Mortgage Bonds are soaring higher

Mortgage Bonds are soaring higher on this weekend’s announcement that Fannie Mae and Freddie Mac will come under control of the government.

The government’s move to create a line of $200 billion to back all Fannie Mae and Freddie Mac loans at all costs is great news for homeowners. First, it ensures the continued liquidity of conforming loans nationwide and, second, it ensures that buyers of this type of Bond have a safe investment going forward. There’s no doubt that this will help the US housing market move through the current crunch that we’re in.

So far this morning, the news has lead to a nice rally in pricing. When combined with the break above the 200-Day Moving Average, this may lead to attractive rates. Therefore, I recommend floating for now.

Rates Get Better

I mentioned on Friday that interest rates were on a roller coaster ride late last week. Fortunately, I noticed that mortgage bonds were overbought midweek and got my clients locked in saving most of them 0.125% on their 30 year fixed mortgages. This saved them anywhere from $25 and $40 per month. I look forward to helping your clients too. This weeks newsletter explains what happened last week.

Fed held constant the Fed Funds rate

Last week the Fed held constant the Fed Funds rate, which had investors ponder the stability of the market. We know the Fed should hike rates to hedge inflation, but the question is will they and when? As the Fed was cutting rates remember I warned that mortgage rates would go up and hey have. I want to mention that if the Fed hikes rates mortgage pricing will get better. I’ll keep you informed as I get the information.

It’s a short week for the Fourth of July weekend. I hope you are safe while enjoying the festivities!

-Sean

Ready for Spring Cleaning?

This is going to be an important week in the financial sector. There is a Fed meeting on Wednesday where we expect the Fed to cut another 0.25% to the Fed Funds rate. We also have the PCE index coming out on Thursday. Remember the PCE is the best indicator of inflation. The most important news though is how the Fed is treating inflation and their words in the report regarding inflation.

Investors feel like this may be the end of the credit crunch, which is certainly good news, and several banks are getting large cash infusions from investors which shows market confidence.

Ready for Spring Cleaning? There are also tips this week on how to do your spring cleaning.

Written by MMG…
In other headlines, Existing Home Sales met expectations, but New Home Sales numbers for March were worse than expected, possibly due to the large increase in the costs for materials needed to construct a home. But then there was a change in climate on Friday, as inflation news from around the World created some strong adverse headwinds for Bonds and home loan rates. Overall, home loan rates ended the volatile week unchanged to slightly higher.

Now is still a good time to take advantage of historically low home loan rates before more inflation talk pushes them higher. I’m always here to help advise you, your friends, and your colleagues…no matter the season!

After last week’s relatively slow economic news calendar, things will heat up this week with several events that have the potential to move the market. On Wednesday, the Fed will announce their interest rate decision…and then the very next day, the Fed’s most favored gauge of inflation will be released, the Personal Consumption Expenditure Index (PCE). It will be interesting to play armchair quarterback to the Fed’s decision, and watch what the inflation numbers reveal! And let’s not forget, on Friday we will see the important Jobs Report, where early estimates are for a net loss of 80,000 jobs.

As you can see in the chart below, Bond prices ended the week between a technical “floor of support” at the 200-day Moving Average and an overhead “ceiling of resistance” at the 50-day Moving Average…and that ceiling might just stop any improvement for Bonds and home loan rates for the short term, unless the news of the week is really Bond-friendly. We’ll have to wait and see if the week’s upcoming news leads to calm or stormy times ahead.

SPRING HAS SPRUNG…

…and that means it’s time to wash away those winter blues! In fact, according to the Soap and Detergent Association – did you even know there was such a thing? – three-quarters of Americans engage in spring-cleaning. In fact, their surveys indicated that more than 80 percent of people who spring clean agree that it helps them save time throughout the year, and 96 percent of people donate or discard items during their spring-cleaning.

But the advantages can go much further than that. Check out these top ten spring-cleaning activities, compiled by http://www.medicinenet.com, that can help make your home healthier and safer:

Thoroughly dust your home. Also clean any air conditioning and heating filters, ducts, and vents to minimize pollens and other airborne allergens.
Organize your medicine cabinet. Throw away expired medications and old prescription medicines that you no longer need.
Inventory your garage and basement. Get rid of any old paint, thinners, oils, solvents, stains, and other similar items you no longer need. Note: You may need to take these items to a hazardous waste drop off center.
Inventory under your sinks and around your house. Dispose of old or potentially toxic cleaning products.
Have your chimney professionally cleaned. This will help you lessen the chances of carbon monoxide exposure when the cold weather returns.
Clean all mold and mildew from bathrooms and other damp areas. Use non-toxic cleaning products.
Check your rugs. Make sure that rugs on bare floors have non-skid mats and that older or dusty mats are either washed or replaced.
Inspect outdoor playground equipment. Make sure that all elements are sturdy and safe, especially guardrails, protruding bolts, and other potential sources of injury.
Change your batteries. Do so for both smoke detectors and carbon monoxide detectors.
Collect old batteries throughout the house for disposal. Dispose of them in a battery recycling or hazardous waste center.
And make it easy on yourself – take it one room, one cleaning task at a time. You’ll be more likely to accomplish more if you tackle each spring-cleaning project separately. And that’s great advice…any time of year!

Important week in the financial sector

This is going to be an important week in the financial sector. There is a Fed meeting on Wednesday where we expect the Fed to cut another 0.25% to the Fed Funds rate. We also have the PCE index coming out on Thursday. Remember the PCE is the best indicator of inflation. The most important news though is how the Fed is treating inflation and their words in the report regarding inflation.

Investors feel like this may be the end of the credit crunch, which is certainly good news, and several banks are getting large cash infusions from investors which shows market confidence.

Ready for Spring Cleaning? There are also tips this week on how to do your spring cleaning.

Make it a great week!

Market Update April 18th

Market Update April 18th:

This morning’s rally in the bond market today has been good considering rising interest rates earlier in the week. Mortgage pricing went down for the day.

The chances of 50 basis points of easing at the FOMC meeting April 30 have evaporated and are now chomping away at the 25 basis point cut signaling that the credit crisis could be near the end.

***Do you know someone who wants a mortgage at less than 5%? Call me for details.***

***100% financing to $500,000? Ask me how.***

See the articles below: The big news for the day was Google reports a 30% profit increase which blew most analyst projects out of the water.

http://www.mydesert.com/apps/pbcs.dll/article?AID=/20080412/BUSINESS04/804120312/1043/business04
http://money.cnn.com/2008/04/18/markets/markets_newyork/index.htm?postversion=2008041817

Have a great weekend and by the way, I’m never too busy for any of your mortgage referrals!

Refinance Your ARM Mortgage

Now that some of the dust from the credit crisis has settled, many borrowers are in serious need of a mortgage review. We take our job as mortgage planners very seriously and would welcome the opportunity to do a 10-minute mortgage review to determine if there are other options you should consider regarding your home financing.

If you currently have a 3-, 5-, 7- or 10-year fixed-rate or adjustable loan OR you have purchased in the last few years, it would be well worth your while to give us a call to review the options available to protect your financial future. It could be time to secure a longer-term fixed-rate option so that you are shielded from future market fluctuations. Also, if property values decline due to credit tightening, it may impact your ability to secure new financing.

Give us a call to discuss your options today. We value our relationships and want to ensure that we are doing everything possible to help our borrowers make the right lending choice for their future.

Many analysts still believe that the credit crunch is far from over and that additional tightening may occur. So it is critical for you to be proactive TODAY in order to protect your financial future!

We are here to help and would welcome your call.