Craig Markhardt, CRMS

Following the announcement from the Federal Reserve a couple weeks ago, the U.S. Government has also made the decision to use taxpayer funds (Treasury Funds) to invest in mortgage securities such as Fannie Mae, Freddie Mac, and Ginnie Mae loans.

This investment may be controversial to many Americans, but since it has been decided by our elected and non-elected officials, everyone should take advantage of the opportunity. This "investment" by the Treasury will most likely be a good one for several reasons. Tradionally mortgage backed securities have been a solid investment (especially when viewed over the life of a typical loan) and will continue to do so, although not for some time. When the economy turns around, we should once again begin to see appreciation in home values, decreasing the liability and risk assumed by the Treasury with the committment.

The second reason this will be a good investment is because giving homeowners the opportunity to obtain the lowest interest available in a lifetime will allow for greater freedom and flexibility with household expenditures. There will also be a great benefit since less interest will be paid over the life of loans on homes, in addition to millions deciding to pay homes off earlier than originally anticipated with current loans.

I expect to see the current rate range of 4.75-5.5% to continue for the next 4-8 weeks, most likely lasting into February, after one or two more Fed meetings. If the economy begins to pick up, and unemployment starts to table off, we will see rates begin to move upward due to inflation worries. Currently there is no indication there is a concern about inflation, but under normal circumstances we would already be seeing it.

Talk to an advisor on how to take advantage of the current interest rate market for your home, auto, college loans, and even short term loans like lines of credit.

The savings will be worth the effort!

Interest rates continue to be as low as they have been in over 4 decades. I recommend everyone to look at their current loan with a professional to discuss the option of either refinancing for a lower payment, or to shorten the term on their loan. I have seen some homeowners saving as much as $690 per month on their payment, and as much as $275,000 over the life of a loan. This is definitely one of the best times to review your loan, or decide to purchase a new home.

If you would like a free consultation, please feel free to contact me at your convenience while rates are still low. My information is provided, but the easiest way to get started is email me at craig@keystoneassociates.biz. You can also begin by visiting us at www.thinkkeystone.com

Have a Merry Christmas!

Today I have had my home on the market for about 4 weeks and from what I am seeing we either are in a unique market with very little concern about the economic conditions, or I have a great deal. I have had over 30 showings, (I lost count last week on #29) and have had several offers. Honestly, my home is under contract for more than what I was asking, what a blessing. Don't get me wrong, it is a great house in a fantastic location, and I think priced right, especially for this time of year.

This morning the inspector is there going through the house to look it over for any potential issues. I don't think he will find anything unusual since I went through it with a fine tooth comb, even replacing the toilet wax seal last week when I found the one in the basement to be not tightened down enough. Since the shingles, gutters, furnace, AC unit, and light fixtures have all been replaced in the past 5 years, things are both up to date and extremely energy efficient. Those items should give it a good seal of approval from the inspector, but naturally I still worry that he'll find something that I didn't know about. Since the home is only about 27 years old, I should be ok.

It has been more chaotic showing it than what I expected. I have had only a couple days in the past 4 weeks without a showing, some days with 5 showings. Today, after the inspector is done, there will be two more showings. It's been tough for my dog Griffin, but I expect he knows something is up with him being taken to shelters, friends homes, and even my office during showings. Fortunately, I have some great friends with children who love him. I recommend visiting with friends to see if they will watch your pet if you decide to sell your home. It works out well for the families whose children want a pet, but parents aren't ready yet, it bides them some time in getting one permanently!

After today's inspetion we should be good to go until closing, but I have heard another offer may be coming in. If that occurs then I'm back to the decision table, which is tougher than I expected. I want to be sure the buyers feel they got a great deal, but I also need to consider my personal needs, so going though those decisions has been challenging.

I'll hear about the inspection report later this week, but with Thanksgiving on Thursday, I expect to hear back as early as tomorrow.

Fortunatly I feel blessed to be in the situation, but now I know how tough it is when more than one offer comes in.

Until next time......

It sounds like Christmas may just be for the kids this year according to statistics put out by the major firms tracking consumer spending. That may not be a bad idea considering the uncertainty of the job market and the talk by President Elect Obama that we may see even higher unemployment in the coming year than what we are seeing now. One thing I am sure is on the minds of a few are whether now is a good time to buy or refinance their home.

It certainly looks like mortgage interest rates will remain at 30 year lows for some time, but they may even dip briefly during the current restructure of how the world economy adjusts to tighter credit guidelines. I think that if you are thinking about buying or refinancing, you could catch a day where rates drop some to give yourself a great deal for a long time. I expect to see 30 year rates go below 6% briefly from time to time, and the 15 year fixed rate has been below that point now for a couple weeks. Its a great time to consider shaving off a significant amount of time on your home loan if you are in a 30 year fixed and move to a 15 or 20 year fixed at a very low interest rate. You can even get it all done with no cost to you if your loan is large enough and you have a knowledgable loan officer working with you.

If you are considering purchasing, here are a few things you may want to keep in mind during uneasy times like we are in. It sounds like unemployment will be going up, but that will most likely only affect a small percentage of industries at this point, so if you are in an industry that has seen downturns already or one that is not generally affected by economic cycles such as health care and government jobs then you are in a great position to get an excellent deal on a home along with one of the best mortgage loan rates ever. If you are unsure about your industry, visit with your employer and discuss the fact that you are considering purchasing a new home, but want to be sure your job is secure. Employers love it when they see their employees prosper and would not want to see them make a mistake, so you should be able to rely on them to give you some great insight.

If you have decided to start looking for a home, now is the time to make your move because people are looking. Things are getting competetitve and you could end up not getting as good of a deal as you thought. I'm in the process of selling my home and I have had a ton of showings, and multiple offers. I'll talk about that experience in a new blog that I'm starting today.

If you want to get pre approved and you are in the SD, Minnesota, and Iowa locale, give me a call, I'd love to help you out, or if you just want to bounce a thought off me.

Good luck and have a great week!

October was a great month for purchasing and refinances. I had heard the entire mortgage industry had an increase in business, especially in the midwest. I think the weather helped, as well as many people deciding to turn the TV off for a while and get back to living their lives, rather than being frozen in fear with what the media is pushing.

The month ended on a high note with excellent weather for the kids that went Trick-or-Treating. I only had about a dozen kids show up, but was ready for many more. Guess that's because I live in a neighborhood without many children, if any.

Now, we're less than 24 hours away from Election Day, I think businesses should give an extra hour to their employees to go vote, how helpful would that be for everyone. I suspect the lines will be long tomorrow, so I'm not sure what time I'll be going.

Mortgage rates pretty much ended October where they started, and today mortgage bonds are looking like they cause rates to go up a little tomorrow. Since rates move so much, I would not get to concerned that they will move out of your price range, they've been bouncing up and down for nearly 6 months now, so you should still be able to catch a rate at or near what you want. If you are looking to refinance or buy by the end of the year, now is the time to get pre-approved. Loan guidelines are still moving to the more conservative side, so they continue to get more strict every week.

After tomorrow evening's election decision, we may be in for a jump in rates in either direction. There will be excitement for sure. I'd like to know what others think will happen in the days after elections to fixed interest rates if Obama, or McCain gets elected.

Obama elected - rates go UP or DOWN?

McCain elected - rates go UP or DOWN?

Let me know what you think and I'll tally the results.

Talk to you later

Craig