MARKET UPDATE AND REVERSE LOAN INFO

Interest Rates have begun to rise again, after a drop last month. However, we are still better off than in the 1st Q of this year. The economy is improving, slowly but surely! You can still find rates in the 3’s if you are willing to go for an ARM, or a Government loan (FHA or VA) and depending on your loan size, credit scores, loan purpose, etc. etc. Most programs have rates in the low to mid-4’s. Realistically we are still very near the bottom of the rate cycle. Purchase specials for jumbo loans are lower than most conventional loan programs.

I just concluded a rent vs. buy analysis for clients, and determined they were better off, especially on an after-tax basis, to buy vs. trying to find a rental. The rental market is just crazy, and availability is scarce!

Reverse Loans are gaining in market acceptance. Borrowers are finally understanding that they still own the home, can sell it or refinance if they wish. The biggest benefit of these loans is the ability to have a line of credit allowing draws as needed for emergencies or major expenses (a roof, a car, etc.) The unused portion of the line available increases or grows like an investment, so over time there is more credit available. I’ve run these scenarios for clients as well as investment professionals, who can see that in ten years the credit line will nearly double.

This is a very useful retirement planning tool. A client age 63 with a line of credit beginning at $320,000 and home value of $636,000 or higher will have a line of credit available in the amount of $573,000 in ten years, assuming no draws during the first ten years, and a home free and clear. This is essentially a return of over $550,000 on initial costs (investment) of $11,000 in upfront costs (including escrow, title, and Mortgage insurance.) Not bad!

Home Remodeling is on the rise, especially here in the OC. Homeowners have seen tremendous appreciation since the recession, and many are taking advantage of their increased equity to pull cash out for a makeover. Kitchens and bathrooms top the list. Landscape upgrades are another popular item. A recent study shows that 15% of California homeowners plan to remodel in the next year. We recently remodeled our bathrooms--and what a difference! We LOVE them!

Family and Travel News!

Paso Robles is really beautiful, and it reminds us of Napa/Sonoma over 30 years ago. We went for a long weekend in April with dear friends, and had a blast visiting wineries (not too many in one day!!) hiking, picnicking and dining. Our favorites were Daou for a gorgeous setting, but we had extra-special tastings and treatment at Opolo, www.opolo.com Epoch www.epochwines.com and Four Lanterns. www.fourlanternswinery.com

We threw in a drive to the coast to visit a couple of dive bars in Cayucos.

We dined at Artisan (highly rated) but our favorite…after two days of wine tasting…was Fish Gaucho. www.fishgaucho.com They offered great high-end Mexican food, heavy on the seafood. Highly recommended.

Our trip took us along the coastal route through Santa Barbara coming and going, so of course we stopped at Brophy Bros in the SB Harbor on the way up, and at Beachside Bar-Café on the way back, in Isla Vista. Lots of good eating and fine wines!

In June we headed out to Bermuda for the first leg of an 18 day trip. We watched two days of racing for the America’s Cup; went scuba diving one day (too rough after that for diving) and did lots of sunning, swimming and touring. Bermuda is beautiful but extremely expensive. We quickly learned we were better off to pick up dinner “to go” at Mr. Chicken, or order pizza at our lodging (St. George’s Club) than to pay top dollar for mostly mediocre food. We still had a fabulous time! Too bad we lost the Cup to New Zealand in the finals, but we have faith America will be back!

Next leg we flew to Tortola (British Virgin Islands) to pick up our 48 foot Catamaran and set out on our week-long sailing adventure with two other couples. These vessels are basically floating condos with sails, with four bedrooms and private baths/showers. I highly recommend this trip although you might want to hire a captain if you aren’t comfortable sailing on your own. We had a few minor issues with malfunctions (mostly of the mechanical type) but all-in-all it was smooth sailing and/or motoring, depending on the winds and our direction to the next port.

We stopped at different bays every night and moored all but one night. We ventured onto land for dinner all but one evening; danced, listened to music, and generally had a wonderful time. The most exciting moments centered around our dingy rides to shore (entrance and exit can be tricky) but this provided for many laughs and a few unexpected swims. Identities withheld.

We had three days of very good diving and were very happy with the sites and the dive masters. But it was a pain to lug all the scuba equipment around from one locale to the next.
Favorite spots: Marina Caye, Cane Garden Bay, Bitter End and Norman Island. Also the Baths are a must-see.

Finally we flew to San Juan, Puerto Rico for two nights at El Convento, a wonderful hotel in Old Town San Juan. You can’t really go wrong anywhere here in Old Town. Most of the restaurants offer Tapas. The food was amazing—best of our trip—and very reasonable. The Hotel is highly recommended as the place to stay, and also very reasonably priced with outstanding service. We loved the colors, the history, the music, the rain, and the food. I want to return!

NEXT UP:
My daughter and granddaughter are visiting for a few weeks this month and I can’t wait. Baby Kai is almost 10 months, and moving fast. I need to purchase a play yard to keep her under wraps while they are here. Can’t wait!

Steve and I continue to be active in the Dana Point Yacht Club. He's started racing, and I've joined the Race Committee to help with scoring (not an easy task!) We've made so many new friends and enjoy our time there.

I love hearing about your adventures too, so please write me! Keep in touch!

IT’S A BRAVE NEW WORLD!

MORTGAGE NEWS

The fall election brought about many changes, not the least of which was an immediate increase in interest rates, resulting in a .5% to 1% bump in mortgage rates across the board. So far, we haven’t seen much effect on home prices, which seem to be holding at a steady increase, albeit at a slower pace than the last few years.

The attention to Reverse Mortgage financing is building as more and more aging baby boomers reach the age of 62. There are many uses for reverse loans, not the least of which is to access untapped equity in your home, or to purchase a new home. They are gaining in acceptance as consumers realize they do still own the home, and may will it to their heirs, but can live without making a payment against the mortgage. Oftentimes I set these up as a line of credit to be used in the future for emergencies, or basic living expenses. More financial advisers are encouraging clients to take out a reverse loan soon after turning 62, as a way to boost their next egg. The credit line available to them (and unused) grows over time and can provide substantial monthly income in later years.

NOW FOR THE FUN: TRAVEL AND FAMILY NEWS

Last June saw me in Dallas for some fun in the Arts District. Always great restaurants!

July 4th Steve and I ventured back to King’s Beach in North Lake Tahoe, where we were married the year before. We stayed in the same home on the waterfront, and had a wonderful visit with dear friends, each of us taking turns cooking dinner. We kayaked, swam, read listened to music and drank a lot of Rombauer Chardonnay.

And, we were treated to two nights of fireworks on the Lake, both Sunday and Monday. The level of the lake was really low, so I’m so glad to hear the level is back to pre-drought levels after all our rain this year.



Near the end of July my daughter Katie flew out from Michigan to visit for a baby shower—for her---with friends. Then we took all the family to Catalina for the day and rented two cabanas at Descanso Beach club. What a blast! All 14 of us!

August saw us attending the Pirate and Wench party at the Yacht club. They love dress-up parties.

Then at the end of the month we went camping to our favorite place, El Capitan State Beach north of Santa Barbara. Steve loves to paint while we are there…and I just relax.

There have been lots of weddings and Birthday celebrations in between and around.

The BIG news…I flew to Ann Arbor for the birth of my granddaughter in September. It was very exciting!

I stayed for two weeks to act as maid, cook and general bottle washer (for real) and was so sad to leave. The kids have been out to visit a couple of times, including an extended stay over the holidays.

We rang in the New Year at the Yacht club, and by early January were on our way to Florida to watch my one and only SISTER Katie tie the knot with her beloved Luke.

They are living between their homes in Florida and northern Michigan, and loving retired life. Their new home in Florida is gorgeous!


Here we are on the Coast at Sunset after the ceremony. We had a lovely dinner at Roy's to celebrate.

We spent the weekend in Dallas before heading to Florida and did all the “right” cultural things…a visit to the Fort Worth Kimball museum for the Monet exhibit; then to the Stock Exchange to watch them bringing the cows home, and a visit to the Perot Science museum in Dallas. That is a MUST SEE! Very impressive! All in all, we were very smart afterwards!

That’s all for now. We’ve lost more friends the past year, it just gets harder. I guess that is part of growing older. You take the bad with the good.