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April 1st, 2019 9:40 AM
That is the best way to describe the current home loan rate environment. This past week we saw mortgage rates experience their largest one-week decline in 10 years!!!

What caused the sharp decline in home loan rates? Recessionary fears, and the likelihood the Fed's next move on rates may be a cut and as soon as this year.

The Treasury's Two-Month Bill yielded 2.40% this past week and the 10-Year Note yielded a low of 2.34%. This "inverted yield curve", where short-term Bonds yield more than long-term Bonds, elevated the recession talk.

Bond yield curve inversions are not always accurate, and the lead time to a recession can be as much as three years.

It will be more important to track how the 2-Year Note, presently yielding 2.23%, performs against the 10-Year Note in the weeks and months ahead, because a sustained inversion between them would be a more serious recessionary signal.

The financial markets were spooked this week when potential Federal Reserve Board Nominee Stephen Moore said if he were brought onto the Fed, he would immediately vote for a .50% cut to the Fed Funds Rate. This surprise statement brought uncertainty to the financial markets, which led to Stocks moving lower and Bonds moving higher in price.

Bottom line: Inflation is not a threat, and was evidenced in last Friday's PCE reading of just 1.8% year-over-year. Plus, the idea that the Fed may now cut rates next means this complacent "wait and see" attitude may continue to keep home loan rates at low levels for the spring home buying season, and more.

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Posted by Eric Fang on April 1st, 2019 9:40 AMLeave a Comment

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March 22nd, 2019 7:37 AM
On all the loan programs. And yes, we will have lower rates for the next 3-5 years. Why take 30 yr fixed? It is the time for ARMs now.

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Posted by Eric Fang on March 22nd, 2019 7:37 AMLeave a Comment

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March 20th, 2019 11:05 PM
A client asked me today. And I said that the rate will start going down, and it will go down for the next 3-5 years. I hope I am right again this time.

Some good rates, 15 yr fixed 3.625% conforming; 30 yr fixed 4% now. Some 10/1 ARM rental 4.25% percent. Let's put APR 4.76% for 30 yr fixed or ARM. Those rates are for no closing cost at all.

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Posted by Eric Fang on March 20th, 2019 11:05 PMLeave a Comment

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March 17th, 2019 11:01 PM
I like to read tour books, especially those who shared their stories.

Last week, I read a book in Chinese. It talked about his travel experience in Italy, India and Alaska etc. And he introduced a "Tour packager" concept. This was the first time that I hear about some people who can prepare your itinerary for you, especially the activities in Alaska. I think that was indeed a good idea. I think I would try next time for a 2-3 weeks vacation there.

For the mortgage industry, we call ourselves consultant sometimes(or just call myself as "sales"). Today, I have a past client asked me about how to purchase a rental property with the equities in his portfolio. And at that moment, I think I am also a mortgage packager or planner?

Sometimes, we indeed need some planning. I have a lot of very successful real estate investors, we do the planning together, and borrower purchased and managed the properties, and I prepared and found the best rate and programs for them. And it went so well that some of them already retired early.

For me, I do not want to retire too early. I like working hard, training hard(for my marathons) and travel a lot. And by the way, I finished one half marathon today, the finish time is !:35:15. Not bad for limited training.  

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Posted by Eric Fang on March 17th, 2019 11:01 PMLeave a Comment

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March 15th, 2019 9:50 PM
We talked about more borrowers are changing 30 yr fixed to lower ARM rates for the primary. And I did lots of those kind of loans this year, especially when the interest rate is at one year low.

And the past week, we have some clients are refinancing the 30 yr fixed rental to the ARMs as well. The new favorable programs are 7/1 ARM or 10/1 ARM loans, and the rates can be around 4.25% for 10/1 ARM, 4% for 7/1 ARM with no closing cost and APR around 4.76%.

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Posted by Eric Fang on March 15th, 2019 9:50 PMLeave a Comment

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Volatility has disappeared in the financial markets and a sense of calm and complacency has emerged. Why?

Well thanks to the Fed, and inflation and higher rates not being a threat -- both Stocks and Bond prices are moving higher.

For 2019, home loan rates have been stable at one-year lows (look at the chart below), and everyone's stock portfolio is increasing in value. What's not to like?

Complacency will change to volatility at some point, and what we are watching is rising wages and how that may increase inflation in months to come.

Should that happen, we could experience a real shock to the US Bond market and the present complacent interest rate market will be over -- and in a hurry.

But for now, complacency is the theme as we head into the Spring housing market...meaning good times for us.

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Posted by Eric Fang on March 15th, 2019 9:47 PMLeave a Comment

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March 15th, 2019 9:45 PM
Dozens of factors go into play in the housing market. The stock market dips, and home prices change. A factory opens or closes and sends homeowners into a frenzy. While mortgage experts can track a few obvious factors over time, there are also more subtle trends that affect housing. Modern startup culture is one of these.

Most people associate startups with Silicon Valley. The home of Google and Facebook is also where thousands of other startups thrive. However, the demand to live there has made housing in San Francisco and the surrounding areas almost impossibly expensive. Housing prices in San Francisco are 76 percent higher than five years ago, but even well-paying tech jobs only pay 20 percent more than the average. Both startup employees and regular non-tech workers struggle to live in the city.

These exorbitant costs are driving startup founders to explore other markets. Parts of the Midwest are now known as the Silicon Prairie, with towns like Lincoln, Nebraska, leading the way as a hub for tech workers. In the South, Birmingham, Alabama, has risen up as a tech hub, recruiting graduates from across the state.

Unlike traditional industries, most startups are only reliant on talent to operate. Unlike the logging or oil industries, which are based on where trees grow and crude oil is found, these "startup hubs" just need to recruit the best and brightest who have great ideas and sufficient funding to start a company. When college graduates with a tech focus don't want to live in tiny apartments in California or New York, they turn to other options closer to home.

When a city is perceived as a "tech hub," its housing situation changes dramatically. More people continue to move to the area, increasing the demand for homes. These jobs are predominately white collar, upper-middle class, and attractive to young workers who may be looking to buy their first homes.

In 2018, Mobile and Birmingham, Alabama, had some of the highest year-over-year home costs, with Mobile's home prices increasing 21 percent and Birmingham's increasing 7.1 percent. Similarly, home prices in Lincoln, Nebraska, are up 10 percent year over year.

Startup culture doesn't just affect Silicon Valley. The changes made in California have had impacts all across the country and in unsuspecting industries. The home builders in Birmingham and Lincoln can attest to that.

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Posted by Eric Fang on March 15th, 2019 9:45 PMLeave a Comment

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March 11th, 2019 6:11 PM
One borrower called me that he got the 7/1 ARM rate of 3.375% with a banker, and checked with me about my rate. After talking to him, I found that he needs to transfer 500k to that lender, then my rate would be 3.125% for his case.

Right now, the rate is very complicated with the "relationships". If you can transfer 75k or 100k, your rate would be better. Or if you have 500k, then your rate will be around 0.25% better. So when you talked to the loan agent, maybe you can disclose how much extra assets you have the relationship with the lender, so that you can get better rates.

And any rate of 3.125% to 3.375% rate are good rates. By  the way, the APR is around 4.7%.

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Posted by Eric Fang on March 11th, 2019 6:11 PMLeave a Comment

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March 10th, 2019 5:18 PM
Please click the link below, Bond Investors Are Daring to Whisper About a Return to Fed QE:

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Posted by Eric Fang on March 10th, 2019 5:18 PMLeave a Comment

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"It's a small world after all" 

If inflation moves lower or is expected to move lower -- rates must go lower as well. That's the situation right now. 

The financial markets and interest rates also follow inflation on a global scale. Why is this important to homeowners? 

If disinflation or the rate of inflation moderates in places like Europe, interest rates in those countries move lower and tend to drag US interest rates lower as well. 

This past week we watched home loan rates revisit one-year lows upon news that the European Central Bank or ECB downgraded their economic outlook and inflation expectations. 

The ECB said they now expect 2019 economic growth to come in at a paltry 1.1%, down sharply from a previous forecast of 1.7%. Moreover, ECB officials said inflation, which is already very low, could move lower still. 

Again, if inflation moves lower in large countries around the globe -- we tend to see improvement in long-term US interest rates...that is the current trend. 

Interest rates don't buy houses, jobs do!

The Bureau of Labor Statistics reported that just 20,000 jobs were created in February, well below expectations of 175,000. This was a disappointing number, but the unemployment rate fell to 3.8% and wages grew by 3.4% year over year...the highest level in a decade. Overall the labor market continues to expand and wages are rising -- all good news for housing. 

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Posted by Eric Fang on March 8th, 2019 11:55 AMLeave a Comment

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March 7th, 2019 3:20 PM
Just read something online, the mid-career crisis exists for almost everybody. Here is why: There are multiple factors in mid-career crisis:

The narrowing of options, the inevitability of regret, and the tyranny of projects successfully completed and replaced.

I felt the same way for the last 1 and half years. Though a lot of people said that I should not work hard, I am still kind of workaholic.  I do a lot of running, reading and travels, still working make me happier. I told my friends sometime ago, I would like to work till the age of 76. I do not know how come I got the number of 76. Maybe by that age, I could finish 100 marathons. That's how I figured out I would work, and run , at the same time.

Finished most part of the book Click. I think I plan to finish by this weekend. And I know, I need to prepare my business tax return as well.

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March 1st, 2019 2:27 PM

Some people recommended this book to me: My Years with General Motors. I was reluctant to read it at the beginning. First this book was first published in 1963. I think this was way too old.  After reading this book, I found that MIT business school was renamed to Sloan Business School in the honor of Alfred Sloan. Also, I knew a lot of history about the auto industry. And a lot of auto company names are actually the last name of the funders, like Lincoln,  Chevrolet, Pontiac etc. They are the auto models now.

Back to the running, got 8 miles done, still the speed workout were killing me yesterday, so I had to slow down today.

As for the loans, this week and the next week is big for me. I will close more loans for the two week, so the total volume will be added up over 12million after next weekend.

I may decide to sent out a newsletter after this weekend. I will do two hikings. One for Saturday, one for Sunday.

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Posted by Eric Fang on March 1st, 2019 2:27 PMLeave a Comment

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Yes, I completed two purchase loans in Las Vegas. And I just prepared a pre-approval for Seattle as well. And I just started 2nd loan application with income in China. And those rates are pretty good.

Finished only 5 books in Feb. Is it because it has only 28 days, or I was quite busy with those loans? Any way, I closed 10M this year. So far so good, though this is nothing compared with my volumes a few years back. Here is the book list:

Started my interval training this morning. It was only 5X600m repeats:



LapDist (mi)TimeAvg (min/mi)Max (min/mi)Avg HRMax HRAvg SPMMax SPMGain (ft)Loss (ft)kCal
But I think I ran faster now. First I had first leg with pace of less 6 min per mile (for 0.4 miles). Normally I trained with a lady, she was faster than me all the time. BUt this morning, I ran first segment faster than her. And we tied on 5th segment. I think both of us were tired. But I think I improved a little bit for the last a few weeks.

But during the training, my friend told me not to training too hard and get injury since this is a very precious opportunity to run in Berlin. Do not get injury and I could not run there. Yes. Should be more careful.


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Posted by Eric Fang on February 28th, 2019 10:20 PMLeave a Comment

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Some of my clients finished the 2018 tax returns, and they would like to refinance again after that. They found that they could not deduct too much interest from the primary home mortgage. So instead, they cash-out mortgage on the rentals(which were already paid off), and will use the interest to offset the mortgage interest.

If you have the similar situation, please just try and find out this is a good solution for you.

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Posted by Eric Fang on February 26th, 2019 3:41 PMLeave a Comment

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February 25th, 2019 1:15 PM
What a week I had. Hiked to Sunol Rose Peak Saturday from 7:45am to 5pm. The total distance is about 20 miles, and with 4000 feet elevation. Not tired after reaching the parking lot. Will do it again in the future.

Finally completed the book Eat, Play and Love. I was a little bit surprised at the donation story at the end of Bali, Indonesia. It did make sense based on the human nature. But was shocked a little bit when the medical practitioner asked more donations when the author tried to collect a donation of $18k to help build a house. Though the plan did not go through, still shocked about it.

Plan to finish reading the book The Road to Little Dribbling: Adventures of an American in Britain this week. I think I should have more interesting books on the shelf. Will read more this week.

And will start bumping my running mileage to over 50 miles this week. And a little bit more intense. Yes, my body needs get used to it.

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Posted by Eric Fang on February 25th, 2019 1:15 PMLeave a Comment

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February 22nd, 2019 12:53 PM
Had a very good run this morning. Here are the splits for 9 mile tempo run:



LapDist (mi)TimeAvg (min/mi)Max (min/mi)Avg HRMax HRAvg SPMMax SPMGain (ft)Loss (ft)kCal

Finished up to 298 pages of The Road to Little Dribbling: Adventures of an American in Britain. 78 more pages to go. I think I should be able to finish the end of this week. Maybe next Monday since I will go hiking of 20 miles this weekend.

Finished story 59 for the book Eat, Play and Love. Page 443 of 804. I will finish this book next week as well.

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Posted by Eric Fang on February 22nd, 2019 12:53 PMLeave a Comment

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The highlight of this past week was the Fed Minutes from the January Fed Meeting. The Minutes are a detailed record of the Fed's monetary policy setting meeting, so the markets gain insight into the psyche of the Fed as it relates to interest rates, the economy and more. 

What the markets heard loud and clear from the meeting Minutes was PATIENCE -- meaning, the Fed is in no rush to hike interest rates and they will watch the incoming economic data to determine when they might hike again. There is now a low probability for another hike in 2019. 

What are the most important reports the Fed is watching which can influence rates?
  • Gross Domestic Product
  • Inflation (big report next week -- more on that below)
  • Jobs Report
  • Consumer Confidence
  • Retail Sales
In response to the Minutes, mortgage bond prices and thus home loan rates are hovering near the best levels in a year. 

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Posted by Eric Fang on February 22nd, 2019 11:37 AMLeave a Comment

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Posted by Eric Fang on February 21st, 2019 8:57 PMLeave a Comment

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February 21st, 2019 2:07 PM
Locked a few loans last week, and a few more in the pipeline. Some fixed loan, most 7/1 ARM.

Did not run much recently. There are always some glitches. And I know I will run more in March.

Finished walking in SF for 16 miles last Saturday.  Plan to hike another 20 miles this weekend, 31 miles on March 1st. Hiking is not bad, at least it is good for controlling the weight.

I started reading Eat, Play and Love. this week. Loved it. So I think I can finish it by this weekend. But I should finish The Road to Little Dribbling: Adventures of an American in Britain since there are only less than 100 pages now.

I enjoy reading books, and should write some reading comments in the future when I have time. At this moment, just keep reading. My reading list is:

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Posted by Eric Fang on February 21st, 2019 2:07 PMLeave a Comment

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We can still get you 4.x 7/1 ARM rate(APR 4.76%) for Rental properties even if you have more than 4 financed properties. We are one of the main lenders who can do this kind of loans, and also it is ok if this property is out of California.

Please call me email me if you have any questions.

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Posted by Eric Fang on February 15th, 2019 3:29 PMLeave a Comment

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February 15th, 2019 1:17 PM
I still remembered my friend's words last Friday: Competitive is good. So I think I would plan to run faster this year. I plan to run 5 minutes faster. So hopefully I can run within 3:15 this year for marathon. And I plan to accomplish my dream at Berlin Marathon.

I ran 7 miles tempo this morning. The average pace is around 7:13 per mile. I would run this pace for the next a few weeks and see how it goes.

A little bit more progress for the reading. I would finish the book The Road to Little Dribbling: Adventures of an American in Britain this weekend. It is a very well-written book to read if you plan to visit Britain in the future. I looked up a few words in the dictionary at the beginning. But only two of three words on each page now.

I would run 18 miles tomorrow. I will run it easy, though it is on the hills.

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Posted by Eric Fang on February 15th, 2019 1:17 PMLeave a Comment

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February 12th, 2019 10:45 PM
The rate is not bad for 30% down. It is around 4.25% for 7/1 ARM with some lender credits. Not bad rate for an out of state loan.

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February 11th, 2019 10:51 PM
I met two couples this weekend. One friend told me that: Competition is good. Which I do agree. That's why I like to challenge myself with my marathons. Not only I need to finish them, but also I need to PR, beat the previous best time, until I am getting older and I could not do it.

And then another friend told me: Eric, just relax and enjoy what you have. You will not know what happen the next day. I could not agree more as well. This friend just had passed out while traveled in Mexico, and he was fully recovered now. Though he would like to travel all over the country again. He said that we do not have to work that hard any more. Just enjoy the life. And I nodded as well.

Finished 198 pages of the book The Road to Little Dribbling: Adventures of an American in Britain so far. The more I read this book, the more I love it. I am interested in knowing the small towns in Britain. I think I would explore them when I visit Britain. I hope I can run London marathon in the next a few years so that I can visit the country for one or two weeks. Yes, I love travels now. 

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Posted by Eric Fang on February 11th, 2019 10:51 PMLeave a Comment

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The housing market is always subject to fluctuations and can be impacted by several factors. In this first month of 2019, one of the biggest issues impacting home sales is the ongoing federal government shutdown. The National Association of Realtors (NAR) recently surveyed a portion of its members and found that the federal government shutdown was having some influence on home sales, but the extent of the impact is still not certain. 

To determine whether the federal government shutdown was affecting the housing market, the NAR surveyed 2,211 of its members, according to MarketWatch. While 75 percent surveyed said they had not noticed an impact from the federal government shutdown, 22 percent reported that they did see an influence, with 11 percent stating current clients were impacted and 11 percent claiming that potential clients were influenced. 

The survey revealed that the federal government shutdown was causing an impact in sales involving both nongovernment employees and federal government workers. One-quarter of agents who reported an impact revealed that some nongovernment buyers were backing out of sales due to uncertainty in the government. The study also found that 9 percent of Realtors who experienced an impact because of the federal government shutdown stated that it was because a government employee decided not to buy a home. 

While the federal government shutdown offers some indication of its related interference with home sales, it is not the only issue at play. In the same NAR study, agents revealed that they were having difficulty closing sales because of issues with FHA loans, USDA loans, and income verification from the IRS. Additionally, the housing market has been slow for more than a year, with both sales and price appreciation consistently down. Although Realtors should pay attention to the situation, multiple factors may make home sales more difficult. 

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Posted by Eric Fang on February 8th, 2019 11:28 AMLeave a Comment

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Every year, several experts take a look at the housing market to determine whether sales will rise or fall. Last year, insiders expected that the updated tax code would cause home sales to slow, but so far, this prediction hasn't come to pass. While the housing market was dampened somewhat in 2018, the culprit was an increase in mortgage rates and housing prices, not the new tax law. 

Home sales have been somewhat flat so far in 2019 as well, for several different reasons, such as global trading conflicts and volatility in the stock market. While it's too soon to tell whether these economic conditions will continue to interfere with home sales, experts are starting to make some predictions for the housing market in 2019. 

According to the National Association of Realtors (NAR), the housing market in 2019 should be relatively stable, especially when considering home values. While the price of homes will still appreciate, a lack of inventory is an issue that may flatten the rate of home sales. The fear is the lack of new home inventory, particularly when taking into account job and population growth in certain markets. 

Some experts are actually predicting a decrease in home sales. The reason that home sales may decline mostly has to do with affordability. As home prices and mortgage rates increase, buying a home becomes less affordable. Unless a big economic change occurs in the future, predicts that it will remain a seller's market for at least the next five years. 

The National Association of Home Builders (NAHB) is also somewhat pessimistic for the housing market in 2019, mostly due to a sharp drop in home builder confidence at the end of last year. The NAHB predicts that several factors could impact home sales in the coming year. 

First, the market faces a shortage of labor and lots suitable for building, which translates to less construction of new homes. Second, strict building regulations and building practices may also reduce successful home sales. Finally, costs for lumber and other supplies have increased for many home builders because of tariffs. As a result of these different factors, the NAHB predicts that sales for new homes should be about the same as last year, although the group also expects construction of single-family homes to increase slightly. 

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Posted by Eric Fang on February 8th, 2019 11:26 AMLeave a Comment

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February 7th, 2019 2:18 PM
Got another phone call today for the purchase. they thought their purchase power is limited because of the income in China from husband. Actually we can use the income to qualify.

Please email or call me of you have similar questions.

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Posted by Eric Fang on February 7th, 2019 2:18 PMLeave a Comment

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February 7th, 2019 1:40 PM
Sometimes we do not do easiest things, we do what our clients want.

I am doing a loan for Las Vegas for the purchase. The rate is around 4.25% for 7/1 ARM(APR 4.72%) and covering some closing cost. The rate is good, and also it is for my client.

And I am doing another purchase loan for my LA client, with 10% down payment. The 7/1 ARM rate of 4.125%(APR 4.72%) is not bad either, this rate is not bad either since there is no mortgage insurance at all.

There are amore requests of changing 30 yr fixed for 7/1 ARM recently, though 30 yr fixed rate is not bad either, but 7/1 ARM will save a few hundred dollars, plus the rate might not go up too much from the current level.

Finished 133 Pages of The Road to Little Dribbling by Bill Bryson. He is an American who lives in Britain. He likes hiking and travel a lot. I like reading his books. I purchased this book about one year ago. It is very entertaining to read it now.

In this book(on the page 105), he wrote his experience with TripAdvisor. there was a restraint: Crown Manor House, who was fined for $20k because of hygiene issues. The newspaper already reported for 5 violations of rats running around the food. And he wrote a comment on TripAdvisor under that restraint and posted the link to the newspaper article. But his comment was deleted by TripAdvisor. The reason is that: this is not his own first hand experience.

So seems like we can not trust TripAdvisor either.   

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Posted by Eric Fang on February 7th, 2019 1:40 PMLeave a Comment

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February 4th, 2019 10:02 AM
It is a great start. Finished 8 miles in the morning and updated my 2019 book list. I finished the book why be happy when you could be normal over the weekend. And another 20 pages per day for two days for The Road to Little Dribbling: Adventures of an American in Britain. I should be able to finished this book the end of Feb(total 19 days).

I also started training for Big Sur marathon on April 28th. No plan for a PR. It should be a happy run. Any time around 3:40 would be good.

For the loan part, locked a few loans last week. Got two purchase loans over the weekend. And I will start a loan in Nevada. Yes, I can do loans for 48 states now.

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Posted by Eric Fang on February 4th, 2019 10:02 AMLeave a Comment

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February 2nd, 2019 9:33 PM
I plan to complete 10 books each month of 2019. Please see the link here for the Jan 2019. Finished 11 books total. Two in English and 9 in Chinese.

In Feb 2019, my main plan is to finish the book The Road to Little Dribbling: Adventures of an American in Britain. I plan to read 20 pages per day, and it will take me about 19 days to complete. And then 9 more books in English.

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Posted by Eric Fang on February 2nd, 2019 9:33 PMLeave a Comment

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January 31st, 2019 8:51 AM

For conforming loans, 30 yr fixed is as low as 4.25% 15 yr fixed 3.75%.  For Jumbo loan, 30 yr fixed rate 4.125%; And we have good rates for Rental ARM now.

For Rental ARM 300k loan, the 7/1 ARM rate can be as low as 4.125%  or 4% with high balance low amount. Very competitive.

The above rates are all for no closing cost at all.

Have not talked about my readings for 2019. Actually I already finished 10 books. I will share my experience in the next blog.

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Posted by Eric Fang on January 31st, 2019 8:51 AMLeave a Comment

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