Soren Kierkegaard 1813-1855

One of Aunty’s favorite quotes is:  Life can only be understood backwards, but must be lived forwards.  (Soren Kierkegaard)

To wit, there are moments in history that come upon us as surprises, but after they occur, we get a different perspective looking back and thus realize that the outcomes were predictable because of what happened prior to.

The crash of 2008

A good example of this was what led to the housing crash in 2008.  Real estate earlier was booming because everyone and anyone could qualify for mortgages.  Daughter #1 bought her first house in Las Vegas with very little down, and she didn’t even have a real job yet!  Prices of homes crept up and up and it seemed as if anyone who wasn’t buying as soon as possible was a dummy.

This was the era of subprime lending.  It was too much, too fast, and too easy.

When the party ended, banks, homeowners, and communities were smashed.  It was devastating, and bankruptcies were at record highs.  During the peak, it was difficult to see that this housing bubble would burst, but once it did, it seemed inevitable.

From the rubble

In Michael Moore’s 2009 movie, “Capitalism, a Love Story”, investors who swooped in and scooped up properties that had suddenly lost more than half its former value were called vultures.  Vultures were evil and vile, predators of poor victims on hard times.  Uncle and Aunty went to see the movie and felt perplexed after the show – we were investors, not vultures.

We bought short sales, and rented back to the former owners.  We bought bank foreclosures, helping to keep communities stable.  We were careful and did not over extend ourselves.  We invested using Robert Kiyosaki’s Rich Dad principles.

Slowly, the market began to stabilize and improve.  Looking back, an innovative and vibrant place like Las Vegas would survive, people always need a place to live in, and houses were of good quality selling for less than the cost to build.  We unknowingly bought at the best time.

And now – Short window of opportunity

We just completed our home refinance – Hallelujah, happy dance, happy dance!  It was grueling for Aunty because of our rather complex situation, but it was worth every paper scan and search now that it is complete.  Our monthly expense for our mortgage is now much less than before.  In Aunty’s opinion, the best deal in town are low mortgage interest rates – and they are not going to last much longer.

Can rates get lower?  Very doubtful.  Janet Yellen of the Federal Reserve Bank has been hinting about raising rates because our economy is improving.

Is our economy improving?  Aunty thinks so.  There are more new cars on the road now, more old furniture on the streets, meaning people are buying new things again.

Will rates go higher?  Let’s see – hints by the person in control of rate hikes (Janet Yellen), people spending money again, housing prices climbing, job markets improving = good indicators that money will become more expensive via higher interest rates soon. [Aunty gets daily mortgage rate updates and interesting tidbits from paul.tamashiro@guaranteedrate.com.  Email Paul if you also want to get daily updates.  No pressure, just a very nice person.]

However, time is of the essence, and lenders are very strict.

Aunty and Noreen Ho (808) 398-8528

Not to despair, Noreen Ho to the rescue!

Aunty loves banks and bankers.  Unfortunately, they don’t love Aunty.  Remember the bank that says “yes?”  Too many times, they checked out Aunty and say “no.”  So rude.

It is because bankers must follow bank rules and are paid by salary.  They can only offer you their own bank’s programs and cannot go shopping for you.  Their number one bread and butter is their employer.

Mortgage brokers are free agents and are paid by commission.   Their number one bread and butter is you, so if one lender says no, they will shop until they find one that wants you.

Noreen found us Provident Lending because they had the best rates, and a credit instead of points to pay!  Aunty will tell you the truth, though.  They are TOUGH and strict.  However, once everything was in order, Noreen arranged the easy closing with Kevin of First American Title Company.

Noreen is THE best mortgage broker we have ever had the pleasure of using.  We first met her because she was also a traveling notary public when we bought properties in Las Vegas and needed to sign docs.  She is professional and also very nice.  She really listens to what her client wants and will bend over backwards to get the job done. (She also looks MUCH better than this picture.)

Borrow to save, save to invest, invest to cash flow

Aunty should be retiring soon.  Retired people will not qualify for mortgage loans because they do not have active income from paychecks.  So…. refinance before you retire.  If you are young and working, buy your parents’ home from them and then rent it out to them. Or, find an investment partner – they put in the down payment, you get the loan – profits and/or cash flow are split equitably.

You may think that it doesn’t make sense to have more, or extend more debt, but this is one of those look-back opportunities as interest rates begin to climb again. You will be glad you have a long term mortgage at historically low rates.

Loans are on sale but your banks are limiting supply.  If you want to have the best mortgage broker working for you, please give Noreen Ho at Savvy Realty and Loans a call.  (808) 398-8528. Tell her Aunty sent you and maybe we can all go to lunch together one of these days.