Wilshire Weekly Mortgage Update - Sept. 17

Let's Recap:
The 30-year fixed rate mortgage averaged 6.31%, down from 6.46% last week.

The 15-year fixed rate mortgage averaged 5.97%, down from 6.15% last week.

The 1-year adjustable rate mortgage averaged 5.66%, down from 5.75% last week.

Those looking to purchase or refinance a home may find some comfort in seeing that mortgage rates across the board dropped from their recent levels just last week. As expected, last week's employment report caused a decrease in interest rates.

The Fed Funds Rate:

It is expected that the Fed will cut the Fed Funds Rate by approximately 25 basis points (.25%) at their next Federal Open Market Committee (FOMC) which is scheduled for tomorrow, September 18th.

The Week Ahead:

This week is a particularly big week given that everyone is focusing their attention on the upcoming FOMC meeting, tomorrow September 18th. Everyone will be closely watching the Fed as they take their next steps in helping to ease the credit crunch.

But also of particular importance this week are the producer and consumer price index reports.

For a view of the Economic Calendar, you can visit www.bloomberg.com or visit Ana Connell's version of the Week Ahead for a clearer description of what to expect.

Recommendation:
I would continue to...

1. Lock-In rates and programs with different institutions
2. Proceed forward with a transaction only after seeing a formal loan approval, since as we know, loan pre-qualifications mean NOTHING today.

Furthermore, I would recommend clients/home owners undergo:

• Credit Reviews - the credit landscape has changed. FICO standards have changed and higher FICOs are law of the land.
• Recast Reviews - it's important that you know when your mortgage adjusts because you want to be prepared and anticipate what your new payment is going to be. You also want to anticipate any refinancing options. If you don't know what they are, NOW is the time to pick up the phone and call your local broker, ME (Ricardo Bueno - Mortgage Planner | 323.810.2175)

• Freedom Point Reviews - are you living within your means? Does your monthly mortgage payment allow you to lead the kind of lifestyle ideally desired? Is your mortgage a part of a greater mortgage plan?

If your answer is "No" to any of these questions, guess what? A mortgage is no longer a transaction done in isolation to help a borrower obtain a home or refinance their current mortgage to lower their interest rate. Instead, a mortgage is a financial instrument utilized to safely, conservatively, and consistently build wealth. And especially in today's market, you need to understand the complexities of your mortgage and what that means for you as a home owner and for your future.

• Equity Review - not that each area has suffered but many areas have experienced a declining market. Home appreciation rates are not what they were in yesterday's market. If you want to be pro-active about your home ownership, you need to obtain a clear indication of what your home is valued at in TODAY'S market. But remember, Real Estate is a localized market so talk to your local Realtor; you can find them here at the Realtors Corner.