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interest rates: Making English Out Of Fed-Speak (June 2007 Edition) - 06/29/07 05:16 PM
The Fed left the Fed Funds Rate unchanged again today for the eighth time in a row after 17 consecutive hikes. None of this is news to us.
The Fed's press release, though, highlights a key theme about our country's economy: inflation may be moderating, but we are far from in the clear.
In other words, there are still a handful of outside factors that could push the Fed back out of their "comfort zone" and force them to raise the Federal Funds Rate.
Mortgage rates were up only slightly after the Fed's remarks which were neither tough nor soft on inflation and the economy.
SourceParsing the … (0 comments)
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interest rates: The Week In Review (June 18, 2007) : What To Watch For - 06/18/07 09:33 AM
After a tame Consumer Price Index report Friday, mortgage bonds staged a brief rally and rates retreated slightly.
Earlier in the week, mortgage rates were at their highest point in almost a year.
Unfortunately for rate shoppers, mortgage investors are behaving like Dr. Jekyll and Mr. Hyde right now. One moment, they hate the outlook on inflation; the next, they love it.
What's really confusing is that data points that made mortgage rates move higher or lower 6-9 months ago (i.e. jobs report, crude oil prices, housing stats) are now being discounted.
Broader data points such as CPI seem to have taken center stage. … (0 comments)
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interest rates: The Two Methods To Generate Home Equity Are Not Equal - 06/15/07 06:15 AM
Home equity is created in one of two ways (assuming increasing home value and a non-negatively amortizing first mortgage).
In the first method of creating equity, the homeowner pays down the principal balance on the mortgage. This increases the difference between what is owed on the home and what the home is worth.
In the second method of creating equity, a home's value increases over time. This increases the difference between what is owed on the home and what the home is worth.
Because both methods create equity, homeowners often confuse the two.
In Method #1, the homeowner takes dollars from a paycheck that have … (0 comments)
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interest rates: What Role Do You Play In This Rising Mortgage Rate Environment? - 06/13/07 10:17 PM
The American Consumer keeps spending.
This morning, the monthly Retail Sales report showed a larger-than-expected jump. Even after stripping out elevated gas prices, the sales increase was more than double the expected amount.
The economy surges ahead, fueled by everyday spending, and this does not bode well for the future of mortgage rates.
The recent run-up in mortgage rates is largely from inflation fears. With inflation, investors' dollar-denominated securities have less value over time because the dollar itself is worth less.
Runaway consumer spending exacerbates the potential for an overheated economy and that is why today's figures are slightly troubling. Each time … (1 comments)
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interest rates: Saving A Nickel May Have Cost You A Dime - 06/12/07 07:31 PM
This cartoon by Wiley applies to mortgages in 2007 like it did to stock trading in 1999.
The least expensive mortgage options aren't always the least costly. A quick look at the Sunday paper's Foreclosure Notice section can verify that.
The right loan at a fair price saves far money money than the wrong loan at any price.
Have a great night everyone!
… (4 comments)
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interest rates: Proof That Mortgage Bonds Are A Global Market - 06/12/07 09:17 AM
If you ever wanted proof that mortgage rates react to global events, the past four days are it.
Worldwide, investors are shunning the United States mortgage market in search of higher returns elsewhere.
The more they sell, the worse mortgage rates get.
The latest catalyst for extra supply: speculation about a Bank of Japan interest rate increase coming soon. The Japanese central bank meets Thursday and Friday and is expected to hold its overnight lending rate at 0.500% although Finance Minister Omi has hinted at future rate hikes.
Japan is a major player in the U.S.-based mortgage bond market so the thought of … (0 comments)
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interest rates: The Week In Review (June 11, 2007) : What To Watch For - 06/11/07 08:37 AM
After a semi-calm start, last week ended terribly for mortgage rate shoppers highlighted (lowlighted?) by Thursday's mortgage bond market crash.
The drubbing Thursday was the worst day for the bond market in three years and is one of the reasons why the conforming and jumbo 30-year fixed mortgage is up 0.625% since late-April.
Conforming and jumbo ARMs are up as well, although not as much.
One factor impacting the mortage bond market is central bank activity in other countries. The European Central Bank, for example, raised its benchmark interest rate by 0.25% last week. That caused investor cash to move away from … (3 comments)
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interest rates: When Mortgage Rates Snowball Higher And It Becomes An Avalanche - 06/09/07 07:35 AM
Thursday was the single worst day for mortgage rates in more than four years.
Because so few homeowners understand how mortgage rates are determined, a day like Thursday may have little context.
So, let's try to put it in perspective.
If somebody told you that the stock market crashed, you'd understand. A stock market crash happens when many more investors are selling stocks than those that are buying.
Supply and Demand causes prices to plummet.
This is what happened to bonds yesterday -- the market had a "crash" because global investors fled the U.S. markets in search of better returns elsewhere.
In other words, … (1 comments)
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interest rates: Why "Prime Rate" Is A Name And Not A Number - 06/04/07 05:44 AM
Pop Quiz: Which interest rate is lower? 8.25% or Prime Rate?
If you answered anything other than "they are the same", then you can understand first-hand why banks refer to Prime Rate by name instead of by number.
It's a neat little piece of sales psychology that keeps people from recognizing their true cost of credit.
Prime Rate is based on the Fed Funds Rate and is pegged to be 3.000% higher. FFR is currently 5.250% (see chart) so Prime Rate is three percentage points higher, or 8.250%.
Since June 2004, Prime Rate has increased by 4.250% from 4.000% to today's levels (again, see … (4 comments)
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interest rates: Twenty Terms You Must Know and Understand Before You Sign Off On Your Mortgage! - 05/19/07 07:40 AM
Buying a home is a major achievement in most everyone's life. Pride of ownership, tax breaks, equity and the ability to increase your wealth and net worth are just a few of the many benefits you'll enjoy with your new home. Your home purchase may also be one of the largest you will ever make.
During the emotional excitement of buying a home, you may encounter terms with which you are unfamiliar. For some, it can be a bit embarrassing to ask what they consider too many questions. Others may make a note of their questions but simply forget to revisit … (0 comments)
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interest rates: Home Improvements Turn Average Homes into Dreams Come True - 05/10/07 05:58 AM
If you're thinking about taking out a home improvement loan, there are several options to consider. First and foremost, your mortgage professional needs to know why you want a home improvement loan. Here are some factors to take into consideration.
•· How long have you been in the home?
•· Will the improvements increase the property value?
•· Are you making improvements to increase energy efficiency?
•· Will improvements be made in one fell swoop, or in stages?
•· What is the current outstanding balance on your mortgage?
•· What is the appraised value of the home?
•· How much will the improvements cost?
•· What improvements will be … (0 comments)
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John Caylor- Post Falls, ID Mortgages
Post Falls,
ID
More about me…
Infinity Financial Group
Office Phone: (208) 773-8382 x 110
Cell Phone: (208) 215-5207
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