Buying a Costa Mesa Home … With a $0 Down Payment?

Some of Costa Mesa’s wealthiest buyers may be getting a mortgage without putting a single dollar down. And we at Weichman Realtors aren’t talking about single-bedroom fixer-uppers, either!

It’s called 100% financing, and, at first blush, it looks suspiciously like a version of the strategy that sent the economy reeling in 2008. But lenders feel that well-heeled Costa Mesa residents who are getting a mortgage through these programs are totally different. How so? you may ask.

For openers, these loans are offered only to the super-qualified: those with serious investment portfolios they can use as collateral. That means getting a mortgage with zero cash for the down payment. That can carry an additional tax benefit, since the borrower won’t have to pay a capital gains tax on investments liquidated to fund a down payment.

Since current mortgage rates can be as low as 2.5%, since even middling investment accounts often return a higher rate, the difference make this strategy what the Wall Street calls an ‘arbitrage play’.

So what would a homebuyer getting a mortgage in Costa Mesa need to do to qualify for one of these mind-bending loans? In addition to the willingness to put up two forms of collateral (the property and a portion of your investment portfolio), the Wall Street Journal offers some relevant details:

• The amount that can be borrowed against any investment account depends on what’s in the portfolio. Usually up to 95% of account cash; up to about 80% for bonds; between 50% and 75% for most stocks. Withdrawing pledged funds is usually restricted.

• To get the lowest rates, clients who already have significant assets at a particular bank should consider applying for 100% financing there.

• Borrowers still need to pass regular underwriting requirements. They’ll need — high credit scores, a low level of overall debt, and documentation of substantial income or assets.

Of course, getting a mortgage doesn’t require a seven-figure portfolio. If you are seriously thinking about buying a Costa Mesa home, call Weichman Realtors — we’ll get started by getting you pre-qualified.

Buying a House Uses Costa Mesa Market Awareness

Anyone who is buying a house in Costa Mesa — or even just checking up on the market — is likely to find that some of the rules of the game seem to have shifted. Particularly anyone expecting to be deluged by the kind of amazing deals being offered in 2008 and 2009 should see what Weichman Realtors mean.

As the latest housing statistics continue to paint an upbeat picture, at least when it comes to bargain-priced properties, the days of multiple bids and ‘offers over asking’ are back. If you are weighing the advantages of buying a house in Costa Mesa before interest rates and prices rise in earnest, it should be useful to take a look at some strategies that work — and some that virtually never work:

1) Blanket Low-balling – Running around writing up a bunch of low-ball offers is a surefire way to get yourself ignored, or worse, miss out on an otherwise great property. A better approach? Work with a knowledgeable agent whose expertise in Costa Mesa neighborhoods will allow you to check on the most recent comps, then write a serious offer.

2) Dismissing Imperfect Properties – The degree of your success in buying a house in Costa Mesa can depend on starting out with a reality check: only very rarely is a property totally perfect for you and priced absolutely right.

3) Highest and Best – Unfortunately, the tempting low prices listed for some Costa Mesa bank-owned homes also means that it’s increasingly common to encounter the dreaded “multiple offer situation.” If you find yourself there, be prepared to submit your highest and best offer first — you may not have another shot.

This changing market doesn’t mean we are headed into the kind of fever-induced ‘bubble’ we saw in the mid- 2000’s. But for those seeking a deal and waiting for the bottom of the market before buying a house in Costa Mesa, the market does not seem to be waiting. 2013 is clearly the time to jump in!

Costa Mesa Businesses Helped by Housing’s ‘Snowball Effect’

Here at Weichman Realtors we know that the Weather Channel has nothing to do with it. What’s happening up in the ski resorts, likewise. The ‘snowball effect’ being discussed in print and on TV won’t soften anytime soon (even if the groundhog was right about winter being over)..

This is an economic snowball — one that’s gathering momentum following what CNN’s Money website describes as “the best year for U.S. real estate market in five years.” Businesses that stand to benefit from growth in the Costa Mesa housing market are watching closely.

The Wall Street Journal’s snowball report took form in last Monday’s Marketplace section, where the top headline read “Housing Recovery Opens Spigot…Makers of Products From Carpets to Air Conditioners Feel Effects of Rebound.”

It was even more heartening as a counter to last week’s government indications that the greater economy seemed to slow. The housing sector’s performance was so strong it acted as a tonic to its many associated industries: among them, many Costa Mesa retailers.

The snowball effect was noted widely. The company that makes Carrier air conditioners said that orders rose 20%; Honeywell International reported the “first sign of life we have had in a while.”

Locally, fingers were crossed that Costa Mesa businesses will be swept up in the snowball. National suppliers expected that to happen. “Housing is what we see leading the economy out of the doldrums,” according to the CFO of United Technologies Corp. The WSJ reported evidence that Americans are spending more to build and refurbish their properties.

With sales of existing housing registering the largest annual jump since 2004, it should come as no surprise if Credit Suisse’s Daniel Oppenheim proves correct in predicting a 7%-8% rise in home improvement spending. He expects it to keep going for at least the next two years. That’s a pretty solid forecast, and in line with what most observers are saying.

All in all, the boost from the housing recovery is one snowball no one seems to think is likely to melt soon — regardless of what Punxsutawney Phil has to say about it.

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