A divorce is one of the toughest things a person can undertake. The emotional turmoil caused by a divorce is just one of the burdens you’re forced to face. Financial issues can also cause an enormous strain on your well-being. Planning ahead and having the right professionals on your side can make the process a little easier. Below are some of the most common mortgage issues individuals face after a divorce.   1.     Credit Scores Fall   Divorces are expensive. Unplanned expenses can add up very quickly during a divorce, like paying for an attorney or buying a new car.   It’s common for expenses like these to affect your credit score because now you’re taking out a personal loan, a vehicle loan, or applying for new credit cards to pay for everything.   With your credit utilization increasing because you’re putting all these new expenses on your credit card and taking out new loans, your credit score will go down just as fast.   Credit scores are very important when getting qualified for a mortgage. Low credit scores can get in the way of getting a good interest rate and monthly payment, and it can even prevent you from qualifying at all.   It’s important to talk to a mortgage broker early in the divorce process so they can give you some guidance towards working on your credit score and qualifying for a loan so you’re ready when it comes time to splitting assets and either buying out your spouse or buying a new home.   2.     Not Knowing the Value of Your Home   Not knowing the value of your home could cost you. For example, if you think your home is worth $500,000 and you agree to let your spouse take the home based on the $500,000. You later do an appraisal, and the value comes back at $575,000, you would have left a lot of equity on the table that you could have had if you knew the actual value of the home.   Homeowners tend to overvalue or undervalue their home because they use sites like Zillow.com or Realtor.com to get their home valuation. Sites like these use an automated system to value your home and will rarely give you an accurate valuation.   Knowing the value of your home can help you make an informed decision as to whether you should stay in your home or get the cash settlement of the equity after a divorce.   Talking to a mortgage broker early on can help you avoid this pitfall and help you plan accordingly.   3.     Employment and Income for Stay-at-Home-Moms   To qualify for a new mortgage on a house, whether you need to refinance to pay off your spouse or need to buy a new home, you will have to show you can afford to pay for the mortgage. Stay-at-home-moms who need to apply for a mortgage after a divorce often run into this issue and don’t qualify for a mortgage because they have no income to show.   Talking to a mortgage broker early in the divorce process should be a priority. They can help you understand what you need to qualify for a mortgage and how to prepare yourself to qualify for it when you need to apply for one.   A divorce can take anywhere between 6 and 15 months to finalize. So it’s important to get some sort of employment as quickly as you can. The best income to show is W-2 employment, but 1099 (self-employment) or having your own business can still get you qualified, as long as you have regular and qualifiable income.   Child support, spousal support, and social security income can also be used to show income as long as you choose to disclose it. For it to count, you need to show 6 months of payments that were already paid. You also need to show that this payment will continue for at least 1 more year. This is important if you have an older child who’s 17 years old and the payments will stop less than 1 year from now when they turn 18.   The best thing a family law attorney can do for their client is provide them with the resources they need early on. Connecting you with a mortgage broker with an understanding of divorces in California can help you plan for you future the right way. Schedule a consultation with us. https://calendly.com/fundingsession/15min sshowkatian@westcapitallending.com

Where Do Trump and Harris Stand on Housing Policies? The current presidential election has been anything but uneventful. As the country’s housing crisis and cost of homes continue to soar, housing policy is on the forefront of voters’ minds. With the November 5, 2024 election just two days away, both candidates have issued their housing plans to address the lack of affordable and accessible housing in the United States. Housing affordability has affected many Americans’ decision to buy a home. Rising interest rates and limited housing supply have caused frustrations and stress to many individuals and families. Since the Great Recession, the United States housing production has decreased significantly as the population continues to grow and home prices and rental costs continue to rise. Here is a breakdown of Vice President Kamala Harris and former President Donald Trump’s proposals to tackle the housing crisis. Kamala Harris $25,000 Down Payment Assistance to First-Time Homebuyers Kamala Harris has proposed a detailed plan aimed at making housing affordable and accessible to homebuyers and renters. Her plan includes: Adding 3 million of new housing units over the next four years A new tax incentive for starter homes Expansion of tax incentives to build affordable rental housing Reduced red tape for builders and federal funds for cities to speed up construction of homes Allocation of $40 billion in innovation fund to support innovative local solutions for housing development Offering first-time homebuyers up to $25,000 in down payment assistance Homelessness has hit a record-high of 653,104 people since January 2023. This is more than a 12.1% increase over the previous year. According to 2021 estimates from Freddie Mac, the United States needs 3.8 million more homes for sale and rent to meet demands. Harris’ housing plan has a multi-prong approach to bring down the cost of housing and make home ownership and renting more affordable.  Despite Harris’ ambitious housing plans, the proposal has been met with skepticism by critics. Congress would still need to approve the funds for the proposed $25,000 down payment assistance program and the $40 billion innovation fund for local governments to create solutions for housing. Opening Up Federal Lands For Housing Harris supports making federal lands for housing, which would entail selling the land for construction purposes with a certain percentage of the units to be offered as affordable housing. The federal government owns about 650 million acres of land, or about 30% of all land in the United States. Harris has not released any specific detail on this proposal. Donald Trump Opening Up Federal Lands and Zoning Law The Trump campaign has not released a proposed plan, but he has "promised" the following: Creating tax incentives for home ownership and first-time homebuyers Reducing “unnecessary” regulations on home construction Making some federal land available for residential construction Trump has promised to tackle zoning and other construction regulations to speed up housing production. The Trump campaign has also expressed support to make “certain” or “limited portions” of federal land for home construction. Deporting Immigrants Most significantly, Trump claims that he will lower housing costs by reducing inflation and stopping illegal immigration. Trump and his campaign have tied their plan for mass deportations to the housing crisis.  Trump said that he will remove 11 million immigrants living in the United States, which he argued will reduce the population and lessen demand for housing as well as lower costs. Critics have said that housing and immigration are tied, as the ability to build houses rely on availability of workers, and about 30% of construction workers are immigrants. Shutting down the border or deporting immigrants would impact the country’s capacity to build more housing.  Single-Family Zoning Trump has long opposed building multi-family housing and supported single-family zoning, which would exclude other types of housing. Trump has said that he would reverse Biden administration efforts to integrate wealthy communities with lower-cost housing, criticizing Biden’s plan as “abolish[ing] the suburbs.”  With respect to homelessness, the Trump campaign has outlined an explicit proposal to “ban urban camping” and to create “tent cities” on “inexpensive land.” Although Harris and Trump have different approaches, it is clear that housing is a big focus for both presidential candidates. One thing is also clear: both Republican candidate Donald Trump and Democratic candidate Kamala Harris agree that housing affordability and accessibility are key to solving the crisis.

Last month, the Federal Reserve cut their rate by a whole point. It was the largest rate cut in over 18 months.   This happened shortly before the upcoming presidential election. This leaves some questions unanswered.   What does this mean for the housing market? Does the rate cut mean the economy is getting better? Is inflation improving? Or was this just another political move?   Let’s start with the basics.   How Are Interest Rates Determined?   Interest rates can encompass everything from the short-term federal fund rate to maturities of 30 years or more. The interest rate is the part of a mortgage that gets the most attention of real estate buyers and investors because it’s the biggest cost of financing real estate.   Government policy, consumer habits, and the Federal Reserve, aka “the Fed”, can all have an impact on interest rates. But it’s important to know the Fed does NOT actually set mortgage rates—their actions influence them.   The Fed sets the federal fund rates, which influence many financial products, including  mortgage rates.  Other factors like inflation and the price of US treasuries also influence the mortgage interest rates across the country.   What Impact Does The President Have On Interest Rates?   Does the president have any influence on interest rates? Should we be worried with the upcoming election?   The central bank is an independent federal agency, that sets the federal fund rate, or what most people call, interest rates. The central bank has two main goals: to maximize employment and stabilize prices.   The Federal Reserve Board of Governors are made up of the seven members, who are appointed by the president and confirmed by the Senate for 14-year terms. A new board member is appointed every two years. The president can remove the Federal Chair, but only for a good reason.   Of course, housing and monetary policies proposed by the president, if taken up by congress and enacted into law, can affect the housing market, which can have an indirect influence on interest rates.   So, it’s safe to say the president doesn’t have too much influence on the Federal Reserve or mortgage interest rates—at least not directly. Have Previous Elections Impacted Mortgage Interest Rates?   Since 1972, the Fed has changed interest rates in every presidential election except two (2012 and 2016). The rate has increased in five election years and been lowered in six.   Some years the rates changed more dramatically than others: in 1980, the Fed increased the rates by 1%, then reduced them by 5.5% between February and July when the economy faced recession but continued to increase them between August and November as it battled double-digit inflation.   Usually,  the changes in the rates were part of cycles that the Fed had set in motion a year or more before an election year. For example, in 1992, the Fed stopped making rate cuts that it started in the 1990-1991 recession.    Recently, the Fed raised rates when inflation was too high, like in 2022 and 2023, and lowered them when the country was faced with a threat of economic strain (in early 2020 during COVID-19 lockdowns).   How Could This Year’s Presidential Election Impact Mortgage Interest Rates?   Just one month ago, the Fed lowered the federal funds rate in from between 5.25% to 5.50% down to 4.75% to 5.00%, a 50-basis point (0.50%) reduction.   The rate cut, which was the first rate cut since March 2020, came less than 7 weeks before the November 5 election.   The Fed has been trying to keep inflation down--within a 2% to 3% range. Since inflation has stopped rising so quickly, and the Fed finally has it more under control, we should see interest rates lowering in 2025.   It’s hard to say what the Fed’s rate changes were based on in previous elections. Whether they were responding to a recession, following a forged path, or making adjustments based on current economic changes, it looks like it has always tried to push its main goals of maximizing employment and stabilizing prices.   Based on historical data, there’s not enough information to say that this election will actually have an impact on mortgage interest rates.   While the 2024 election has been eventful, economic growth and inflation expectations will have a bigger impact on interest rates. As economic growth stabilizes and as inflation continues to move closer to 2%, we can see rates continue to have a downward trend through the end of 2024 and into 2025.

Have you ever wondered how investors are buying properties at a deep discount? Where do they find these properties? How do they get the funds for it? In this article I will discuss the strategies investors use to find these deeply discounted off-market properties. Note: the list is fairly long so I'm breaking up this article into 2 parts. Part I will only include 7, 6, and 5. How To Find Off-Market Properties 7. D riving For Dollars   Driving for dollars is an easy way to find properties in your neighborhood  that are in disrepair.   What do properties in disrepair look like?   Properties in disrepair can be easily spotted. They have noticeable conditions like chipped paint, unkept and neglected lawns, roofing in bad condition, or lots of trash in the yard. Chances are these properties have also received code violations from the city or local municipality.   When this happens, you know the owner hasn’t taken care of the property and could be willing to sell it to get it off their hands.   How do you contact the owner?   There are a few ways to do this. You can leave a note on their door letting them know you’re in the market to buy a house. You can knock on the door to find out more information or talk to the owner directly. You can look up county records to find out who the owner is. You can even write down the address and skip trace it to find the owner’s information.   Once you have the owner’s contact information, you can contact them directly to see if they’re willing to sell their property to you at a discounted price.   With persistent follow up and effort, you can come across great deals to buy an off-market property in your neighborhood at a great discount.   6. Foreclosures, Auctions, and REO Properties   Foreclosures Properties go into foreclosure when the owner has not paid their mortgage for a while or after they default on their mortgage.   The bank or the lender proceeds with a formal process (either through the court or directly with the owner and their trustee, depending on the state you’re in) to take the property back and sell it at a discount.   Banks and lenders are not in the business of selling houses—they are simply trying to get rid of their underperforming inventory. Banks and lenders simply want the loans to be paid back along with any accrued unpaid interest and associated costs and fees. They will typically sell the house at a price lower than the actual value of the property, so long as the loan and fees get paid.   Auctions Where do banks and lenders go to sell these houses? They sell them at an auction. Investors typically attend these auctions to buy houses at a discounted price. You can find active and upcoming auctions at sites like auction.com  or RealtyTrac.com .   REO Properties When the bank is unable to sell a house at an auction to a third-party buyer or investor, that house is now labeled as an REO property (Real Estate Owned). This simply means the bank now owns this house. They then hire REO managers or asset managers who deploy real estate agents specializing in REO properties to manage and sell these underperforming REO houses.   So, another good place to find houses at a discount are through real estate agents specializing in REO properties. You can find them through your local MLS. Look for certified REO real estate agents.   Finding properties in foreclosure, properties being sold at an auction, or REO listing properties with an agent are great ways to find amazing real estate deals at a discount.   5. Expired Listings   Expired listings occur when properties are listed for sale on the market (on the MLS) with an agent but did not sell. Now the listing is considered expired.   Why do houses not sell on the market?   73% of all houses that do not sell fast enough are over-priced.   Usually, the owner of these properties are emotionally attached and over-value their house, despite their real estate agent’s advice.   After the property sits on the market for a while without any movement, owners are sometimes willing to sell it at a cheaper price because it costs them more money to keep it. Every month they have to keep up with the payments like cost of insurance, taxes and mortgage.   Another benefit of finding these properties is that when these listings are expired, the real estate agents no longer have the exclusive right to sell it. That’s another negotiating point with the seller.  You can now negotiate directly with the owner even more since they won’t have to pay realtor commissions.   Where to find expired listings?   You can find expired listings on sites like Zillow.com or redfin.com .   Using the strategies above, you can easily build a list of properties or leads to follow-up with. With determination and consistent effort in contacting these leads, you will soon be able to buy an off-market property at a deep discount.   Stay tuned for PART II of this article where I list strategies #4 - #1 in finding off market properties at a deep discount!   Want to get a Fix and Flip Quote? [Click Here for a no-obligation quote] Want to get a DSCR Quote?  Learn more about financing real estate investment properties. For exclusive mortgage rate updates and to learn about real estate investing, click below to subscribe to our newsletter

If you remember, mortgage interest rates hit a high point in February 2023 and they haven’t cooled off since then. The market has been stagnant for more than 18 months and everyone has been waiting on the sidelines for rates to drop. We're finally starting to see a shift all over the news and in the market. Where Are Rates Now? In the last 6 weeks, mortgage rates have finally  started to drop, albeit slowly.   The average interest rate for a 30-year fixed mortgage for conforming loans dropped from 6.43% to 6.29%. (Mortgage Bankers Association).   Joel Kan, Deputy Chief Economist at the Mortgage Bankers Association (“MBA”), attributes the rate drops to “cooling inflation, a slowing job market, and the anticipated first rate cut from the Federal Reserve later this month.”   With rates slowly coming down, the demand for new mortgages have been going up. According to MBA, mortgage applications for refinances have gone up 1% each week. And mortgage applications for purchasing a home went up 2% last week.   Still, the low inventory of houses for sale and affordability of housing prices are a barrier to making purchasing decisions.   We’re seeing mortgage refinance applications submitted by homeowners and investors who purchased a home within the last 2 years when rates were at its higher point. Once The Federal Reserve cuts its rate, we will likely see mortgage rates drop even more. Stay tuned.   Want to get a personalized rate quote to see if it’s worth refinancing your mortgage?   Want to get a Fix and Flip Quote?   Learn more about investor loans.