Good Afternoon,
Rates are still trending upwards as they had been last week. The main news is the initial release of information on the Presidential Mortgage Plan* that many have been asking about over the past few weeks.
Will it help homeowners? Only time will tell. The key ingredient I see on whether this will help current homeowners is if their total mortgages add up to more than 105% of their home value. If so, then there currently does not seem to be help for you in this plan. (See: Who is Eligible**)
As we find out more on this plan as we move into the next couple months, I will be sure to share updates for this.
Matt
*http://money.cnn.com/2009/03/04/news/economy/guidelines/index.htm?postversion=2009030414
**http://money.cnn.com/2009/03/04/real_estate/Obama_foreclosure_plan/index.htm?postversion=2009030414
Good Morning,
We will keep this one short and sweet this week as we are still awaiting the details over the next couple weeks on the Mortgage stimulus plan from the president.
Last nights address led to some confidence in the overall market, which is good for the stock market but ends up with the opposite effect on mortgage rates. With the trend today, we are expecting rates to rise to 5% or just above by this afternoon.
Todays Rates:
30 Year fixed: 4.875%
15 Year fixed: 4.75%
Matt
Matthew Royer Mortgage Planner Homes Mortgage ofc 651 770 0637 cell 612 232 7646 fax 651 766 5201 toll free 888 481 0009 www.MattRoyer.net
Good Morning,
Let’s continue our interest rate roller coaster ride, shall we? How does 4.75% strike you? Rates have been increasing slightly day by day over the past week and this trend seems to hit the same barrier as previous times we have seen rates get down to this level.
Why haven’t rates gone lower again? Well Mortgage Market Analyst Barry Habib has done a great job explaining this with the current government financial plan for lowering interest rates, for those interested I have included it below my signature.
Have a great week!
Todays Rates: 30 Year fixed: 4.75% 15 Year fixed: 4.625%
Matt
by Barry Habib.
The Fed's been at it again, offering words that sound encouraging at first blush, confirming that their buying program of Mortgage Backed Securities is in full swing and will continue as needed. Of course, the media will pick this up and offer their own interpretation, saying "Good news, the Fed's words on continuing their purchasing program mean that rates will continue to drop lower, and remain low into the summer..." But is this really what that means? Not so.
Here's the truth. Yes, the Fed has been buying Mortgage Bonds, but if you look at what they are purchasing, they are buying a lot of FNMA 30-yr 5.5% and 5.0% Bonds...which won't have much of an impact on present interest rates. Why? First, see the Fed's purchases for yourself by hitting this link: Direct Link to View Fed Mortgage Bond Buying - http://www.newyorkfed.org/markets/mbs/index.html. So why is the Fed buying these Bonds? Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates.
Stay with me here... With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary. Bottom line, the Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.
Here's the most important part. Sometimes I talk to clients who are in a situation where it makes sense to refinance right now, and save $250 per month for example. But when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision to save the $250 per month right now, in the hopes of gaining another $30 per month in additional savings with a lower rate than where we stand presently. Now clearly, rates could turn higher, and this window of opportunity could pass them by entirely.
The clincher is this: Even if those clients ultimately are correct in timing the market, and eventually grab that lower rate and save another $30 per month - think of what they have lost by waiting. While they delayed, they lost the savings they could have gained by taking action sooner - or in the example used, $250 - for every single month they waited. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting. I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Let's talk further on this - call or email me and let's discuss what this might mean for you.
Good Morning,
So, was our 40 degree day this weekend a good or bad thing? I found the day of a wonderful excuse to get outside for a well deserved long walk. Of course, the deserved part could be argued as a dog is always a dog…but I like to think he’s trying his best. Then we come to Monday. I think I still am feeling the chills and I’m blaming the heat wave from the weekend.
Rates have spiked back up slightly from last week in what I would now begin to call a normal move in this market. The week to week volatility we have seen has been fairly consistent for the past year. Many analysts are still predicting that they will trend back down….just as many are predicting they won’t. I have been going over this with clients left and right that I don’t believe we currently have any ‘experts’ in this market scenario. It is unlike anything that came before it making it hard for me to believe that anyone can claim that their expertise enables them to predict the unpredictable.
I think the certainty comes in the fact that life just is. There will always be hiccups and hardships just as there will be joys and happiness. So, let’s hope for the best and plan accordingly.
Have a great week!
Todays Rates: 30 Year fixed: 5.375% 15 Year fixed: 5.25%
Matt
Good Afternoon,
There was a little financial drama today and that is leaving rates bouncing up and down. The Federal Reserve announced that the key interest rate will remain at 0%. This led to a quick sell off of Mortgage Backed Securities and brought rates back up to 5.125% as of 30 minutes ago. Since then, the trend has reversed and rates are back down to the levels we saw released this morning.
From what we are seeing going forward, our assumptions are that rates will stay at or near this level for quite sometime. I am skeptical that we will see rates reach 4.5% again and go as far as warning my clients that when the economy starts to recover in the coming years, the expectation is that interest rates will rise as they traditionally do in an inflationary economy. We could easily see rates get back up near 7% in that event. Keeping in mind that it would mean that the economy as a whole would be on the mend making it a better situation for most and I don’t see that happening for quite some time.
Have a great week!
Todays Rates: 30 Year fixed: 4.875% 15 Year fixed: 4.75%
Matt
www.MattRoyer.net
Mortgage Planner of 8 years, specifying in ensuring that homebuyers both understand and enjoy the mortgage process, not worrying about last minute changes and closings not happening.
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