New Listing! 317 Zogata Way, Arroyo Grande


Location, views, privacy and more

This beautiful, 3 bedroom, 2.5 bathroom home is nestled on a quiet street in one of the most desirable neighborhoods in Arroyo Grande. Views abound, as the property has incredible sight lines that expand to the hills beyond Lopez Lake. The .7 acre property is
surrounded by several open parcels which create a natural buffer adding to the privacy and tranquility of the home.

The custom floor plan is open and comfortable. The living room, family room, dining areas, kitchen, half bath and garage all share the entry level. A few steps up take you to a spacious master suite, walk in closet, parlor room, and a luxurious bathroom. Take a bath and
soak in the views too. Two well situated bedrooms are located on the lower level, along with a large bathroom, laundry room, and access to the side yard and deck.

Come take a look, you’re sure to fall in love.

Patience My Dear!

Red Soles Winery on Oakdale off of 46 West has been doing more than just making great wine.  They have done some pretty fun things with their beautiful new still, affectionately named ‘Patience My Dear’.  They started with a wonderful brandy (made from grapes) concoction called California Hooch.  This led to the creation of the yummy Limoncello which is infused with Meyers Lemons for 40 days and – of course – 40 nights.  These clever and fun loving Red Soles folks have evenred soles glass vineyards still with hooch created some cocktails from their brews so stop by and be entertained!  PS – the wines are fab also!

New Listing! 315 San Gabriel, Morro Bay


Lovely three bedroom, two bath mobile home with office/bonus room and sun porch.
Fenced yard with apple/pear, plum and avocado trees and lots of privacy. Located
at the end of the street and backing up to ranch land, truly one of the best
locations in the park! The price of $299,000 includes the purchase of the lot,
priced at $145,000. Note holder may carry for purchase of lot – to be
negotiated. Quiet country living awaits you just outside town!

Market Overview: Are Lending Standards “Too Tight”?

Around the third and fourth weeks of the month, we are treated to a deluge of national real estate data. We learn about general national trends over the preceding months (“construction activity increasing!” “home sales jump!”), and draw conclusion about the relative “health” of the housing market (“outlook improves as inventory rises!”).

There are two problems here for local buyers and sellers. 1) We focus on California and the Central Coast real estate market, and 2) From its release, the data is already stale. Buyers, realtors, and lenders grapple constantly with shifting conditions on the ground. The national one price median of $222,900 in July feels pretty disconnected from SLO County’s median of $485,000.

Any questions about home loans in California? We are The Mortgage Experts: ask us anything! We have a loan program to fit every need. Call 805.543.LOAN or email us today.

Still, it can be useful to understand the broader picture, because although real estate markets are “local”, national real estate and lending policies have top-down implications.

For example, the Federal Reserve’s beefed-up third round of “Quantitative Easing” was specifically tailored to push mortgage rates down and stimulate struggling real estate markets. SLO County buyers benefited. The record-low mortgage rates helped spur the rapid real estate recovery. Today – just 24 months later – prices are up 22.8%, supply is low, and middle-income buyers are struggling mightily to compete in the market.

So what does all of this mean for us Californians and Central Coasters?


1) Real Estate

In our mid-year overview of the SLO County real estate market, local realtors identified low supply, rising prices, and tight lending as the primary challenges for local buyers. Moving forward, we expect the market to achieve a better balance of supply / demand that will slow price gains and increase inventory. [Second quarter overview of SLO County real estate market]


2) Lending

Last week, we published our mortgage rate projections. Rates are still very near record low levels, but in the coming year, we expect the 30-year fixed to move closer to 5.0% than 4.0%. Click here to learn why.

Another recurring question around the lending debate: will lenders loosen qualification standards? The “tight lending” myth goes like this: lenders upped their standards after the real estate crash and many “on the bubble” buyers are unable to qualify.

First of all, standards are already loosening. National data shows the following: 1) the availability of for-sale homes is low (but rising), and 2) foreclosure activity continues to drop. As volume slows and lending-risk declines, lenders are loosening standards to drum up business, thus making it easier for buyers to obtain home financing.

Another point to consider: lenders compete for clients. So while one lender might have high standards, other lenders might be more willing to take on risk.

In the past month, we have qualified a borrower with zero credit history, and another with a 550 credit score and student debt trouble. The benefit of our “mortgage branker” model (both a broker and a banker) is that we can shop around to find a loan from many different banks. Where one bank might refuse a borrower, another might accept. The flexibility that we offer our clients makes it much easier to qualify for a loan.

So to potential buyers, we offer the following advice: 1) don’t “self-qualify” from the couch. Talk to a mortgage expert and learn about the possibilities. 2) Shop around! This is a competitive business. Where one bank offers a high mortgage rate or denies a loan application, another might vary well accept.

Knowledge is power, and we are happy to hand it out for free. Give us a call at 805.543.LOAN or contact us here to set up a free pre qualification discussion about your finances.


Central Coast Lending is a California mortgage broker and direct lender based on the Central Coast of California in San Luis Obispo County. Call us today at 805.543.LOAN or email us here to set up a free pre qualification. We are The Mortgage Experts: ask us anything!

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Mortgage Rates Continue 2014 Tumble: Here is Why

Mortgage rates dropped noticeably since our Wednesday (Aug. 13) update. The APR for the 4.125% 30-year fixed rate moved from 4.182% to 4.140, as the rate “cost” fell 5/8 of a point.

You will often hear mortgage pricing discussed in terms of “points.” Like anything you would buy in a store, each mortgage rate has a “price” associated with it, and this price is expressed in terms of “points”. One point is equal to 1% of the total loan amounts. Two points would equal 2% of the total loan amount. And so on.

4.125 copySo a rate dip of 5/8 of a point on a $417,000 loan translates to a dollar value of $2,606.25. In other words, the fictional borrower would pay $2,606.25 less to obtain a loan with a rate of 4.125%. (For a guide understanding mortgage pricing, click here).

Of course, mortgage pricing is more complicated than that, and varies based on the borrower, the property, and the loan. Borrowers can pay extra for lower rates (and a lower monthly payment) or accept a rebate (cash back) from the lender to accept a higher rate, which can be used to cover closing costs or fees.

On any given day, mortgage rates typically move in small, 1/8 point increments in reaction to markets. The fact that our 30-year fixed rate fell 5/8 of a point in pricing is more significant, and has us seeking out answers.

Why Mortgage Rates are Falling

Any questions about home loans in California? We are The Mortgage Experts: ask us anything! We have a loan program to fit every need. Call 805.543.LOAN or email us today.

“Rates currently have downward pressure due to geo-political stress overseas, weak Q2 earnings for U.S. companies, and the Fed easing out of quantitative easing,” said Jason Grote, co-owner of Central Coast Lending.

When investors are worried or uncertain, they seek out safer investments. U.S. bonds provide one of the safest havens around, including mortgage backed securities (MBS). More activity (demand) in the MBS market will increase MBS prices and decrease yields… which means lower mortgage rates.

Partially, we are seeing this “flight to safety” help keep mortgage rates low, but to add a bit of nuance, let’s take a look at the 10-year Treasury bond.

The 10-year Treasury bond yield is often used as a point of correlation to the 30-year fixed mortgage rate (read this primer to learn why).

In 2014, the 10-year yield has dropped steadily. Larry McDonald (Forbes) and co-author Robbert Van Batenburg (Newedge) published an excellent article on Forbes explaining why the 10-year Treasury Yield has dropped to 2.40% and below, despite consensus 2014 expectations for something more like 3.44% (a full 1% difference!). This issue is an important one, and helps explain why mortgage rates are so much lower than expected.

There is a lot to say here, but we will pick out a few of the most important points:

1) Flight to safety.

As Grote said, turmoil abroad (“geopolitical risk) has sent investors towards safer investments. The only problem: U.S. Government-backed bonds are one of a shrinking number of “low risk” plays.

The alternative flight to safety assets, such as gold, oil or the dollar, have lost their reputation in recent years, due to their diminished resilience in times of turmoil.

Meanwhile, foreign demand for this safety remains sky-high:

According to U.S. Treasury data, the percentage of U.S. debt held by foreign investors was close to 34% of the United States’ total debt load as of April, 2014 vs 31% at the end of 2011.

The United States economy is exhibiting worrying signs, which reinforces the need for safety:

Measured over the same period in 2013, the US economy grew by a mild 2.4% and is expected to grow this year by 1.7%, which is the lowest GDP growth outside of a recessions year since measurements started in 1930.

2) U.S. Demographics and Politics

The baby boomers are retiring and looking for a place to park their money, and finding the U.S. bond market. Meanwhile, U.S. workforce participation continues to drop:

Today, the US civilian labor force is 155 million vs 154 million in 2007, but the US population has grown from 301 million in 2007 to 318 million this year.  Net net, that’s 17 million more Americans with NO change in the size of the labor force.

The authors point out that the aforementioned forecasts that called for a higher 10-year Treasury Yield may have gone off of antiquated expectations for U.S. economic growth:

In developing their interest rate forecasts, it’s like Wall St. is focused on 20th century economic yardsticks in a drastically different post-Lehman world.

There is plenty more to read, including discussion about the effects of financial regulation under Dodd-Frank and Basel III, and the effect that a Republican-led Senate could have on the economy. Read the full piece.


Where Will Mortgage Rates Go?

Moving forward, Grote didn’t foresee any immediate major reasons for mortgage rates to move significantly: “I see rates staying at these low levels for the next couple of quarters.”

The McDonald / Van Batenburg article touched on something important when the authors wrote: “It’s like Wall St. is focused on 20th century economic yardsticks in a drastically different post-Lehman world.” As with the housing market recovery, we are not totally sure what the “new normal” looks like… and we have a ways to go before we find out.

So while buyers might expect rates to remain this low for awhile yet, the economy is more than capable of making unexpected movements. As Grote put it:

“That being said, a bird in the hand is worth two in the bush, so get these low rates while you can.”


Central Coast Lending is a California mortgage broker and direct lender based on the Central Coast of California in San Luis Obispo County. Call us at 805.543.LOAN or email us here to set up a free pre qualification. We are The Mortgage Experts: ask us anything!

About   ||   Mortgage FAQ   ||   Market Update Blog   ||   Radio Show   ||   Contact

New Listing! 11605 Cardelina, Atascadero


This desirable Dove Creek home was built in 2012 and is the largest floor plan
of the Villas. What’s more is that it is situated in a prime location at the end
of the street. That means that home shares only one wall with neighbors and
faces the greenbelt with access to a nature trail that weaves through the
community. Natural light to pours into the home creating a bright, welcoming
feel throughout. The living areas, kitchen, and half bath are on the entry level
with the bedrooms, two additional bathrooms and laundry room upstairs. Upgrades
such as granite counters and stainless appliances are the icing on this deal.
Call the Dove Creek community home and enjoy all it has to offer.

New Listing! 1791 Bradford Road, Cambria


Charming and cozy home on a large corner lot! Inviting front deck captures south
facing sun. Beveled glass door greets you and inside the living room has
soaring, open beam, vaulted ceilings. Lots of windows! Wood stove in the corner
for warmth and cheer in the colder months. Ceiling fans in the living room and
bedroom for the warmer months. One bedroom and a full bathroom also on this
level. Efficient kitchen has a skylight and high ceilings too. Dining room,
currently doubling as an office, is adjacent to deck, ideal for grilling or
outdoor entertaining on the large patio below. Downstairs is a bedroom with a
sitting area, bathroom and lots of storage with direct access outside. Also
downstairs is the laundry and lots more storage. This property backs to an
vacant lot. Nice neighborhood, great location!

New Listing! 3480 Falling Star Lane, Cayucos


RARE OPPORTUNITY! 40 acres in Cayucos for less than a million dollars! This hidden gem is tucked away off Santa Rita Road in Cayucos. It has a three bedroom, two bath home with open vaulted ceilings, granite counter tops, air tight wood stove and beautiful canyon views. An 1800 (approx) square foot barn which has been converted to a two bedroom, one and a half bath apartment is also located on property. Avocado orchard planted several years ago in need of tender loving care.



New Listing! 200 Cyclone, Nipomo


This beautiful 5 bedroom 3 bath home was just built in 2012. It includes a
separate mother-in-law quarters downstairs with endless possibilities! Because
of the unique elevation of the lot, the main floor plan is on street level and
there are no stairs to contend with. The home has two fireplaces, a great room
and a game room. The gourmet kitchen boasts granite counters, with a walk-in
pantry. The luxurious master bedroom suite is large enough for your oversized
furniture, with walk-in closets, a soaking tub, and separate shower. Burnished
bronze colored fixtures accent the baths. The downstairs has a separate entrance
and also stairs going up to the main floor with its own locking door. The front
and rear yards are landscaped with sprinkler systems. There is an oversized 3
car garage and a patio at the entrance. This is the perfect home for a large
family or a family in need of a separate living space. A 2012 Stainless Steel
Samsung Refrigerator, Washer and Dryer are included.