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Debunking Some Myths About Mortgage Availability

There seems to be a growing chasm between what the public believes to be needed and what is actually needed to qualify for a residential home loan.

A recent survey by Ipsos reported that:

  • Two-thirds of those surveyed believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780.
  • Consumers overestimate the down payment funds needed to qualify for a home loan, with 36 percent thinking a 20 percent down payment is always required.

However, according to American Enterprise Institute’s International Center on Housing Risk’s May First-Time Buyer Mortgage Risk Index (FBMRI), reality is far from perception. The report reveals:

  • 70% of first-time buyer mortgages had a combined loan-to-value ratio of 95% or higher
  • About 20% of first-time buyers taking out mortgages had a FICO score below 660
  • 25% had total debt-to-income ratios above 43 percent
  • The median first-time buyer with an agency mortgage made a down payment of only 3 percent, or $7200 in dollar terms.
  • The median FICO score for first-time buyers with agency mortgages was 705
  • For first-time buyers with FHA-insured loans, the median FICO score was only 672

These numbers contradict the frequent claims that first-time buyers face difficulties in obtaining mortgages.

Bottom Line

Stephen Oliner, co-director of AEI’s International Center on Housing Risk explained the reality of the situation.

“One hears all the time that first-time buyers have limited access to mortgage debt.  But this isn’t true. Many first-time buyers with low FICO scores and little money down are buying homes every month.”

* Source: Keeping Current Matters


This week in Claremont!

Wednesday, June 10

CLAREMONT GARDEN CLUB Feeling the garden effects of the drought? Wishing for more of the three B’s (butterflies, birds and bees)? Local botanist and landscape designer Susan Schenk will talk about how naturally water-wise native plants can help mitigate the habitat loss that is affecting your native wildlife and attract them to your garden. Free to the public. Enter Pilgrim Place from Sixth Street and bear left, right onto Avery Road. Napier is on the left. This is the last meeting for the summer. Meetings will resume on September 9. 6:30 to 8:30 p.m. Pilgrim Place’s Napier Center, 660 Avery Road, Claremont. (909) 621-6381.


Thursday, June 11

TAI CHI The low-impact exercise, Tai Chi increases strength and flexibility, reduces stress and improves balance, and has been shown to lower blood pressure and increase bone density. Taught in the Wu-style of Tai Chi, every class involves warm up, proper and safe instruction of each movement and the progressive movement through the form’s stages. Classes are held indoors and outdoors depending on weather conditions; wear comfortable attire and shoes with flat soles, bring a bottle of water. No experience necessary, all are welcome to attend. Limit 20 students each session. Preregistration is required online or at the admissions kiosk. 9 to 10 a.m. Rancho Santa Ana Botanic Garden, 1500 N. College Ave., Claremont. (909) 625-8767, ext. 224.


Friday, June 12

FRIDAY NIGHTS LIVE Enjoy free live music throughout the Village from 6 to 9 p.m.


Saturday, June 13

HERB WALK Join experienced herbalist William Broen for a garden walk and presentation featuring medicinal and edible plants native to California. Participants will learn both traditional and modern plant uses of approximately 30 species, as well as relevant folklore associated. Program is limited to 20 participants. Please bring a sack lunch or snack and a water bottle. General admission is $25. For ages 12 and older. 10 a.m. to 1 p.m. Rancho Santa Ana Botanic Garden, 1500 N. College Ave., Claremont. (909) 625-8767.

CONCERT “Trees & PhDs,” a concert celebrating the Chorale’s hometown in a springtime collection of new and old songs on community, nature, learning and heritage. All ages are welcome. 3 to 4:30 p.m. Admission is $10 available online at, in person at Rio de Ojas (250 Harvard, Claremont) or admission is $15 at door. Bridges Hall of Music, 150 E. Fourth St., Claremont. (909) 542-8340.

ROD GILFRY: A GIFT OF SONG Internationally known operatic baritone Rod Gilfry is a former Claremont resident. In addition to his accomplishments in opera he is known for his performances in musical theater including Emile De Becque in the national tour of South Pacific and as Sweeney Todd in the Opera Theater of St. Louis. He is a two-time Grammy nominee, singer and actor who has performed extensively in the world’s music capitals. Recent appearances include: San Francisco Symphony The Tempest, New York City Opera Anna Nicole. Wine and hors d’oeuvres with the artist following the concert. This benefit will provide tickets for local children to attend concerts at Walt Disney Concert Hall. 5 to 7:30 p.m. Pitzer College’s Benson Auditorium, 1050 N. Mills Ave., Claremont. Call (909) 621-7769 for more information.

Source: Claremont Courier


In Honor Of Memorial Day

This Memorial Day weekend, the CG Group would like to honor and remember the service members who made the ultimate sacrifice for their country.


More Home Buyers Putting Down Less

recent post by the National Association of Realtors (NAR) revealed that in the months of December 2014 through February 2015, there was an increase in the number of first-time buyers making a down payment of 6% or less as compared to last year:

  • 2014: 61% of first time home buyers
  • 2015: 66% of first time home buyers

While the number of small down payments is lower than it was in 2009 when 77% of down payments were 6% or less, it does show the recent decisions by both Fannie Maeand Freddie Mac to offer 3% down payment options to certain buyers is impacting the market. FHFA Director Mel Watt recently explained why Freddie and Fannie made this decision:

“The new lending guidelines by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3% down. These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices.”

This is great news to millions of purchasers that have been denied the opportunity to own their own home because of the almost impossible burden of saving for a 20% down payment.

Will these programs create future challenges?

Certain pundits fear that low down payment programs will create a wave of foreclosures down the road. Mr. Watt also addressed this concern:

“To mitigate risk, Fannie Mae and Freddie Mac will use their automated underwriting systems, which include compensating factors to evaluate a borrower’s creditworthiness. In addition, the new offerings will also include homeownership counseling, which improves borrower performance. FHFA will monitor the ongoing performance of these loans.” 

Also, the Urban Institute revealed data showing what impact substantially lower down payments would have on default rates in today’s mortgage environment. Their studyrevealed:

“Those who have criticized low-down payment lending as excessively risky should know that if the past is a guide, only a narrow group of borrowers will receive these loans, and the overall impact on default rates is likely to be negligible. This low down payment lending was never more than 3.5 percent of the Fannie Mae book of business, and in recent years, had been even less. If executed carefully, this constitutes a small step forward in opening the credit box—one that safely, but only incrementally, expands the pool of who can qualify for a mortgage.”

Here are the direct links to the guidelines for each program:

Fannie Mae 3% Down Program

Freddie Mac 3% Down Program

Remember, as with any new program, there will be some confusion. Contact your mortgage professional for a deeper understanding.


*Source: Keeping Current Matters


5 Financial Reasons To Buy

We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own differ for each buyer, with many basic similarities.

Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership in his paper – The Dream Lives On: the Future of Homeownership in America.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You’re paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, contact a local professional who can help evaluate your ability to do so.

* Source: Keeping Current Matters


Claremont Craft Beer Walk

hdr_bandb_256Are you getting excited for summer? The Craft Beer Walk is happening in Claremont next month! With over 40 different tasting sites along with several non-alcoholic tasting sites, this is an event you won’t want to miss. Mark your calendars for June 27th. The event is from 4-8 PM and tickets cost $45 dollars in advance.

For more information, click here.



What’s Happening In Claremont This Weekend!

Friday, May 8

OLA FIESTA The OLA Fiesta at Our Lady of the Assumption Church returns to Claremont for a 68th year on May 8, 9 and 10 at 435 Berkeley Ave. Historically among the most popular events in the city, the fiesta attracts 15,000 visitors over the weekend to its renowned international food booths, big carnival rides and live entertainment, including evening headliners The Ravelers (Friday), The ACE Band (Saturday) and The Way Back Machine (Sunday). Ethnic food is prepared by OLA’s own Hispanic, Vietnamese and Filipino communities. Quieter, afternoons attractive to young families and seniors feature a Christian band, The Falconers (Saturday), and Sgt. Peppers Beatles Tribute Band (Sunday). Admission is free. Hours are Friday from 5 to 10 p.m., Saturday 11 a.m. to 10 p.m. and Sunday noon to 8 p.m. Discount ride tickets are available through the parish office at (909) 626-3596 until that Friday at noon. Visit for details.

NATIONAL PUBLIC GARDENS DAY Free admission 8:00 a.m. to 5 p.m.?Rancho Santa Ana Botanic Garden,? 1500 N. College Ave. Claremont.

DEMOCRATIC CLUB Jerry Fenning, local resident and author, will discuss a method to stop importing oil along with the obstacles preventing the solution. The luncheon cost is $17. Attending the program is free and open to the public. Luncheon buffet begins at noon. Program begins at 1 p.m. Darvish Restaurant, 946 W. Foothill Blvd., Claremont.

FRIDAY NOON CONCERT SERIES The Claremont Chamber Choir conducted by Charles W. Kamm present “Madrigals and Folk Songs.” 12:15 p.m. Balch Auditorium, 1030 Columbia Ave., Claremont.

AN EVENING AT PADUA 2015 Claremont Heritage Annual Gala featuring cocktails, dinner, auction, jazz, dancing and more. 6 to 10 p.m. For ticket information call (909) 621-0848 or visit

FRIDAY NIGHTS LIVE Enjoy free live music throughout the Village from 6 to 9 p.m.


Saturday, May 9

RELAY FOR LIFE The American Cancer Society Relay For Life is the world’s largest and most impactful fundraising event to end cancer. It unites communities across the globe to celebrate people who have battled cancer, remember loved ones lost, and take action to finish the fight once and for all. Today, with the support of thousands of volunteers, the American Cancer Society is helping save more than 400 lives a day. The Claremont/La Verne event takes place at 10 a.m. at Claremont High School, 1601 N. Indian Hill Blvd., Claremont with the theme “Relay Around the World.”

BUTTERFLY FESTIVAL Kick off the Butterfly Pavilion season with family activities and educational fun. Included with general admission or membership. The Butterfly Pavilion, which runs through August 2, combines science education with interactive fun to teach visitors about California native butterflies and conservation. 10 a.m. to 3 p.m. Rancho Santa Ana Botanic Garden, 1500 N. College Ave., Claremont.

BOUQUET WORKSHOP A hands-on workshop on making a native-plant themed gift. Production manager Antonio Sanchez will lead participants to gather flowers and foliage fresh from the garden, and then help you arrange it into a lovely bouquet to take home in an upcycled vase. $25 per bouquet: register for the number of bouquets you wish to make. 11:30 a.m. to 1 p.m. Rancho Santa Ana Botanic Garden, 1500 N. College Ave., Claremont.

OPHELIA’S JUMP THEATER Espíritu Gitano, celebrating the flavor, music and passion of Spain featuring performances by some of LA’s top Flamenco artists, musicians, singers and selections of the translated works of Federico Garcia Lorca. This one-night-only event is a perfect way to celebrate Mother’s Day Eve with tapas and sangria surrounded by a gathering of professional international talent for a truly immersive and unforgettable experience. For ages 10 and older. This special event ticket of $35 includes the tapas selection and a glass of sangria or non-alcoholic beverage. Additional wine will be available for purchase through donation. 8 p.m. Women’s Club of Claremont, 343 W. Twelfth St., Claremont.


Sunday, May 10

MOTHER’S DAY BRUNCH Fantastic food, live music and free tickets to the butterfly pavilion. Brunch at 9:30 a.m., lunch at 12:30 p.m. 8:45 a.m. to 2 p.m. Rancho Santa Ana Botanic Garden, 1500 N. College Ave., Claremont.

* Source: Claremont Courier  



4 Reasons To Move-Up This Spring


Spring is in full force; the summer months are right around the corner. If you are debating moving up to your dream home, here are four great reasons to consider buying today instead of waiting.

1.) Buyer Demand is High & Inventory Is Low

Recent numbers show that buyer demand is at the highest peak experienced in years, and inventory for sale is at a 4.6 months supply, which is still markedly lower than the 6.0 months needed for a historically normal market.

The National Association of Realtors, Chief Economist, Lawrence Yun put it this way, “Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer.”

Listing your home today can greatly increase exposure to buyers who are out in force and ready to act.

2.) Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 11.7% (most pessimistic) and 27.5% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting for your current home’s value to increase before selling could price you out of your new home if you aren’t careful.

3.) Mortgage Interest Rates Are Still Near Record Lows

As we reported last week, interest rates have remained below 4% for some time now, and are substantially lower than the rate previous generations paid when getting a mortgage.

The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will rise over the next 12 months.

An increase in rates will impact YOUR monthly mortgage payment. Even an increase of half a percentage point can put a dent in your family’s net worth. Whether you are moving up or buying your first home, your housing expense will be more a year from now if a mortgage is necessary to purchase your home.

4.) It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Have you always wanted to live in a certain neighborhood? Would a climate change be just what the doctor ordered? Would you like to be closer to family?

Bottom Line

If the right thing for you and your family is to move up to your dream home this year, buying sooner rather than later could lead to substantial savings.

* Source: Keeping Current Matters


Meet our newest agent!

The CG Group is very excited to introduce our newest team member. Join us in welcoming Monique Zacarias. Monique is our newest listing agent and sales partner. We are excited to have her on our team!

Monique Zacarias is a Southern California native. She joins the Costantino Group with 20+ years of real estate experience with a strong background in client services. Having worked with some of the top names in real estate, Monique is respected for her tenacious spirit and utmostprofessionalism. Working her way up the real estate ladder, she is well versed in all aspects of the real estate industry. With a reputation for hard work, attention to detail, and outstanding client service, her communication, and unrivaled motivation make Monique a perfect fit for The Costantino Group. She is passionate about offering the utmost in customer service to older clients, first time home buyers and sellers ensuring the highest ethical standards. When Monique is not working, she’s spending time with her family and three beautiful children and traveling as much as she can. She also takes pride in her children’s accomplishments and is dedicated to providing them with opportunities for unlimited growth and potential to succeed.


3 Questions to Ask Yourself Before Buying A Home

If you are debating purchasing a home right now, you are surely getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in real estate. Let’s look at whether or not now is actually a good time for you to buy a home.

There are 3 questions you should ask before purchasing in today’s market:

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances.

A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of the space

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

When looking at future housing values, Home Price Expectation Survey provides a fair assessment. Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

Here is what the experts projected in the latest survey:

  • Home values will appreciate by 4.4% in 2015.
  • The cumulative appreciation will be 19.3% by 2019.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 11.7% by 2019.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by an increase in mortgage rates.

The Mortgage Bankers Association (MBA), the National Association of Realtors andFreddie Mac have all projected that mortgage interest rates will increase by approximately one full percentage over the next twelve months.

Bottom Line

Only you and your family can know for certain the right time to purchase a home. Answering these questions will help you make that decision.


* Source: Keeping Current Matters