| |
mortgage: The Key Fact Missing From Today's Existing Home Sales Headlines - 02/26/09 10:57 AM
In reading the headlines this morning, you'd think that last month's Existing Home Sales figure signaled more trouble ahead for the housing market.
Quite the contrary.
Beyond the attention-grabbing headlines is the real story; the one that shows -- once again -- that housing market fundaments are coming back into balance.
As home values tick lower, it appears, value buyers are stepping in and snapping up supply. It's true that the number of homes sold fell to its lowest levels in 12 years, but we can't ignore the fact that the number of homes available to buy fell, too.
Banks have put the … (1 comments)
|
mortgage: The Relative Cost Of Owning Versus Renting Is Back At Historical Norms - 02/25/09 10:53 AM
One popular housing theory is that -- before a bona fide housing recovery can begin -- the cost of owning a home versus renting one must return to historical levels.
If that belief is a truth, a national return to rising home prices may be in store for 2009.
Falling home prices coupled with falling mortgage rates, too, have dropped the relative, after-tax cost of owning a home to 125% of the cost of renting a home.
This is the exact 18-year historical average and not since 2001 has the gap been this small.
As reported by the Wall Street Journal, though, the … (0 comments)
|
mortgage: Webinar Invitation: Inrease Sales with Credit Restoration - 07/21/08 10:58 AM
… (3 comments)
|
mortgage: Mandatory FHA Loan Fees Increase for Some, Fall for Others - 07/21/08 10:03 AM
The FHA risk-based pricing matrix For the first time in its history, the FHA changed its funding fees and mortgage insurance structure this week. FHA-insured home loans are now subject to a risk-based pricing adjustment, as shown by the table above.
Because of risk-based pricing, FHA home loans are now more expensive for borrowers with less-than-ideal credit profiles, and less expensive borrowers with perfect ones.
Prior to the changes, most FHA borrowers paid an up-front fee of 1.500 percent, plus on-going annual mortgage insurance payments equal to one-half-percent on the amount borrowed.
FHA-insured mortgages have grown in popularity this year … (0 comments)
|
mortgage: You've Been Pre-Approved -- Now Get RE-Approved - 12/19/07 10:21 AM
Even if you've been recently pre-qualified (or pre-approved) for a mortgage, it may be prudent to get "re-approved". The mortgage industry is changing quickly; being prepared beats the alternative.
Recently, mortgage lenders have made adjustments in what they will lend, and to whom. This shrinks the pool of eligible mortgage borrowers.
Some of these guideline changes include:
Low or no downpayment loans may require more income and/or assetsNo income verification (i.e. stated) loans may not be availableHigher credit scores may be necessary to qualify In addition to tighter guidelines, many mortgage lenders are now required to pass higher fees and/or mortgage … (3 comments)
|
mortgage: How to Squeeze Extra Tax Deductions from Your Mortgage In 2007 - 12/18/07 04:55 PM
For most Americans (but not all), mortgage interest is tax-deductible in the year in which it was paid.
With some advance planning, therefore, a homeowner can increase his 2007 tax deductions by paying additional mortgage interest while the calendar still reads 2007.
The key is to make the mortgage payment due January 2008 a few days early.
Because mortgage interest is paid in arrears, a mortgage payment due January 1, 2008 accounts for interest that accumulated throughout December 2007.
Rather than make January's mortgage payment on January 1, 2008, a homeowner can send payment this week or next -- … (1 comments)
|
mortgage: Mortgage Rates are Going Up -- But Not for the Reason You'd Expect - 12/13/07 12:16 PM
Conforming mortgages are getting more expensive -- but not because of mortgage rates.
To protect against further weakness in the housing sector, Fannie Mae and Freddie Mac are instituting "delivery fees" on all conforming mortgages, effective March 2008.
Fannie Mae's Adverse Market Delivery Charge and Freddie Mac's Market Condition Delivery Fee will add a one-time, quarter-percent fee to every home loan purchased from mortgage originators.
This means that on a $100,000 conforming mortgage, the borrower could:
Pay a $250 fee out-of-pocketAccept a slightly higher interest rate that "finances in" the higher fee Because the fee is in percentage terms, as the loan size increases, … (7 comments)
|
mortgage: 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 gains, but have climbed to their highest levels of the month.
This is because post-rate cut, the U.S. dollar is trading at all-time lows against the Euro and other currencies. Therefore, buyers of dollar-denominated securities such as mortgage bonds are getting less return for their investment.
When an investment loses … (8 comments)
|
mortgage: 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 Fed Funds Rate. Prime Rate moves in tandem with the FFR and is always three percentage points higher.
So, after the FFR's 0.500% drop Tuesday, consumer loans tied to Prime Rate dropped by 0.500%, too.
Prime Rate was 4.000% in June 2004 before the Federal Reserve started a string of … (7 comments)
|
mortgage: 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 equity lines of credit and holders of credit card debt.
Each saw their respective borrowing rates drop 0.50% yesterday because the interest rates for HELOCs and credit cards are based on Prime Rate.
Prime Rate moves in lock-step with the Fed Funds Rate.
In the statement above -- as explained … (0 comments)
|
mortgage: 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 the head" of Fed chief Ben Bernanke, speculating about how he will react in the first Federal Open Market Committee meeting since the credit crunch reached a head in mid-August.
The speculation and guessing tells us that there is tremendous uncertainty about how the FOMC will vote today.
Uncertainty in markets … (3 comments)
|
mortgage: 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 Fed will lower the FFR by at least 25 basis points Tuesday. The same analysis shows a 50% chance for a 50 basis points cut.
One basis point is equal to 0.01%.
The wayward path of mortgage bonds last week reflects varying opinions about tomorrow's Federal Reserve press release and … (4 comments)
|
mortgage: 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.
As consumers cut back spending, the economy slows down which generally leads to lower mortgage rates and weaker housing markets as a result of job losses. According to GasBuddy.com, some areas of San Francisco are already topping $3.50/gallon.
… (10 comments)
|
mortgage: 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 about investor psyche and it is up nearly 10 percent from its 30-day low.
As a "safe haven" investment, gold's value tends to increase when an economic recession is expected. That's because gold tends to hold its value during a recession; its value is tied to the global economy … (0 comments)
|
mortgage: 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, and he may buy mortgage bonds if he expected favorable bond market conditions ahead.
In a declining economy, bonds can be an especially attractive investment because they offer a fixed rate of return to an investor. As more buyers line up to buy, of course, the price of bonds goes … (8 comments)
|
mortgage: 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 many players on Wall Street had been placing their bets to the weak side of that figure.
Very few (if any) expected a number this weak, however.
The implication of a weak jobs report is that many now believe that the Fed has an economic reason to lower the … (4 comments)
|
mortgage: 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 can measure how the market is betting on the future by looking at the options trading in Fed Funds Futures.
As of September 5, 2007, an analysis of Fed Funds Futures option pricing leads to the following predictions:
5.250%: 12 percent chance5.000%: 28 percent chance4.750%: 42 percent chance4.500%: 10 percent … (2 comments)
|
mortgage: 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 banks borrow money from the Federal Reserve. It is different from the Fed Funds Rate, which is the rate at which banks borrow from each other.
After the adjustment last week, the Discount Rate now stands at 5.750%; the Fed Funds Rate is 5.250%. Note that the Fed "charges" … (6 comments)
|
mortgage: 7 Things You Must Never Do When Applying For a Home Loan - 08/18/07 09:55 PM
This is a list of things to steer clear of when you are seeking to obtain financing for a home. The following items may prove to be a detriment when you wish to move forward with the loan process.
Don't buy or lease an auto! Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.Don't move assets from one bank account to another! These transfers show up as new deposits and complicate the application process, and you must then disclose and … (14 comments)
|
mortgage: Is Your Loan Officer Incorrectly Reading In Which Direction Mortgage Bonds Are Moving? - 08/16/07 10:15 PM
As we discuss over and over again, mortgage interest rates are determined by the price of mortgage bonds. Nothing else, and nothing more. The challenge in that truth is that mortgage bond pricing is not very accessible to the general public.
This includes the press.
As a result, the media tends to use a government bond called the "10-Year Treasury Note" as a mortgage rate indicator because it tends to move in the same direction as mortgage bonds.
Not knowing any better and making matters worse, a lot of loan officers also use the 10-Year Treasury Note as a … (4 comments)
|
|
|
|
|
|
Ilyce N. Powell, CMPS™ - Certified Mortgage Planning Specialist
Baltimore,
MD
More about me…
AmeriSave Mortgage Corp./ United First Financial
Address: Lending in All 50 States + DC, Eliminating Debt and Building Wealth in United States and Canada
Office Phone: (866) 814-2153 x 7103
Email Me
 Links
Archives
|
;)
;)
