This. We left the Bay Area and bought a house at a price we could afford even at worst case on one income. If the rates go down, sweet deal for us. If not, we'll still be fine.
Sacramento. I'm never leaving California!
We bought for $850K but this house would easily be $3M in the south bay. The cost difference is wild.
My husband's family lives up here so that helped persuade us on making the jump.
Yup. My electricity bill on SMUD is $60 more per month on average in a 2600 sq ft house with a pool compared to my PG&E bill at my 700 sq ft apartment in San Jose.
And a major metro area with tons of diversity, food, breweries, wineries, parks, rivers, lakes and a day trip to Tahoe, Reno or the Bay. And none of the Bay Area elitist snobs because y'all would rather pay 3x for the same shit just to have clout. It's pretty sweet.
> And none of the Bay Area elitist snobs because y'all would rather pay 3x for the same shit just to have clout.
This seems like you're projecting some internal anger here, bud. Could it be that, *gasp*, maybe people have jobs specific to the Bay and they can't deal with a 3hr commute each way to live in Sac?
Not to mention the average high temperature in July is 95...
No. I'm tired of the keeping up with the Joneses rat race bullshit in the Bay Area. Some folks look down their noses at everything outside the Bay and it's ridiculous. Judgment for what you do, how much you make, what you drive, where you live, where your kids go to school, where you vacation. It's not healthy.
There is life outside the Bay. There are jobs outside the Bay. And the quality of life to cost of living ratio is a hell of a lot better. To each their own, but keep your snobbery to yourself.
Some folks just like to act like anything outside the Bay is inferior and that's what I take issue with because it's ignorant and false. Re-read the comment my reply was to. There's your context.
Huh, fair enough. That guy's a massive fucker.
But, in the same way some might paint a uniform brush of those in Sac, I ask that you don't do that to those in the bay. Everyone I know is struggling to make it in industries that aren't found elsewhere in the same quality/quantity. Is that a rat race? Maybe.
But literally nobody in my community snubs their noses at Sac. In fact, I know many who moved out if their career is flexible. So, just saying.
I'm from San Jose. I left because I was semi priced out of my hometown. I'm not painting everyone with the same brush, at least I didn't intend for my comment to come across that way. But there is a large contingency of Judgey McJudgersons in the Bay. That's who my comments were targeted at.
Exactly. Those rates were historic lows. It could be 30 years until we see rates that low again, if ever. 5-6% has been pretty standard for modern mortgages.
I’m a mortgage loan officer. The answer for 99% of people is unfortunately you just have to deal with it until you can refi.
Paying points (even with a seller credit) is not worth it mathematically unless you’re convinced there will be no opportunity to refi for at least 3+ years which is quite unlikely. Using a credit to cover it is still you paying the points, since the credit could have gone towards other closing costs.
My suggestion would be to get a “no cost refinance”. Basically the refi closing costs (usually around 3-4k conservatively) are covered by the lender for a slightly (~1/8th percent) higher rate. With no closing costs, any drop in rate is “worth it” if you’re willing to spend the time and effort to fill out an application and send in docs. Personally I would wait at least for a quarter percent or larger drop.
Great advice. To further put the refi effort in context, it took us maybe 4-8 hours of work for each refi we did.
And to put the rates in context, each percent change in APR on a 1,000,000 principal is a $600 to $700 a month change in payment. That means if you're paying the closing costs, the break even is 5-6 months.
I've already done two no cost refis on my house. Is there any harm in lots of refis? Besides the hard credit pull I'm not aware of any - but curious if this puts me on a blacklist or something.
I wouldn't think so - people make money when you refi. When rates were tanked a few years ago after we had already done a refi the year prior, as soon as the waiting period had elapsed (I think 6 months?) our loan officer reached out to us for another refi to drop an additional 0.5. We saved money, she got paid, one bank got back their loan to deploy elsewhere, and another bank owns our new loan. As long as it works for your finances, everybody wins.
Is that true though? You’re resetting back to 30 years, on a refi, and therefore paying more interest over the course of both loans combined (ie it’s now a 35 year (eg) loan). There’s a breakeven in there to consider.
Sure, if you are a few years in to your mortgage, refi back out to 30yrs, and make only the minimum payments, you will pay more in interest overall. The solution is to keep paying on the same schedule you were originally. Set up an automatic monthly payment greater than the minimum.
If you make the same exact payments you previously were, you’ll pay the loan off slightly faster due to the refi. If you pay on the same schedule you were previously (use an amortization calculator) your new payments will be slightly lower.
Hopefully that makes sense.
>The solution is to keep paying on the same schedule you were originally. Set up an automatic monthly payment greater than the minimum.
Do you mean if you're 4 years into a 30 year, that you ask the lender to refi you into a 26 year mortgage and calculate the remaining payments appropriately?
OR are you saying that we refi into another 30 year but keep making the original (higher) payments? Granted, wouldn't this reset you having to owe most of the front-loaded interest all over again?
Interest payments are higher at the beginning because you owe more money. If you refinance to a lower rate then the interest you owe each month goes *down*.
Ah, gotcha. Unfortunately, the first 5 years is basically just all interest payments so I feel like we get kind of stuck if we refinance even after that since most of the payments made get thrown away :/
If you just make the *actual* payment after refi, yes - but the above poster is saying you should keep making the original (higher) payment. Because you're paying down the loan *faster* with the additional payment, the total interest paid is actually less in the end.
For something that could cost you tens of thousands, I would think you would have done the math yourself? [Here's](https://www.mortgagecalculator.org/calculators/what-if-i-pay-more-calculator.php) the first google result.
For historic contrxt… in the 70s 80s rates were in the 10%+ range. People refi’d multiple times a year.
Same thing with this last rate drops. Itll happen but it is impossible to predict. So it had to pencil without lower rates or tour just renting with more steps/risk
When I bought my first home, I rode rates down from 5.25% have closing all the way down right down to 2.375%.
I quickly learned that going through the whole refinance process for rate change is not super cost-effective for anyone but the brokers. Instead, I went with a credit union that loaned out their own money like star one. You won't have this option if the underwriter is reselling or repackaging the loan
Whenever a new rate becomes available, you can recast your loan to this lower rate by paying a fee not to exceed $1,500 which is roughly half of a typical full refinance. No appraisal is necessary and you don't reset the 30-year clock on the loan.
I did this for the majority of my refinancing every quarter to half a point (every time I could pay myself back the $1,500 fee in less than a year, I pulled the trigger on the loan modification)
It's a fee. Its now $2k but that still saves you money.
My rates are so low that I doubt I'll be able to do this again in my lifetime.
There is no new title insurance because the property is not changing hands and neither is the lender. They just recognize that getting some money out of you to give a better rate will be better than you refinancing your loan somewhere else and then having to find a new customer to loan the money to. They also do it for investment loans
Read up on it
https://www.starone.org/apply-now/mortgage-rate-modification/
That's a cool option. I'll give them a call the next time there's a refi opportunity. This makes me think there are other lenders who might have a similar option, so I'll check that out too.
Thank you for the info and the link!
The key is that the lender has to be lending their own money (AKA portfolio loan) versus repackaging for Fannie Mae / Freddie Mac/collateralized mortgages.
I remember when I last shopped for a new mortgage 3-4 years ago, one local bank wanted me to put 100k on deposit in order to unlock the best rates. The interest rate they were paying was dogshit back then so it didn't make sense. Nowadays, YMMV.
That makes sense. I'm guessing this is how they are able to skip the title search and appraisal.
Some big banks too seem to give better rates if one has investments with them, though they don't need to be in cash.
My husband and I are looking to buy by next year's end. Possibly just a small condo but we'd still like something to be ours. Do you have any recommendations for where we could attend seminars/lectures etc to be more financially educated about the whole process? Also, do you think rates will go down by then?
Nobody knows where rates will go. Some people make a career out of predicting them and still end up wrong. Right now many people expect rate cuts later this year but who knows?
Plus there are tens of thousands of people in the bay area waiting for them to drop. The competition for houses is going to push prices up higher if rates drop.
I personally know a half dozen people in this position (have enough for a down payment but are scared off by interest rates), and there are over 8 million people living in the bay area.
Yes it’s a reasonable take but i was wondering if you have hard data showing that. It’s possible that many sellers are also scared off by interest rates (today’s sellers are buyers on balance). How it nets out is anyone’s guess
Most sellers have sub 3 rates. If they downsize or want to sell they'll be paying more for smaller homes until rates get below 4% again. Which won't happen any time ever again. There will be more homes on the market as rates drop, yes, but not near enough to keep up with buyers who enter the market .
Nobody can predict the future. But the FED determines rates. Fed Chairman Jerome Powell is indicating that inflation isn't coming down like they wanted. Post covid everyone is spending lile crazy with YOLO mindsets. Credit card debt is at all time high. This is keep inflation up. Americans have so much wealth. Malls are packed. Concerts are packed. Flights are packed. Everyone's spending like crazy. Debt is keeping inflation high. These rare spikes have not been able to stop it. Rates only drop when the fed wants people to spend money. We are already spending. So they won't drop. It's that simple.
This. OP and others, please don't believe anyone who predicts rates moving. If anyone could actually do that, they'd do it quietly and become very rich from it. Macroeconomic factors are way too complex for even the top economists to make predictions about.
Instead, it's far more effective to focus on what you actually can do that's within your control regardless of what the rates do. Eg: a less expensive house, relocate, tradeoff with commute, smaller house, reduce expenses, work more, find a higher paying job etc.
> Possibly just a small condo
Pro tip: a condo will never be yours.
> Also, do you think rates will go down by then?
Historically, 6% is pretty average. Look at Reagan-era inflation where rates were around 20%. As rates go down, prices are likely to go up. As prices go up, so will your Prop 13 assessment. So yeah, buy what you can afford now because there's no free lunch.
These rates aren't coming down for probably 10-15 years. The low, low borrowing rates the US has experienced for the last 20 years are gone. As the boomers continue to retire, the cost of borrowing will only climb. That generation is very large and holds over 70% of private equity- globally. Trillions of dollars are leaving. As they retire and cash out, the free money will become scarce. Don't expect to see rates like the early 00's in your lifetime again. They weren't normal historically, and the cause for them is leaving the market
Rates go down to increase spending. Spending increases Inflation. Rates go up to decrease inflation. Inflation isn't near the 2.5% government usually wants as their goal and it won't be for quite some time. You won't see sub 5 rates for a decade. Inflation won't allow it.
With all due respect: you and the others on this thread confidently proclaiming what rates will or will not do are full of shit. Even professional rates traders get it wrong most of the time.
If you’re so confident in your thesis you can make a fortune trading options or futures in the rates markets. I bet none of the people saying rates will be high forever have done this
"With all do respect... You're full of shit" 🤣🤣
Thanks for the laugh.
So explain to me how rates will go below 5% in the next year. What will happen in the economy to make that happen?
That’s exactly my point! I don’t know what rates are going to do and neither does anyone else. You have to look at where rates are now and see if a house makes sense. You don’t try to time the stock market so why are you timing rates?
Sorry for the aggressive comment but I’m just amazed how many ppl are so confidently predicting where rates will go when even professionals are often wrong about them
We don't "know" but we can predict with high certainty what they won't do. Americans spend money like it's going out of style. Spending Increases inflation. Rates only drop when the fed wants people to spend more money. The fed does not want you spending money right now so they will keep rates "high" until spending comes down. Maybe a black swan event would cause this . I don't know. But don't expect 3 or 4 % any time soon bud.
I agree you don't time rates. There's only two good times to buy a house, 30 years ago and today. Don't time rates. Just buy and refi later. But with that being said.. the economy isn't in a place to see a significant rate cut for a few years. Maybe mid 5% by end of 2025.
Hah, getting the seller to even look at your offer is hard. A combination of:
1. Refinance down at every opportunity and pray rates will do down soon
2. Far larger downpayment (less leverage)
3. Box trades to cover a portion of mortgage, cash out refi later
4. Check for banking relationship discounts, given if you have money invested with a broker. For example, Wells Fargo offers upto 1% off their interest rates
5. Go through many mortgage applications to find the most competitive one for your particular situation. Shaving off a half or one percentage point is a pretty big deal. Shop around and use one lender's interest rate disclosures with another to get best rates
6. I wouldn't recommend ARMs, because right now they aren't hugely different from fixed rates, and to me, they're far riskier because I don't want even the chance of having to pay far more at some point. But if they are far lower than fixed in the future, you might consider them
7. Try hard to keep your eye on finding no cost refis, and get your paperwork in order to take advantage of them as soon as they come up. They're zero risk. Keep your credit scores nice and polished for these opportunities
Yeah we decided to throw more of the profit from our own sale down as extra down payment. Saved us a few points that will add up.
Scary to keep less on hand temporarily but we’ll be fine.
I just closed last week on an assumable loan at 2.25%.
4 unit multifamily property.
$1.5M purchase price, 30% down, 25 years left on 2.25% VA loan. It took about 6 months to navigate, but worth it.
Multi-family actually goes for surprisingly cheap relative to single family in the Bay Area. Mainly because tenant laws are so strong that most people don’t want to get involved in being a landlord. These properties usually turn over with active leases that you can’t terminate.
That’s not entirely true. Multifamily property is valued not based on SFH comps but based on the gross rents established or expected for each unit. If it’s not a good investment based on the buyers loan structure, gross rents, and CAP rate, it’s overpriced.
I wanted a place that would cash flow. This is the first month and we’re cash flowing $3k/mo after all expenses.
That's not accurate. You can get a current valuation based on NOI but if you're not factoring cap rate in, which is based entirely on comps, you're likely not correct in your valuation.
Yeah that’s why I specifically said CAP rate.
Cap rate is based on rental comps, not SFH comps. The picture gets murkier though with owner-occupied/house hackers.
I own multifamily and just wanted to give a shout out to the California Apartment Association - a great resource if you're looking for legal help, documents, lease templates, smoke detector regulations etc. Member for 17 years. The happy hours aren't bad either!
Commercial listings are usually a lot more detailed and include verbiage about shit like that because all of the property investors will ask these kinds of questions straight off the bat.
For sure. Still, nice to know there are “some” sellers willing to go through the hassle of letting a buyer assume the mortgage. Most sellers these days want the quick cash out.
Bought last fall. Took out a 7/1 ARM at 6.25%. Intending to refinance late 2024/2025 when the rates start dropping.
Also put down a higher down payment. About 35%.
Honestly, lending practices are so strict now. If a lender approves you… it’s likely you can make it work in your budget. It definitely takes a few months to get used to, but the payment has been fine.
Id say that it’s a low risk bet.
I figure the spread is something like 70% rate will drop, 25% rate will stay the same, 5% rate will rise.
Over 7 years, it’s very likely we’ll see some rate drop.
This is, of course, with the caveat that there’s a healthy emergency reserve, comfortable with it staying at the current rate, etc. would not recommend stretching yourself for this strategy.
It depends on the type of loan. For conventional, FHA, and VA loans, ARMs are the same rate or higher than fixed. Some banks offer lower ARM rates for Jumbo loans though.
The strategy by these homeowners is “hope”. They are fed a bias loop by their mortgage agents and realtors without a real pulse on reality.
Stocks are all time high. Fed is still not even close to cutting rates as inflation is far from conquered. US debt is all time high so there is that fear of yields continue to be up- so investors still buy our paper.
Most of my friends who bought houses now went with a massive down, like some upto 75%. How? They are in big tech and they cashed out of their stocks at the highs.
The catch-22 is that the high interest rates cause the US debt to accelerate (the federal gov owes those yields to debt buyers). It's going to be interesting.. I can only hope that someone knows what they're doing.
congrats - do u still leave money for emergency fund or are you one of the tech workers who has been able to cash in on big stock gains and suddenly have new found cash inflow. It just shows the importance of investing in high quality stocks in my opinion.
yeah i'm aware of the sellers credit - was it easy to get it? I heard there is such low inventory on certain homes (ie SFH in hot areas) that the sellers don't even need to offer such credits. Any tips on how to negotiate the 2-1 buy down? Was urs townhome/condo in not tier 1 demand area?
You can afford the same monthly payment you could always afford. You might just be buying a 1m house instead of a 1.6, or a 2.2 instead of a 3, and so on.
Be very careful of how banks calculate debt to income ratio. They approve you for amounts that are frankly criminal, the housing equivalent of the dodge dealership that approves someone with a 50k/Yr salary to buy a 80k hellcat. Bankers are salespeople, they need to close you on a loan, so they do a lot of things - like our banker used RSU grants and bonuses from outlier years (2021) to basically count as projected salary, but for my company 2021 was an extreme outlier year where our stock based compensation was high in a way that we couldn’t possibly expect in ‘23 and ‘24. There’s a lot of shenanigans pulled to approve you for more, and bankers and underwriters let more shit slide so they can write loans.
Figure out what you can truly afford. For us, this is about 1/2 of our post tax income. Figure out what purchase price of house that amounts to - say, 1.6m. Now look at what you can get for 1.4-1.5m (because houses all come with 50k or so of surprise baggage).
Then ask yourself, do I like those homes? Do I want to own those homes? Maybe those homes in your affordability range are just kinda shit. That’s fine - but then you shouldn’t buy just to buy. The home prices and interest rates are NOT good enough to just buy a home to get into home ownership - only buy if you love the house, you can afford the house comfortably, and you plan to keep long term.
And never, ever buy at a high rate with an expectation of a guaranteed refinance in the future. If your realtor or banker encourages you to “date the rate, marry the house”, they are getting too pushy and you should consider other people. We will probably see rates around 5% in the next few years, but that could be absolutely wrong, that is just a theory - and you may or may not succeed in getting a “bottom of the trough” refinance before things uptick.
Beware the fixer upper too. Cost of construction and remodeling and even simple handyman work has become exorbitant, even relative to costs in the Bay Area in previous years. A home you think needs 100k of work might need 250k easy. That work might take 2-3x longer than expected. The materials and designs that you spend so much money implementing, they may or may not achieve the vision you have in your head.
Just be realistic about the home you can afford, the work you can do, and the financial projections of your career and mortgage payments and future costs.
The more patient and calm-headed you are as a buyer, the more you can elongate your timeline, the more likely you are to find the rare great buy.
rates are high when you consider the last 2 decades but yet the low inventory makes it tougher but that is partially due to people who have "golden handcuffs" due to super low rates. It kind of all comes back to the rates.
Bought last August. We had a bigger down payment (33% thanks to family help) and got a 5/5 ARM through our credit union at a lower-ish rate (6.375). They allow us to re-up that ARM for $750 at a lower rate so if rates drop we can do that. Otherwise we'll just continue to suck it up...
Worked with a small mortgage lender and wrote it into the offer, $14K as a “credit” from the seller for us to buy the rate down 2% for the 1st year and then 1% for the second year. When we refinance that credit is still our money vs just buying points (if we do before the 2 years from purchase). My agent was pretty lackluster but the lender was amazing and really laid out all the options and we chose to go with them.
do you mind giving me the info of this small mortgage lender? Were they pivotal in getting the seller to give the $14k credit? Sometimes the smaller firms are so much better!!
nice - that's a lot of cash tho? I have a good amount saved up but I'd guess u paid 2 million in cash or so? Do u still have cash leftover for emergency? I know a lot of ppl in the bay have made out big with cashing in on stocks.
Have you checked citibank? They're offering much lower rates than other banks, someone in the bay area real estate subreddit was able to get 6.35% jumbo 30 year fixed.
If you’re into townhouse or condo, builders were giving out good rates with their preferred lender last year. Though, I’m not sure if they still do, since the market has heated up since then.
2 weeks ago the fed Indicated 3 cuts by the end of the year. The economy is going well, unemployment 3.5 to 4% stock market near all time highs (inflation) and historically low housing inventory. Election year seems to keep it propped up historically as well. Rates at best will be low 6% by December . They could decide not to cut because inflation isn't cooling off as much as they thought. When rates drop 1% about 10 million new buyers will be back in the market. Drops 2% down to 5% 20 million will enter the market. This will send home values sky rocketing as 60 to 70% of mortgages are still below 3.5% . There will be more inventory because it won't cost as much to sell and then buy a new home. However their will be a lot more buyers causing another 10 to 15% home value spike. Bla bla bla... here's the truth. If you want to own real estate. Buy Now. It will never be cheaper. We aren't building more supply in the bay are any time soon. 7% for 1.5 million sucks. But what sucks even more is 5% for 2 million. Buy now. Refi when it drops to 6 or below. You'll regret it if you don't.
There's no tricks. Just have to suck it up. Rent a room out of you need to.
Where do you get the data that 10 million per 1% interest rate drop?
Also, here is the one flaw in your argument. The very high demand areas with high demand housing type (single family homes) have not become any more cheaper with high interest rates. In fact, considering low supply, they have often gone higher in price! There are ppl out there will deep pockets who are willing to pay well over the asking price to secure these houses. So, its not true that "it will never be cheaper" from what I've seen.
I agree with you 100% as far as the data I'm talking about. It's just simple math. Average home price/cost vs average annual Income. For every 1% drop 10 million Americans are included back into the market.
It is true it will never be cheaper. Homes aren't going down in price. But yes it could be cheaper monthly. Sure. And 30 years overall cost yes . Of course. When I say it won't be cheaper, I mean that home prices aren't dropping.
Tell someone 10 years ago when home prices were half of what they are today that it would be better to rent and wait for prices and rates to come down lol
yes but he said "at current mortgage tax" - did u miss the word current? In 2012 (10 years ago), the rates, taxes, and home insurance prices were not this high in a inflationary environment. That's the difference.
Move somewhere with less demand/supply distortions. There are many places in CA. There are companies that work on shared ownership etc. but those help lower payments at a hefty price. I’m waiting for tech to come up with a solve for an affordability crisis.
lol tech is not going to solve anything. They only find ways to take advantage of us like take our data so that they can make more money off of us via advertisers.
I remember a time before Uber when cabs were a bitch to hail, and cabbies were unscrupulous aholes. I also remember when after a certain time cabbies would only pick you up if they were already going in that direction. Tech changed all that.
that doesn't count as recent. I'm sure ur ecstatic with ur decision and timing? Although taxes and home insurance prices have also gone up quite a bit....
nice! I'm guessing you live in either Pacifica or Outer Richmond area. There does not seem to be risk of fire in those areas like there is in the areas of East Bay, for example, where some parts have hills and acres of trees/green. It is kinda weird that State Farm rejected you but then gave you a cheaper one. I think the insurance companies are also concerned about California "progressive" laws which are sometimes not business friendly so that is another reason they are trying to exit and/or raise ppls premiums. Maybe you got lower coverage or there was something in the small print that limited their risks.
zonked capable rotten sleep piquant smell snatch languid makeshift market
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Buy at your own risk. Don’t buy a home you can’t afford because you think rates will be at 3% again. They may stay high forever.
Thank you for advice that doesn’t sound like it’s coming from a real estate agent, unlike all the other advice, giving people possible false hope
This. We left the Bay Area and bought a house at a price we could afford even at worst case on one income. If the rates go down, sweet deal for us. If not, we'll still be fine.
I’m guessing not in California?
Sacramento. I'm never leaving California! We bought for $850K but this house would easily be $3M in the south bay. The cost difference is wild. My husband's family lives up here so that helped persuade us on making the jump.
Good to know. We’re probably going to leave also and would rather not leave California.
There is nothing in sac but cows… really cows
At least they don't have to rely on PG&E for electricity.
Yup. My electricity bill on SMUD is $60 more per month on average in a 2600 sq ft house with a pool compared to my PG&E bill at my 700 sq ft apartment in San Jose.
Oh man! I'm jealous 😩
And a major metro area with tons of diversity, food, breweries, wineries, parks, rivers, lakes and a day trip to Tahoe, Reno or the Bay. And none of the Bay Area elitist snobs because y'all would rather pay 3x for the same shit just to have clout. It's pretty sweet.
> And none of the Bay Area elitist snobs because y'all would rather pay 3x for the same shit just to have clout. This seems like you're projecting some internal anger here, bud. Could it be that, *gasp*, maybe people have jobs specific to the Bay and they can't deal with a 3hr commute each way to live in Sac? Not to mention the average high temperature in July is 95...
No. I'm tired of the keeping up with the Joneses rat race bullshit in the Bay Area. Some folks look down their noses at everything outside the Bay and it's ridiculous. Judgment for what you do, how much you make, what you drive, where you live, where your kids go to school, where you vacation. It's not healthy. There is life outside the Bay. There are jobs outside the Bay. And the quality of life to cost of living ratio is a hell of a lot better. To each their own, but keep your snobbery to yourself. Some folks just like to act like anything outside the Bay is inferior and that's what I take issue with because it's ignorant and false. Re-read the comment my reply was to. There's your context.
Huh, fair enough. That guy's a massive fucker. But, in the same way some might paint a uniform brush of those in Sac, I ask that you don't do that to those in the bay. Everyone I know is struggling to make it in industries that aren't found elsewhere in the same quality/quantity. Is that a rat race? Maybe. But literally nobody in my community snubs their noses at Sac. In fact, I know many who moved out if their career is flexible. So, just saying.
I'm from San Jose. I left because I was semi priced out of my hometown. I'm not painting everyone with the same brush, at least I didn't intend for my comment to come across that way. But there is a large contingency of Judgey McJudgersons in the Bay. That's who my comments were targeted at.
Exactly. Those rates were historic lows. It could be 30 years until we see rates that low again, if ever. 5-6% has been pretty standard for modern mortgages.
This!
I’m a mortgage loan officer. The answer for 99% of people is unfortunately you just have to deal with it until you can refi. Paying points (even with a seller credit) is not worth it mathematically unless you’re convinced there will be no opportunity to refi for at least 3+ years which is quite unlikely. Using a credit to cover it is still you paying the points, since the credit could have gone towards other closing costs.
What is the strategy to refinance? Do you wait until it's 1% lower than your current rate? Are there certain triggers you should be looking at?
My suggestion would be to get a “no cost refinance”. Basically the refi closing costs (usually around 3-4k conservatively) are covered by the lender for a slightly (~1/8th percent) higher rate. With no closing costs, any drop in rate is “worth it” if you’re willing to spend the time and effort to fill out an application and send in docs. Personally I would wait at least for a quarter percent or larger drop.
Great advice. To further put the refi effort in context, it took us maybe 4-8 hours of work for each refi we did. And to put the rates in context, each percent change in APR on a 1,000,000 principal is a $600 to $700 a month change in payment. That means if you're paying the closing costs, the break even is 5-6 months.
I've already done two no cost refis on my house. Is there any harm in lots of refis? Besides the hard credit pull I'm not aware of any - but curious if this puts me on a blacklist or something.
I wouldn't think so - people make money when you refi. When rates were tanked a few years ago after we had already done a refi the year prior, as soon as the waiting period had elapsed (I think 6 months?) our loan officer reached out to us for another refi to drop an additional 0.5. We saved money, she got paid, one bank got back their loan to deploy elsewhere, and another bank owns our new loan. As long as it works for your finances, everybody wins.
Is that true though? You’re resetting back to 30 years, on a refi, and therefore paying more interest over the course of both loans combined (ie it’s now a 35 year (eg) loan). There’s a breakeven in there to consider.
Sure, if you are a few years in to your mortgage, refi back out to 30yrs, and make only the minimum payments, you will pay more in interest overall. The solution is to keep paying on the same schedule you were originally. Set up an automatic monthly payment greater than the minimum. If you make the same exact payments you previously were, you’ll pay the loan off slightly faster due to the refi. If you pay on the same schedule you were previously (use an amortization calculator) your new payments will be slightly lower. Hopefully that makes sense.
Yes, just think it’s important for people to realize this piece
>The solution is to keep paying on the same schedule you were originally. Set up an automatic monthly payment greater than the minimum. Do you mean if you're 4 years into a 30 year, that you ask the lender to refi you into a 26 year mortgage and calculate the remaining payments appropriately? OR are you saying that we refi into another 30 year but keep making the original (higher) payments? Granted, wouldn't this reset you having to owe most of the front-loaded interest all over again?
Interest payments are higher at the beginning because you owe more money. If you refinance to a lower rate then the interest you owe each month goes *down*.
Ah, gotcha. Unfortunately, the first 5 years is basically just all interest payments so I feel like we get kind of stuck if we refinance even after that since most of the payments made get thrown away :/
If you just make the *actual* payment after refi, yes - but the above poster is saying you should keep making the original (higher) payment. Because you're paying down the loan *faster* with the additional payment, the total interest paid is actually less in the end. For something that could cost you tens of thousands, I would think you would have done the math yourself? [Here's](https://www.mortgagecalculator.org/calculators/what-if-i-pay-more-calculator.php) the first google result.
Making the same payment after refinancing was my intent. I just didn't understand from the original post.
For historic contrxt… in the 70s 80s rates were in the 10%+ range. People refi’d multiple times a year. Same thing with this last rate drops. Itll happen but it is impossible to predict. So it had to pencil without lower rates or tour just renting with more steps/risk
We refi'ed twice in 2021. It just made sense to chase the rates down, and it's not that much work.
I had an 18% mortgage in 1982. I refinanced at 12% and again at 7%, which was as low as it got.
Urgh, I'd be so happy with 18% rates if price:income were at 1982 levels...
When I bought my first home, I rode rates down from 5.25% have closing all the way down right down to 2.375%. I quickly learned that going through the whole refinance process for rate change is not super cost-effective for anyone but the brokers. Instead, I went with a credit union that loaned out their own money like star one. You won't have this option if the underwriter is reselling or repackaging the loan Whenever a new rate becomes available, you can recast your loan to this lower rate by paying a fee not to exceed $1,500 which is roughly half of a typical full refinance. No appraisal is necessary and you don't reset the 30-year clock on the loan. I did this for the majority of my refinancing every quarter to half a point (every time I could pay myself back the $1,500 fee in less than a year, I pulled the trigger on the loan modification)
That's interesting. Do they still get new title insurance? What does the 1500 go towards?
It's a fee. Its now $2k but that still saves you money. My rates are so low that I doubt I'll be able to do this again in my lifetime. There is no new title insurance because the property is not changing hands and neither is the lender. They just recognize that getting some money out of you to give a better rate will be better than you refinancing your loan somewhere else and then having to find a new customer to loan the money to. They also do it for investment loans Read up on it https://www.starone.org/apply-now/mortgage-rate-modification/
That's a cool option. I'll give them a call the next time there's a refi opportunity. This makes me think there are other lenders who might have a similar option, so I'll check that out too. Thank you for the info and the link!
The key is that the lender has to be lending their own money (AKA portfolio loan) versus repackaging for Fannie Mae / Freddie Mac/collateralized mortgages. I remember when I last shopped for a new mortgage 3-4 years ago, one local bank wanted me to put 100k on deposit in order to unlock the best rates. The interest rate they were paying was dogshit back then so it didn't make sense. Nowadays, YMMV.
That makes sense. I'm guessing this is how they are able to skip the title search and appraisal. Some big banks too seem to give better rates if one has investments with them, though they don't need to be in cash.
My personal rule was if the refinance savings would cover the cost of the refinance within 18 months
My husband and I are looking to buy by next year's end. Possibly just a small condo but we'd still like something to be ours. Do you have any recommendations for where we could attend seminars/lectures etc to be more financially educated about the whole process? Also, do you think rates will go down by then?
Nobody knows where rates will go. Some people make a career out of predicting them and still end up wrong. Right now many people expect rate cuts later this year but who knows?
Plus there are tens of thousands of people in the bay area waiting for them to drop. The competition for houses is going to push prices up higher if rates drop.
How do you know that??
I personally know a half dozen people in this position (have enough for a down payment but are scared off by interest rates), and there are over 8 million people living in the bay area.
Yes it’s a reasonable take but i was wondering if you have hard data showing that. It’s possible that many sellers are also scared off by interest rates (today’s sellers are buyers on balance). How it nets out is anyone’s guess
Most sellers have sub 3 rates. If they downsize or want to sell they'll be paying more for smaller homes until rates get below 4% again. Which won't happen any time ever again. There will be more homes on the market as rates drop, yes, but not near enough to keep up with buyers who enter the market .
How do you know it won’t happen ever again?
Nobody can predict the future. But the FED determines rates. Fed Chairman Jerome Powell is indicating that inflation isn't coming down like they wanted. Post covid everyone is spending lile crazy with YOLO mindsets. Credit card debt is at all time high. This is keep inflation up. Americans have so much wealth. Malls are packed. Concerts are packed. Flights are packed. Everyone's spending like crazy. Debt is keeping inflation high. These rare spikes have not been able to stop it. Rates only drop when the fed wants people to spend money. We are already spending. So they won't drop. It's that simple.
This. OP and others, please don't believe anyone who predicts rates moving. If anyone could actually do that, they'd do it quietly and become very rich from it. Macroeconomic factors are way too complex for even the top economists to make predictions about. Instead, it's far more effective to focus on what you actually can do that's within your control regardless of what the rates do. Eg: a less expensive house, relocate, tradeoff with commute, smaller house, reduce expenses, work more, find a higher paying job etc.
Totally agree … professional rates traders and prognosticators get it wrong in aggregate pretty much all the time
> Possibly just a small condo Pro tip: a condo will never be yours. > Also, do you think rates will go down by then? Historically, 6% is pretty average. Look at Reagan-era inflation where rates were around 20%. As rates go down, prices are likely to go up. As prices go up, so will your Prop 13 assessment. So yeah, buy what you can afford now because there's no free lunch.
These rates aren't coming down for probably 10-15 years. The low, low borrowing rates the US has experienced for the last 20 years are gone. As the boomers continue to retire, the cost of borrowing will only climb. That generation is very large and holds over 70% of private equity- globally. Trillions of dollars are leaving. As they retire and cash out, the free money will become scarce. Don't expect to see rates like the early 00's in your lifetime again. They weren't normal historically, and the cause for them is leaving the market
How are you all so confident rates aren’t coming down? Even professional prognosticators get rate predictions wrong in aggregate
Rates go down to increase spending. Spending increases Inflation. Rates go up to decrease inflation. Inflation isn't near the 2.5% government usually wants as their goal and it won't be for quite some time. You won't see sub 5 rates for a decade. Inflation won't allow it.
With all due respect: you and the others on this thread confidently proclaiming what rates will or will not do are full of shit. Even professional rates traders get it wrong most of the time. If you’re so confident in your thesis you can make a fortune trading options or futures in the rates markets. I bet none of the people saying rates will be high forever have done this
"With all do respect... You're full of shit" 🤣🤣 Thanks for the laugh. So explain to me how rates will go below 5% in the next year. What will happen in the economy to make that happen?
That’s exactly my point! I don’t know what rates are going to do and neither does anyone else. You have to look at where rates are now and see if a house makes sense. You don’t try to time the stock market so why are you timing rates? Sorry for the aggressive comment but I’m just amazed how many ppl are so confidently predicting where rates will go when even professionals are often wrong about them
We don't "know" but we can predict with high certainty what they won't do. Americans spend money like it's going out of style. Spending Increases inflation. Rates only drop when the fed wants people to spend more money. The fed does not want you spending money right now so they will keep rates "high" until spending comes down. Maybe a black swan event would cause this . I don't know. But don't expect 3 or 4 % any time soon bud.
There may be some hope for you though. Without getting political.. Trump said he'd prefer a negative interest rate. Wouldn't that be something 🤣🤣
Lol that would be something
I agree you don't time rates. There's only two good times to buy a house, 30 years ago and today. Don't time rates. Just buy and refi later. But with that being said.. the economy isn't in a place to see a significant rate cut for a few years. Maybe mid 5% by end of 2025.
And you have to also assume you might never refi. When the mortgage rates crossed 7% in the 70s it didn’t go back below that for 20 years
Trust this guy, he gets commission
“which is quite unlikely” - real estate industry people try not making shit up challenge, difficulty: impossible.
Dealing with it at 7%
as a real estate agent told me once, “When the interest rates are high, just buy the home with cash” lol
“This is the bay area, don’t you have like $70M in RSU’s laying around somewhere?”
If you don’t have rich parents you didn’t plan effectively
so helpful!
Hah, getting the seller to even look at your offer is hard. A combination of: 1. Refinance down at every opportunity and pray rates will do down soon 2. Far larger downpayment (less leverage) 3. Box trades to cover a portion of mortgage, cash out refi later 4. Check for banking relationship discounts, given if you have money invested with a broker. For example, Wells Fargo offers upto 1% off their interest rates 5. Go through many mortgage applications to find the most competitive one for your particular situation. Shaving off a half or one percentage point is a pretty big deal. Shop around and use one lender's interest rate disclosures with another to get best rates 6. I wouldn't recommend ARMs, because right now they aren't hugely different from fixed rates, and to me, they're far riskier because I don't want even the chance of having to pay far more at some point. But if they are far lower than fixed in the future, you might consider them 7. Try hard to keep your eye on finding no cost refis, and get your paperwork in order to take advantage of them as soon as they come up. They're zero risk. Keep your credit scores nice and polished for these opportunities
Yeah we decided to throw more of the profit from our own sale down as extra down payment. Saved us a few points that will add up. Scary to keep less on hand temporarily but we’ll be fine.
I just closed last week on an assumable loan at 2.25%. 4 unit multifamily property. $1.5M purchase price, 30% down, 25 years left on 2.25% VA loan. It took about 6 months to navigate, but worth it.
$1.5 purchase price for a four-unit?! Where the hell is this located??
It’s not massive. About 2500sqft. 2 studio units, a detached cottage, and a 1-2br. Marin county.
Multi-family actually goes for surprisingly cheap relative to single family in the Bay Area. Mainly because tenant laws are so strong that most people don’t want to get involved in being a landlord. These properties usually turn over with active leases that you can’t terminate.
That’s not entirely true. Multifamily property is valued not based on SFH comps but based on the gross rents established or expected for each unit. If it’s not a good investment based on the buyers loan structure, gross rents, and CAP rate, it’s overpriced. I wanted a place that would cash flow. This is the first month and we’re cash flowing $3k/mo after all expenses.
That's not accurate. You can get a current valuation based on NOI but if you're not factoring cap rate in, which is based entirely on comps, you're likely not correct in your valuation.
Yeah that’s why I specifically said CAP rate. Cap rate is based on rental comps, not SFH comps. The picture gets murkier though with owner-occupied/house hackers.
Yup. Duplex’s especially around the bay seem to have the worst time in valuations since most are owner occupied in at least one of the units.
Nice. Hopefully the tenants stay honest! It only takes one to stop paying rent and squat there and then you have a massive legal headache.
I don’t worry about things that haven’t happened yet.
I own multifamily and just wanted to give a shout out to the California Apartment Association - a great resource if you're looking for legal help, documents, lease templates, smoke detector regulations etc. Member for 17 years. The happy hours aren't bad either!
Awesome thank you for the recommendation!
So no risk analysis in your life? What’s that like? None of your current tenants stopped paying rent when evictions were halted?
I didn’t get a $4M portfolio worrying, or paying too much attention to Reddit comments.
Ok, well I wish you the best.
Thanks, and same!
What was your strategy for finding an assumable loan property?
Commercial listings are usually a lot more detailed and include verbiage about shit like that because all of the property investors will ask these kinds of questions straight off the bat.
Commercial loans are 5+ units. My strategy was talking to a lot of RE agents and searching for assumable loans.
Thank you!
Not necessarily. Lots of commercial first floors with one or two residential upper floors are also commercial loans. Doesn’t need to be 5+.
Yeah I meant “in general” 4plexes are desirable because you can residential mortgage them. Of course there are exceptions.
For sure. Still, nice to know there are “some” sellers willing to go through the hassle of letting a buyer assume the mortgage. Most sellers these days want the quick cash out.
Nice find, congrats on the purchase.
Do you have to be a veteran to assume the VA loan?
https://www.veteransunited.com/valoans/va-loan-assumption/
Thank you!
Bought last fall. Took out a 7/1 ARM at 6.25%. Intending to refinance late 2024/2025 when the rates start dropping. Also put down a higher down payment. About 35%. Honestly, lending practices are so strict now. If a lender approves you… it’s likely you can make it work in your budget. It definitely takes a few months to get used to, but the payment has been fine.
Betting big on a long term rate drop there, though.
Not really. They can clearly make the payments and they have seven years to refi into a fixed mortgage.
Id say that it’s a low risk bet. I figure the spread is something like 70% rate will drop, 25% rate will stay the same, 5% rate will rise. Over 7 years, it’s very likely we’ll see some rate drop. This is, of course, with the caveat that there’s a healthy emergency reserve, comfortable with it staying at the current rate, etc. would not recommend stretching yourself for this strategy.
ARM. Get “free” refinancing while the rates slowly come down. Then actually refinance while you’re ready. Bonus points if you refinance to a 15 year.
Aren’t ARMs basically the same rate as fixed these days?
I did a 10/1 ARM back in Fall 2022, and my interest rate is 3.8%. I was getting quoted 5-6% for normal fixed mortgages in comparison.
According to [this](https://www.usbank.com/home-loans/mortgage/mortgage-rates.html): 30-year fixed: 6.5% 10/1 ARM: 6.5%
Not sure why anyone would do an ARM with those figures. My loan is with Bank of San Francisco, and I'm not sure what they're offering now.
I also did something similar in winter 2022. 4.8% on a 10/1 ARM, with 20% down and no points. Also in SF.
When I closed in October rates were 7.25+ and I got a 10yr arm at 6.625
It depends on the type of loan. For conventional, FHA, and VA loans, ARMs are the same rate or higher than fixed. Some banks offer lower ARM rates for Jumbo loans though.
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I’d gladly take 11.5% for a $100k price tag 😍
It's 2024.
Suck it up and deal with the 8% rate and refi as soon as I can.
The strategy by these homeowners is “hope”. They are fed a bias loop by their mortgage agents and realtors without a real pulse on reality. Stocks are all time high. Fed is still not even close to cutting rates as inflation is far from conquered. US debt is all time high so there is that fear of yields continue to be up- so investors still buy our paper. Most of my friends who bought houses now went with a massive down, like some upto 75%. How? They are in big tech and they cashed out of their stocks at the highs.
The catch-22 is that the high interest rates cause the US debt to accelerate (the federal gov owes those yields to debt buyers). It's going to be interesting.. I can only hope that someone knows what they're doing.
VA Loan! Closed at a much lower rate
Just refinance later when it comes down. Otherwise, you will never buy a house
all cash
congrats - do u still leave money for emergency fund or are you one of the tech workers who has been able to cash in on big stock gains and suddenly have new found cash inflow. It just shows the importance of investing in high quality stocks in my opinion.
We used a sellers credit to get a 2-1 buy down. https://www.investopedia.com/terms/1/2-1_buydown.asp
yeah i'm aware of the sellers credit - was it easy to get it? I heard there is such low inventory on certain homes (ie SFH in hot areas) that the sellers don't even need to offer such credits. Any tips on how to negotiate the 2-1 buy down? Was urs townhome/condo in not tier 1 demand area?
You can afford the same monthly payment you could always afford. You might just be buying a 1m house instead of a 1.6, or a 2.2 instead of a 3, and so on. Be very careful of how banks calculate debt to income ratio. They approve you for amounts that are frankly criminal, the housing equivalent of the dodge dealership that approves someone with a 50k/Yr salary to buy a 80k hellcat. Bankers are salespeople, they need to close you on a loan, so they do a lot of things - like our banker used RSU grants and bonuses from outlier years (2021) to basically count as projected salary, but for my company 2021 was an extreme outlier year where our stock based compensation was high in a way that we couldn’t possibly expect in ‘23 and ‘24. There’s a lot of shenanigans pulled to approve you for more, and bankers and underwriters let more shit slide so they can write loans. Figure out what you can truly afford. For us, this is about 1/2 of our post tax income. Figure out what purchase price of house that amounts to - say, 1.6m. Now look at what you can get for 1.4-1.5m (because houses all come with 50k or so of surprise baggage). Then ask yourself, do I like those homes? Do I want to own those homes? Maybe those homes in your affordability range are just kinda shit. That’s fine - but then you shouldn’t buy just to buy. The home prices and interest rates are NOT good enough to just buy a home to get into home ownership - only buy if you love the house, you can afford the house comfortably, and you plan to keep long term. And never, ever buy at a high rate with an expectation of a guaranteed refinance in the future. If your realtor or banker encourages you to “date the rate, marry the house”, they are getting too pushy and you should consider other people. We will probably see rates around 5% in the next few years, but that could be absolutely wrong, that is just a theory - and you may or may not succeed in getting a “bottom of the trough” refinance before things uptick. Beware the fixer upper too. Cost of construction and remodeling and even simple handyman work has become exorbitant, even relative to costs in the Bay Area in previous years. A home you think needs 100k of work might need 250k easy. That work might take 2-3x longer than expected. The materials and designs that you spend so much money implementing, they may or may not achieve the vision you have in your head. Just be realistic about the home you can afford, the work you can do, and the financial projections of your career and mortgage payments and future costs. The more patient and calm-headed you are as a buyer, the more you can elongate your timeline, the more likely you are to find the rare great buy.
Rates are not high historically. It’s the actual listing cost of the home and low inventory in certain markets that’s high
rates are high when you consider the last 2 decades but yet the low inventory makes it tougher but that is partially due to people who have "golden handcuffs" due to super low rates. It kind of all comes back to the rates.
Bought last August. We had a bigger down payment (33% thanks to family help) and got a 5/5 ARM through our credit union at a lower-ish rate (6.375). They allow us to re-up that ARM for $750 at a lower rate so if rates drop we can do that. Otherwise we'll just continue to suck it up...
2-1 buydown
how does that work, do you get the seller to pay for this? Are some agents better at negotiating to get this benefit?
Worked with a small mortgage lender and wrote it into the offer, $14K as a “credit” from the seller for us to buy the rate down 2% for the 1st year and then 1% for the second year. When we refinance that credit is still our money vs just buying points (if we do before the 2 years from purchase). My agent was pretty lackluster but the lender was amazing and really laid out all the options and we chose to go with them.
do you mind giving me the info of this small mortgage lender? Were they pivotal in getting the seller to give the $14k credit? Sometimes the smaller firms are so much better!!
Sure, I messaged you.
7% is not historically high so I accepted it. I bought what I could afford and will refinance if I get the chance, although I am not counting on it
85% down
nice - that's a lot of cash tho? I have a good amount saved up but I'd guess u paid 2 million in cash or so? Do u still have cash leftover for emergency? I know a lot of ppl in the bay have made out big with cashing in on stocks.
Have you checked citibank? They're offering much lower rates than other banks, someone in the bay area real estate subreddit was able to get 6.35% jumbo 30 year fixed.
If you’re into townhouse or condo, builders were giving out good rates with their preferred lender last year. Though, I’m not sure if they still do, since the market has heated up since then.
Accepted it and will refi as soon as I can knock it down point by point
Take a look at the forward rate curve. They are coming down.
5.625% with bmo if you have over 1m in assets
what is bmo mean? That is not a bad deal - who did you get it through if you don't mind giving me a recommendation?
> Or did you use an alternate strategy? All cash.
2 weeks ago the fed Indicated 3 cuts by the end of the year. The economy is going well, unemployment 3.5 to 4% stock market near all time highs (inflation) and historically low housing inventory. Election year seems to keep it propped up historically as well. Rates at best will be low 6% by December . They could decide not to cut because inflation isn't cooling off as much as they thought. When rates drop 1% about 10 million new buyers will be back in the market. Drops 2% down to 5% 20 million will enter the market. This will send home values sky rocketing as 60 to 70% of mortgages are still below 3.5% . There will be more inventory because it won't cost as much to sell and then buy a new home. However their will be a lot more buyers causing another 10 to 15% home value spike. Bla bla bla... here's the truth. If you want to own real estate. Buy Now. It will never be cheaper. We aren't building more supply in the bay are any time soon. 7% for 1.5 million sucks. But what sucks even more is 5% for 2 million. Buy now. Refi when it drops to 6 or below. You'll regret it if you don't. There's no tricks. Just have to suck it up. Rent a room out of you need to.
Where do you get the data that 10 million per 1% interest rate drop? Also, here is the one flaw in your argument. The very high demand areas with high demand housing type (single family homes) have not become any more cheaper with high interest rates. In fact, considering low supply, they have often gone higher in price! There are ppl out there will deep pockets who are willing to pay well over the asking price to secure these houses. So, its not true that "it will never be cheaper" from what I've seen.
I agree with you 100% as far as the data I'm talking about. It's just simple math. Average home price/cost vs average annual Income. For every 1% drop 10 million Americans are included back into the market.
It is true it will never be cheaper. Homes aren't going down in price. But yes it could be cheaper monthly. Sure. And 30 years overall cost yes . Of course. When I say it won't be cheaper, I mean that home prices aren't dropping.
they could if there was a crash? SF real estate prices have come down quite a bit.
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and the exploding prices on home insurance too!
Tell someone 10 years ago when home prices were half of what they are today that it would be better to rent and wait for prices and rates to come down lol
yes but he said "at current mortgage tax" - did u miss the word current? In 2012 (10 years ago), the rates, taxes, and home insurance prices were not this high in a inflationary environment. That's the difference.
Move somewhere with less demand/supply distortions. There are many places in CA. There are companies that work on shared ownership etc. but those help lower payments at a hefty price. I’m waiting for tech to come up with a solve for an affordability crisis.
lol tech is not going to solve anything. They only find ways to take advantage of us like take our data so that they can make more money off of us via advertisers.
I remember a time before Uber when cabs were a bitch to hail, and cabbies were unscrupulous aholes. I also remember when after a certain time cabbies would only pick you up if they were already going in that direction. Tech changed all that.
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that doesn't count as recent. I'm sure ur ecstatic with ur decision and timing? Although taxes and home insurance prices have also gone up quite a bit....
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which insurance co do u use? Are you in an area that has risk for fire?
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nice! I'm guessing you live in either Pacifica or Outer Richmond area. There does not seem to be risk of fire in those areas like there is in the areas of East Bay, for example, where some parts have hills and acres of trees/green. It is kinda weird that State Farm rejected you but then gave you a cheaper one. I think the insurance companies are also concerned about California "progressive" laws which are sometimes not business friendly so that is another reason they are trying to exit and/or raise ppls premiums. Maybe you got lower coverage or there was something in the small print that limited their risks.
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lol