Buy, Rent, CD, or Stocks

Mike's Morning Mortgage Update
Buy, Rent, CD or Stocks?

I hope you are having a great day so far.  January is a typically slow month in Real Estate, but that does not seem to hold true this year.  Interest rates are moving up slightly, and so are prices, so you better get in while the getting is good. 
As I sit at my desk today, the Stock Market is at an all-time high, interest rates are climbing, Real Estate prices are at an all-time high and rents are at an all-time high and still climbing.  So what do you do and how do you get ahead when you think everything will pull back soon.  Rent and hold your money in a CD?  I guess you could do that and you could also buy an earthquake preparedness kit and some land in Montana to escape to when all hell breaks loose.  We have seen this all before and we could see this all continue for another 3-5 years or more?  The economy is seemingly getting better and all of the markets are strong.  Companies like Google, Apple, Netflix and Amazon have had their stock prices increase by about 50% over the past year and there is no telling where the prices of these stocks will go from here. 
So if you have money sitting around, and I don't care if it is $1,000.00, $10,000.00, $100, 000.00 or more, you have to wonder where to put your money.  If you are renting then that answer is easy!  Buy a house or condo!  But you are saying to yourself, "Is now the time?"  Here is what I know and then I will let you decide:  I mentioned four stocks above. Let's say you purchased $100,000.00 in those stocks last year on January 23rd.  Today you would have $150,000.00 and you would feel pretty good.  Now if you would have purchased a house for $500,000.00 with that $100,000.00 down then your property would have gone up by $40,000.00 (assuming an 8% increase which happened in most areas) and the balance would have gone down by $7,000.00.  Both are great investments over the past 12 months.  If you purchased a CD last year and you found a bank to pay you 3% then you would have a 3% profit! 
Let's say you had $20,000.00 and you bought a house last year instead of buying the stocks.  The house was still $500,000.00 and it is still worth $540,000.00 today!  You would have made $47K on a $25K investment!  CRAZY!  That is 188% profit!  We don't know what is going to happen going forward, but we do know that the CD will get us somewhere in the 2-3% range.  There is low inventory in the real estate market for sale and for rent, and it does not look like it will change soon especially if the stock market and the economy keep going strong.  Let's see where 2018 takes us, but don't be a Monday morning quarterback and say we should have done this or we should have done that!  Act now!   
Interest rates are still rising.  These are the highest levels of the year, but rates are still great!  I hope these are helpful as your buyers are looking for property:
  • 30-year fixed conventional 1st mortgage with 20% down - 4.25% (4.310 APR). Loan amounts up to $453,100.00 = $2228.98
  • 15-year fixed conventional 1st mortgage with 20% - 3.75% (3.851 APR). Loan amounts up to $453,100.00 = $3295.04
  • 5/1 ARM 1st mortgage with 20% down - Fixed for 5 years and then becomes variable - 3.875% -  (3.931 APR) Loan amounts up to $453,100.00 = $2130.64
  • 7/1 ARM 1st Mortgage with 20% down - Fixed for 7 years and then becomes variable - 4.000% - (4.056 APR) Loan amounts up to $453,100.00 = $2163.17
  • 10/1 ARM 1st Mortgage with 20% down - Fixed for 10 years and then becomes variable - 4.125% - (4.184 APR) Loan amounts up to $453,100.00 = $2195.95
  • 30-year fixed 1st Mortgage FHA loan 3.50% down - 3.875% (4.897 APR). Loan amounts up to $453,100.00 = $2167.93 + $326.56 PMI = $2494.49
  • 30-year fixed 1st Mortgage VA loan 0% - 3.875% (4.033 APR). Loan amounts up to $453,100.00 = $2130.64
  • 30-year fixed 1st Mortgage Jumbo loan 20% down - 4.250% (4.263 APR). Loan amounts up to $3,000,000.00 = $14,758.20
All of the above are based on a 740 credit score.  Rates are subject to change without notice, your mileage may vary! 
Please let me know if you have any questions or concerns.  I am here to help and I would love to hear from anyone you know who needs a home loan.  Have a great day and my Office # is 661-260-2970 Xt. 2222 and my cell is  661-714-6258.  
If the above box did not appear the rest of my info is below:

Mike Meena
Augusta Financial
25129 The Old Road, Suite 350, Santa Clarita, CA 91381
Phone  661-260-2970 Fax 661-554-7121
Email -


David has been my real estate agent twice and has been excellent each time. This time we were selling a condo and David helped us...
- Chris M, Santa Clarita

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