About Burlington County, NJ

What's In Your Wallet?

In recent years, there has been an explosion in the number of credit card issuers and - perhaps more confusingly - in the types of rewards being offered by those credit cards. So now, you not only need to consider the rate and terms of your credit card, but also what rewards or other benefits it offers. The following information can help you consider what types of rewards are out there and which is best for you.

Airline Miles: If you travel frequently, then maximizing your airline miles may be the very best reward. And if you primarily fly on a single carrier, you will do the best to take their affiliated credit card, as they typically offer 'bonus' opportunities to earn extra miles.

Cash Back: There are several items to consider when focusing in on cash back cards, most importantly being the fine print. For example, some cards have tiers - which means, you won't earn the most cash back until you reach a certain amount of spending for the year.

Store Cards: Cards issued by particular merchants can be some of the most valuable cards if you are a frequent shopper at that store.

Points Cards: Many rewards cards offer general purpose points that can be redeemed for a wide variety of items, including airline miles, cash back, gift cards from a variety of places, gifts to charity or simply merchandise. These cards can be very beneficial due to the flexibility that they offer.

Mortgage Interest Rates for Fixed Rate Mortgages*

Rates as of Thursday, 19th November, 2009:

*Rates are subject to change due to market fluctuations and borrower's eligibility.

Karl Peidl
Pleasant Valley Home Mortgage Corp.
305 Harper Drive, Suite 3
Moorestown, NJ 08057

856-252-1224

kpeidl@pvhmconline.com

www.karlpeidl.com

www.pleasantvalleyhomemortgage.com

How Much Money Should You Borrow?

While it might be tempting to borrow whatever amount of money your lender is willing to give you, it's important to think carefully about how much you'll actually need to borrow in order to purchase a new home. From the down payment to taxes to insurance and interest rates, there are many factors to consider when making this important, life-changing decision.

Contrary to popular sentiment, there is no standard formula for accurately calculating the specific dollar amount you should borrow when purchasing a new home. Many websites do offer special borrower calculators that claim to factor in important variables, and yet final results vary vastly from one site to the next. Other websites offer general rules of thumb, suggesting that you should never borrow more than 2 1/2 to 3 times your gross annual income, or that 28%, 32%, or even 40% is the maximum amount of debt you should ever take on.

And, while these insights may be helpful as you begin thinking about the overall borrowing process, meeting with a reputable loan professional and getting yourself pre-approved (not pre-qualified) is really the only way to know the exact amount of money you can and should borrow. By getting pre-approved, you not only increase the chance of finding the perfect house for your needs, you also become a "cash buyer", instantly increasing your bargaining power.

As a mortgage professional, I see my role differently than a traditional loan officer. While my job is to match you with the best mortgage available for your specific needs, I feel that it's also my duty to make sure it's the most responsible product as well. After all, what if something unforeseen or unexpected were to occur? What if you have an accident or you lose your job?

Whether you choose to work with me or not, be aware. A lender will often offer you the maximum amount of money that you qualify for, whether you actually need the full amount or not. Because of this, it's vital to sit down with a professional you can trust to figure out your complete financial picture.

If you or someone you know could benefit from this type of free consultation, give me a call. I would be happy to assist you!

Karl Peidl
Pleasant Valley Home Mortgage Corp.
305 Harper Drive, Suite 3
Moorestown, NJ 08057

856-252-1224

kpeidl@pvhmconline.com

www.karlpeidl.com

www.pleasantvalleyhomemortgage.com

Last Week:

Mortgage pricing continued to improve slightly again last week for the third week in a row. MBS and Treasuries were both improved last week with the 10-year TSY closing at 3.42%.

The economic calendar was light last week and the market watched the Treasury note auctions closely since the Fed was not participating this time. The auctions went well on the 3yr and 10yr, but was a little light on the 30yr. Overall, strong demand continues for bonds - keeping a lid on mortgage pricing.

Additional good news for mortgage rates could be found in the spread between the conforming 30-year fixed and the benchmark 10-year TSY. The spread is back to more normal levels of 160 bps- meaning at the current 3.42% 10-year TSY, you could expect the 30-year fixed to be approximately 5.08%. The spread for Jumbo pricing is still very elevated and has another 60bps or so before it comes back to normal levels. All of this means credit markets continue to heal and normalize, but are still very fragile as secondary markets, x-Fed, are relatively nonexistent.

Consumer sentiment came in weaker than expected and still shows a consumer that is feeling the lingering effects of the recession, while corporations and Wall Street seem to be doing better. good news for would be employees as corporations are now running very lean and productive, which will lead to hiring and investment once they feel they are out of the woods of the recession completely.

Stock markets held up and closed near highs for the year. Gold also settled at a new record at over $1,100 an ounce as the US Dollar continues to weaken.

The Week Ahead:

This week brings us the release of six monthly economic reports for the markets to digest. With very important data scheduled for release three different days and relevant data four of the five days, we will likely see a fair amount of volatility in the markets and mortgage pricing this week.

Overall, look for any of the first three days of the week to be the most important with very important reports scheduled each day. The quietest day will most likely be Friday since there is no relevant data scheduled for release that day.

Since this is likely to be a fairly active week for mortgage rates, it would be prudent to maintain regular contact with your mortgage professional if still floating an interest rate.

MONDAY:

The first data is one of the most important reports of the week. The Commerce Department will give us October's Retail Sales figures early tomorrow morning. This data measures consumer spending, which is considered extremely important because it makes up two-thirds of the U.S. economy. It is expected to show a 0.9% rise in spending, meaning consumers spent much more last month than they did in September. This would be considered negative news for bonds because large increases in spending fuels an economic recovery and raises inflation concerns in the marketplace. If tomorrow's report reveals a smaller than expected increase in spending, bonds should react favorably, pushing mortgage rates lower. If it shows a larger than expected increase, mortgage rates will likely move higher tomorrow.

TUESDAY:

There are two reports scheduled to be posted Tuesday. The first is October's Producer Price Index (PPI) that is one of the two key inflation readings on tap this week. The PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If it reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and should drive mortgage rates higher. If we see in-line or weaker than expected numbers, mortgage rates should fall Tuesday. Current forecasts are calling for an increase of 0.5% in the overall reading and a 0.1% increase in the core reading.

Tuesday's second report is October's Industrial Production data. It gives us a measurement of manufacturing sector strength by tracking outpu t at U.S. factories, mines and utilities. It is expected to reveal a 0.4% increase in production. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this data is not as important as the PPI readings are.

WEDNESDAY:

October's Consumer Price Index (CPI) will be released at 8:30 AM ET Wednesday morning. This index is similar to Tuesday's PPI, except it measures inflationary pressures at the more important consumer level of the economy. The overall reading is expected to show an increase of 0.2% while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while larger than forecasted increases could lead to higher mortgage rates Wednesday.

Wednesday's second report is October' s Housing Starts. This data gives us an indication of housing sector strength, but usually does not have a noticeable impact on mortgage rates. I don't expect this month's version to be any different unless it varies greatly from analysts' forecasts and the CPI matches expectations. It is expected to show a small increase in starts of new homes.

THURSDAY:

The Conference Board will release its Leading Economic Indicators (LEI) late Thursday morning. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.4% increase, meaning economic activity will rise over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to vary greatly from forecasts for it to affect mortgage rates.

Two-Month Rate Forecast:

With rates at multi-year or near historic and all-time lows, it's tough to expect that they have considerable space to decline much from here, especially in the face of a modestly improving economic climate and improving corporate earnings picture.

Rates that were lower earlier this year were fueled by an apocalyptic economic state and near-term view forward. While this has improved, investor lack of appetite to take risk, weak economic growth, and the low near-term prospects for inflation should serve to keep a lid on any serious increases, too.

We expect mortgage rates to likely wander in a range from about 4.875% to 5.375% on the Conv. 30-year fixed, but to be choppy in that range as the stock and bond markets search for new trend line.

Mortgage Market Advisory Disclaimer

This is only our opinion and cannot be guaranteed to be in the best interest of any or all parties. This service is provided for informational purposes only and is not intended for trading purposes. None of the information provided constitutes a solicitation, offer, or recommendation by NHLA to buy or sell any security, or to provide legal, professional, tax, accounting, or investment advice. Every lender's price desk has their own strategies and reactions to market movements. Our information is simply based on market movements and does not predict or report potential pricing adjustments by particular lenders.

Copyright © 2009 National Home Loan Advocates LLC

Mortgage Rate Update

Don't Wait for a Tax Return - Get That Money Now for Holiday Shopping

This time of year, millions of Americans find themselves wondering how they're going to pay for everything on their holiday shopping lists. Wouldn't it be nice if you had your tax return money now so you can use it for holiday spending? In a way, you can.

The IRS allows you to increase the number of dependants on your W-4 withholding form, meaning that less will be withheld for taxes from each paycheck. In the past, if you claimed greater than nine dependants, an explanation and approval may have been required. But the IRS has lifted this restriction. This lets you have more money in each paycheck instead of "loaning" the money to the IRS and having to wait for a refund.

But don't go overboard. You should only lessen the periodic tax withholding to match the expected refund. This way you are taking your refund as you go; instead of letting the IRS hold on to it.

Before you make the changes, consider visiting the IRS Withholdings Calculator to see how a change will impact your paycheck. Just visit www.irs.gov and type "Withholding Calculator" into the search bar at the top.

Mortgage Interest Rates for Fixed Rate Mortgages*

Rates as of Thursday, 12th November, 2009:

*Rates are subject to change due to market fluctuations and borrower's eligibility.