education: Want More Proof that the Fed Doesn't Control Mortgage Rates? - 09/21/07 09:08 AM
For more proof that the Fed does not control mortgage rates, consider this:
In the immediate aftermath of the Fed's decision to lower the Fed Funds Rate by 0.50%, mortgage rates improved by about 0.25% on average.
But, in the two days since, mortgage rates have not only given back those … (8 comments)
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education: How Prime Rate Relates to the Fed Funds Rate - 09/20/07 09:07 AM
Prime Rate is currently 7.750%.
Prime Rate is the "shorthand" name for the Wall Street Journal Prime Rate, a variable interest rate that is used in pricing many types of consumer loans.
These loans include:
Home equity lines of creditCredit card loansAuto loans Prime Rate's variable nature is tied to the … (7 comments)
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education: Making English out of Fed-Speak (September) - 09/19/07 09:11 AM
The Fed lowered the Fed Funds Rate by 0.50% yesterday. A rate decrease was expected by most market participants, but the 50 basis points movement seemed to catch some players off-guard.
Mortgage rates dipped in the wake of the announcement, but the real winners are homeowners with balances on their home … (0 comments)
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education: How the Fed Will Disappoint No Matter WHAT it Does Today - 09/18/07 08:54 AM
It's all eyes on the Fed today; the market anxiously awaits the central bank's 2:15 P.M. ET press release.
Some of the market bias towards a 0.50% rate cut has decreased in favor of a 0.25% cut. This shift is largely psychological.
Markets are trying to "get inside … (3 comments)
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education: The Week in Review (September 17, 2007) : What to Watch For - 09/17/07 09:17 AM
The volatile path of mortgage rates last week followed the changing expectations for Tuesday's Federal Open Market Committee meeting.
The FOMC sets the Fed Funds Rate, a benchmark interest rate upon which Prime Rate is based.
According to Federal Funds Rate futures, there is a 94 percent chance that the … (4 comments)
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education: What Would it Take for YOU to Feel the Pinch of Higher Gas Prices? - 09/14/07 08:48 AM
As crude oil crossed $80 a barrel Thursday, the Wall Street Journal ran an interactive poll with its readers.
What sustained price for gasoline would cause you to cut back on other household spending?
The graph above shows the on-going results of the non-scientific study. You can chime in, too, at http://forums.wsj.com/viewtopic.php?t=805.
… (10 comments)
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education: What the Price of Gold Says about the Economy - 09/13/07 09:33 AM
Headlines today read that the value of gold is nearing its all-time high (adjusted for inflation). The lay people would ignore this story, but those in the know understand that the price of gold is usually reflective of the state of the global economy.
The spot price of gold tells a lot … (0 comments)
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education: Why Mortgage Rates Fell BEFORE the September 18 Fed Meeting - 09/12/07 06:02 PM
Mortgage rates "come from" one place only: the prices of mortgage bonds as determined by investors.
The higher the price, the lower the corresponding return, or rate.
Bonds -- like stocks -- are traded as securities. An investor may buy Microsoft stock if he thought the company's future looked bright, … (8 comments)
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education: Explaining Why Per Diem Is Not A Closing Cost - 09/11/07 10:18 PM
Line 901 of a mortgage settlement statement is commonly confused for a closing cost. It's actually an "advance payment" on the mortgage.
Often called a per diem by mortgage professionals, line 901 itemizes a borrower's prepaid mortgage interest charges due at closing. The total amount due equals the daily rate of … (28 comments)
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education: Thank You, Zig! - 09/10/07 11:10 PM
Zig Ziglar’s most famous quote is “You can get anything you want if you help enough people get what they want.”
It’s true. Help your clients get what they want:
a nice homea fair pricegreat service.Do this, and you'll have clients for life - clients who will tell all their … (22 comments)
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education: How Today's Jobs Report Impacts Mortgage Rates - 09/07/07 10:15 AM
This morning, the government reported that the U.S. economy lost 4,000 jobs in August. Led by losses in manufacturing and construction, this is the first time since 2003 that the economy has failed to add jobs in any given month.
Markets had been expecting a job gain of roughly 110,000, but … (4 comments)
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education: Traders Predict The Fed Funds Rate Future Using Options - 09/06/07 11:10 AM
The Federal Open Market Committee meets September 18, and traders are aren't quite sure what to expect with respect to the Fed Funds Rate.
Will the FFR stay unchanged? Will it FFR decrease? If it decreases, by how much? These are questions that are perplexing market participants.
Luckily, we … (2 comments)
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education: If Interest Rates Go Back Up to 18%, What Will You Do? - 09/05/07 11:12 PM
We all know that real estate is a seasonal business. When the economy is good, real estate is booming. When things slow down or when rates go up, real estate goes on life support.
Do you have a second stream of income to protect you not only from the economy, but … (18 comments)
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education: An Appetite For Jumbo Loans Returns - 09/05/07 09:20 AM
Yesterday was a rather drab day in mortgage circles -- not much happened and mortgage rates idled. The bigger story was how liquidity appears to be slowly returning to some areas of the beaten-down mortgage market.
Specifically, liquidity is returning to prime, fixed-rate, full documentation jumbo loans and pricing appears to … (2 comments)
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education: Look to Your Past - 09/04/07 08:14 AM
Every now and then, reflect upon on the past with the aim of searching for techniques that have made you successful . . . not only in sales, but in all other endeavors as well.
Perhaps recalling a summer job during high school or college will unearth a skill that … (0 comments)
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education: P.S. Did You Know . . . ? - 09/02/07 08:20 AM
The P.S. (postscript) in any letter is the second most read statement after the headline.
So, add a P.S. in every single one of your letters.
You could use it to provide a general summary of whatever you said in your letter. Or you could write "teaser" information to … (45 comments)
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education: Selling a House With No Equity - 09/01/07 08:34 PM
You can’t list a house with no equity.
Well, you can if you don't mind working for free.
You will occasionally run across a listing where the owner does not have enough equity in the house to pay for your real estate commission. You obviously cannot help, but a private … (6 comments)
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education: Do Your Clients Know How Much You Do For Them? - 09/01/07 08:00 PM
You can never educate your customers too much.
As their agent or lender, you need to tell them in excruciating detail, everything you do for them. Like an attorney, who lists every minute he spent on your behalf, you can list every action you take for them.
There is nothing … (12 comments)
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education: How Credit Cards May Be Replacing Home Equity As A Funding Source - 08/29/07 12:40 PM
As mortgage guidelines loosened between 2002 and 2006, homeowners often used their home equity to retire credit card and other consumer debt. They did this by increasing the size of the mortgage and taking "cash out" from their home.
As you'd expect, this type of mortgage transaction is called a "cash … (4 comments)
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education: Like The Fed Funds Rate, The Fed's Discount Rate Does Not Control Mortgage Rates - 08/21/07 02:03 PM
Friday, the Federal Reserve lowered its Discount Rate by 0.50% in an effort to preserve liquidity among our nation's banks.
This has nothing to do with mortgage rates that people like you and I get for our homes. Well, not directly at least.
The Discount Rate is the rate at which … (6 comments)
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