A jumbo mortgage is a home loan for an amount that exceeds the regulatory conforming loan limit. The limit is $424,000 in most of the United States and tops off at $636,150 in the highest-cost areas. The current limit in San Diego County is $619,950 for a single-family dwelling.
Jumbo loan means a larger loan balance and greater risk for the lender. As such, the restrictions are tighter, and the guidelines are generally tougher. When you think of buying a home, good credit, money saved, and solid income are prerequisites. With a jumbo home loan, the bar is raised. You are generally required to demonstrate that you have an excellent credit rating, a reasonable debt-to-income ratio, and reserve funds in order to qualify.
Conforming loans allow for as little as 3% down. However, jumbo lenders want borrowers to have more “skin in the game.” 10% down at the very least is required in most cases and the percentage increases as the desired loan
Jumbo lenders have more autonomy and more underwriting authority. In some ways, jumbo loans are actually more flexible. There is little wiggle room with regards to guidelines on conforming loans. Government agencies such as Fannie Mae and Freddie Mac write the rules and leave little room for lenders to apply their own input. Jumbo lenders take on more risk, but can also choose to be more lenient when they can justify doing so. For instance, a jumbo lender may qualify a borrower who is willing to put less down but has more in reserves and/or has a stronger credit rating. The same is not true on a conforming loan. You might have $25 million in the bank, but if the conforming guidelines call for 5% down then you must put 5% down regardless of how much money you have saved, how strong your credit rating is, etc.
There is more at stake with a jumbo home loan, and thus the time between application and approval is typically longer. Conforming loans usually take roughly 21-30 days to process, approve, and fund. A jumbo mortgage can be processed quickly but typically takes 30-35 days to close.
There is a widespread misconception that jumbo home loan rates are higher than conforming rates. That is not always the case. During the economic downturn, when jumbo financing all but disappeared, it was indeed difficult to find a jumbo loan with a desirable rate. But, with the recovery of the real estate market in full swing, jumbo rates are now every bit as good as conventional loan rates, if not better. Jumbo loans are being offered by more lenders and the terms are quite attractive today.
Published in the San Diego Union-Tribune
By: Del Coronado Realty
For decades, the stately Hotel del Coronado, with its imposing red-roofed turret, chandelier-bedecked Victorian lobby and its storied ties to Hollywood nobility, has been instantly recognizable well beyond San Diego County.
Yet what has long been lacking is an equally recognizable entryway befitting the grandeur of the more than century-old icon.
That omission will be no more after the Coronado resort undergoes over the next few years a $200 million redevelopment and expansion, which is easily the most costly upgrade since the hotel opened in 1888. As a comparison, it’s almost triple the cost of the 78 luxury beachside cottages and villas that opened in 2007, and it far exceeds the addition of more than 300 hotel rooms in the 1970s.
The milestone project also marks the final build-out of the 28-acre resort, which will not only be getting a new palm tree-lined entry, but also a 25,000-square-foot conference center and great lawn, two parking garages, 142 more guestrooms, a new signature restaurant, a major transformation of 97 California Cabana rooms, and a redo of the popular ocean-view sun deck.
By the time the project is fully done by late 2021, the 757-room resort will have grown to nearly 900 rooms.
Walking the grounds, it’s hard not to notice that parts of the resort have turned into a construction zone, with the roar of jackhammers and bulldozers piercing the quiet of the coastal retreat.
“The Del is 130 years old and it’s gone through upgrades over that period as every hotel does but what this master plan will do is keep the Del alive for another 130 years,” says hotel general manager Harold Rapoza Jr.
He is especially excited about plans for the new entryway, acknowledging that the current route for accessing the hotel’s main entrance — a nondescript roadway off Orange Avenue — is not only somewhat confusing to visitors but also “underwhelming.”
“We are going to close that area off and instead you’ll continue down to Avenida del Sol, make a right turn and come up a much more grand entrance with the money shot of the Del in front of you,” Rapoza added.
As much as successive renovations of the resort have always incorporated the kind of creature comforts one would expect of any contemporary hotel, this latest project is also a nod to the hotel’s rich history.
For instance, the original front porch, gradually covered over in decades past, will be entirely recreated, down to the separate set of stairs that years ago were reserved exclusively for lady visitors.
The hotel porch of yesteryear is not hard to miss in the 1959 film “Some Like it Hot,” which in one scene features several gentlemen sitting on the veranda quietly reading their papers. They suddenly come to life and quickly turn their heads as Marilyn Monroe’s character walks up the steps to the hotel.
Many of the coming changes to the Hotel Del shouldn’t come as a complete surprise because most of the improvements have long been envisioned in the resort’s master plan, first approved by the city of Coronado in 2003 and later amended in 2010. Memories may be short, though, given the considerable time that has passed since the California Coastal Commission’s approval nearly a decade ago.
An earlier slowdown in the tourism economy was in part responsible for the delay, and changes in the ownership structure over the past years also affected the timing of the project. Although the current owner, the Blackstone Group, has had an ownership interest since 2005, it hasn’t always been in a majority position.
In 2011, Blackstone came to the rescue when the Coronado hotel was at risk of going into default on more than $600 million in loans and invested $100 million in the property. Five years later, it was prepared to sell the hotel to a Beijing-based firm as part of a larger portfolio transaction but the Hotel Del was pulled from the portfolio after a Treasury Department committee was said to have had concerns about its proximity to the Coronado Naval Base.
“The main reason we’re doing this now is because it’s time to do it,” Rapoza said. “In general, we should see a big lift in our room rates when we get done with our guestrooms. Outside of Beach Village, the cabanas will be the premier rooms in the resort after they’re renovated, giving us a 20 percent to 30 percent lift in our room rates.”
The Hotel Del is also in the enviable position of being a coastal property that still has enough land left to add a sizable number of rooms and meeting space, even at a time when the pace of growth in the hotel industry is expected to slow.
“This is in Coronado, where it’s extremely difficult to get approvals for anything so the value of being able to add more rooms to that is incredible,” said Alan Reay, president of the Orange County-based Atlas Hospitality Group. “I don’t know of any other hotel on the California coast with that amount of rooms and meeting facilities so it’s very difficult to go wrong with adding the rooms they’re adding.
“It’s like it’s own little demand generator, which makes it very, very unique.”
Here is a preview of the changes coming to the Hotel Del Coronado:
North parking garage: Now under construction, the nearly 800-space structure will consist of two levels of underground parking, plus surface parking. Located near the intersection of Orange Avenue and R.H. Dana Place, the garage will occupy what had been a 236-space lot. Once all the development is completed, the number of parking spaces will grow from 943 to 1,179.
Construction site of north parking garage (Hayne Palmour IV / San Diego Union-Tribune)
Vista Walk: Also currently under construction, this is a revamp of the existing outdoor event space. It replaces what had been a two-level event area that Rapoza describes as more of a hodgepodge. The new space, located near the ballroom, will be larger, all on one level and will offer views to the ocean and the hotel’s historic turret. It should be finished by May.
Rendering of Vista Walk (Courtesy of Hotel Del Coronado)
Serēa replaces 1500 Ocean: Now in demolition mode, the former 1500 Ocean was the hotel’s fine dining venue for the last 13 years. The hotel ownership brought in Las Vegas-based Clique Hospitality — responsible for creating Lionfish at the Pendry hotel in downtown San Diego — to develop the Hotel Del’s new anchor restaurant.
There was nothing intrinsically wrong with 1500 Ocean, says Clique founder Andy Masi, but the hotel needed a new dining venue that is more in keeping with San Diego’s evolving food scene.
“I really looked at what is the direction restaurants are moving in, and what can we deliver to the tourists and how do you get locals to drive over the bridge to visit a great restaurant,” said Masi, whose firm has helped develop a number of nightlife venues in Vegas.
For Serēa, the menu will be Mediterranean-inspired and will capitalize on locally caught seafood. Masi describes the look of the 180-seat indoor-outdoor restaurantas reminiscent of a “really great beach house where you feel like you’re dining at someone’s home or on their patio.” It is expected to open by early summer.
While Serea will be the biggest dining change, food and beverage revamps are planned throughout the hotel, says Rapoza. The management team is still weighing changes for Sheerwater, the hotel’s three-meal-a-day restaurant. One possible idea is converting it to a steakhouse. It will also get a name change. Work on that venue, though, wouldn’t start until next year.
Another planned change is to relocate the hotel’s grab-and-go outlet next to its Eno Pizzeria and Wine Bar and create more of an Italian marketplace offering upscale to-go prepared foods, Rapoza said.
“This all goes back to the master plan development,” he explained. “We didn’t want to have this new development, and then the food and beverage hasn’t been touched. We wanted to bring excitement to all parts of the resort.”
Main entry/porch: Starting next year, work will begin on the new entryway, creating a clear sense of arrival for guests. It will be lined with palm trees, and the surface will be composed of decorative pavers. As vehicles approach the main entrance, they will go around a landscaped circle that will be used for both entering and exiting the property. A signal will be installed at Avenida del Sol that will help made left-hand turns onto Orange Avenue easier and safer.
Once completed, the entryway will mark a return to its original location where hotel guests in the early years would arrive by train. The hotel believes that the earlier alignment was relocated to its current location sometime in the 1960s. Also next year, the original veranda that ran across the front facade, from the ballroom to the Crown Room, will be recreated.
Coronado Residents & non-residents, register today for Winter/Spring 2019!
By Jennifer Riner, Trulia
The question of whether to buy or rent your next home is a convoluted one. Clearly there are hurdles to homeownership, notably saving up for a down payment and getting your credit in order. However, the benefits are usually well worth the time and effort. Aside from building equity, the average homeowner in the U.S. spends less per month compared to renters in the same area. Part of the financial advantage of homeownership comes from low interest rates, but also stems from high rent prices. Even in popular markets like Coronado and greater San Diego, homeowners realize considerable monthly savings.
Although home values and interest rates are steadily rising, Trulia’s recent rent vs. buy report revealed that buying still beats renting in most U.S. metros areas. This past spring, the median rent price in San Diego was $2,500 per month while the median home value was $528,318, allowing buyers to save 25.8 percent over renters.
To get a better idea of how much you could potentially save by buying, see how the rent vs. buy calculations play out in various part of the San Diego metropolitan market, including Point Loma, Coronado and Imperial Beach. All percentages are calculated using recent home prices, rent rates and a 30-year fixed mortgage interest rate of 4.35 percent.
With a median rent price of $5,125 per month, renting in Point Loma is costly. However, if you were to purchase a median-priced home for sale in Point Loma for $1 million, you could theoretically save 31 percent in total monthly housing costs. When averaged out over time, the costs of renting in Point Loma are less than $5,000 per month, which includes fees such as the rent, insurance and refundable security deposit. Meanwhile, the total costs of owning a home in Point Loma come to $3,422 per month when the purchase price, closing costs, taxes and deductions average out over time.
Coronado homebuyers save around eight percent compared to renters. The current median monthly rent is $5,500 per month, which averages out to $5,295 per month – all costs above considered. Meanwhile, the median home price is $1,430,000, which costs $4,854 each month when averaged out over time. Keep in mind, this assumes you live in the home for at least seven years and have an income tax rate of 25 percent. It is even cheaper to buy than rent for individuals in a higher tax bracket. Homebuyers with a 35 percent tax rate experience a 16 percent savings.
Even homes in Imperial Beach at a median list price of $555,000 save buyers substantially. With that price point in mind, buying in Imperial Beach is 20 percent less expensive compared to renting a mid-range apartment at a rate of $2,500 per month. When totaled and averaged, the long-term costs of renting an apartment in Imperial Beach equal $2,118 each month while the costs of homeownership are an affordable $1,524 per month.
Owning versus renting is the best choice even in some of San Diego’s most luxurious areas. If you are in the process of buying a home stay abreast of interest rates and how they affect your
budget with a mortgage rate calculator. If you are thinking about selling, see how much your home could fetch under current market conditions with our free San Diego property value report.
One thing they don’t tell you when you become a parent for the first time is the anxiety you suddenly will feel about your financial future. Until now, you knew that you and your partner could fend for yourselves – adding a tiny human to the mix complicates matters and makes you feel as though you are completely unprepared and ignorant about retirement plans, college tuition savings plans, life insurance policies, and on and on. Rather than stress and cry more than your newborn, you need to create a life plan so you can create your life goals and start working to achieve them.
Understand What a Life Plan is All About
A life plan goes beyond a traditional retirement savings account or meetings with a financial advisor. When you create a life plan, you take stock of your current situation, give yourself an honest evaluation of your financial, emotional, and physical health, and then describe your ideal life. This reflection time will give you a handle on where you are now and where you want to be so that when you do meet with a financial advisor, you can articulate your financial situation and future goals. Your financial advisor will then be able to help you create short-term goals that will put you on the path to meeting your life goals.
Whether or not you meet with a financial advisor, you should take this time to reflect on what changes you may need to make in the near or distant future. Adding a child to the mix is a life-changing decision, but in doing so you may have to make some big financial decisions too. What is the best budget-friendly child care in your area? Will a car seat fit safely in your small car? What about location? Your current one-bedroom starter home may be situated near all the best amenities, but it might not be the ideal situation for expanding your family. Meet with a realtor to check out home prices in your area to avoid a cramped and stressful situation when your new family member arrives. Save for these expenses ahead of time to avoid an “oh no” moment.
As a new parent, you may feel overwhelmed thinking about your ultimate life goals. Allow yourself to imagine your ideal life and where you picture yourself, the people you are with, and where you are. You may picture your future grandchildren or your brand new child’s college graduation. The objective is to know where you want to end up so you can start making and sticking to a plan to get you there.
Take Steps to Secure the Future for Your Family
With a newborn in the house, the last thing you want to think about is your untimely death. But, now that you are a parent, you have a responsibility to your family to secure their future should tragedy strike. One of the first steps you should take is writing a will. You need to designate a guardian for your child and an executor of your will who can ensure your wishes are carried out when you die. This is the time to determine what happens to your assets and your property and to set up a trust fund or other financial plan for your child.
Another step that will secure the future of your family is purchasing life insurance. Your financial advisor may be able to assist you in this step, as many financial advisors also sell life insurance. No matter whom you work with, you should consider purchasing enough coverage for 8-12 times your income to ensure the financial security of your family. Remember, your life insurance policy should cover more than your final expenses; you need to consider the amount needed to pay off your mortgage, provide for child care, and help your family maintain their standard of living after you are gone. Consider building a savings nest egg for child-related expenses to be used in preparation for the new child, or to be used as a safety net in case of your untimely demise. You or a guardian may have to purchase a new vehicle or pay for the cost of moving to a new home. A new family member undoubtedly brings new and often unexpected expenses.
Even though your child is a newborn, you need to begin thinking about his or her future. Of course, most parents plan for their children to attend college, and you will need to choose a college savings plan that fits your budget and gives your child a good financial foothold when entering an institute of higher learning. There are several options for new parents who want to start saving for their child’s college education including 529 plans, savings accounts, Roth IRAs, Coverdell Education Savings Accounts (CESAs), CDs and savings bonds, and trusts. Again, a financial advisor will be a helpful resource when you are trying to decide which college tuition savings option is best.
New parents have a great deal on their plate, but life planning should take priority so you can secure your future and that of your new child. Evaluate your current status, determine your life goals, and start working with a financial advisor to help you get there.
Coronado schools are among the best in California. Four schools in the Coronado Unified
School District have been named California Distinguished Schools, two have been named National Blue Ribbon Schools, and one is recognized as a demonstration site for the state.
Many parents move here just so their kids can have access to a world-class education in a safe, welcoming, and walkable community. And, many families who don’t officially become Coronado residents will rent just for the school year, meaning your Coronado vacation home is a hot commodity even in the middle of winter.
Coronado has always been extremely popular for summer rentals, but we’re starting to see substantial growth in the demand for school year rentals. Many families—particularly those from other countries—will rent in Coronado through the year and then spend the summer back home.
For example, a father will secure a job in San Diego and move the family to Coronado. The entire family is together for most of the year while the kids get an award-winning education. Come summertime, the whole family might fly home, or the father might stay for work and rent a small studio across the bay in Downtown San Diego. When summer is over, the family will return and rent again.
Traditionally, renting out a vacation home during the off-season can be rather difficult. The same goes for finding a 9-months renter.
However, the Coronado market is unique. Our schools have become so coveted that school year rentals are now almost as popular as summer rentals. The year-round demand means you can:
· Rent your property to a family for 9 months.
· Enjoy your vacation home in summer.
· Or, rent out the home in summer, too.
In the majority of markets across the country, you might estimate you’ll be able to viably rent out your vacation home for 6 to 8 months of the year. In Coronado, it is possible and common to earn rental income from your vacation home for 9 months or more—perhaps even year-round if you wish!
School year rentals are most popular in the center of town, called the Village. However, the Shores and the Cays also offer a world of options. To take the first step toward owning a vacation home in Coronado, contact Del Coronado Realty at 619-437-1888.
Having spent decades living and working in Coronado, we at Del Coronado Realty enjoy an all-access pass to the island’s evolution from remote enclave to mainstream destination. Just how far has Coronado come over the years? Let’s take a glance.
Prior to the construction of the San Diego–Coronado Bridge in 1967, Coronado’s real estate market was rather limited. In order to travel to and from Coronado, you had to take the ferry—a scenic ride, but not necessarily a desirable mode of everyday transit. The majority of Coronado’s population consisted of military families stationed at North Island. Wealthy families were still buying vacation homes in Coronado, but many people saw the lack of accessibility as a deal breaker.
Fast forward to the 1970s and ‘80s, and the newly constructed bridge proves to be an expressway to growth. Coronado’s population grew from 18,039 in 1960 to 26,540 by 1990. The ease of access became apparent, and the real estate market expanded accordingly. People began visiting and moving from across the bay, country, and even from overseas.
Today, Coronado is one of the most sought-after living, vacation, and investment destinations in the U.S. Whether you prefer a quaint home in The Village, a boater’s paradise in The Cays, or a luxurious vacation condo in Beach Village at The Hotel Del Coronado, our island offers something for everyone. Coronado is beloved for its:
· Year-round mild weather
· World-famous beaches
· Low crime rate
· Endless entertainment and outdoor activities
· Gorgeous properties
With a total land area of 32.7 square miles, room for new development on the island is limited. We are seeing plenty of redevelopment, remodeling, and multi-unit development, but Coronado isn’t sprawling like other cities. What that means for Coronado homeowners and investors is that property values will continue to climb. There will always be a strong demand for homes, vacation properties, and rentals.
Are you looking to buy or sell property in Coronado? Del Coronado Realty can help! Call us at 619-437-1888, or visit us in The Shops @ The Hotel del Coronado at 1500 Orange Avenue. For ongoing information about real estate in Coronado, visit our blog at www.delcoronadorealty.com/blog.