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Market Commentary 6/26/20

Posted on June 26, 2020 by Damon Germanides

Major U.S. indexes fell this week as Covid-19 cases surged, putting the economic re-openings at risk. The resurgence of Covid-19 overshadowed what had been positive consumer-related data this week. Consumer spending, which had been on the upswing, slowed down. The notion of a quick recovery is unclear and the rise in infection rates suggest the recovery will be choppy. Should the economy stall, we fully expect there will be more Fed stimulus and lending programs to help individuals and businesses get to the other side.

Home buying and mortgage applications, at least in Southern California, have seen a major uptick. We are encouraged by this activity. Housing has been sheltered from this pandemic and is in a much better place than other real estate sectors, such as commercial properties and retail. Our L.A. office has been receiving a surge in applications as borrowers’ businesses recover and interest rates remain at historical lows. While we don’t expect rates to go too much lower, if equity volatility continues to increase, we may see rates drop.

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These are the opinions of the author. For financial advice, please talk to your CPA or financial professional.

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(1) Disclosures

(1) No Tax Return loans and foreign national loan products require other forms of income documentation and asset verification in lieu of tax returns. Not all applicants will qualify. Some products we oﬀer may have a higher interest rate, more points or more fees than other products requiring more extensive or different documentation. (2) Minimum FICO, reserve, and other requirements apply. Contact your loan officer for additional program guidelines, restrictions, and eligibility requirements. Rates, points, APRs and programs are subject to change without notice. Loan to values (LTV) are based on appraised value. Actual closing times will vary based on borrower qualiﬁcations and loan terms. All loans are subject to credit approval. (3) With an interest-only mortgage payment, you will not pay down the loan's principal balance during the interest-only period. Once the interest-only period ends, your payments will increase to pay back the principal and interest. Rates are subject to increase over the life of the loan. Contact your Insignia Mortgage, Inc. loan officer to determine what your payments might be once the interest-only period ends. (4) With an adjustable rate mortgage (ARM), once the fixed rate period ends, the loan payment will adjust after an initial period and then adjust on a regular basis as set forth in the loan documents. For example, a “3/1” loan will have an interest adjustment 3 years after the loan closes and every 12 months thereafter. Also, the loan will be subject to annual and lifetime adjustment caps. Contact your Insignia Mortgage loan officer to determine what your payments might be once the fixed rate period of the loan ends. (5) Insignia Mortgage, Inc., is a real estate broker licensed by the CA Bureau of Real Estate, DRE #01969620, NMLS #1277691

(2) Disclosures

(1) Minimum FICO, reserve, and other requirements apply. Contact your loan officer for additional program guidelines, restrictions, and eligibility requirements. Rates, points, APRs and programs are subject to change without notice. Actual closing times will vary based on borrower qualiﬁcations and loan terms. All loans are subject to credit approval. (2) “Loan to Cost” (LTC) is defined as the acquisition price of the property plus the cost to build as determined by a bank appraisal. Contact your loan officer for additional program guidelines, restrictions, and eligibility requirements. (3) With an interest-only mortgage payment, you will not pay down the loan's principal balance during the interest-only period. Once the interest-only period ends, your payments will increase to pay back the principal and interest. Rates are subject to increase over the life of the loan. Contact your Insignia Mortgage, Inc. loan officer to determine what your payments might be once the interest-only period ends. (4) With an adjustable rate mortgage (ARM), the loan payment will adjust after an initial period and then adjust on a regular basis as set forth in the loan documents. For example, a “3/1” loan will have an interest adjustment 3 years after the loan closes and every 12 months thereafter. Also, the loan will be subject to annual and lifetime adjustment caps. Contact your Insignia Mortgage loan officer to determine what your payments might be once the fixed rate period of the loan ends. (5) Insignia Mortgage, Inc., is a real estate broker licensed by the CA Bureau of Real Estate, DRE #01969620, NMLS #1277691.