Mortgage Bonds are up this morning after grim employment news was released. According to the Labor Department, 467,000 jobs were lost in June, in addition, the unemployment rate rose to 9.5%, its highest level since August 1983. Overall, the weak Job numbers indicate that the recession continues at concerning levels.
The European Central Bank held its benchmark interest steady at 1% to help stimulate the European economy. As a result, the US Dollar has strengthened significantly, which has caused a sharp decline in Oil prices today. The decline in Oil, in turn, is applying pressure to Stocks by pushing shares of energy lower.Currently, the weak job news has helped Mortgage Bonds climb to test a dual layer of resistance. I recommend floating for now, but be prepared to lock in the gains if Bonds are pushed lower. Remember, the markets will be closed tomorrow in observance of Independence Day. Have a safe and happy holiday
Leonard Winslow Dominion Trust Mortgage
434-760-2580 (cell)
leonad.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Showing posts with label Loan. Show all posts
Showing posts with label Loan. Show all posts
Thursday, July 2, 2009
Rate Watch 7/2/2009
Mortgage Bonds are up this morning after grim employment news was released. According to the Labor Department, 467,000 jobs were lost in June, in addition, the unemployment rate rose to 9.5%, its highest level since August 1983. Overall, the weak Job numbers indicate that the recession continues at concerning levels.
The European Central Bank held its benchmark interest steady at 1% to help stimulate the European economy. As a result, the US Dollar has strengthened significantly, which has caused a sharp decline in Oil prices today. The decline in Oil, in turn, is applying pressure to Stocks by pushing shares of energy lower.Currently, the weak job news has helped Mortgage Bonds climb to test a dual layer of resistance. I recommend floating for now, but be prepared to lock in the gains if Bonds are pushed lower. Remember, the markets will be closed tomorrow in observance of Independence Day. Have a safe and happy holiday
Leonard Winslow Dominion Trust Mortgage
434-760-2580 (cell)
leonad.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
The European Central Bank held its benchmark interest steady at 1% to help stimulate the European economy. As a result, the US Dollar has strengthened significantly, which has caused a sharp decline in Oil prices today. The decline in Oil, in turn, is applying pressure to Stocks by pushing shares of energy lower.Currently, the weak job news has helped Mortgage Bonds climb to test a dual layer of resistance. I recommend floating for now, but be prepared to lock in the gains if Bonds are pushed lower. Remember, the markets will be closed tomorrow in observance of Independence Day. Have a safe and happy holiday
Leonard Winslow Dominion Trust Mortgage
434-760-2580 (cell)
leonad.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Thursday, June 25, 2009
Different Types of Loans
Understanding Different Loan Types
The market today has been reduced to more traditional loan programs. The standards of today are fixed, adjustable, hybrid and flexed fixed. With these financing packages one can be tailored to meet your financial goals.
While the different choices may seem overwhelming at first, the overall goal is really quite simple: you want to find a loan that fits both your current financial situation and your future plans. Though this article discusses some of the more common loan types, you should spend time talking with your lender before deciding on the right loan for your situation.
Categories of loans:
Typically loans fall into one of three major categories: fixed rate, adjustable and hybrid loans that combine features from both the fixed rate and adjustable.
Fixed Rate Mortgages:
As the name describes, the mortgage is based on a fixed rate at a fixed term. The term can range from 10 to 30 years and in some cases can go to 40 years. The fixed rate mortgage has been the reliable tradition for all time. You can plan a budget based on a known monthly payment, the principal and interest does not change, you can pre-pay the mortgage, allowing you to pay the loan off early.
Adjustable Rate Mortgage:
Adjustable Rate Mortgages as the name implies change based on a new rate and new principle balance at the time of adjustment. For some people the adjustable rate is the right program. Typically a life event is going to occur in future that will allow them to pay down the balance, have another income enter into the family or just want a potentially lower payment for the first few years of the mortgage. Adjustable rate mortgages over history have a lower initial interest rate which would mean a lower payment.
The interest rate at time of adjustment is based on an index typically the one year treasury index or more recently the LIBOR, (London Inter Bank Rate) and a margin. The margin typically is 2.75%. You add the two together and that would be the rate for the ensuing time frame. The rate on most adjustable can go up or down by no more than 2% per change and no higher or lower than 6% over the life of the loan.
Hybrid Loans:
Hybrid loans combine the features of both fixed rate and adjustable rates. A hybrid will start with a moderate fixed term (5, 7, 10 years) and then will go to a 1 year adjustable for the remaining time of the loan. The same principal for adjustment as above applies with the exception of the first adjustment. Some Hybrids at the first adjustment will change by up to 5% maximum after the initial fixed term. As with the adjustable a future life event may occur; an additional income source, additional monies to pay down the mortgage, or a time frame of staying in the home.
Another possible feature could be an interest only feature for the fixed time frame. This would mean a lower monthly payment in the first years of the mortgage but would also translate to a higher payment after the fixed term.
Balloon Payments:
A balloon payment refers to a loan that has a large, final payment due at the end of the loan. For example, there are currently fixed-rate loans which allow homeowners to make payments based on a 30-year loan, even though the entire balance of the loan may be due (the balloon payment) after 7 years. As with some hybrid loans, balloon loans may be attractive to homeowners who plan to have a future life event occur. In the case of a balloon, it could be another property selling, an inheritance, or a planed move.
Strategies of mortgage planning
The general theme when planning a mortgage strategy is to ask your self several questions. These questions are:
1) How long do I plan to stay in the home?
2) How much do I want my payments?
3) How much money do I want to commit to the transaction?
Given question 2 and 3 being equally important, which one is more important?
While time is important when designing a mortgage program it is question 2 and 3 which to most people are the important ones. Time is used more for deciding a permanent buy-down of the rate is rational. The rates on the fixed and adjustable are not different as they have been in the past.
FHA :
Federal Housing Administration loans, aka FHA, are backed by the federal government by insuring the loan in cases of default. The loan requires 3.5% down and has higher qualifying ratio’s. Used predominately with borrows with limited cash resources
VA:
Veterans Administration loans, AKA VA, are loans made to qualified veterans. They do not require a down payment and are used for Veterans of the armed forces and some other government entities. VA is entitling the loan only in cases of default.
VHDA:
Virginia Housing and Development Authority, AKA VHDA, Issues bonds that are tax free in some cases and lends monies to first time homebuyers. There loans can be combined with FHA, VA, RD and conventional loan mortgage insurance. There loans have income and sales price limitations. http://www.vhda.com/ .
Conventional Loans:
A conventional loan is simply a loan offered by a traditional lender. They may be fixed-rate, adjustable, hybrid or other types. While conventional loans may be harder to qualify for than government-backed loans, they typically have higher credit scores and tighter qualifying ratios.
By:Leonard Winslow
Dominion Trust Mortgage
www.dominiontrustmortgage.com/leonard.winslow
434-760-2580
Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell) roballey@roywheeler.com http://www.robsellscharlottesville.com/ http://www.forestlakesliving.com/ http://www.charlottesvillevarealestate.blogspot.com/ http://www.charlottesvilleshortsale.com/
The market today has been reduced to more traditional loan programs. The standards of today are fixed, adjustable, hybrid and flexed fixed. With these financing packages one can be tailored to meet your financial goals.
While the different choices may seem overwhelming at first, the overall goal is really quite simple: you want to find a loan that fits both your current financial situation and your future plans. Though this article discusses some of the more common loan types, you should spend time talking with your lender before deciding on the right loan for your situation.
Categories of loans:
Typically loans fall into one of three major categories: fixed rate, adjustable and hybrid loans that combine features from both the fixed rate and adjustable.
Fixed Rate Mortgages:
As the name describes, the mortgage is based on a fixed rate at a fixed term. The term can range from 10 to 30 years and in some cases can go to 40 years. The fixed rate mortgage has been the reliable tradition for all time. You can plan a budget based on a known monthly payment, the principal and interest does not change, you can pre-pay the mortgage, allowing you to pay the loan off early.
Adjustable Rate Mortgage:
Adjustable Rate Mortgages as the name implies change based on a new rate and new principle balance at the time of adjustment. For some people the adjustable rate is the right program. Typically a life event is going to occur in future that will allow them to pay down the balance, have another income enter into the family or just want a potentially lower payment for the first few years of the mortgage. Adjustable rate mortgages over history have a lower initial interest rate which would mean a lower payment.
The interest rate at time of adjustment is based on an index typically the one year treasury index or more recently the LIBOR, (London Inter Bank Rate) and a margin. The margin typically is 2.75%. You add the two together and that would be the rate for the ensuing time frame. The rate on most adjustable can go up or down by no more than 2% per change and no higher or lower than 6% over the life of the loan.
Hybrid Loans:
Hybrid loans combine the features of both fixed rate and adjustable rates. A hybrid will start with a moderate fixed term (5, 7, 10 years) and then will go to a 1 year adjustable for the remaining time of the loan. The same principal for adjustment as above applies with the exception of the first adjustment. Some Hybrids at the first adjustment will change by up to 5% maximum after the initial fixed term. As with the adjustable a future life event may occur; an additional income source, additional monies to pay down the mortgage, or a time frame of staying in the home.
Another possible feature could be an interest only feature for the fixed time frame. This would mean a lower monthly payment in the first years of the mortgage but would also translate to a higher payment after the fixed term.
Balloon Payments:
A balloon payment refers to a loan that has a large, final payment due at the end of the loan. For example, there are currently fixed-rate loans which allow homeowners to make payments based on a 30-year loan, even though the entire balance of the loan may be due (the balloon payment) after 7 years. As with some hybrid loans, balloon loans may be attractive to homeowners who plan to have a future life event occur. In the case of a balloon, it could be another property selling, an inheritance, or a planed move.
Strategies of mortgage planning
The general theme when planning a mortgage strategy is to ask your self several questions. These questions are:
1) How long do I plan to stay in the home?
2) How much do I want my payments?
3) How much money do I want to commit to the transaction?
Given question 2 and 3 being equally important, which one is more important?
While time is important when designing a mortgage program it is question 2 and 3 which to most people are the important ones. Time is used more for deciding a permanent buy-down of the rate is rational. The rates on the fixed and adjustable are not different as they have been in the past.
FHA :
Federal Housing Administration loans, aka FHA, are backed by the federal government by insuring the loan in cases of default. The loan requires 3.5% down and has higher qualifying ratio’s. Used predominately with borrows with limited cash resources
VA:
Veterans Administration loans, AKA VA, are loans made to qualified veterans. They do not require a down payment and are used for Veterans of the armed forces and some other government entities. VA is entitling the loan only in cases of default.
VHDA:
Virginia Housing and Development Authority, AKA VHDA, Issues bonds that are tax free in some cases and lends monies to first time homebuyers. There loans can be combined with FHA, VA, RD and conventional loan mortgage insurance. There loans have income and sales price limitations. http://www.vhda.com/ .
Conventional Loans:
A conventional loan is simply a loan offered by a traditional lender. They may be fixed-rate, adjustable, hybrid or other types. While conventional loans may be harder to qualify for than government-backed loans, they typically have higher credit scores and tighter qualifying ratios.
By:Leonard Winslow
Dominion Trust Mortgage
www.dominiontrustmortgage.com/leonard.winslow
434-760-2580
Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell) roballey@roywheeler.com http://www.robsellscharlottesville.com/ http://www.forestlakesliving.com/ http://www.charlottesvillevarealestate.blogspot.com/ http://www.charlottesvilleshortsale.com/
Different Types of Loans
Understanding Different Loan Types
The market today has been reduced to more traditional loan programs. The standards of today are fixed, adjustable, hybrid and flexed fixed. With these financing packages one can be tailored to meet your financial goals.
While the different choices may seem overwhelming at first, the overall goal is really quite simple: you want to find a loan that fits both your current financial situation and your future plans. Though this article discusses some of the more common loan types, you should spend time talking with your lender before deciding on the right loan for your situation.
Categories of loans:
Typically loans fall into one of three major categories: fixed rate, adjustable and hybrid loans that combine features from both the fixed rate and adjustable.
Fixed Rate Mortgages:
As the name describes, the mortgage is based on a fixed rate at a fixed term. The term can range from 10 to 30 years and in some cases can go to 40 years. The fixed rate mortgage has been the reliable tradition for all time. You can plan a budget based on a known monthly payment, the principal and interest does not change, you can pre-pay the mortgage, allowing you to pay the loan off early.
Adjustable Rate Mortgage:
Adjustable Rate Mortgages as the name implies change based on a new rate and new principle balance at the time of adjustment. For some people the adjustable rate is the right program. Typically a life event is going to occur in future that will allow them to pay down the balance, have another income enter into the family or just want a potentially lower payment for the first few years of the mortgage. Adjustable rate mortgages over history have a lower initial interest rate which would mean a lower payment.
The interest rate at time of adjustment is based on an index typically the one year treasury index or more recently the LIBOR, (London Inter Bank Rate) and a margin. The margin typically is 2.75%. You add the two together and that would be the rate for the ensuing time frame. The rate on most adjustable can go up or down by no more than 2% per change and no higher or lower than 6% over the life of the loan.
Hybrid Loans:
Hybrid loans combine the features of both fixed rate and adjustable rates. A hybrid will start with a moderate fixed term (5, 7, 10 years) and then will go to a 1 year adjustable for the remaining time of the loan. The same principal for adjustment as above applies with the exception of the first adjustment. Some Hybrids at the first adjustment will change by up to 5% maximum after the initial fixed term. As with the adjustable a future life event may occur; an additional income source, additional monies to pay down the mortgage, or a time frame of staying in the home.
Another possible feature could be an interest only feature for the fixed time frame. This would mean a lower monthly payment in the first years of the mortgage but would also translate to a higher payment after the fixed term.
Balloon Payments:
A balloon payment refers to a loan that has a large, final payment due at the end of the loan. For example, there are currently fixed-rate loans which allow homeowners to make payments based on a 30-year loan, even though the entire balance of the loan may be due (the balloon payment) after 7 years. As with some hybrid loans, balloon loans may be attractive to homeowners who plan to have a future life event occur. In the case of a balloon, it could be another property selling, an inheritance, or a planed move.
Strategies of mortgage planning
The general theme when planning a mortgage strategy is to ask your self several questions. These questions are:
1) How long do I plan to stay in the home?
2) How much do I want my payments?
3) How much money do I want to commit to the transaction?
Given question 2 and 3 being equally important, which one is more important?
While time is important when designing a mortgage program it is question 2 and 3 which to most people are the important ones. Time is used more for deciding a permanent buy-down of the rate is rational. The rates on the fixed and adjustable are not different as they have been in the past.
FHA :
Federal Housing Administration loans, aka FHA, are backed by the federal government by insuring the loan in cases of default. The loan requires 3.5% down and has higher qualifying ratio’s. Used predominately with borrows with limited cash resources
VA:
Veterans Administration loans, AKA VA, are loans made to qualified veterans. They do not require a down payment and are used for Veterans of the armed forces and some other government entities. VA is entitling the loan only in cases of default.
VHDA:
Virginia Housing and Development Authority, AKA VHDA, Issues bonds that are tax free in some cases and lends monies to first time homebuyers. There loans can be combined with FHA, VA, RD and conventional loan mortgage insurance. There loans have income and sales price limitations. http://www.vhda.com/ .
Conventional Loans:
A conventional loan is simply a loan offered by a traditional lender. They may be fixed-rate, adjustable, hybrid or other types. While conventional loans may be harder to qualify for than government-backed loans, they typically have higher credit scores and tighter qualifying ratios.
By:Leonard Winslow
Dominion Trust Mortgage
www.dominiontrustmortgage.com/leonard.winslow
434-760-2580
Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell) roballey@roywheeler.com http://www.robsellscharlottesville.com/ http://www.forestlakesliving.com/ http://www.charlottesvillevarealestate.blogspot.com/ http://www.charlottesvilleshortsale.com/
The market today has been reduced to more traditional loan programs. The standards of today are fixed, adjustable, hybrid and flexed fixed. With these financing packages one can be tailored to meet your financial goals.
While the different choices may seem overwhelming at first, the overall goal is really quite simple: you want to find a loan that fits both your current financial situation and your future plans. Though this article discusses some of the more common loan types, you should spend time talking with your lender before deciding on the right loan for your situation.
Categories of loans:
Typically loans fall into one of three major categories: fixed rate, adjustable and hybrid loans that combine features from both the fixed rate and adjustable.
Fixed Rate Mortgages:
As the name describes, the mortgage is based on a fixed rate at a fixed term. The term can range from 10 to 30 years and in some cases can go to 40 years. The fixed rate mortgage has been the reliable tradition for all time. You can plan a budget based on a known monthly payment, the principal and interest does not change, you can pre-pay the mortgage, allowing you to pay the loan off early.
Adjustable Rate Mortgage:
Adjustable Rate Mortgages as the name implies change based on a new rate and new principle balance at the time of adjustment. For some people the adjustable rate is the right program. Typically a life event is going to occur in future that will allow them to pay down the balance, have another income enter into the family or just want a potentially lower payment for the first few years of the mortgage. Adjustable rate mortgages over history have a lower initial interest rate which would mean a lower payment.
The interest rate at time of adjustment is based on an index typically the one year treasury index or more recently the LIBOR, (London Inter Bank Rate) and a margin. The margin typically is 2.75%. You add the two together and that would be the rate for the ensuing time frame. The rate on most adjustable can go up or down by no more than 2% per change and no higher or lower than 6% over the life of the loan.
Hybrid Loans:
Hybrid loans combine the features of both fixed rate and adjustable rates. A hybrid will start with a moderate fixed term (5, 7, 10 years) and then will go to a 1 year adjustable for the remaining time of the loan. The same principal for adjustment as above applies with the exception of the first adjustment. Some Hybrids at the first adjustment will change by up to 5% maximum after the initial fixed term. As with the adjustable a future life event may occur; an additional income source, additional monies to pay down the mortgage, or a time frame of staying in the home.
Another possible feature could be an interest only feature for the fixed time frame. This would mean a lower monthly payment in the first years of the mortgage but would also translate to a higher payment after the fixed term.
Balloon Payments:
A balloon payment refers to a loan that has a large, final payment due at the end of the loan. For example, there are currently fixed-rate loans which allow homeowners to make payments based on a 30-year loan, even though the entire balance of the loan may be due (the balloon payment) after 7 years. As with some hybrid loans, balloon loans may be attractive to homeowners who plan to have a future life event occur. In the case of a balloon, it could be another property selling, an inheritance, or a planed move.
Strategies of mortgage planning
The general theme when planning a mortgage strategy is to ask your self several questions. These questions are:
1) How long do I plan to stay in the home?
2) How much do I want my payments?
3) How much money do I want to commit to the transaction?
Given question 2 and 3 being equally important, which one is more important?
While time is important when designing a mortgage program it is question 2 and 3 which to most people are the important ones. Time is used more for deciding a permanent buy-down of the rate is rational. The rates on the fixed and adjustable are not different as they have been in the past.
FHA :
Federal Housing Administration loans, aka FHA, are backed by the federal government by insuring the loan in cases of default. The loan requires 3.5% down and has higher qualifying ratio’s. Used predominately with borrows with limited cash resources
VA:
Veterans Administration loans, AKA VA, are loans made to qualified veterans. They do not require a down payment and are used for Veterans of the armed forces and some other government entities. VA is entitling the loan only in cases of default.
VHDA:
Virginia Housing and Development Authority, AKA VHDA, Issues bonds that are tax free in some cases and lends monies to first time homebuyers. There loans can be combined with FHA, VA, RD and conventional loan mortgage insurance. There loans have income and sales price limitations. http://www.vhda.com/ .
Conventional Loans:
A conventional loan is simply a loan offered by a traditional lender. They may be fixed-rate, adjustable, hybrid or other types. While conventional loans may be harder to qualify for than government-backed loans, they typically have higher credit scores and tighter qualifying ratios.
By:Leonard Winslow
Dominion Trust Mortgage
www.dominiontrustmortgage.com/leonard.winslow
434-760-2580
Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell) roballey@roywheeler.com http://www.robsellscharlottesville.com/ http://www.forestlakesliving.com/ http://www.charlottesvillevarealestate.blogspot.com/ http://www.charlottesvilleshortsale.com/
Tuesday, March 17, 2009
FAKE HUD WEBSITE...BEWARE!
There is a deceptive website out there that is posing as HUD. This website tries to dupe people into giving out personal information (known as “phishing”) - and because they’ve made their site appear to be an “official us government website”, some people may fall prey to this scam.
The website is: http://bailout.hud-gov.us/
If anyone asks you about this website, advise them to stay away.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
The website is: http://bailout.hud-gov.us/
If anyone asks you about this website, advise them to stay away.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
FAKE HUD WEBSITE...BEWARE!
There is a deceptive website out there that is posing as HUD. This website tries to dupe people into giving out personal information (known as “phishing”) - and because they’ve made their site appear to be an “official us government website”, some people may fall prey to this scam.
The website is: http://bailout.hud-gov.us/
If anyone asks you about this website, advise them to stay away.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
The website is: http://bailout.hud-gov.us/
If anyone asks you about this website, advise them to stay away.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
Thursday, February 5, 2009
February 5th, 2009 Morning Market Update
"Bonds are having another volatile morning on the heels of more bad news on the labor front. Initial Jobless Claims reached the highest level in 26 years. In addition, while Productivity in the 4th Quarter was better than expected, Output in the 4th Quarter declined by the largest amount in 26 years.
In other news, the Senate voted to include a $15,000 tax credit in the new stimulus plan in hopes of revitalizing the slumping housing market. The stimulus bill is still working its way through Congress after being voted on in the House last week, and its impact still remains to be seen.
Overall, Bonds have drifted significantly lower since peaking on January 9th. If tomorrow's Jobs Report is as bad--or worse--than expected, Bonds could rally on the negative economic news. Therefore, I recommend floating ahead of the Jobs Report, but I will let you know if we need to shift gears."
Brought to you by:
Leonard Winslow
Gateway Bank Mortgage
690 Berkmar Circle
Chrlottesville, Va 22901
(O) 434-220-3409 (F) 434-220-3429
(M) 434-760-2580 email leonardwinslow@gwfh.com
www.emortgageware.com/leonardwinslow
In other news, the Senate voted to include a $15,000 tax credit in the new stimulus plan in hopes of revitalizing the slumping housing market. The stimulus bill is still working its way through Congress after being voted on in the House last week, and its impact still remains to be seen.
Overall, Bonds have drifted significantly lower since peaking on January 9th. If tomorrow's Jobs Report is as bad--or worse--than expected, Bonds could rally on the negative economic news. Therefore, I recommend floating ahead of the Jobs Report, but I will let you know if we need to shift gears."
Brought to you by:
Leonard Winslow
Gateway Bank Mortgage
690 Berkmar Circle
Chrlottesville, Va 22901
(O) 434-220-3409 (F) 434-220-3429
(M) 434-760-2580 email leonardwinslow@gwfh.com
www.emortgageware.com/leonardwinslow
February 5th, 2009 Morning Market Update
"Bonds are having another volatile morning on the heels of more bad news on the labor front. Initial Jobless Claims reached the highest level in 26 years. In addition, while Productivity in the 4th Quarter was better than expected, Output in the 4th Quarter declined by the largest amount in 26 years.
In other news, the Senate voted to include a $15,000 tax credit in the new stimulus plan in hopes of revitalizing the slumping housing market. The stimulus bill is still working its way through Congress after being voted on in the House last week, and its impact still remains to be seen.
Overall, Bonds have drifted significantly lower since peaking on January 9th. If tomorrow's Jobs Report is as bad--or worse--than expected, Bonds could rally on the negative economic news. Therefore, I recommend floating ahead of the Jobs Report, but I will let you know if we need to shift gears."
Brought to you by:
Leonard Winslow
Gateway Bank Mortgage
690 Berkmar Circle
Chrlottesville, Va 22901
(O) 434-220-3409 (F) 434-220-3429
(M) 434-760-2580 email leonardwinslow@gwfh.com
www.emortgageware.com/leonardwinslow
In other news, the Senate voted to include a $15,000 tax credit in the new stimulus plan in hopes of revitalizing the slumping housing market. The stimulus bill is still working its way through Congress after being voted on in the House last week, and its impact still remains to be seen.
Overall, Bonds have drifted significantly lower since peaking on January 9th. If tomorrow's Jobs Report is as bad--or worse--than expected, Bonds could rally on the negative economic news. Therefore, I recommend floating ahead of the Jobs Report, but I will let you know if we need to shift gears."
Brought to you by:
Leonard Winslow
Gateway Bank Mortgage
690 Berkmar Circle
Chrlottesville, Va 22901
(O) 434-220-3409 (F) 434-220-3429
(M) 434-760-2580 email leonardwinslow@gwfh.com
www.emortgageware.com/leonardwinslow
Thursday, October 23, 2008
Thursday's bond market opened flat but has since slipped into negative ground following early gains in stocks. The stock markets are rebounding from yesterday's afternoon sell off that pushed the Dow down over 500 points and the Nasdaq down 80 points. I suspect that this morning's rally may be short-lived so we should be looking for afternoon volatility again.
The Dow is currently up 180 points while the Nasdaq has gain 13 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point. If the stock markets due give back their current gains, we may see improvements to mortgage rates later in the day.
The only economic news released this morning was last week's initial unemployment claims from the Labor Department. They reported that new claims rose to 478,000 last week, which was an increase of approximately 15,000. Analysts were expecting to see lit tle change form the previous week, meaning that the employment sector is still showing signs of weakness. This is good news for bonds, but this particular report is not considered to be of high importance because it tracks only a week's worth of claims.
Tomorrow morning brings us the release of September's Existing Home Sales data from the National Association of Realtors. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.
The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push prices lower and mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not th is is the bottom for the stock markets. It appears there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result. That means that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
The Dow is currently up 180 points while the Nasdaq has gain 13 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point. If the stock markets due give back their current gains, we may see improvements to mortgage rates later in the day.
The only economic news released this morning was last week's initial unemployment claims from the Labor Department. They reported that new claims rose to 478,000 last week, which was an increase of approximately 15,000. Analysts were expecting to see lit tle change form the previous week, meaning that the employment sector is still showing signs of weakness. This is good news for bonds, but this particular report is not considered to be of high importance because it tracks only a week's worth of claims.
Tomorrow morning brings us the release of September's Existing Home Sales data from the National Association of Realtors. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.
The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push prices lower and mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not th is is the bottom for the stock markets. It appears there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result. That means that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
Thursday's bond market opened flat but has since slipped into negative ground following early gains in stocks. The stock markets are rebounding from yesterday's afternoon sell off that pushed the Dow down over 500 points and the Nasdaq down 80 points. I suspect that this morning's rally may be short-lived so we should be looking for afternoon volatility again.
The Dow is currently up 180 points while the Nasdaq has gain 13 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point. If the stock markets due give back their current gains, we may see improvements to mortgage rates later in the day.
The only economic news released this morning was last week's initial unemployment claims from the Labor Department. They reported that new claims rose to 478,000 last week, which was an increase of approximately 15,000. Analysts were expecting to see lit tle change form the previous week, meaning that the employment sector is still showing signs of weakness. This is good news for bonds, but this particular report is not considered to be of high importance because it tracks only a week's worth of claims.
Tomorrow morning brings us the release of September's Existing Home Sales data from the National Association of Realtors. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.
The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push prices lower and mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not th is is the bottom for the stock markets. It appears there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result. That means that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
The Dow is currently up 180 points while the Nasdaq has gain 13 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point. If the stock markets due give back their current gains, we may see improvements to mortgage rates later in the day.
The only economic news released this morning was last week's initial unemployment claims from the Labor Department. They reported that new claims rose to 478,000 last week, which was an increase of approximately 15,000. Analysts were expecting to see lit tle change form the previous week, meaning that the employment sector is still showing signs of weakness. This is good news for bonds, but this particular report is not considered to be of high importance because it tracks only a week's worth of claims.
Tomorrow morning brings us the release of September's Existing Home Sales data from the National Association of Realtors. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.
The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push prices lower and mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not th is is the bottom for the stock markets. It appears there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result. That means that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
Top Ten Tips to Avoid Foreclosure
Watch How to Avoid Foreclosure - Top Ten Tips in How to Videos | View More Free Videos Online at Veoh.com
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/
Top Ten Tips to Avoid Foreclosure
Watch How to Avoid Foreclosure - Top Ten Tips in How to Videos | View More Free Videos Online at Veoh.com
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/
Thursday, October 16, 2008
Bond Market Update October 16th
Technorati Profile
Thursday's bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday's sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday's record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.
This morning's economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August's level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were bel ow forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.
The biggest surprise came from September's Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.
The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week's worth of claims, it had little impact on trading this morning.
The remaining two reports are both scheduled for release tomorrow morning. September's Housing Starts is the first, but is the week's least important piece of monthly data. It gives us an indication of housing sector strength and mortgage cre dit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September's final of 70.3.
Thursday's bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday's sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday's record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.
This morning's economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August's level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were bel ow forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.
The biggest surprise came from September's Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.
The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week's worth of claims, it had little impact on trading this morning.
The remaining two reports are both scheduled for release tomorrow morning. September's Housing Starts is the first, but is the week's least important piece of monthly data. It gives us an indication of housing sector strength and mortgage cre dit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September's final of 70.3.
Bond Market Update October 16th
Technorati Profile
Thursday's bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday's sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday's record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.
This morning's economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August's level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were bel ow forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.
The biggest surprise came from September's Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.
The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week's worth of claims, it had little impact on trading this morning.
The remaining two reports are both scheduled for release tomorrow morning. September's Housing Starts is the first, but is the week's least important piece of monthly data. It gives us an indication of housing sector strength and mortgage cre dit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September's final of 70.3.
Thursday's bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday's sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday's record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.
This morning's economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August's level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were bel ow forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.
The biggest surprise came from September's Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.
The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week's worth of claims, it had little impact on trading this morning.
The remaining two reports are both scheduled for release tomorrow morning. September's Housing Starts is the first, but is the week's least important piece of monthly data. It gives us an indication of housing sector strength and mortgage cre dit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September's final of 70.3.
Wednesday, October 15, 2008
Rate Lock Advisory
This week brings us the release of seven economic reports that are of interest to the mortgage market. The week also gets heavy in quarterly earnings releases for companies, which could cause significant movement in the stock markets again. The earnings results could affect bond trading as investors move funds into stocks if the reports are good. The other possibility is that the earnings reports would generally disappoint, meaning investors may move funds out of stocks and into bonds as a safe-haven. The latter would be good news for the bond market and mortgage rates.
The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first pieces of data come Wednesday morning, which are two of the week's more important releases. The first is September's Retail Sales report. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. S ince consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 0.4% decline in sales.
September's Producer Price Index (PPI) is the second report of the day. This index measures inflationary pressures at the producer level of the economy and is also considered to be of high importance to the markets. Analysts are expecting to see a decline of 0.3% in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. But, weaker than expected readi ngs should lead to lower rates, especially if the sales report doesn't give us stronger than expected results.
Also scheduled for release Wednesday is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.
Thursday morning also brings us two economic releases. The first is September's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading coul d raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates.
September's Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August's level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.
The remaining two reports are both scheduled for release Friday morning. September's Housing Starts is the first, but is the week's least important piece of data. It gives us an indication of housing sector st rength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 69.0, down from September's final of 70.3.
Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday's PPI and Retail Sales reports and Thursday's CPI data. But as we saw last week, we certainly don't need factual economic releases to see mortgage rates move. I am thinking we may still see plenty of volatility in the stock markets that may affect bond prices also. Accordingly, please proceed cautiously if you have not locked an interest rates yet.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first pieces of data come Wednesday morning, which are two of the week's more important releases. The first is September's Retail Sales report. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. S ince consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 0.4% decline in sales.
September's Producer Price Index (PPI) is the second report of the day. This index measures inflationary pressures at the producer level of the economy and is also considered to be of high importance to the markets. Analysts are expecting to see a decline of 0.3% in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. But, weaker than expected readi ngs should lead to lower rates, especially if the sales report doesn't give us stronger than expected results.
Also scheduled for release Wednesday is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.
Thursday morning also brings us two economic releases. The first is September's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading coul d raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates.
September's Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August's level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.
The remaining two reports are both scheduled for release Friday morning. September's Housing Starts is the first, but is the week's least important piece of data. It gives us an indication of housing sector st rength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 69.0, down from September's final of 70.3.
Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday's PPI and Retail Sales reports and Thursday's CPI data. But as we saw last week, we certainly don't need factual economic releases to see mortgage rates move. I am thinking we may still see plenty of volatility in the stock markets that may affect bond prices also. Accordingly, please proceed cautiously if you have not locked an interest rates yet.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rate Lock Advisory
This week brings us the release of seven economic reports that are of interest to the mortgage market. The week also gets heavy in quarterly earnings releases for companies, which could cause significant movement in the stock markets again. The earnings results could affect bond trading as investors move funds into stocks if the reports are good. The other possibility is that the earnings reports would generally disappoint, meaning investors may move funds out of stocks and into bonds as a safe-haven. The latter would be good news for the bond market and mortgage rates.
The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first pieces of data come Wednesday morning, which are two of the week's more important releases. The first is September's Retail Sales report. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. S ince consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 0.4% decline in sales.
September's Producer Price Index (PPI) is the second report of the day. This index measures inflationary pressures at the producer level of the economy and is also considered to be of high importance to the markets. Analysts are expecting to see a decline of 0.3% in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. But, weaker than expected readi ngs should lead to lower rates, especially if the sales report doesn't give us stronger than expected results.
Also scheduled for release Wednesday is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.
Thursday morning also brings us two economic releases. The first is September's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading coul d raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates.
September's Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August's level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.
The remaining two reports are both scheduled for release Friday morning. September's Housing Starts is the first, but is the week's least important piece of data. It gives us an indication of housing sector st rength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 69.0, down from September's final of 70.3.
Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday's PPI and Retail Sales reports and Thursday's CPI data. But as we saw last week, we certainly don't need factual economic releases to see mortgage rates move. I am thinking we may still see plenty of volatility in the stock markets that may affect bond prices also. Accordingly, please proceed cautiously if you have not locked an interest rates yet.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first pieces of data come Wednesday morning, which are two of the week's more important releases. The first is September's Retail Sales report. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. S ince consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 0.4% decline in sales.
September's Producer Price Index (PPI) is the second report of the day. This index measures inflationary pressures at the producer level of the economy and is also considered to be of high importance to the markets. Analysts are expecting to see a decline of 0.3% in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. But, weaker than expected readi ngs should lead to lower rates, especially if the sales report doesn't give us stronger than expected results.
Also scheduled for release Wednesday is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.
Thursday morning also brings us two economic releases. The first is September's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading coul d raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates.
September's Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August's level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.
The remaining two reports are both scheduled for release Friday morning. September's Housing Starts is the first, but is the week's least important piece of data. It gives us an indication of housing sector st rength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 69.0, down from September's final of 70.3.
Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday's PPI and Retail Sales reports and Thursday's CPI data. But as we saw last week, we certainly don't need factual economic releases to see mortgage rates move. I am thinking we may still see plenty of volatility in the stock markets that may affect bond prices also. Accordingly, please proceed cautiously if you have not locked an interest rates yet.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Credit Scoring Part IV
Credit Scoring
Part IV: Credit Remediation
If you are in need of credit remediation, and especially if you live in an area where this is an overall problem within the population, you should seek to align yourself with a credible referral source for credit repair. While government web sites will suggest that self-help may be the best option, keep in mind that for the most part people lack discipline when it comes to spending and making payments. They are not likely to have the diligence to research and remedy their own credit problems.
The Federal Trade Commission regulates credit repair services, and they provide free information to help consumer’s spot, stop, and avoid businesses with fraudulent, deceptive, or unfair practices. Be familiar with the Credit Repair Organization Act http://www.ftc.gov/os/statutes/croa/croa.htm as you seek out a genuine ally in this area. Research their background and make sure this company will cast a good reflection on you when you refer your clients to them.
written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog
Part IV: Credit Remediation
If you are in need of credit remediation, and especially if you live in an area where this is an overall problem within the population, you should seek to align yourself with a credible referral source for credit repair. While government web sites will suggest that self-help may be the best option, keep in mind that for the most part people lack discipline when it comes to spending and making payments. They are not likely to have the diligence to research and remedy their own credit problems.
The Federal Trade Commission regulates credit repair services, and they provide free information to help consumer’s spot, stop, and avoid businesses with fraudulent, deceptive, or unfair practices. Be familiar with the Credit Repair Organization Act http://www.ftc.gov/os/statutes/croa/croa.htm as you seek out a genuine ally in this area. Research their background and make sure this company will cast a good reflection on you when you refer your clients to them.
written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog
Credit Scoring Part IV
Credit Scoring
Part IV: Credit Remediation
If you are in need of credit remediation, and especially if you live in an area where this is an overall problem within the population, you should seek to align yourself with a credible referral source for credit repair. While government web sites will suggest that self-help may be the best option, keep in mind that for the most part people lack discipline when it comes to spending and making payments. They are not likely to have the diligence to research and remedy their own credit problems.
The Federal Trade Commission regulates credit repair services, and they provide free information to help consumer’s spot, stop, and avoid businesses with fraudulent, deceptive, or unfair practices. Be familiar with the Credit Repair Organization Act http://www.ftc.gov/os/statutes/croa/croa.htm as you seek out a genuine ally in this area. Research their background and make sure this company will cast a good reflection on you when you refer your clients to them.
written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog
Part IV: Credit Remediation
If you are in need of credit remediation, and especially if you live in an area where this is an overall problem within the population, you should seek to align yourself with a credible referral source for credit repair. While government web sites will suggest that self-help may be the best option, keep in mind that for the most part people lack discipline when it comes to spending and making payments. They are not likely to have the diligence to research and remedy their own credit problems.
The Federal Trade Commission regulates credit repair services, and they provide free information to help consumer’s spot, stop, and avoid businesses with fraudulent, deceptive, or unfair practices. Be familiar with the Credit Repair Organization Act http://www.ftc.gov/os/statutes/croa/croa.htm as you seek out a genuine ally in this area. Research their background and make sure this company will cast a good reflection on you when you refer your clients to them.
written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog
A Lenders Response to the Bailout Rescue Plan
The Chinese have a proverb: "May you live in interesting times." And we are living through interesting times indeed.
Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".
Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.
Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices.
And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.
Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.
This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.
Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.
As always – please keep in touch during these volatile times. I am here to help you and your clients in any way that I can.
Sincerely,
Leonard Winslow
Gateway Bank Mortgage
434-220-3409
leonardwinslow@gwfh.com
Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".
Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.
Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices.
And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.
Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.
This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.
Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.
As always – please keep in touch during these volatile times. I am here to help you and your clients in any way that I can.
Sincerely,
Leonard Winslow
Gateway Bank Mortgage
434-220-3409
leonardwinslow@gwfh.com
A Lenders Response to the Bailout Rescue Plan
The Chinese have a proverb: "May you live in interesting times." And we are living through interesting times indeed.
Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".
Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.
Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices.
And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.
Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.
This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.
Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.
As always – please keep in touch during these volatile times. I am here to help you and your clients in any way that I can.
Sincerely,
Leonard Winslow
Gateway Bank Mortgage
434-220-3409
leonardwinslow@gwfh.com
Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".
Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.
Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices.
And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.
Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.
This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.
Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.
As always – please keep in touch during these volatile times. I am here to help you and your clients in any way that I can.
Sincerely,
Leonard Winslow
Gateway Bank Mortgage
434-220-3409
leonardwinslow@gwfh.com
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