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Mortgage Rates haven’t been this low in 50 years. What does this mean for homebuyers now?

Mortgage Rates haven’t been this low in 50 years. What does this mean for homebuyers now?

Q & A with Ken Moran, Executive Vice President of Cabrillo Mortgage & Owner and President of Golden Coast Funding

Who you work with matters more than ever now. And that’s why I’m incredibly thankful to my colleague and friend, Ken Moran, who took time out of his busy schedule to provide this valuable information for you.
When I say “busy”, Ken and his team at Cabrillo Mortgage have been working around the clock serving clients during this unprecedented time. From my clients, who are purchasing a new home, to mortgage refinance and new home buyers, Ken helps clients effectively navigate these unchartered waters to find the best possible funding.

Ken’s responses to our Q&A below provide insight to taking advantage of these historic low-rates while also making sure you can get the level of funding you’re looking for. We hope this brings value to you and are happy to answer any questions you have to review your goals for homebuying and wealth preservation.

Tell us a little about yourself and your role. How long have you been in the Mortgage industry?

My name is Ken Moran and I am the Executive President of Cabrillo Mortgage and the Owner and President of Golden Coast Funding, our new branch office in Rancho Santa Fe, California. I have been in the mortgage industry for more than 27 years funding all types of mortgage loans. We specialize in Jumbo loans to $10 million, government loans, and conventional loans. We have longstanding relationships with more than 100 funding sources that enable us to provided preferred rates and pricing on mortgage products that many other lenders do not have access to. I have been closing loans in San Diego County since 1993, closing well over $1 Billion Dollars in mortgage loan volume.

Record Low Mortgage Rates: What is your take on these new record low rates for mortgages?

With the average 30-year fixed-rate mortgage at 3.18% this past week, according to Freddie Mac, it is the lowest level in the nearly 50 years of its survey. Rates are expected to stay near these low levels for at least the rest of 2020.

What does this look like for a buyer of a home that costs $600K for someone who otherwise may be renting?

Interest rates are hovering near all-time lows. For qualified borrowers in San Diego County, borrowing less than $701,000, should get optimal rates in the low 3’s.

How does it look for a buyer in the $900K or $2 million arena? (Can you share a brief of what their estimated down payment may be and monthly cost?)

Qualified borrowers borrowing up to 2 million dollars in California will have great options with 15%-25% down payment. There are great loans that are fixed for 3, 5, 7, and 10 years all with rates in the mid to high 3’s. There are also options to amortize over 30 or 40 years and interest only options for lower payments and higher cash flow.

In what ways has your role made an impact in our North County community?

I close some really creative financing to help borrowers purchase when they otherwise could not. I do cross collateral loans to help buyers purchase non-contingent without having to sell their current residence. I fund asset depletion loans using assets to create income where other lenders cannot. We have really great technology that enables us to frequently close loans in two weeks or less at market leading rates and terms. The great products, rates, and experience really enables me to close transactions and provide options for buyers that might not otherwise be able to purchase a home.

It’s more important than ever to get organized before you set out to buy a new home or refinance. What’s your checklist that readers can get prepared for?

It is really not too much to compile. I always request 2 years tax returns and w-2s, 2 months bank statements, and 2 recent paystubs. If a buyer is self-employed, I will also need 2 years business tax returns and K-1s or 1099s. I always setup a secure link so they can just drag and drop to make it quick and easy.

Do you think these historically low rates could go even lower?

It is very possible. With the bond yields at record lows rates could continue to test 50-year lows. We are certainly in unprecedented times which can be unpredictable. My best advice is to lock in a historically low rate now while you can. If rates go down you can always refinance but if rates go up there is nothing you can do. Rates are incredibly low. Take advantage of it while you can!

Renting vs. Buying:

Equity and tax benefits are created through home ownership. I always think long-term. I’ve lived in my home for 16 years and I’ve paid it down a ton. Some years it was worth more and some years less but over the long term it is worth significantly more than I paid for it and I have also benefitted from the tax incentives of home ownership.

What do you think of the cost gap between buying and renting a home?

When you take the net benefit of the mortgage interest deduction and the other financial benefits of home ownership into consideration, home ownership usually outweighs renting. Additionally, building equity and pride of ownership can only be attained through home ownership.

Do you subscribe to the concept of “buy what accrues and rent what decreases in value”? For example, do you lease a car and buy a home? We’re seeing a huge trend in consumers leveraging Rent the Runway and even Banana Republic now has a rental service for clothing. Those smaller choices can add up to put dollars toward home buying for a first-time buyer.

I could not agree more! A home is a long-term appreciating asset that can not only create tax free income/appreciation, but also creates tax deductions from your personal income. It is an incredible investment! What other investment can build appreciation, create personal tax deductions, and provide a beautiful place to live and raise a family?!

Why do you like working with Garret Milligan?

Garrett is a true professional always with his clients’ interests at heart. He is extremely honest and trustworthy, and I trust him implicitly. He is a very hard worker and does a ton of research to always find the facts and the best solutions.

Anything you would like to add?

When I started in the business a 30-year fixed rate mortgage was at 10.25% and the available adjustable rate mortgage was at 8.95%. When rates dipped below 10% people were elated. The national average for a 30-year fixed today is at approximately 3.18%. It took 27 years to get there. My best advice is to take advantage of it! Don’t get stuck regretting not doing it.

27 years is a long time to wait for anything!


Garret Milligan

A lifelong resident of Rancho Santa Fe, Garret was raised in a family deeply integrated in the historic and vibrant community. Garret developed an affinity for the real estate industry at a young age by observing his mother—one of the community’s most successful real estate agents for more than 30 years—and learning the secrets to becoming a personable, yet results-oriented Realtor. He became the youngest partner in an elite luxury real estate legacy in ‘the Ranch’ in 2012 and quickly honed his skills, developed a vast network of industry resources, and built an impressive list of satisfied clients.

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