Mortgage Rates On The Rise!!!
06/18/2009
Mortgage rates are rising in this summer but don't look so shocked -- rates seem to rise every summer.
As recorded by Freddie Mac <http://www.freddiemac.com/pmms/pmms30.htm>, since 2006, 30-year fixed-rate conforming mortgage rate have made a habit of rising in May, June, July and August before settling down through football season.
This year, the June Swoon <http://en.wikipedia.org/wiki/Chicago_Cubs_futility_theories> looks especially strong. Mortgage rates are higher by 3/4 percent versus late-May and we're only at the start of the summer trend.
The biggest reason why mortgage rates are up is because of inflation fears.
Inflation devalues the U.S. dollar and renders fixed-rate investments -- a set that includes mortgage-backed bonds -- less attractive to investors. When the dollar is worth less, bond repayments are worth less, too. This is why traders don't like holding mortgage bonds in their portfolios when inflation looms -- it can be a real money-loser.
So, mortgage bonds tend to sell-off when inflation is coming which, in turn, causes mortgage-backed bond prices to fall. Lower bond prices yields higher mortgage rates.
Now, it's tough to know what's happening <http://www.youtube.com/watch?v=_2rDgZWqvhY> with inflation in real-time because most officially-published government data lags by a few weeks. However, you can sometimes use your local gas station as a proxy. Rising gas prices are often considered inflationary so if you notice a rising cost to fill-up is rising, it may be a predictor of higher mortgage rates ahead.
Source: <http://themortgagereports.com/>
What happens when the Fed cuts rates?
11/03/2008
If the Fed cuts interest rates that means mortgage rates will go down….right?
Not necessarily. First off, the interest rates that the Fed controls are not directly related to mortgage rates. Secondly, when the market believes the Fed will cut interest rates it usually prices in those lower rates in anticipation of that rate cut. When it finally happens mortgage rates actually move higher most of the time, following the old “buy the rumor, sell the news” philosophy in the stock market.
So what does this mean to me?
We are in an unprecedented time in history in terms of financial markets. Over the last year mortgage rates have consistently changed two and three times in a single day. Borrowers should not try to “time” this market in hopes of getting a lower interest rate. If you are considering a purchase or refinance and are happy with your proposed rate and payment you should lock it now. Do not wait!!!
10 Biggest Home Buying Mistakes - Part 3 of 3
10/29/2008
Mistake #8: Not getting what you want because you're impatient.
This is a big decision. You need time. Impatient decisions can lead
Mistake #9: Waiting for a better market and interest rates.
Warren Buffett, arguably the single best investor, says the rear view clearer than the windshield. In other words, get in now because chances will always rise.
Mistake #10: Not buying at all.
If you can afford a home and you don't make that purchase, you'll deductions, building home equity and the appreciation in value.
10 Biggest Home Buying Mistakes - Part 2 of 3
10/27/2008
Mistake #5: Overlooking how the house will function for your family.
How do you really live? Do you really need a formal dining room and living room? Would you be happier with an eat-in kitchen, a great room, and a den to use as a home office? The house only needs to fit one family -- yours.
Mistake #6: Not having the home properly inspected in a resale.
This is not the time for surprises. Get an inspection from a qualified, respected professional.
Mistake #7: Not checking out the builder’s reputation on a new home.
Talk to three or four people who live in the builder’s homes and see what they have to say. If one builder did all the houses in a neighborhood, talk to the residents and get their input. (It’s also a great way to see what your neighbors would be like.)
10 Biggest Home Buying Mistakes - Part 1 of 3
10/22/2008
Don’t Make The 300,000 Mistake!
Many times people go to buy a home “thinking” that they have all the answers. Perhaps
some do, but don’t take the chance. Think about it, would you bet hundreds of
thousands of dollars of you own money on something you “think” you know? No.
And neither would anybody.
So take a few minutes and read the information below. You never know, if may say you a
boatload of money.
Mistake #1: Not doing your homework.
Knowledge is power. Tremendous information is available on the Internet. There is no excuse for entering the market unprepared.
Mistake #2: Trying to make a shrewd investment.
People need to buy based on what fits their family. Don't try to guess what will happen to the market.
Mistake #3: Choosing a poor location.
Even within a neighborhood, location matters. Is it on the busiest street? Is there a shopping center out the back window?
Mistake #4: Overlooking an inferior floor plan for an attractive exterior.
It may have gorgeous curb appeal, but you don't live on the lawn. No matter how attractive the exterior, you need a livable home.
HR3221 or Hope for Homeowners!
10/18/2008
Are you struggling to hold up your current house?
There are estimates from many organizations that by the end of next year 1 out of every 6 homeowners will be "upside down" in their homes. What does that mean? It means you owe more on your mortgage then your home is currently worth.
