It's almost the end of summer!  Wahh!!  I get asked all of the time how we determine interest rates - please review the info below to learn how rates are calculated.  Here's a cool new website that you might find interesting - I heard about it this am and will be checking it out - it seems like it has some good content:  www.housingmatrix.com    As usual below the rate sheet are various commentaries to shed some light on what rates are doing and why.  Please let me know how I can be of assistance to your or your clients this coming week.  Thanks!    

Mary Taylor Sales Manager/Sr. Loan Officer Golf Savings Bank Phone: (503) 701-2269 Fax: 1-888-287-1675 metaylor@golfsavingsbank.com

What's Your Rate? When it comes to buying a home, consumers can no longer shop for a mortgage based simply on lowest interest rate quotes. Today's home buyer needs good advice from an experienced, educated mortgage professional who has the consumer's best interest in mind. For consumers, this means beware of anyone who quotes you an interest rate over the phone or the Internet without asking anything about you, your family, your finances or your lifestyle. Besides market conditions, your mortgage rate is based on a long list of criteria that are unique to your individual financial situation. Look at the list below of 26 different criteria that affect your mortgage rate. How can anyone quote you an interest rate you can trust without a thorough knowledge of your unique financial situation? 1. Loan Amount 2. LTV 3. CLTV 4. Credit Score 5. Credit History 6. Escrow Preference 7. Closing Date 8. Loan Type 9. Property Type 10. Occupancy Type 11. Residency 12. Available Assets 13. Asset Seasoning 14. Co-borrowers 15. Debt Ratio 16. Housing Ratio 17. Improvements Needed 18. Employment Type 19. Employment History 20. Documentation Type 21. Paying Points 22. Length of Loan 23. Relocation 24. Seller Contributions 25. Gifts 26. Cash-out Give us a call. We'll analyze your individual needs and offer you a combination of loan programs and interest rates that makes the most sense for you and your family.

Mortgage Interest Rates*

Rates as of Friday, 28th August, 2009:

Conforming APR Payment per $1,000 Jumbo APR Payment per $1,000 30-Yr. Fixed 5.125% 5.257% $5.44 % 0.000% $0.00 15-Yr. Fixed 4.5% 4.723% $7.65 % 0.000% $0.00 3-Yr. ARM - FHA 4.25% 4.375% $4.92 % 0.000% $0.00 30-Yr FHA 5.25% 5.383% $5.52 % 0.000% $0.00 30-Yr VA 5.25% 5.383% $5.52 % 0.000% $0.00 5-Yr. ARM - Conv 4.0% 4.124% $4.77 % 0.000% $0.00

*Rates are subject to change due to market fluctuations and borrower's eligibility.

All loans subject to credit approval and property appraisal. Programs, rates, and terms subject to change without notice. For ARM loans, rate may increase after settlement. Prequalification is not a commitment to lend, a condition of loan approval, or an application for credit. Pre-approvals will result in a loan decision subject to conditions. Consult a tax advisor regarding the deductibility of interest.-- a Division of National City Bank

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Mary Taylor
Golf Savings Bank
9755 SW Barnes Road Suite 460
Portland, OR 97225

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  Dick Lepre, San Francisco  

II) Fundamentals

Today we have our first peek at how the economy is doing in 3Q2009 and the data shows an economy which is still flat. Personal Income was flat. While inflation - as measured by today's PCE which is +0.1% - is tame the fact is that real wages are declining. I believe that this may become a longer term reality. With so many unemployed and the need to compete with a world economy real wages may well decline for another year or longer. Personal Spending was +0.2% but that is the consequence of the dubious at best "Cash for Clunkers" which compressed sales into the small time frame in which it operated. These auto sales were at the expense of the near future. Considering the cost, I do not believe that this was money well spent. It did not create more auto sales. It moved them in time.

Revised 2ndQ2009 GDP was the same are the preliminary data showing a 1.0% decline in GDP. Initial Jobless Claims were 570,000. The GDP Deflator (a weighted measure of inflation) was flat.

New Home Sales were up 9.6% at 433,000 annualized. Durable Goods Orders ex-Trans were +0.8% (overall was +4.9%).

III) The Technicals 

The daily is poised to downcross next week indicative of higher Treasury yields and mortgage rates. The weekly is still bullish.  

Think Big, Work Small

Questions increase about interest rate outlooks as the stock market continues to point to economic rebound. With the rate markets focusing primarily on how equity markets perform these days, unless stocks roll over the rate markets are not likely to work lower in rates. It now appears that it will take a market surprise to reverse the current bullish outlook for the economy. Until something more than talk occurs stocks won't buckle; that surprise could be next week's employment report if it shows a big increase in the unemployment rate and larger drop in non-farm job growth---not forecasting it, but whatever the trigger will be the markets won't fall back much without some kind of sentiment change even if it short-lived. Don't know where or what it will be but we believe it will happen in Sept and push mortgage rates to 5.00% and lower.     

LOW MORTGAGE RATES HELPING TO STABILIZE HOUSING MARKET

 

McLean, VA - Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.14 percent for the week ending August 27, 2009, up from last week when it averaged 5.12 percent. Last year at this time, the 30-year FRM averaged 6.40 percent.

The 15-year FRM this week averaged 4.58 percent up from last week when it averaged 4.56 percent. A year ago at this time, the 15-year FRM averaged 5.93 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.67 percent this week, down from last week when it averaged 4.57 percent. A year ago, the 5-year ARM averaged 6.03 percent.

"Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market," said Frank Nothaft, Freddie Mac vice president and chief economist." Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007, according to the National Association of Realtors®.

"Similarly, new home sales rose for the fourth month in a row to 0.4 million, the strongest pace since September 2008, the Commerce Department reported. The sales gain helped to reduce the number of new unsold houses on the market to the lowest amount since March 1993. In addition, house prices in June rose nationally for the second consecutive month, according to the Federal Housing Finance Agency's purchase-only house price index."