Joe Gonzalez

October 2, 2008

Would someone please tell me WHY people in Allentownare STILL renting when they could buy a home with close to 100% financing & a great rate?! WHY WOULD YOU STILL RENT?!!  I JUST DON'T GET IT!!!

www.rentingisdumb.com

BECAUSE RENTING IS REALLY DUMB!!

Because Renting Is Just Dumb!

This week is moderately busy with four economic reports scheduled to be released. Only one of the four is considered to be of high importance to the markets and mortgage rates. The remaining three are of interest to the markets but likely will not cause a large change in mortgage rates unless they vary greatly from forecasts.

The first report of the week is also the most important. May's Producer Price Index (PPI) will be posted early Tuesday morning. It helps us measure inflationary pressures at the producer level of the economy and is the sister report to last week's Consumer Price Index (CPI). There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food and energy prices. A large increase could add fuel to the theory that inflation is a real threat to the economy because the higher prices will likely be passed on to the consumer in the near futur e. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond's future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 1.0% in the overall index and a 0.2% rise in the core data.

The second of three reports being posted Tuesday is May's Housing Starts report. This report gives us a measurement of housing sector strength, but is the week's least important. It usually doesn't have a major impact on the bond market or mortgage rates and I see no reason for this month's results to be any different. Analysts are expecting to see a drop in starts of new homes between April and May.

The third and final piece of data scheduled for Tuesday is May's Industrial Production. This report will be released at 9:15 AM ET. It measures output at U.S. factories, mines and utilities, giving us an important mea surement of manufacturing sector strength. If it reveals that production is rising, concerns of manufacturing strength may come into play in the bond market. A decline would indicate that the manufacturing sector is weaker than expected and should help push mortgage rates lower. Current forecasts are calling for an increase of 0.1%.

May's Leading Economic Indicators (LEI) will be posted late Thursday morning. The Conference Board, who is a New York-based business research group, will post this data. It attempts to predict economic activity over the next three to six months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher Thursday morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show no change from April to May.

Overall, look for Tuesday to be the big day of the week. Not just because it brings the release of three of four reports, but becaus e it brings us the PPI that is considered to be a key inflation reading. I am expecting to see the least amount of movement in rates tomorrow and Friday, unless the major stock indexes stage a considerable sell off or rally. However, I am still not sure that we have seen the end of the recent bond selling. Therefore, I am holding the lock recommendations for the time being.

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... Lock if my closing was taking place between 21 and 60 days... Lock 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.

This update announces the guidelines for FHA's Risk Based Premium model. For the first time in history, FHA will take credit scores into account. These guidelines are effective as of July 14th, 2008. At the bottom of the page is a link to the full update.

The 10 primary guideline changes are as follows:

1. Borrowers need either no score, or at least 500, to get a LTV >90%; see matrix below.
2. Borrowers with a score less than 500 get a maximum LTV of 90%.
3. Borrowers without scores will require manual underwriting.
4. Upfront Mortgage Insurance Premiums will range from 1.25% - 2.25%, based on score.
5. The Monthly Mortgage Insurance will range from .50% to .55% depending on score.
6. The premium is based on the borrower with the lowest score.
7. If one of the borrowers has no score, then the Non-Traditional credit grade is used.
8. Credit rescoring is allowed to improve a borrower's credit grade.
9. All FHA Secure refinances >95% LTV with delinquencies have a 2.25% UFMIP and .55% MMI.
10. Cash-out, rate & term, and non-delinquent FHA Secure refinances are included in this change.

Find Out What Your Landlord DOESN'T WANT YOU to KNOW at
www.stoprentingalready.com

THREE UNIT IN ALLENTOWN. HOUSE NEAR ELEMENTARY SCHOOL. NEWER FURNACE, PORCH, NEWER KITCHEN (2nd fl.),AND SOME FLOORS. PLUS THERE IS A DETACHED TWO CAR GARAGE THAT HE USES FOR STORAGE OF HIS BELONGINGS. OWNER WILL LOOK AT ALL OFFERS. AVAILABLE FOR QUICK CLOSING. OWNER PAYS HEAT AND FOR HALL LIGHTS,WATER,SEWER AND TRASH. TENANTS PAY THE REST OF THE UTILITIES. LAST RENTS WERE 675, 650, 625...BUILDING IS VACANT, IF IMPROVED RENTS COULD BRING MORE.

Use our FREE & Easy Purchase Assistant at www.stoprentingalready.net to get pre-qualified for a home today. Don't waste your time - find out EXACTLY what you can afford BEFORE you start looking at homes. That's www.1stmetropolitan.net