mortgage: Surprise: "Toxic" Mortgages Are The Best - 09/26/07 02:58 AM
With all the negative talk and horror stories concerning the Option ARM I thought I would share this article that recently came out in BusinessWeek.
Surprise: 'Toxic' Mortgages Are the Best
(2 comments)

mortgage: Making English Out Of Fed-Speak (June 2007 Edition) - 06/29/07 10:16 AM

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)

mortgage: How To Protect Yourself From Becoming A "Trigger Lead" - 06/26/07 02:23 AM

From the CBS News Video Web site, an interesting story for anyone who's recently applied for credit.
Credit repositories now sell the contact information of people applying for new mortgage loans to other mortgage lenders that want to compete for the business.
Called "trigger leads", an unsuspecting mortgage applicant can have his credit checked by a mortgage lender, and then discover that the credit bureaus have sold the rights to his personal information to countless other credit firms across the country.
Because trigger leads identify a person making a lending decision right now, one marketer of trigger leads calls them "the best leads in … (0 comments)

mortgage: Be Wary Of Opinions That Masquerade As News - 06/21/07 03:14 AM

Is "news" always news, or is it masked opinion? 
When doing research on mortgages, it's important to pay attention to the objectivity of your research source. 
Often, a writer will deploy key adjectives, phrases, and/or images that distort an otherwise factual story.
The above cartoon from clangnuts.com is a terrific example. 
It implies that interest only home loans are for people that can't otherwise afford homeownership.
The truth is that interest only loans are used by all economic classes of homeowners -- not just those that need payment relief. 
Many people choose interest only home loans for their flexibility, or as a financial planning … (1 comments)

mortgage: The Two Methods To Generate Home Equity Are Not Equal - 06/14/07 11:15 PM
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)

mortgage: Would You Have Answered The Mortgage Type Quiz Correctly? - 06/13/07 11:32 PM

The pie chart above comes from a Bankrate.com survey, sampling 1,000 adults about their current housing situation.
The question asked: What type of mortgage do you currently have? 
While the 34% "Don't Know" figure is troubling, even more frightening is the 6% "ARM" figure. 
The sample size was small, but far more than 6% of homeowners carry adjustable rate mortgages.  Some of the survey responders may have mistaken their "5-year fixed rate mortgage" for a true fixed rate mortgage -- even though they are aware that the rate can change after 60 months.
According to the Federal Reserve, ARM holders tend … (0 comments)

mortgage: What Role Do You Play In This Rising Mortgage Rate Environment? - 06/13/07 03:17 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)

mortgage: Proof That Mortgage Bonds Are A Global Market - 06/12/07 02:17 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)

mortgage: The Week In Review (June 11, 2007) : What To Watch For - 06/11/07 01:37 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)

mortgage: When Mortgage Rates Snowball Higher And It Becomes An Avalanche - 06/09/07 12:35 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)

mortgage: Planning Your Mortgage and Seeking Pre−Approval - 06/04/07 11:33 PM
Choosing the right lender is a key element to managing your mortgage. As a mortgage planner, my goal is not just to provide you with a loan, but also to help select the one most beneficial to you and your long-term goals, and then, help you manage that debt over time. There are not many lenders out there who provide this type of personalized service.
My job is just beginning when your first loan closes. I will continuously monitor rates on your behalf, and stay in touch with you to make sure we remain on target with your financial goals.
Seek Pre-Approval
What's the … (0 comments)

mortgage: Why "Prime Rate" Is A Name And Not A Number - 06/03/07 10:44 PM

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)

mortgage: Alert! Your Name is Being Sold - Take Action Now! - 06/03/07 01:50 AM
Your name is worth everything to you...it's your identity, it's YOU.  Here's breaking news you need to know...and you need to let all your family and friends know right away as well.    
Few people realize that each time their credit is checked, the information provided to the credit bureaus (Equifax, TransUnion, Innovis or Experian) immediately becomes a commodity that is sold not only to other lenders but also to companies that sell and resell the same names and personal information.  
That's right - The credit bureaus have found a way to increase their revenues at your expense....and without your permission.  These … (0 comments)

mortgage: One Method To Reduce The Amount Of Sub-Prime ARM Foreclosures - 06/02/07 06:59 AM
 
The above graph comes from The Wall Street Journal and it illustrates something that we all intrinsically know: Sub-Prime ARMs foreclose at a faster pace than all other home loan types.
When adjustable rate mortgages reach the end of their "fixed rate" period, some homeowners are unprepared for the upward-adjusting mortgage payments and that can lead to payment shock. 
It doesn't mean that sub-prime mortgages are bad for all homeowners, however.
A little known fact: Nearly all sub-prime ARMs carry an initial fixed period of 24 months or more.  This means that the sub-prime borrower has at least two years to make financial adjustments … (3 comments)

mortgage: Dealing with Credit Challenges - 06/01/07 11:00 PM
Typically, a person with a bad credit score is in this position because they lack structure in their life. There are, of course, cases where unplanned health or employment complications are to blame, but for the most part, these are individuals who lack the discipline to pay their bills on time or curb their spending. This is your opportunity to be the "knight in shining armor" that provides them with a simple roadmap to get back on track.
Let's take a look at some examples that can help to quickly improve less-than-perfect credit scores for the potential homebuyer:
Let's say we have … (1 comments)

mortgage: S.M.A.R.T. Approach to Achieving Your Goals - 06/01/07 12:43 AM
Specific Define your eventual success. Create vivid, detailed, clear written descriptions, so you know exactly where you are headed. Do you want to own waterfront property or acreage in a location of your choice? Do you want your real estate to generate income? If so, how much? Continually, keep your goals "top of mind" by displaying and carrying key words written on small cards, but don't share all the details until your goal is achieved.
Measurable Breakdown the goal into doable steps. Know how you will benefit from each. How many real estate properties, each with its own reasonable amount of … (3 comments)

mortgage: Ten Questions You Must Ask Any Realtor Before You List - 05/30/07 11:26 PM
Most of us sell only a few homes in our lifetime.  With such limited experience in real estate, how do you maximize the profits from your home sale?  Many home sellers make the critical mistake of thinking all Realtorsâ are the same.  They list with the first agent who comes along.  Does it make good business sense to put the responsibility of selling your home with someone who has no plan or qualifications?  This report will give you key fundamental characteristics you should look for when selecting an agent. 
So, where do you start?  By doing a few hours of research.  Ask … (1 comments)

mortgage: Training and Managing a Team - 05/30/07 11:12 PM
When it comes to training and managing a team, you must start out with a clear vision in directing your team to a common goal through job description and training. Creating a job description and training the individual you hire is very important to the end result. You must think through the position and its job description in great detail, even before you start interviewing people for that position. Here are some tips:
1. Define exactly what you are looking for, including the personality traits and skill sets you would like to see in that individual.
In addition, make sure you have a … (1 comments)

mortgage: Business Owner or Self−Employed? - 05/29/07 11:55 PM
Two fantastic sources for entrepreneurs are The E-Myth Revisited by Michael Gerber and Rich Dad's Cashflow Quadrant by Robert Kiyosaki. Gerber's book is accurately sub-titled: Why Most Small Businesses Don't Work and What to Do About It. He examines the small business and the entrepreneur, and his results are intuitive but important.
As Gerber says, "The technical work of a business-and a business that does that technical work-are two totally different things!"
Take the general contractor as an example: Building a house requires a far different skillset than advertising a business and keeping the books. That's not to say the contractor shouldn't go … (1 comments)

mortgage: “WARNING! Don’t Put Your Home on the Market Until You’ve Read This Post... Avoid 11 Mistakes That Could Cost You Hundreds... Even Thousands of Dollars!” - 05/29/07 11:39 PM
Selling your home can be an exhausting experience.  Last minute walk-throughs, inconvenient calls, price adjustments and the possibility of being stuck with two mortgages are real concerns.  If you are not completely prepared, you could end up losing hundreds even thousands of dollars in profit.
The difference between a profitable smooth transaction and a break-even... miserable experience is often a fine line.  In the majority of cases, it comes down to the subtle know-how of your professional.  By utilizing the knowledge of a good, qualified real estate professional, you'll ensure the quick, profitable sale of your home.  This report is designed to … (0 comments)

 

John Caylor

Post Falls, ID Mortgages

Post Falls, ID

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