 209-3288

Nationwide Commercial https://agentcenter.nationwide.com/WorkspaceAC/...
(888) 667-3866
Pacific Specialty (800) 303-5000

Personal Umbrella (800) 564-1799 x9
Progressive http://www.foragentsonly.com
(877) 776-2436

Protective Life (888) 800-6608
Pure https://www.pureinsurance.com/agent_login
(888) 813-7873

QBE https://agents.qbefirst.com
(866) 318-2016
Safeco http://www.safeconow.com
(877) 566-6001 x1x4

Sage Sure / Occidental https://agents.sagesure.com/
(877) 304-4785 x2
Service First

State Auto https://saconnect.stateauto.com
(888) 999-8103
Stillwater http://stillwaterinsurance.com
(800) 849-6140 x4

Stroud (800) 654-4056
Texas Mutual

Texas Windstorm https://portal.twia.org/twia/do/login
(800) 788-8247

Travelers https://logon.travelers.com/TravelersLogin.asp
1.800.Claim33


Travelers Commercial https://logon.travelers.com/TravelersLogin.asp
1.800.238.6225



United Property & Casualty http://www.upcinsurance.com/agents/agent-center...
(800) 295-8016 , New HO3 (844) 872-7785
Universal North America https://www.uihna.com/Forms/Login.aspx?ID=23
(866) 458-4262

USAssure (800) 800-3907
Wellington http://www.wellingtoninsgroup.com
(866) 780-1901 x3

Wright Flood http://www.wrightflood.net
(800) 820-3242

The number of homes for sale is a problem; here's what to do about it!

In almost every major city in Texas there is solid demand from home buyers who struggle to find a home (any home) that meets both their housing and affordability requirements. This is especially true for first time home buyers. It’s a situation that requires both patience and creative solutions.

On the other hand, this may be an excellent time for you to explore options that may not be on your short list. Here are a few suggestions;

1.Look at a fixer-upper. That run-down house that’s been sitting on the market for months may be a diamond in the rough for a buyer with the vision to see its potential, especially if you have the time and skills to participate in renovations. Before making an offer, however, encourage your agents to assist in estimating renovation costs and identifying people in the trades to assist them. There are several different loan programs which make financing the improvements easy.

2. Buy a teardown and rebuild. If a thought of a fixer-upper doesn't excite you, perhaps a teardown, or a vacant lot, and building a new home. Fortunately, there are many ways to accomplish this without the expense of hiring an architect or a custom home builder. Learn who is supplying prefabricated and modular homes to your market—options that aren’t only economical and energy-efficient, but also increasingly popular with younger buyers.

3. Consider a duplex. While many don't love the idea of managing a property (much less a neighbor) the financial upside is hard to ignore. Improvements made to the property may be tax deductible and the additional income will never hurt.

Considering Buying or Refinancing a Home? Read This....

According to a survey conducted by J.D. Power, 27% of new homeowners ultimately came to regret their choice of lender. Twenty seven percent. The major reason for the dissatisfaction was overall poor customer experience. That's pretty vague so let's dive further. A lack of communication or unmet expectations (again back to communication) topped the "poor customer experience" sub list. Other regrets listed included pressure from the lender to choose a particular product/loan and not closing on time. Communication is a two way street. As a homeowner or potential homebuyer, you can remove some of the tension and turmoil of home loan process by carefully vetting potential lenders. Here are 5 questions to ask potential lenders before you make a commitment.

1. What mortgage programs do you offer? In many cases, choosing the best loan for your specific financial situation requires working with a lender who offers a wide array of loans. You don’t want to work with a lender who tries to push you into one loan simply because that’s the only option from their limited selection. Ask them if they regularly handle the type of loan you are looking for. If the type of loan you are looking for is more specific than say, a conventional fixed-rate mortgage, a little more expertise is useful — and in some cases, it might be necessary. An uncommon home loan like a United States Department of Agriculture loan, for instance, must go through an approved lender.

2. Inquire about the qualifications for the home loan you are seeking. There may be two lenders who offer the same type of loan, but their minimum requirements could differ. For instance, Department of Veterans Affairs loans require a minimum credit score of 620, but a lender might require a minimum score of 640. Comparison-shop. Don’t assume the same type of loan means the same terms.

3. Ask your lender to provide an estimate of the rates and fees expected to pay. Important note here; If you have taxes and insurance tied to your mortgage payment, an initial estimate will never guarantee your final, out-of-pocket expense. Numbers will change as things like title are received or surveys are approved or ordered. That said, it can be a solid jumping-off point for evaluating lenders. If the loan programs are the same, a helpful starting point is to compare the interest rate and total origination costs. It is important to know rates fluctuate, so try comparing lenders on the same day to get the most accurate mortgage rate comparisons. Speaking of rates....

4. Ask when you may be able to do a rate lock. As we mentioned above, mortgage rates can change multiple times a day. They can be as fluid as the stock market. Be sure to ask about the associated fees, including how much it costs to extend the lock should it expire before closing.

5. What is the time estimate for processing my home loan? This is critically important if you are selling a home or coordinating the end of a current lease with a new home purchase. Under the TRID guidelines, it's vitally important you receive your initial closing disclosure four business days before your closing date. In short, get the key dates of the appraisal and underwriting approval. Of course, it’s always a good idea to build in a small buffer if you can — and not just because loan preparation can take longer than expected. Along these lines, make sure you explain that you expect communication in a straightforward and timely manner.

As we indicated with our November 10th Blog,

https://efinitygroup.blogspot.in/2016/11/if-you-currently-are-or-have-been.html

the Federal Reserve voted yesterday (Wednesday March 15th) to again raise the key interest rate one-quarter percentage point. This is just the first of three hikes we anticipate for 2017. The rate was increased one-quarter percentage point just three months ago in December 2016. This was the probable outcome following encouraging employment figures in February.

We believe this consecutive increase marks a turning point in policy. The Fed raised the rate only twice in the past decade. Wednesday’s decision quickens the pace, signaling the potential for more aggressive action as the year unfolds.


Rising rates have been top of mind for members of the housing industry, especially those of us in residential finance. Raising interest rates with the unprecidented apprecition witnessed in Texas, makes the fear of affordability a viable concern. We know in speaking with many of our potential homeowners the anticipated monthly payments on homes in various price ranges have "felt" higher. This is something which will continue to play out throughout 2017.

First-Time Homeowners and our Existing FHA Clients

Federal Housing Administration announced they will reduce the annual premiums most borrowers will pay by a quarter of a percent. The new rates are projected to save new FHA-insured homeowners an average of $500 this year said U.S. Housing and Urban Development Secretary Julián Castro.


This announcement along with Efinity's Mortgage's pledge to get our FHA borrowers into homes for only the required 3.5% down payment makes this the time to call us and get your home loan started.



Efinity Group
817.581.8878 o
888.638.5030
817.581.8898 f
info@efinitygroup.com
www.efinitygroup.com
INSURANCE | INVESTMENTS | MORTGAGE


Announcement & Source: https://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2017/HUDNo_17-003

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.

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.

It's SUMMER TIME!

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.

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.

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.

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. CNBC.com 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.

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?

Learn the Facts & Myths of Reverse Mortgages

I had a lengthy conversation yesterday with one of my trusted realtors regarding Reverse Mortgages. While this is not been in Efinity Group's typical space, I was shocked at the misinformation that was understood as fact regarding this program. Similar to what we have done in the past I wanted to put something together to get the facts out there for our reading audience. Taking equity from a house is large decision for most seniors. It's not a decision that should be taken lightly. That said, a Reverse Mortgage is designed to allow seniors to improve their lives by freeing up the monthly obligations of a mortgage and whatever restrictive monthly cash flows that may present. Having access to funds to pay off credit cards, home equity loans and increasing cash flow for living expenses are a few benefits to having a reverse mortgage. Here are a list of facts and myths about reverse mortgages to help you make your decision.

Myth #1: It is the bank that owns the senior's home. Fact: When a customer has a reverse mortgage, their name will stay on the title unless a change in the title is made.

Myth #2: The bank has the right to make an elderly person leave their home. Fact: Reverse mortgages are insured and regulated by the Federal government. Any mortgage servicer has no authority to ask a senior to give up their home unless they fail to comply with the loan terms. Similar to any other mortgage, items like property taxes and homeowners insurance need to be paid and current. Texas Senior Lending wants to help customers stay in their homes as long as they can.

Myth #3: The senior’s heirs will eventually have to repay the loan if the customer passes away. Truth: A reverse mortgage is a non-recourse loan that gives the estate a year to sell the home at market value. Once the house is sold, the money from the sale will pay for the loan.

Myth #4: You will be responsible to make payments on reverse mortgage loans. Truth: Payments are due when the last living homeowner of the property permanently leaves the home.

Myth #5: Reverse mortgage proceeds are taxable and affect Social Security or Medicare. Truth: Although proceeds of a mortgage are not taxable and have no effect on your social Security or Medicare, you’re Supplemental Security Income (SSI) and Medicaid can possibly be affected. We hope some of what was provided above is beneficial.

Interested in buying a home? Here the difference between success and failure (per the NAHB)

August 4, 2014 - Each $1,000 increase in the cost of a new median-priced home price forces 206,000 prospective buyers out of the marketplace, according to a new study by the National Association of Home Builders (NAHB). source: http://www.nahb.org/news_details.aspx?newsID=16947 In all the wrangling over credit, construction and confidence in this housing recovery, the real cost of owning a new home could come down to about the same amount as the cost of a new washing machine. NAHB claims just $1,000 makes all the difference. "Each $1,000 increase in the cost of a new median-priced home price forces 206,000 prospective buyers out of the marketplace," reads the first line of a new report from the National Association of Home Builders. NAHB researchers based their findings on the number of households that would not qualify for a mortgage (factoring income, debt, interest, property taxes and homeowners insurance) based on that price increase to a median-priced home. They varied state to state, with a low of 313 borrowers not qualifying in Wyoming, to a high of 18,250 in Texas. "It all adds up. A thousand dollars means an additional monthly cost, based on someone's income. That may make the difference between owning and renting," said Robert Dietz, a tax and market analyst at the NAHB. The NAHB is using the analysis to focus on the effects that building regulations have on affordability, noting that higher regulatory costs for builders are passed on in the price of a new home. That said, the $1,000 figure is striking evidence of just how many Americans teeter on the edge of homeownership. The nation's homeownership rate continues to fall, as job and wage growth does not keep pace with home price growth. Nationwide, home prices, including distressed sales, rose 7.5 percent in June 2014 compared with June 2013, according to a report released Tuesday by CoreLogic, a data company. This is a moderation in the double-digit price gains seen last year, but still represents 28 straight months of year-over-year appreciation. "Home prices are continuing to rise fueled by ongoing tight supply, low rates and aggressive investor buying on the East and West coasts," said Anand Nallathambi, CEO of CoreLogic, in a release. "The expected surge in the number of homes for sale has not materialized to date, as many homeowners are staying put and waiting for better economic times and higher prices." Supply issues are easing somewhat and should continue to moderate price gains, but other issues in the mortgage market are also keeping the price of home ownership higher. While builders complain of construction regulations, mortgage lenders argue they are being handcuffed by a still backward-looking housing finance system. They need to have $1,000 extra, according to the builders, but that is just one small part of a far more complicated housing recovery. Home buyers need good credit, sufficient down payments, proof of solid employment…or cold hard cash as covered by Diana Olick with CNBC. Souce: http://www.cnbc.com/id/101895900 While the national news agencies quickly found this story appealing, the truth behind the matter is if you have been responsible in your borrowing, have shown steady employment for over two years and have at least the required down payment; most everyone can obtain a mortgage. There, we said it. It's really not that hard. We have programs available today which allow 1st time homeowners leveraging FHA financing to have as low as a 580 credit score. They only need steady employment and the HUD required 3.5% down and even that can be a gift from a family member! In closing, don't let the headlines fool you. As in years past, steady income and responsible borrowing have been and always will be the key to homeownership.

It's that time again... Property Tax Tips for Filing in 2014

Here are 5 property tax tips for a successful filing in 2014 First off, make sure all your current property taxes are paid. The tax code is very clear in placing the burden of making sure taxes are paid squarely on the taxpayer, not the tax assessor / collector. Failure to receive a tax statement does not relieve you from responsibility that prior year taxes are paid on or before January 31 of each year. Second, take pictures of your property on January 1 each year. The effective date of all tax appraisals is January 1 each year. You are taxed on your property as it existed on the first day of the year. If it burns to the ground on January 3, you still get to pay taxes on it for the entire year. On the other hand, if something is seriously wrong with your property (flooded, torn up for remodel, etc.) and the market value is significantly diminished at the beginning of the year, you will need evidence of this later in the spring when you file your protest. Pictures are the best evidence of property condition on January 1. Next, make home improvements or additions in the winter. If you add that pool or new bathroom in November, it becomes taxable in just two months and you will pay the extra taxes that year. Make the same improvements in February and they don’t become taxable until the next year and you won’t pay the higher taxes until the year after that! Also, it is not “too late” to fix big problems with your tax appraisal. Even if you did not file a protest by May 31, all is not necessarily lost. If you can prove the tax appraisal is at least 25% too high you can still file a “Substantial Error” motion until January 31 of the following year and get the value reduced. Also, if you can prove that the Appraisal District failed to send you a required notice you can file a “Failure to Receive” motion by January 31 and be entitled to an appeal hearing. Lastly, under section 25.25(h) of the Property Tax Code, you can beg the Chief Appraiser to fix just about anything and he has the authority to do it with a signature. Finally, you would be surprised how many people don't do the following: Make sure you have filed your Homestead Exemption. Carefully check your property tax statement to verify that part of the value of your homestead is exempted from taxation. The amount varies by taxing entity, but you should see some discounts off of the total appraised value for the school district and county We hope you find these tips helpful and perhaps save you some money!

The Train has left the Station!

According to Industry reporting, home prices are going up, up, up, but it’s not a bubble just yet. The surge in home prices over the past year may have some home buyers wondering if the market has gotten ahead of itself. Rising interest rates aside, housing prices in most parts of the country appear to have plenty of room to move higher if the wider economic recovery remains intact. The latest data on price gains show home prices advanced 7.7 percent in the year through June, a rise that has fed on itself as fence-sitting home buyers move to buy before prices rise further. West coast housing markets have seen the biggest gains. The Federal Housing Finance Agency report showed prices in June were 17 percent higher than a year earlier in the Pacific area, which includes California and Washington. House prices jumped 11 percent in the Mountain region, which included Nevada and Arizona. The Middle Atlantic region -- New York, New Jersey and Pennsylvania -- had the smallest increase, at 2.5 percent. The government data echoes other reports of healthy gains in home sales and prices. The National Association of Realtors said Wednesday that the median price of a previously owned home jumped 13.7 percent for the year ended in July to $213,500. A recent rise in mortgage rates is also spurring buyers to lock in rates before they climb further. "When start you see interest rates rise, people are going to want to jump in," said Beth Ann Bovino, deputy chief economist at Standard & Poor's. "All those people on the fence come back into the market. But that's a good thing." Higher borrowing costs could eventually price some buyers out of the market and slow the pace of home sales. Sales of new single-family homes dropped sharply in July to their lowest level in nine months, the Commerce Department reported Friday. Sales dropped 13.4 percent to an annual rate of 394,000 units, and the government also revised sharply lower its estimate for home sales in June. Sales of previously owned homes, a much larger share of the overall market, picked up by 6.5 percent last month to the fastest pace since November 2009, according to the Realtors report. The inventory of homes for sale remains tight – just 5.1 months' worth at the current sales pace – which has help sellers and homebuilders boost their asking prices. After a long drought in new home construction, that tight supply is expected to continue to support prices. "We have a number of locations where the next home sold may take as much as one year to deliver, because our backlogs are so big at individual communities," said Douglas Yearly, CEO of luxury home builder Toll Brothers. "That's when we raise price." There are early signs that the rise in prices and borrowing costs may be cooling demand. Mortgage applications for both home purchases and refinancings dropped for a second straight week as rates rose, according to the Mortgage Bankers Association. Demand fell 4.6 percent in the week ended Aug. 16, as the rate on a 30-year fixed mortgage rate rose to 4.68 percent, matching this year's high mark. Rates have been rising since May, when the Federal Reserve first signaled it may begin tapering off its $85 billion in monthly bond purchases. That easy-money policy has been a critical stimulus in reviving the housing market from its historic 2007 collapse. The continued pickup in the pace of home sales and prices will depend heavily on whether the job market continues its slow recovery and incomes continue to rise. That disposable income represents the buying power required to fuel the housing market’s continued recovery. And despite the recent jump in prices, homes in most local markets remain affordable by historical standards. One of the most widely used measures – the Realtors affordability index – stood at 178 in June – down from a peak of 200 during the depths of the housing bust – but well higher than average levels. (The index, which factors in prices, incomes, borrowing costs and other variables, shows that a family with the median national income has 178 percent of the income needed to qualify for a mortgage that covers 80 percent of a median-priced house.) Other measures indicate that, despite rapid gains, homes are reasonably valued, according to a research note from Capital Economics. After the sharp declines following the housing bust, home prices have yet to reach levels in line with the long-term trend since 1975, according to the report. Prices are some 15 percent below that trend as measured by the Case-Shiller price index and 11 percent lower based on the FHFA's data. And the cost of buying a house is still cheap in relation to the cost of renting, suggesting prices haven't yet reached a point where they will cool demand, according housing Capital Economics housing economist Paul Diggle , who prepared the report. "The most reliable measure still suggests that housing is undervalued," he said. Even if rising prices and rates don't scare away potential home buyers, the continued housing recovery will depend on the availability of credit, which tightened considerably following the wave of rogue lending that fueled the mid-2000s housing bubble. Lenders are much choosier than they were six years ago, but there are signs they've begun to ease up a bit on credit standards as they compete for new borrowers. And after paring down a large pile of debt accumulated during the credit boom, those potential buyers are better able to take on a new mortgage payment. That will help the housing market better weather the ongoing rise in interest rates, according to Bovino. "We've had four years of cleaning up our balance sheets, getting our fiscal homes in order," she said. "I think we do have the capabilities to cushion that blow (from higher rates)."

The Fiscal Cliff

Following numerous requests from our clients, we thought we would put some effort on summarizing the tax related measures which resulted from the eleventh hour Fiscal Cliff agreement. These new laws are detailed in Senate Amendment to H.R. 8 and are collectively called The American Taxpayer Relief Act of 2012. For those unfamiliar with the Fiscal Cliff, hopefully this may provide valuable background information. We now await the political brinkmanship associated with the negotiations to raise the U.S. Debt Ceiling. Two New Taxes for 2013 Two new taxes go into effect starting January 1, 2013: 1. A 3.8% Net Investment Income Tax (NIIT) applies to individuals, estates and trusts that have unearned investment income above certain threshold amounts. Net Investment Income for the purpose of calculating this tax includes interest, dividends, capital gains, rental and royalty income, non-qualified annuities, income from businesses involved in trading of financial instruments or commodities and pass-through income from a passive business. The NIIT does not apply to municipal bond income. For an individual, the NIIT is equal to 3.8% of the lesser of two amounts: i. An individual’s net investment income or ii. The excess of the individual’s modified adjusted gross income (MAGI) over the threshold amount ($200,000 for individual taxpayers and $250,000 for married couples filing jointly). 2. A 0.9% additional Medicare Tax applies to individual’s wages and self-employment income that exceeds the threshold amount based on the individual’s filing status. Ordinary Income Tax There will be no change in Federal income tax rates for taxpayers earning less than $400,000 ($450,000 for joint filers). Individuals earning above this threshold, will now pay 39.6% on marginal income above $400,000 ($450,000 for joint filers). Capital Gains and Qualified Dividends Tax Effective January 1, 2013, the top tax rate on long term capital gains and qualified dividends reverts back to 20% on gains for taxpayers above the $400,000 ($450,000 joint) income threshold. For taxpayers below these thresholds, the 15% rate remains. This tax rate increase, along with the Medicare tax, will result in a top effective tax rate of 23.8% for long term capital gains and dividends. Similarly, short term capital gains will be taxed at ordinary rates plus the 3.8% NIIT, for an effective top rate of 43.4%. Estate, Gift and Generation Skipping Transfer Tax The credit amount remains at $5 million per individual donor and continues to be inflation-indexed from 2010 (rounded in $10,000 increments). The inflation adjusted credit was $5.12 million in 2012 and is expected to be $5.25 million in 2013. An important component of the new legislation is the reunification of the gift and estate tax credit amount. In other words, the $5.25 million credit is available for use with lifetime gifts or estate transfers at death. The top transfer tax rate on gifts exceeding the credit amount has increased from 35% to 40%. Phase Limitation on Itemized Deductions Before 2010 itemized deductions for taxpayers above a certain income level were partially phased out, thus increasing income taxes as a consequence of reduced deductions. In 2013, if a taxpayer’s Adjusted Gross Income (“AGI”) is above a threshold amount ($250,000 for individual taxpayers, $275,000 for head of households and $300,000 for joint filers), itemized deductions will be reduced by an amount equal to the lesser of 3% of the excess over the threshold or 80% of allowable deductions. Taxpayers apply 80% to the total of their itemized deductions other than the deductions for medical expenses, investment interest, casualty losses and thefts, and gambling losses. As a result of the phase-out of deduction for high income taxpayers, marginal effective tax rates are higher than marginal statutory rates for such taxpayers. Roughly speaking, the 3% reduction of a deduction against income taxed at 43.4% raises the tax rate on marginal income by 1.3 percentage points. Alternative Minimum Tax (AMT) The new bill increases the AMT exemption amounts from $33,750 to $50,500 for individual filers and from $45,000 to $78,750 for joint filers, indexed for inflation from 2013. IRAs The Pension Protection Act of 2006 allowed a taxpayer to exclude from income, distributions of up to $100,000 to a qualified tax-exempt organization (i.e., a public charity but not a supporting organization or a donor advised fund) from a traditional IRA. This provision has been extended for 2012 through December 31, 2013. The distribution must be made directly to the public charity and the IRA owner must have attained age 70½. The distribution will be counted for purposes of the required minimum distributions from an IRA but will be ignored for purposes of computing the limitations on charitable deductions in the year of the gift. Notably, the $100,000 exclusion is per taxpayer so married taxpayers (with their own IRAs) may each take advantage of the provision. Moreover, this provision contains a transition rule, which allows a distribution made in January 2013 to qualify as a 2012 distribution and allows an IRA distribution made December 2012 to qualify if subsequently paid to a qualifying charity in January 2013 (and meeting all other requirements). Roth Conversions In 2012, only the distributable amount (i.e. IRA balances or 401(k) s where the owner has either separated from employment or is over 59½) in pre-tax retirement plans could be converted to Roth accounts. The new bill allows any amount in a non-Roth account to be converted to a Roth account in the same plan, whether or not the amount is distributable. The conversion from a pre-tax retirement plan to a Roth plan results in the recognition of taxable income on all the gains and income in the plan. Retroactive Extension of 100% Exclusion of Small Business Capital Gains Generally, non-corporate taxpayers may exclude 50% of the gain from the sale of small business stock acquired at original issue and held for more than five years. For stock acquired after February 17, 2009 but by September 27, 2010, the exclusion was increased to 75 percent. For stock acquired after September 27, 2010 and before January 1, 2011, the excluded amount was increased to 100%. The 2010 Tax Relief Act further extended the 100% exclusion through December 31, 2011. The new legislation retroactively extends the exclusion of 100% of the gain from Qualified Small Business Stock to stock acquired after September 27, 2010 and before January 1, 2014. Qualifying Small Business Stock is from a C-corporation whose gross assets do not exceed $50 million (including the proceeds received from the issuance of the stock) and who meets a specific active business requirement. The amount of gain eligible for the exclusion is limited to the greater of ten times the taxpayer’s basis in the stock or $10 million of gain from stock in that corporation. Other The personal exemption phase-out has been reinstated, which means that high income taxpayers will have to reduce the total of their personal exemptions by 2% for every $2,500 by which their annual gross income exceeds the threshold amount for their filing status ($250,000 for individual filers, $275,000 for head of households and $300,000 for joint filers), indexed for inflation from 2013.