American Pacific Mortgage

American Pacific Mortgage

Monday, January 21, 2019

Boys & Girls Club of America

Our Holiday for Martin Luther King's birthday made me think about what we do for others. In the past I have been actively been involved in my children's schools (geez that was a long time ago!) as far as PTA, PTO, and Bond financing for local school improvements. I was also instrumental in the origination of the Dinosaur Dash in Tustin, a race/walk event to raise funds for the Tustin Public Schools Foundation.

But some of my most memorable work was on the Board of the Tustin Boys & Girls Club. I had the honor to attend a couple of national conventions where there were many young people representing their clubs nationwide. These young adults universally felt the Club saved their lives.

This organization provides things like after-school activities for kids of all ages, as well as meals and transportation to and from school. To this day it makes me tear-up to think of the kids they keep off the streets, and instead active in sports and homework, and heading toward responsible adulthood.

Now that we live in South Orange County, we support the Boys and Girls Club of Capistrano Valley. This is an amazing organization with three locations that serve an average of 480 children every day and 3,000 kids over the course of the year. My husband serves on the board and we support many of their events and fund-raising programs. It is gratifying to say the least, and I can't think of a better way to give back for the fortunate lives we lead.

Wednesday, January 9, 2019

30 Year Fixed Rate Financing - Is it Worth It?

In the aftermath of the great Recession, there was a flight to the "security" of the 30 year fixed rate loan. But, how many people do you know who have had the same mortgage loan for 30 years? parents did. They never moved from their original home, and they remodeled utilizing cash on hand. But, in today's world, we rarely see people who have lived in the same home for 30 years, and even if they have, they have refinanced at one time or another for alternate purposes such as an addition, remodel, debt consolidation etc.

I personally can't think of anyone today who has had the same loan for that long. So, why the tendency to go for a 30 year fixed rate loan? Today there are far more attractive rates for 7- or 10-year ARM loans vs. a 30 year fixed rate loan. An ARM loan is still a 30 year amortizing loan, but the rate is only "fixed" for the initial period. After that, it adjusts on a fixed schedule, usually annually, over an index such as LIBOR or Treasuries.

There are reasons to use a 30 year fixed rate. A rental property might be a good candidate for a 30 year fixed rate loan. But, why pay a higher interest rate for a 30 year loan when you likely won't hold the loan for more than seven to ten years? Prior to the recession of 2008, the average hold time for a home in California was six years. Post-recession it extended to nine years, mostly due to the fact that many homeowners were "under water" and owed more than their home was worth. However, this is certainly not the case today.