Napa Mortgage News

Tapping Into Home Equity

April 7th, 2017 5:16 PM by Dale DiGennaro

Dear Gena,

The Cash-Out Craze is On!

The sharp rise in home prices has generated an interesting side-effect.

Many homeowners have gained equity even though they have only owned the home for a few years. They are now tapping that equity at the fastest rate in eight years.

Even more unexpected, one of largest groups pulling out cash is millennials. Many are choosing HELOCs but others are simply refinancing. Cash-out refinances accounted for nearly half of all refinances in the last quarter of 2016.

With rates up a bit, some believe the cash-out boom will die off, but at this time there are still plenty of people who want some cash as reported HERE by CNBC.

VISIT OUR WEBSITE

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THINKING OF SELLING OR EVEN DOING A REFINANCE...
Our "Home Price Index" will take into consideration your original purchase price & date of home purchase to determine...

according to the appreciation rate for the region you live in...whether it is a good time for you to refinance now or....if you are getting ready to list your home...what a reasonable value for your area would be. You can also sign up to receive a quarterly report of your homes value based on the up to date analysis of your region.

Just a couple of ways that Custom Lending keeps you informed of our changing market place so you can make the best financial decisions for you and your family!

Disappointing Job Gains

A wide range of news was positive for mortgage rates this week. Hawkish comments from the Fed were the only significant unfavorable influence. As a result, mortgage rates ended the week lower, near the best levels of the year.

Friday's key Employment report showed that the economy added just 98,000 jobs in March, well below the consensus forecast of 180,000. It appears that the weather had a larger than anticipated effect over the last two months. Incredibly warm weather likely boosted the results in February, while a severe storm seems to have slowed hiring in March.

For example, the construction industry added 59,000 jobs in February but just 6,000 in March. The average job gains over the last three months remained at a strong pace of 178,000. Since slower economic growth reduces the outlook for future inflation, the downside miss in the March data was good for mortgage rates.

Two other events also were positive for mortgage rates this week. On Wednesday, House Speaker Paul Ryan said that tax reform will take longer to accomplish than reforming health care. Tax reform was expected to be inflationary, so a slower pace for implementation is good for mortgage rates. Thursday night, the U.S. launched a missile strike in Syria. In response, investors shifted to relatively safer assets, including mortgage-backed securities (MBS). Added demand for MBS helped mortgage rates.

The primary negative influence for mortgage rates this week was the hawkish tone of Wednesday's minutes from the March 15 Fed meeting. According to the minutes, if the economy performs as expected, Fed officials expect to begin to reduce the Fed's massive $4.5 trillion holdings of MBS and Treasuries before the end of 2017. This would be earlier than had been expected by investors. Added demand for MBS from the Fed has helped push mortgage rates lower in recent years. As a result, investors pushed mortgage rates higher due to the possibility that Fed demand will begin to drop this year.

Looking ahead, investors will be keeping a close eye on events in Syria. In the U.S., mortgage markets will be closed on Friday in observance of Good Friday, but that will be the big day for economic data with Retail Sales and the Consumer Price Index (CPI). Earlier in the week, the JOLTS report will be released on Tuesday, and the Producer Price Index (PPI) will come out on Thursday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

My Greater Napa Kiwanis Chapter took a road trip to Sacramento last weekend to assist in cleaning up and beautifying the "Kiwanis Family House". It is used by families whose children are in the hospital so they can stay close by and not have an added expense.

"Thank you for always trusting in us to do the best for you and your family and please feel free to call me anytime you have questions. I will be happy to share with you whatever information you may need!"