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A Word from the Road…

The moment you make up your mind that your actions will make a difference, is the moment that it will make a difference in your actions.

~ Mike Baker

CEO, The Mortgage Coach

[pic]FROM THE OFFICES OF YOUR NAME HERE • 2nd Quarter, 2003

Your Source for Real Estate and Finance Information!

Licensed Broker Your State Dept. of Real Estate.

Your Name on Bonds:

Are interest rates creating a housing bubble?

By Your Name, Title

Over the last 3 to 6 months, a significant amount of our client base has asked me whether I think that it is a good idea to be investing in real estate. You may be surprised to hear my response but I believe that investing in real estate right now would be like investing in the NASDAQ in February of 2000!

Let me first start by taking you back about six months ago in November of this past year. My family and I were on vacation in Cancun, Mexico. I ran into a gentleman at our hotel three times in a forty-eight hour period. This gentleman, who is also staying at the hotel, is obviously very affluent and well off. One afternoon while he and I were wading in the Caribbean, I asked him what he did for a living.

“I am a real estate investor,” he responded. “I have been in the profession for twenty-five years.”

Over the last 2 1/2 years or so, my wife Anna and I have time and time again referenced the fact that we feel that we should be investing money in real estate, considering that we have a tight finger on the pulse of that industry, given what I do for a living. The craziness of my work week has never allowed for me to spend the kind of time that I would like to invest in researching the various opportunities that exist in our marketplace. At the time of this writing, we currently own a couple of pieces of Real Estate but have never delved heavily into this type of investment vehicle.

During my next hour and a half of wading in the water with John and talking to him about his profession, I learned a very valuable lesson. John informed me that the real money to be made is in the appreciation of the property, and that I should pay little or no attention to whether the monthly cash flow was positive or negative. He continued, explaining the mechanics of putting together real estate investment deals.

What is more important? You can buy at the high end of the market just to get a great interest rate, while knowing that the value of the property is likely to drop by 25-30%. On the other hand, you could buy property at the low end of the market when rates are inflated, but do that knowing that you can refinance at some

(See RATES, continued on Page 2)

Your Name Here, Title

YOUR COMPANY NAME

Address Line 1

City, State, Zip Code

Phone: (000) 000-0000

Email: YourName@

PRSRT STD

U.S.

POSTAGE

PAID

Your City, State

Permit No. 000

What’s Inside:

Did You Know? 1

Your Name on Bonds 1

Rates 1

Creative Cuisine 2

Book Review 2

What’s New With

Your Name Here? 2

Trivia Challenge 3

Personal Fundings 3

Thank You! 3

From The Road 4

Did You Know?

In his famous televised testimonials to Congress in 1986, what was the reason that Oliver North gave when asked why he needed to install a $50,000 security system in his house using government monies?

Answer: He was receiving terrorist threats from a young Saudi Arabian rebel named Osama Bin Laden!

Rates:

Conforming Jumbo

30 – Year Fixed High 5’s High 5’s

15 – Year Fixed Low 5’s Mid 5’s

7 – Year Fixed* Low 5’s Low 5’s

5 – Year Fixed* High 4’s High 4’s

3 – Year Fixed* Low 4’s Mid 4’s

T-Bill ARM Mid 3’s Mid 3’s

(Index Value: 1.32)

COFI ARM Low 5’s Low 5’s

(Index Value: 2.537)

MTA ARM High 3’s High 3’s

(Index Value: 2.066)

The interest rate represented here is at one point.

* Amortized over a 30-year period. Following its fixed term, it converts to a 1- year Treasury Bill adjustable rate mortgage for the remaining term of the 30-year loan.

My very strong belief is that this housing market is being held by the dramatically low interest rates we see now, and people can afford to get into the home of their dreams at a monthly cost they never thought they would be able to secure.

If you are pondering the thought of moving into a new home in the next couple of years, I would consider doing it now and get yourself locked in at a very low interest rate.

Please understand, when interest rates go up to 7.5% or 8% in the next couple of years (which I can assure you, they more than likely will do so) it should have a dramatic impact and will create a slow-down in the housing market. Translation? The bi-product of higher interest rates and a slow-down in the housing market will result in property values having to adjust accordingly in a downward direction to stimulate new sales.

Let’s get back to my friend John’s philosophy. If the investment strategy for income property is to buy when the market is beaten down, as it was in the early 90s, (regardless of where interest rates are), and then to sell when values are high, that would mean that right now is not the best time to buy investment property.

There is an old saying from Baron Rothschild, one of the wealthiest men in Britain during the French-English War, “You buy when there is blood on the streets.”

I don’t know about you, but I haven’t seen any blood in the streets of the housing market in Southern California in quite some time.  %

What s New

(Continued fro■

What’s New

(Continued from Page 2)

Continue your copy here for What’s New…

$ 3 0 0 O F F !

This coupon entitles you or a friend to $300 off your closing costs when obtaining home financing (purchase or refinance) through Your Name Here

at Your Company Name Here.

Loan Officer Name Here

(000) 000-0000

Company Name Here

Real Estate Broker, Your State Department of Real Estate.

Coupon must be presented at time of application.

Limit one coupon per loan transaction.

Not valid on loans currently in process or with any other

discounts or offers.

[pic]

Chocolate Fudge Cake

Preheat oven to 350 degrees. Grease and flour bundt pan.

Ingredients:

• 1 box chocolate cake mix

• 4 oz. chocolate pudding mix

• 1 C milk

• ¾ C oil

• 3 eggs

• ½ pint sour cream

• 1 bag chocolate chips

• Powdered sugar

Preparation:

Mix first 6 ingredients together in a large bowl, using a mixer. Add chocolate chips and stir by hand. Pour into prepared pan and bake for 50 minutes, or until a toothpick inserted into the cake comes out clean. When cake has cooled, turn over onto a plate and sprinkle with powdered sugar.

[pic]

From the Desk of Your Name Here

In this section, write a few paragraphs about what’s new with your business or personal life. Study the section in on EXPOSURE MARKETING to help you with this section of the newsletter.

(See WHAT’S NEW, continued on Page 3)

Personal Funding:

Since our last issue:

Number of loans funded:

Dollar volume:

Year to date funded:

Dollar volume:

Thanks to You!

As always, we wish to thank our clients who are kind enough to refer more business to us. This quarter, our thanks go out to:

List all clients who sent you referral business here.

[pic]

Win a night on the town by answering our Trivia Challenge correctly!

Trivia Challenge Question:

Prior to the Eiffel Tower being built in France in 1898, what was the tallest man-made structure in the world?

Call in with your answer on our Trivia Challenge Answer line: (000) 000-0000 by ENTER DATE FOR DEADLINE HERE. The names of all those who call in with the correct answer will be put into a drawing. The prize: Dinner and movie tickets for two!

You must call the number above to qualify.

Congratulations to WINNER NAME HERE, winner of last issues trivia question:

“The Dow Jones Industrial just finished its third consecutive losing year in 2002. Only once in history has the Dow had four consecutive losing years. Name those 4 years.”

Answer: 1929, 1930, 1931 and 1932.

(See WHAT’S NEW, continued on Page 3)

Rates

(Continued from Page 1)

point in the future.

Before I continue, let me say that purchasing real estate takes on two different forms. Buying an investment property is an entirely different strategy than buying the home that will be the roof over your head.

If you have an opportunity to buy a home that you intend to live in, right now is an outstanding time to make a purchase. From a cash flow perspective, you can enjoy the benefits of a very low monthly payment, and yet have a very attractive living environment at the same time.

In Alan Greenspan’s recent testimony to Congress, he indicated that he did not feel as if there was a proper analogy between the stock market bubble of 3 years ago and the housing bubble that we currently have today. With all due respect to Mr. Greenspan, I have to pose a question. If the majority of American homeowners have an interest rate of 6% or lower on a Fixed Rate basis, what motivation will those homeowners have to sell their houses and move up when interest rates go back up to 7.5% or 8%, given those rates are still considered to be historically low levels?

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