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Friday, 25 January 2008
PUBLIC Open House scheduled on Saturday 2/2/08 from 2-4pm at 5932 Checkerberry Lane in Huntersville, NC 28078. The home is listed for $425,000.
Friday, 25 January 2008
Us Stimulus Package Looks Positive for Mortgages
The House has flipped and agreed to increase the loan limits for Fannie and Freddie. The increase is to be temporary until the end of the year and got traction because the jumbo loan market continues to be soft with rates for jumbos 50 to 75 basis points higher than conforming limits. As it is being structured, the limits will increase by 125% of the median home price in any SMSA market area to a max of $750,000. It was initially reported that the limit would go to $625K across the board.
FHA also looks to raise its limits to $271k with a max loan amount in high cost areas to $729k.
This is great news for 2 huge programs!
Tuesday, 22 January 2008
The Federal Reserve made a surprising mid meeting rate cut of .75% this morning on the Fed Fund and Discount Rate, just one week before their scheduled meeting.
The cut this morning was the largest single rate cut since Oct 1984 when the rate was cut 1.75%. The mortgage industry needs lower interest rates if there is going to be a significant turnaround in the credit markets.
Over time, rate cuts should stimulate economic growth by making it cheaper to borrow money for consumption or investment. Banks typically lower their prime lending rate for their best customers in lockstep with the Fed. Mortgage and commercial loans, however, are based on interest rates set in competitive markets, which may or may not follow the Fed's lead.
The mortgage industry needs lower interest rates if there is going to be a significant turnaround in the credit markets. This is good news for mortgage rates!
Brad Dinkel
704-634-2918 Direct
980-233-3909 Fax
"Focusing on Strategic Mortgage Planning and Wealth Advancement"
To get Pre-Qualified now, click the link below so that I can assist you as quickly as possible:
www.BradMortgage.com
Monday, 21 January 2008
Price Reductions in Huntersville, NC
MLS# 735336
5932 Checkerberry Lane
Old Price-$439,900
NEW PRICE-$425,000
5 Bedrooms plus a bonus
MLS# 735197
15202 Fred Brown Rd
Old Price $515,000
NEW PRICE-$499,900
2 Acres
Monday, 21 January 2008
Market Update
The Stock market has gotten hammered lower since the beginning of the year, and last week was no exception. But when Stocks move lower, money can flow over into Bonds, helping home loan rates improve. What caused last week's action was a combination of terrible earnings reports from Citigroup and Merrill Lynch; higher inflation numbers indicated in the Consumer Price Index; lower than anticipated Retail Sales; a weak report from the Philadelphia Fed showing a sharp contraction in manufacturing activity; and a Housing Starts and Building Permits report showing the worst levels of starts and permits in about 16 years. While there was plenty of mid-week action, home loan rates ended just slightly higher for the week overall
But bear this in mind...the slowdown in new home construction is actually not bad news, as overbuilding has helped to create a glut of inventory in the real estate market. Less inventory coming on the market is actually a real positive as the housing market continues to settle. And with home loan rates at multi-year lows, now may be the time to act on that home purchase or refinance.
Market Interest Rates:
30yr Fixed- 5.5%
15yr Fixed- 5.125%
FHA/VA- 5.75%
Jumbo 5/1 Arm- 5.5%
Investor 10% down- 6%
Wednesday, 09 January 2008
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Provided to you Exclusively by Brad Dinkel |
If you hear about the Recession Talks right now- Here is the scoop
There is often a lot of misconception of the word recession or what it really is. Goldman-Sachs went to the historic definition of recession- 2 successive quarters with negative growth. That's it. Goldman is also making a prediction saying they expect the economy will be -1.0% growth in Q1 and Q2 of 2008. They base their new bearish outlook on the increase in the Dec unemployment rate to 5.0% from 4.7% in Nov, and as we have hammered, consumers will pull back growth and spending. Why this recession may be different if in fact we do show negative growth? Personal savings and earnings are up not down. This may keep the spending volumes up.
Again, we expect 2008 to be a ray of sunshine for A paper lending with rates hovering in the 5% range. Last week, Mortgage Applications were up nationally 32.2% with 14.7% of that figure in purchase applications. The average national 30yr Rate was 5.73%. Good signs for the start of the year.
Monday, 07 January 2008
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For the week of Jan 07, 2008 --- Vol. 6, Issue 2 |
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"THE BEST WAY TO APPRECIATE YOUR JOB IS TO IMAGINE YOURSELF WITHOUT ONE." Oscar Wilde And unfortunately, last Friday's Jobs Report indicated that many more Americans than expected are not just imagining themselves without a job, they truly are without a job.
The Unemployment Rate jumped up to 5.0% from 4.7%, and new job growth in December was reported at a paltry 18,000 jobs...with private-sector job growth actually falling by 13,000, the largest private sector drop in more than four years. And here's an interesting note - Hourly Earnings actually moved higher than expected. While this seems somewhat contradictory to a slowing jobs number, perhaps it means that employers are attempting to save money by paying more dollars to fewer workers, rather than hiring more staff.
Many experts feel that even the lower than expected number of jobs created is an overstatement, due to averaging that is used by the Labor department, and that this number will eventually be revised lower. Job growth is a leading indicator of economic health, and the latest read points to a strong possibility of a recession in 2008.
Overall, the Jobs Report was much weaker than anticipated - and remembering that negative economic news is generally bad for the Stock market, but good for the Bond market - Bonds enjoyed some nice gains, sending home loan rates about .25% lower throughout the week.
RIGHT UNDER YOUR NOSE, YOU MIGHT BE HELPING LARGE FINANCIAL INSTITUTIONS COVER THEIR LOSSES FROM THE PRESENT FINANCIAL MARKET TURMOIL...FIND OUT HOW TO PROTECT YOURSELF, IN THIS WEEK'S MORTGAGE MARKET VIEW! |
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The economic event calendar slows down significantly this week, with only one meaningful report scheduled to arrive on Thursday - Initial Jobless Claims, giving a look at the most recent reports of filings for unemployment. Considering the recent stats on higher unemployment levels, this report will be given special attention.
And notice how prices have recently separated far from their 25-day Moving Average, shown as a green line. Many securities tend to gravitate back towards their 25-day MA once they stray too far above or below it. This is called the "Leash Effect". Imagine a puppy on a leash straying too far...its owner will tug on the leash to bring the puppy back. Mortgage Bonds have historically shown a similar reaction; once prices stray far from their 25-day MA, they tend to snap back towards it. Notice how this happened about a month ago in the chart below. It is likely that Bonds will again be reined in by the "Leash Effect" in the week ahead, which suggests a bit higher rates.
The colorful chart below shows how Bond prices have run up higher in recent days, and in turn, home loan rates have improved. In fact, they've improved so much, that they are somewhat ripe for a reversal. In the absence of any unexpected news - don't be surprised to see home loan rates worsen a bit in the coming week. |
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WHO REALLY LOSES?
Over the past several months a steady stream of large financial companies have given notice of large losses that they are sustaining as a result of the credit crunch and sub-prime mortgage market issues. So the question is, who really loses when a company or in this case an industry loses a lot of money?
Clearly, it is rarely the CEO of the firm. And obviously, it is initially the shareholders in the company, as the value of their investments plummet. But who really pays the price in the end...and how? Well, as many Americans are finding, the buck stops with the consumer.
Home Loan Rates
Although home loan rates overall remain fairly low, Fannie Mae and Freddie Mac--the two large government sponsored companies that form the framework for most conventional home loans--have announced a series of changes over the past sixty days. Many of these changes deal with stricter underwriting standards and guidelines, but several are price increases as they work to cover losses incurred based on previous loans.
Price increases are generally not paid in cash, but rather are reflected by a higher interest rate on a new loan - which is why it is crucial that you clearly understand the rates and terms that you qualify for, when you are shopping for a new mortgage.
Credit Cards
It's pretty common practice for credit card issuers to hike rates if a payment is missed or the card is charged over the limit, especially if that consumer had an average or below average credit rating. But it is becoming increasingly common that issuers are starting to place these 'hair trigger' rate resets on consumers with solid credit ratings. The reason? You guessed it, most of the credit card issuers are the same large financial companies that are being hurt by the overall strife in the financial markets.
Many of these companies fear that the financial issues related to the mortgage industry will spill over into the revolving credit card markets, as it only stands to reason that a consumer, if faced with either paying their mortgage or their credit cards, will probably choose their mortgage. So as foreclosures rise, credit card late payments and losses will ramp up accordingly.
How to Protect Yourself
The best defense you can take is to proactively monitor and safeguard your credit - and I would encourage you to call me for an analysis of your current credit standing, as I may be able to make suggestions that could help right away.
Additionally, when it comes to your credit cards in particular, make sure that you do not give that lender reason to bump your rates. If they do, call their customer service lines to ask them to reverse course, or risk losing your business. If your credit score is strong, you will greatly increase your chances of winning this fight, or being able to simply follow through on your threat and take your business elsewhere. This will at least help mitigate the chances that YOU will have to help subsidize the massive losses being experienced by some of the largest banks in the US.
New Year's Resolution Idea
Check all of your credit cards that you carry balances on to confirm the current rate. You may be surprised to see that some of these rates are higher than you recall. Remember that credit card rates can be changed very frequently and easily by the issuer, and rarely in your favor. And even better - give me a call to check your overall debt structure, and let's ensure that it makes sense based on your current financial goals. |
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Economic Calendar for the Week of January 07 - January 11
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Date |
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Economic Report |
For |
Estimate |
Actual |
Prior |
Impact |
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Thu. January 10 |
08:30 |
Jobless Claims (Initial) |
1/05 |
NA |
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NA |
Moderate |
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Thu. January 10 |
10:30 |
Crude Inventories |
1/05 |
NA |
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NA |
Moderate |
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Fri. January 11 |
08:30 |
Balance of Trade |
Nov |
-$59.5B |
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-$57.8B |
Moderate |
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The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
As your trusted advisor, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.
Brad Dinkel
19460 Old Jetton Rd,
Cornelius, NC 28078
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Friday, 04 January 2008
Market Update Friday, 1/4/08
HAPPY NEW YEAR!
This week was loaded with economic data. On Monday the economic news was Nov existing home sales were up 0.4% against expectations of +0.6%. There is a 10.3 month of inventory based on the present buying pace; Oct sales were revised slightly better, to -1.0% from -1.2%. The December employment report came in lower than expected at 18k new jobs as the unemployment rate rose .3% to 5%. This data does not necessarily come as a shock but does paint a picture of what we can look for in the next FED meeting at the end of January; meaning a .5% cut in the Fed Funds rate. Interest rates are doing better in the face of this weeks information as the 30yr fixed is sitting at 5.75%.
Brad Dinkel
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