Even when inflation is high like today, Americans recognize owning a home is a powerful financial decision. Because inflation has reached its highest level in 40 years, it is more important than ever to understand the benefits of home ownership. Rising inflation means prices are increasing across every commodity, and that includes goods, services, housing costs, and more. When you buy a home, you lock in your biggest budgetary item each month.
For 9 years in a row Americans have chosen real estate as the best long-term investment. The following graph depicts the results of the latest poll conducted:
When inflation has risen in the past, home prices have risen as well. A house is an asset that typically increases in value over time even during inflation. According to Mark Cussen, Financial Writer for Investopedia:
“There are many advantages to investing in real estate…It often acts as a good inflation hedge since there will always be a demand for homes regardless of the economic climate and because as inflation rises, so do property values…”
Whether you are a first-time homebuyer or an investor looking to increase your family’s wealth or retirement fund, look no further than property.
If you like the idea of investing in real estate but dread the headaches inherent in becoming a property owner, consider becoming a private real estate investor with Sun Pacific Mortgage. Check out our website: www.sunpacificmortgage.com or call us at 707-523-2099. We are a family owned and operated company which has been in business for almost 34 years. We provide well-vetted opportunities, and you provide the funds to allow qualified borrowers to purchase or refinance their homes anywhere in California.
Over the last thirteen years real estate has been in a Bull market, which changed the way that we look at the 7-year cycle that previously rang true. This heating and cooling of the market, low interest rates, and removal of subprime loans has created something better and different than before.
Some of the gains have been:
Larger equity increases across the entire state
Record low default and foreclosure rates
High demand / Low Inventory
An increase in well qualified borrowers
As we addressed in the first State of the Market, (which you can read here: pt. 1), top economic experts do not foresee a bubble situation. The market gains do not support it.
Now in June, Private Money Lending has remained unchanged. In fact, you could say that the miserabilism and rising rates have increased the benefits of our loan programs. Hard Money rates are constant and now overlap with conventional lenders who are tightening their lending requirements.
This has created a prime opportunity for Direct Private Lending and brought in a higher frequency of qualified Borrowers. So here is a recap of our last month:
In May, our investors helped fund over $18 million in loans at an average interest rate of 9.5%.
This is up from April’s $17 million at an average of 10.2%*.
*Note that lower rates are granted to Strong Borrowers with Low LTV.
While talk of inflation, recession, and panicked markets continue to consume the energy of the media – remember that real estate continues to be strong. The last two weeks in our local market had some of the highest amount of new listings coming on the market in a very long time. Buyers are flocking at open houses. One we went to last weekend had over 30 buyers touring the house at the same time.
The market may be changing and look different, but there is a reason why mortgages are used to hedge problems in the economy. It’s because of the strength in real estate.
A newsletter to current and future Investors at Sun Pacific Mortgage
For over 34+ years in the lending business, we have always viewed our Investors as our biggest asset. Without you there would be no Sun Pacific Mortgage! You provide the revenue that allows Borrowers to become homeowners. We have always strived to be as transparent as possible to support the confidence and trust you place in us.
With this in mind, we thought this might be a suitable time to review just what happens behind the scenes here at our office, before we even present a loan to you.
There are a number of qualifications we put a Borrower through, starting with the loan to value, loan amount, location, and property. Provided the property is lendable, the loan amount & loan-to-value are reasonable, and the location is within California, we will take the next steps to qualify the loan.
This next step is to obtain the necessary information & verification about the Borrower, including a loan app, credit report, preliminary title report, something supporting the income & assets of the Borrower, and property valuation (we require documentation to support the valuation such as MLS Comps, a BPO, online valuation methods, or we will get an appraisal if the loan is over 65% LTV, a Commercial property, or if value isn’t apparent).
We work to get something to show what the Borrower’s stated income is; such as bank statements, CPA letter, employment letter, paystub, 1099, 1040s, W-2, etc. It is also important to let you know we always speak directly to any Borrower 65 years or older, to ascertain that they fully understand the loan, fees, are coherent, etc.
As a note, many other Private Money companies do not obtain anything showing income or assets; they lend solely on the equity in the property. That type of lending is true Hard Money – lending on the equity of the property. We do hold this opinion too but like to see that the Borrower can afford the payments and we are not setting up a valued Investor with a foreclosure.
After ascertaining what appears to be a legitimate Borrower with a lendable property, we work with Title & Escrow to obtain all needed payoff demands and Title clearances. We do this to ensure that you as the Lender are provided a clean and clear Title report with the best possible Title insurance that we can obtain.
We get about 60 requests a week for new loans! You see only about 25% of what comes across our desk. We have a tight vetting process and underwriting procedure. Only after this is all done will we submit the Trust Deed Offerings to you for review & approval.
If you have interest in a particular Offering, simply respond to the offering email with your interest. You are not approving the loan but instead, we can send you our due-diligence package that we have compiled through our vetting process for your review.
Once approved, our in-house Processors prepare Private Money Loan Docs and any other required forms for Title.
In addition to having one of the top private money attorneys on retainer, we attend the quarterly CMA (California Mortgage Association) conventions to ensure we are up to date on all Private Money lending regulations. Yearly we keep up on our training with an 8-hour Mortgage Licensing Continuing Education Course through the National Mortgage Licensing Board, and every 4 years we do a 20-hour Continuing Education Course through the Department of Real Estate.
So, there you have it, a glimpse into what we are doing behind the scenes to assist in bringing you qualified Borrowers & properties to lend against, for stronger returns.
After 34 years of experience, we are specialists at helping bridge the distance for individuals who need additional financing to buy a new home, before selling their current house. Let us help you or someone you know with our popular Private Money Bridge loan program, like we did below.
Loan of the Week
Program: Bridge Purchase Loan Size: 1.4 million Location: San Luis Obispo County Reason Came To Us: A Mortgage Broker brought his Borrower to us for some fast help. Their financing was disapproved by underwriting at the last minute due to debt-to-income ratio being a bit too high. This wasn’t an issue with our programs due to the great equity in his current house. As we have no DTI requirements, we were able to rapidly get him approved and loan fully completed in just 13 days!
Visit our website at www.sunpacificmortgage.com or call today 707-523-2099 so we can let you know what we can do to help you or someone you know bridge the distance to a future home!
Just as the pandemic put a temporary damper on the housing market, so too did the jump in mortgage rates. But just as the economic shut down didn’t have a lasting effect on the market, neither will this increase in mortgage rates. And the reason is the same – very little inventory. There are still more Buyers than Sellers and that is driving the market right now.
Despite the slight increases in interest rates, and decreases in inventory, it doesn’t necessarily mean the market is going down. Because Builders have not built enough housing and interest rates remain relatively low, it is thought that the industry might slow, but not fall.
Waiting can be a gamble in this game of real estate. Even if you wait to purchase with the thought that prices could be coming down, if rates increase it will all be for nothing. And renting will not be a cheaper option in the long run.
The market is stable. It hasn’t been driven by Investors, Flippers, and bad mortgages, but by legitimate Buyers. While demand may slow down eventually, there are no signs of prices going down anytime soon.
If you need a loan fast or have not qualified for a conventional loan, consider a privately funded mortgage through Sun Pacific Mortgage. Give us a call at 707-523-2099 or visit our website at www.sunpacificmortgage.com if you are purchasing or refinancing in California.
Take advantage of our Private Money Programs if you are in need of FAST financing. We can also help if their debt-to-income ratio is too high or you’ve been turned down by another lender for any reason.
We’ve funded many loans in less than 1 week. No credit requirements. And with over 34 years in business, we’ve helped thousands of individuals get the financing they wanted!
Analysts, Economists, and Industry Commentators have much, and sometimes divergent, opinions about the present and future of real estate in Sonoma County. They all agree, however, that sales data in the coming months should provide more concrete indicators of the market condition.
The experts have commented that when hot markets shift to cooler, the effects are typically reflected in reductions in multiple offers, overbidding, and the number of homes going into escrow. All these realities result in less appreciation, but historically, over the longer term, real estate remains an excellent and robust investment.
The monthly median home price, 6-month rolling average proves the point:
The average days on the market typically ebb and flow seasonally with spring often seeing the highest demand. Spring 2022 has just seen the lowest average days on the market ever recorded.
The combination of quickly rising prices and the fastest mortgage rate increase in over forty years is going to affect purchase demand. As this phenomenon occurs, the private mortgage business picks up steam. Using this avenue of financing allows otherwise ineligible Buyers to get into the real estate market and profit from the appreciation which continues to rise.
Sun Pacific Mortgage, a family-owned and operated business located in Sonoma County, serving all of California, has been in the Private Money Mortgage business for over 34 years with impressive results and loyal, appreciative clients and investors. With our year of experience, we can close escrows in as little as a week. Give us a call at 707-523-2099 or visit our website at www.sunpacificmortgage.com to investigate the loan programs we have available in funding purchases and refinances or how we can help you start increasing your wealth. We look forward to your call.
FAST approvals and fundings – even when turned down elsewhere! Check out a recent scenario below:
Loan of the Week
Program: Business Purpose Refinance Loan Size: $950,000 Days To Fund: 12 days Location: Los Angeles County Reason Came To Us: Debt to income ratios too high so her conventional Broker brought her to us. This Borrower was looking to get cash out of her primary residency to further expand her business. This was no problem for us! With good LTV and credit, we were rapidly able to get her loan done.
If you are trying to refinance or purchase but don’t qualify for a conventional loan just yet – let us help! We have this HOT Alt-A Private Money loan program with lower rates, so call us at 707-523-2099 or visit our website at www.sunpacificmortgage.com and we’ll quickly get back to you.