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.

ELECTION MANIA, BREXIT AND TRAVEL UPDATES!

The upcoming election is certainly overwhelming our media! But recently Brexit has taken front stage. Currently interest rates are trending down, following the Fed decision to hold on any further rate increases for now, slowing employment and economic indicators, and the flight to security of US bonds, with Britain’s vote to exit the EU.

Home prices are reaching and in some cases exceeding the levels of the last decade, so this makes for a great time to refinance, especially for many who were unable to do so a few years ago. I’m seeing lots of debt consolidation refinances as well as refinances to drop rates. Yes, there are still plenty of people out there with rates in the 5’s and higher, who could benefit from a refinance. Anyone with a rate over 4.5% can likely benefit from current rates.

TRAVELS

Steve and I returned to Cocoview for the fourth time in February. We don’t like it there much! This is a dive resort on the island of Roatan in Honduras, in the western Caribbean. www.cocoviewresort.com. We stay in a private home down the beach from the main buildings for more privacy and quiet. Here is sunset from our home.

As usual the diving was great, and the sand fleas were biting (Steve). We met some fun, interesting people including a family of four from Houston, and a couple from Seattle. Dive boats leave the dock twice a day for four boat dives daily, and shore diving is unlimited. We were disappointed my daughter and her husband were unable to join us due to the Zika threat. For good reason, she is expecting in September! Yahoo, exciting!

MUSEUM TOWER

We flew in and out of Dallas, with a few days spent in Dallas each way, making the travel to Roatan much easier. The Tower continues to perform very well with the building over 60% sold. Dallas is always fun! And, the Tower has a great pool!

We stayed another weekend in Dallas in April for a wedding, and rented bikes one day for a ride around White Rock Lake, home to the Dallas Arboretum and Botanical Gardens. The lake is filled with sailboats and surrounded by beautiful homes. There are hiking and biking trails all the way around it, and some leading away and into other park areas. You could literally ride for hours.
We usually try to fit in a walk on the Katy Trail when we are in town, including a stop at the Ice House, a lively open air bar/restaurant. www.katyicehouse.com Great beer and burgers!

GRADUATION AND MORE WEDDINGS

May brought the graduation of David, Steve’s youngest son, from San Jose State with a B.S. in International Business.

WOW! We stayed in an Airbnb in Sunnyvale in a very cool new downtown environment in the Heritage District just off Murphy Avenue. We dined our first evening at the Steakhouse in the Fairmont, which was a real treat with grandparents, parents and kids in attendance. Friday evening we had a quiet dinner at Roberto’s Cantina on Murphy. Highly recommended! www.robertoscantina.net

After the grad festivities we flew to LA for a wedding at the Four Seasons Beverly Hills. Quite an event from beginning to end! Champagne upon arrival, fabulous food, dancing and fun. And, brunch the next morning. We were completely spoiled.

IN MEMORIAL

We celebrated Susan Green in mid-March for her birthday, and watched her ashes spread over the mountains above Palm Springs. It was a lovely, moving event. Then, last week we celebrated the life of Christy Christian Motter, the daughter of very dear friends and lost to us far too early.

Steve and I continue to enjoy Dana Point and all it has to offer: beaches, the harbor, our Yacht Club, hiking and biking paths nearby, wine tasting events, etc. Next we are off to Lake Tahoe for the 4th!

Hoping you are all happy, healthy and have a safe 4th of July!

Home is Where the Wealth Is!

Today home equity is where the vast majority of working and near-retirement Americans have the bulk of their net worth. And, for those who were already retired or nearly there, the economic meltdown was a disaster for their portfolios. In many cases they lost half or more of their assets.

Most of them, including many of my friends, placed remaining assets in cash, and therefore missed the market recovery. This means the biggest and best pool of money available to most Americans during their retirement years is their home equity. And, how do you access that without increasing your monthly debt load, and reducing cash flow? A Reverse loan.

Reverse loans can be used to provide monthly income while you stay in your home until you die. Hence the “Aging in Place” motto for reverse lenders. No payments are necessary. Does a reverse loan erode your equity? Sure, but it beats making a monthly payment when you are on a fixed income in your later years. Or, asking your children to help you make ends meet. It pays to check if you are a good candidate for a Reverse Loan. In fact, you'll find that more and more financial planners are embracing Reverse loans as a part of a diversified approach to wealth preservation for their clients.

Reverse Mortgage for a Home Purchase

Yes, you can use a reverse mortgage to buy a home. You are going to put down closer to 50%, but you’ll never have to make another mortgage payment. Not a bad idea, especially if you are selling a home with substantial equity. Why buy all-cash, when you can invest elsewhere to augment income?

Scott Burns with AssetBuilder Inc. has written some very interesting articles about this very topic. You can check out him and his column at www.dallasnews.com or www.assetbuilder.com

Please contact me if I can answer questions or assist you with a reverse loan.

The Ideal New Year's Resolution: A Living Trust

As most of you know, I was married in August. One of the first things Steve and I did is to update our joint Living Trust document, Wills, Powers of Attorney and Advanced Medical Directives, and update the vesting of our real estate.

I am passionate about utilizing Living Trusts, especially here in California…for anyone who owns a home or has children. Here are some of the things to consider:

1. Appoint short-term and long-term guardians for any minor children.

2. Review the title of your home to make sure it is vested properly; Either in your Trust, OR in Community Property with Rights of Survivorship, if you are married and don't have a trust.

3. Make sure you know where all important documents are located; whether your life insurance policy is up-to-date and has proper beneficiary designations, and whether any joint tenant property (bank/investment accounts) or other "transfer on death" type of assets are up-to-date.

4. Leave medical instructions, written down, for your family, on what to do if you are incapacitated.

5. Appoint someone to make both medical and financial decisions on your behalf, if you were to be incapacitated. (Medical Directive and Power of Attorney)

6. And last, but certainly not least, have legal instruments on how to properly distribute both personal and real property, and who will be charged with making those decisions. (Trustee if held in Trust, or Executor of your Estate if you are using only a Will)

An experienced Estate Planning attorney will be able to discuss the above items and help you to make the decision that is best for both you and your family. I would be happy to refer you to an attorney to assist you in this endeavor and provide you with peace of mind in the coming year. I promise you that is is far less costly to create a trust vs. using just a Will, or dying intestate. (without a will) Probate is costly and takes a long time, and a judge has to approve everything that is dispersed.

Happy New Year to all, and please make this a priority!

Karen

My Holiday Event Picks - All Around SoCal

BOAT PARADES:

Dana Point Harbor Boat Parade of Lights, December 11th, 12th, 18th and 19th – 7:30 p.m.

Huntington Harbor Boat Parade and Philharmonic Cruise of Lights, December 12th and 13th, 5:15 p.m.

Marina del Rey Holiday Boat Parade, Saturday December 12th - 5:55 fireworks and Parade is 6:00 to 8:00 p.m.

Channel Islands Harbor Parade of Lights, Saturday December 12th – 7:00 p.m.

Newport Beach Christmas Boat Parade and Ring of Lights, December 16th – 20th 6:30 p.m.

Ventura Harbor Holiday Parade of Lights & fireworks, Friday December 18th and Saturday the 19th – 6:30 p.m.

King Harbor Holiday Boat Parade, December 12th 3:00 p.m. Concert and 5:45 boat parade

Oceanside Harbor Parade of Lights, December 12th

Mission Bay Christmas Boat Parade of lights, December 12th

Port of San Diego Bay Parade of Lights, December 13th and 20th, 5:30 p.m.

CULTURAL EVENTS:

Westlake Village Symphony Christmas Concert, Friday December 4th - 8:00 p.m.

The Nutcracker, Dolby Theatre in Hollywood, December 12th and 13th

A Christmas Carol, South Coast Repertory Theater, through December 27th

Handel’s Messiah, Segerstrom Concert Hall, December 6th

A Child’s Christmas in Wales, Camino Real Playhouse, through December 20th

The Nutcracker, ABT at the Orange County Performing Arts Center, December 10th – 20th

A Swingin’ Christmas: The Count Basie Orchestra, Disney Concert Hall December 21st – 8:00 p.m.

Tis the Season, Pacific Chorale at OCPAC, December 20th and 21st

OTHER FUN FAMILY STUFF!

Palm Springs Festival of Lights Parade, December 5th – 5:45 p.m.

Corona Del Mar Christmas Walk, December 6th – 11:00 a.m. to 4:00 pm.

Santa Barbara Zoo -- Open on December 25th –!

Pershing Square Ice Rink with DJ’s, December through January 18th

Chanuka Festival, Ventura Harbor Village, Sunday December 13th – 2:00 p.m.

Janss Marketplace Holiday lights and Music Spectacular, December 11th to 24th – 6:00 to 8:00 p.m.

Venice Canals Holiday Lights Tour, December 15th to January 4th – 2:00 to 5:30 p.m.

LA Zoo Lights, including reindeer, at the LA Zoo, December through January 3rd, 6:00 to 10:00 p.m.

Griffith Park Holiday Light Festival Train Ride, Month of December, 5:00 to 9:00

San Diego Botanic Garden of Lights, December 26th – 30th, 5:00 to 9:00

Sawdust Festival Winter Fantasy, Laguna Beach, weekends through December 20th, 10:00 a.m. through 6:00 p.m.

Irvine Park Railroad Christmas Train with Santa, through December 23rd, www.irvineparkrailroad.com

Great Dry Land Yacht Parade, Villa Park, December 13th 5:00 to 7:00 p.m.

This is a photo in downtown Dallas at the Klyde Warren Park, with Museum Tower in the background, from last December.

I am wishing you all a fabulous holiday season filled with fun and family!

Will You Need an ARK this Rainy Season?

Protect your home in case of flooding. If you don't already have flood insurance, you don't live in a Federal Flood Zone per the FEMA maps. But, you can still purchase flood insurance...and for much less than if you DID live in a Flood Zone.

Flood insurance protects you from ground water that enters and/or damages your home. And this winter may be the year you need it, if we do receive torrential rain as the El Nino prognosticators are predicting.

I purchased a flood policy for my rental property in Orange since it has flooded twice in the past during heavy rains. And, I am purchasing a policy for my home in Dana Point as well, just in case. I feel the extra cost is well worth it in case of damage to either of the structures and their contents.

If you need an agent I highly recommend Jon Firey of Firey and Associates, located in Laguna Hills. Jon has handled my insurance for years as well as many of my clients, who all speak highly of him. His website is www.Fireyinsurance.com and his phone is 949-542-7222.

Keep safe and dry and don't delay, since flood insurance does not take effect for 30 days after putting a policy in place.