If you are interested in Santa Clarita real estate, I'm Connor Macivor and have been representing real estate buyers and sellers in the Santa Clarita Valley since 1998.
I have also developed our Santa Clarita EDGE program - You can register here: SCVedge.com
That way you can obtain the discounts, rebates, and credits you deserve when wanting to buy or sell Santa Clarita real estate.
The impact of COVID19 on Santa Clarita interest rates
Interest rates in the Santa Clarita Valley don't differ from the national interest rates. You probably already knew that.
However, there are some topics that I want to talk about for the benefit or our Santa Clarita EDGE home clients and those of you who are still on the fence as to whether or not to utilize my services.
The effects on our local real estate market and interest rates as a result of the COVID19 Virus and national pandemic are visible.
What will the long term effects of COVID19 on our local markets and what will that mean for interest rates for you that already own Santa Clarita real estate to those of you who are considering buying Santa Clarita real estate?
There are several things that this article will cover, let me start with a local versus national comparison of my own.
Back in the early 1990's I was a Los Angeles Police officer and was working the RIOTS. Now, the Los Angeles riots were nationally reported upon, but only directly impacted South Los Angeles, directly. If you want to look at the racial overtones - then the influence was much larger.
This is also a similar comparison to the national Pandemic. While it is having an effect on the entire world, the United States is being affected differently, as is the Santa Clarita Valley.
The interest rates on a local level may be the same. However, those rates, futures, and other factors help when they are spoken about in a local sense.
I don't care to read an article about mortgage rates and the COVID19 impact on Phoenix real estate, when I want to invest, buy or refinance a Santa Clarita home.
In our local market, we had a big refinance boom over the past couple of years. The stock market was so robust, then it started to get a bit shakey.
Then we had many Bear Markets recently which is seemingly good for the lowering of interest rates. While they don't always reflect the lowering on the "street" meaning for those of you buying homes and refinancing, they eventually are impacted.
There are two types of stock market scenarios that get the most media attention. Bull and Bear Markets.
Think of it this way - Bulls go horns up - the stock market is going up.
Bears - swipe their paws/claws down - the stock market is coming down.
As of late, due to the pandemic of the Corona Virus - Covid19, we have seen primarily a Bear Market.
Now that we have the terms correctly, let me talk about the past refinance markets in the Santa Clarita Valley. IN most cases, when a person refinances a home, they typically not thinking about selling.
Usually, a refinance to a lower interest rate equates to a person may be saying in that home for a time longer or potentially renting it for a larger profit.
What I explain to my clients is to always look at the "numbers" related to their refinance.
- What is the interest rate,
- where is their current rate,
- how long have they been paying at the current interest rate and
- what will be the monthly savings with the new rate?
- look at the lender's cost of handling your refinance,
- enter those numbers into the equation.
- Making sure you have all of the actual costs,
- including the junk that the lender may tell you does not exist in their refinance process.
Work the total numbers. Pencil it out - Dad would have been so proud!!!
The question in mind should be how long will it take you to "catch up" and start to save money after all the "costs/fees" and years of previous payments have been satisfied?
Remember, if you have been paying on a 30-year mortgage for 10 years, then you refinance, you will most likely be refinancing into a new 30-year mortgage.
You need to see if it's worth it - if you need help, call me, I'm not a lender but I know some truly transparent local folk that will look at any of the numbers you were promised and let you know if it's worth doing or if they can do you better!
The impact of the last 12-14 months' refinance boom has been the local Santa Clarita inventory has continued to be very low.
In fact, we have seen these low numbers in the Santa Clarita housing inventory for the past 4 years. It's been a home seller's market for that time and that trend continues today, even with the Quarantine and COVID19.
Wall Street's reaction pertaining to COVID19 and Santa Clarita Rates
All that has to happen is someone important comments either positively or negatively about how COVID19 is being attended to. How are the other countries dealing with it? Who the new villains are and who is holding PPE, personal protective equipment.
That is when you will see the stock market react. The market will react in a tangible way. You will see the numbers increase or decrease.
If those trends persist for long enough (that is the $100 dollar crystal ball question BTW), the interest rates will reflect the investing in the bond market or the recoiling from the bond market.
In the Santa Clarita Valley, when you are working with a local lender, they are going to be able to quote you the national rates, and even though you may have "heard" they are at a particular percentage, you may not get that quote.
Here is why the interest rates may differ in the Santa Clarita Valley lender quote from the National Numbers you have heard.
Most times, those national interest rate numbers are being quoted by those who have skin in the game.
They have an investment of capital in some way to get you to use them or those that they know to do your loan or refinance.
Maybe they are with those VA lenders who are wanting every veteran to allow them to refinance their homes and pull out the money so the Veteran can pay bills or buy a new car. (BTW, you need to be careful of these programs - they sound great, but create debt, the debt you may not need to take on)
The interest rate they are quoting is known as the Goldilocks rate.
Do you remember the story, Goldilocks? The porage was too cold, then too hot, then just right?
The same with the bed the squatter was going to try out, too hard, too soft then just, right?
All of the advertisers in the world and lenders advertise the Goldilocks Rate.
That is when you as a borrower are 10's in every category.
- You have perfect credit
- You have a solid income stream
- Your debt to income ratio is just right
You have to be the borrower who is "just right" in every category in order to obtain the Goldilocks rate.
This is when the machine breaks down. I have a client that calls me about wanting to refinance their home.
I give them my FREE advice about using local lenders versus those on TV.
They call my contact and talk about refinancing their Santa Clarita home, only to hear that the interest rate from the lender I recommend is higher than the lender they heard talking on prime time.
Refinance rates Santa Clarita COVID19 impact
Here is what happens next, most times if they have not read this article or if they are getting bad advice.
They call up the national lender and the lender provides the client wanting to pre-qualify for a mortgage or refinance with some of the most romantic pillows talk imaginable.
The nation lender tells them they are going to get them in touch with a lender who can perform as they just promised.
The lender or many lenders get sold the personal and private information of the clients who called the national lender's advertised phone number.
The client then gives all of their personal information to the lender who establishes the very next communication point.
If this is concerning a refinance of a Santa Clarita home, then the homeowner will give up all of the information the lender requires. The lender is going to send out an appraiser, if that fits with the current requirements, then the lender will have the refinance paperwork was drawn up and the loan documents will be dispatched to the homeowner.
It is typically at this time when the homeowner finds out that the interest rate quoted, costs and their items are not as were promised.
Then the lender provides excuses as to why this is the case and why the rates, fees, and charges are different from the lead generator they spoke with first.
Now, the local Santa Clarita lender that I referred my client to is looking much better. Sometimes it's too late to stop the process.
Sometimes, the home seller can pull out, and the very threat will be enough to get the lender to match or get close to their original pitch.
Origination rates Santa Clarita COVID19 impact
To originate a loan means to start a new loan on a new home or resale home purchase.
This is your typical person wanting to buy a home scenario where a home loan is going to be needed to purchase the residence.
Needing a Loan versus having the total funds to buy the home in an account of some type.
COVID19 has definitely brought out those who are hurting for real estate business.
This included the lending arm of real estate. The homes are selling, but as I reported back in April 2020 as compared with April 2019, The Santa Clarita valley had a reduction of 29% as it relates to sales numbers when both years are compared.
In April 2019, we had the similarly low real estate inventory in the Santa Clarita Valley. In April 2020 we had the COVID19 quarantine in full swing in the Santa Clarita Valley.
Hence the reflection of reduction with regard to the numbers of units pertaining to SOLD Santa Clarita residential real estate.
There are many ways to skin a cat, but why would you? -Connor Macivor
If you are wanting to buy a home, you need to watch out on all fronts. You need to ensure, the best that you can, that the agent you are selecting is one that is focused on your needs, wants and desires, and not their commission.
Of course, I sell homes and represent buyers and sellers of real estate in order to earn a living. However, my Santa Clarita EDGE program speaks for itself related to my commission and the value I bring back to my clients!
You have your agent, now they should be able to guide you, at least partly through the loan securing process.
They should also be able to tell you if you are getting a fair deal or not from the lender you are using or from the lender they referred to you.
They should do this without concern about the consequences. I remember we were part of a Credit Union home buyer program. They expected me to refer to them my clients without question.
However, when I observed this credit union was gouging my clients pertaining to their loan, I told my clients and they sought financing elsewhere.
Is that bad? Was I wrong? I will tell you that I am sure I was not, but I never received any more home buyers from this credit union and I was kicked out of their home buyer program.
Another turning point in my business - one of the reasons I developed the EDGE program.
COVID19 is changing the ways that home buyers buy real estate. The viewings are less and harder to schedule, all showings are by appointment only, even with vacant housing and there is paperwork that needs to be read, understood, and signed before viewing any Santa Clarita homes for sale.
The same truths apply to the impact of COVID19 on the Santa Clarita home buyer's interest rates. If you are looking to buy a home, watch out for the "promised" interest rates that are being told you via social media and other outlets.
The best practice is to find a referred lender.
- Give them your credit report that you had generated showing your total score,
- give them other documents without having them run your credit,
- not matter how much they say they cannot do it without they themselves pulling your credit,
- tell them to quote you a rate at the present time.
You are going to find that mainline banks and credit unions are going to have speechless moments because they don't typically hear this.
Mortgage brokers will be very nimble and will be able to quote you, but it's going to be an estimate.
The credit report that is pulled by the lender comes from different systems and in some cases may be more detailed in the information it contains.
You will see this reflected on your quote and all should be able to be explained if the numbers change due to some new or additional information discovered related to your personal credit profile.
Final World about the COVID19 impact on Santa Clarita interest rates
The world has changed for sure. My kid won't graduate from high school in a typical manner this year. Prom has been canceled for now and I think he is going a bit crazy staying home.
There are a lot of people wanting to get your business. Time is tough and the interest rates fluctuate often.
They are able to be locked in once a home has been identified where there is an agreed-upon contract by both the buyers and the sellers.
Some lenders, don't lock immediately because they like to gamble. Some lock immediately because they play it much safer.
A lock on an interest rate can go anywhere from 30 days to 90, but at some point it costs the lender to "hold the rate".
That cost to "hold the rate" usually transfers to you as the borrower.
They should let you know how it works and if there are other unexpected charges for you in wanting to borrow money to buy a Santa Clarita home, they should be upfront about it.
National interest rates are impacted by COVID19 - because the Stock market is impacted by all the happenings in the government and in other governments that we are dependent on with regard to the manufacture of medicine and PPE.
Oil and other items are also subject to the impact of COVID19.
My tip is this, ensure you are working with a local expert. Make sure you meet with them, at least on some type of video communication platform so you can watch them and see how they interact with you, besides just their voice.
I'm Connor with REMAX Gateway, The Santa Clarita home experts.
I will be here for you when you are ready to buy or sell real estate in the Santa Clarita Valey cities in California.
All you have to do is call me or sign up for our HomeBuyer / HomeSeller EDGE program in order to join with us to start saving money on buying or selling real estate in the Santa Clarita Valley.
Thank you for reading the COVID19 impact on Santa Clarita's interest rates. I'll be here when you are ready for my help please make sure you have a look at the number one blog about Santa Clarita real estate.