rate

Why You Should Re-Pre-Qualify Yourself Today

May 24, 2007

If you’re in the process of buying a home and are working without a rate lock, take notice:  over the past two weeks, mortgage rates have spiked to their highest levels since November 2006. Your actual mortgage payment will be higher than you originally anticipated. Depending on your preferred mortgage product, rates have increased by as […]

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One Method To Reduce The Amount Of Sub-Prime ARM Foreclosures

May 23, 2007

The graphic at right comes from The Wall Street Journal and it illustrates something that we all intrinsically know: Sub-Prime ARMs foreclose at a faster pace than all other home loan types. When adjustable rate mortgages reach the end of their “fixed rate” period, some homeowners are unprepared for the upward-adjusting mortgage payments and that […]

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How Lenders Protect Against Losses When Mortgage Markets Deteriorate

May 23, 2007

The graph at right shows the path of mortgage rates in May.  The rate run-up continued yesterday. After a fairly tame start, yesterday’s action rapidly slipped away from mortgage rate shoppers beginning at 12:00 P.M. ET. Many lenders responded by invoking their right to a mid-day reprice as well, with some adding as much as 0.25% […]

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The Week In Review (May 21, 2007) : What To Watch For

May 21, 2007

Mortgage rates moved substantially higher last week as traders reacted to Thursday’s Initial Jobless Claims. The amount of new unemployment filing dropped below 4-week trend line is now at its lowest levels in a year. Fewer unemployment claims coupled with increasing employee wages raised fears of inflation and inflation nearly always pushes mortgage rates higher. […]

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How Psychological Factors Are Pushing Mortgage Rates Higher

May 17, 2007

Mortgage rates have held in a very tight range over the past few months, but little by little, they are inching higher. Mortgage rates are not picked from thin air.  Just like stock prices, they are based on facts, opinions, and psychology. There is a lot of news and data to interpret but, for the […]

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Hot Housing Starts Figure May Push Mortgage Rates Higher

May 16, 2007

Each month, the Commerce Department releases a statistic titled “Housing Starts” that measures residential construction activity. This morning, the Commerce Department released April’s Housing Starts data (PDF) and the headline data reflected a 2.5% (±9.3%) increase in new construction. Markets had anticipated a 0.8% decrease.  This coincided with a decrease in available homes, as shown […]

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When You Can’t Pay The Mortgage, Pick Up The Phone Pronto

May 15, 2007

According to RealtyTrac, one out of every 783 homes in the United States filed for foreclosure in April.  This is down one percent from March, but up 62 percent from one year ago. If you are struggling to pay your mortgage and have not yet entered foreclosure, the best thing to do is to call […]

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The Week In Review (May 14, 2007) : What To Watch For

May 14, 2007

Last week in the mortgage markets was thick with hype and thin with action. Whenever the Fed meets, there is potential for wild swings in mortgage rates.  And, although the Fed doesn’t control mortgage rates, it’s views on inflation and the economy carry tremendous weight with traders, with economists, with banks, and with governments across […]

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As Expected, Housing Drags Down Retail Sales

May 11, 2007

When consumer spending slips, it can send shockwaves through the economy.  Consumer spending, after all, makes up 70% of the economy. The best measure of consumer spending data is Retail Sales, a monthly figure describing how much money Americans are spending, and where they’re spending it. Retail Sales unexpectedly fell in April and that would […]

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Today Is FOMC Day : What Will They Do/Say?

May 9, 2007

The Federal Open Market Committee meets today and markets will be hanging on their every word. There is virtually no chance that the Fed will change the Fed Funds Rate from its current 5.250% level, so its the Fed’s press release that will get all of the attention. We’ll disect the message in tomorrow’s blog […]

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The Week In Review (May 7, 2007) : What To Watch For

May 7, 2007

Data painted a dismal picture for the economy last week including tempering inflation readings, slowing job growth, depressed home sale data, and ever-higher gasoline prices.  This gave markets hope that the Fed may start to ease up on the Fed Funds Rate. But, while the stock market rallied on the news, the bond market continued […]

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How The ADP Jobs Report Impacts Mortgage Rates

May 3, 2007

If yesterday’s ADP Employment Report is any indication, tomorrow’s jobs report may fall short of the 100,000 new job expectation from the Bureau of Labor Statistics. ADP reported 64,000 new jobs were created in April. The ADP report has never been in lock-step with the “official” report from BLS, including this well-publicized event in June […]

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Why “Prime Rate” Is A Name And Not A Number

May 2, 2007

Pop Quiz: Which interest rate is lower?  8.25% or Prime Rate? If you answered anything other than “they are the same”, then you can understand first-hand why banks refer to Prime Rate by name instead of by number. It’s a neat little piece of sales psychology that keeps people from recognizing their true cost of […]

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Jobs Report Is The 800 Pound Gorilla In The Room

May 1, 2007

There’s a palpable uneasiness in mortgage markets right now and Friday’s payroll report looms large. Remember: it’s not the actual data that matters — it’s how close the data is to its expected levels. All week, traders have been jockeying for position based on a projected 100,000 new jobs created and if the number is […]

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The Week In Review (April 30, 2007) : What To Watch For

April 30, 2007

Last week, a ranking Fed official delivered a “wait-and-see” speech on inflation and that roiled the mortgage markets plenty. After sitting in a tight range for Monday through Wednesday, rates exploded higher Thursday as markets abruptly changed their expectations of growth for the rest of 2007. Despite weak housing numbers, employment and consumer spending figures […]

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What’s All That Yellen About?

April 27, 2007

So much for market calm. The mortgage market tanked yesterday when, in response to conflicting data about growth and inflation, San Francisco Fed President Janet Yellen said “watchful waiting” is the Fed’s likely next step. This surprised markets because most expect the Fed to lower the Fed Funds Rate within the next few months. The […]

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With The Next Fed Meeting 13 Days Away, Markets Will Listen For Clues

April 26, 2007

Mortgage rates have been fairly lazy this week, reaching a near flatline.  Even the much-talked about housing data didn’t do much to unperch markets from their current levels. This afternoon, Fed officials Yellen, Fisher, and Mishkin each speak to the public in separate appearances.  If data can’t move mortgage rates, perhaps opinion can. Of the group, […]

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The Week In Review (April 23, 2007) : What To Watch For

April 23, 2007

The economy showed signs of pushing forward last week, but major pressure on the average American consumer surfaced in the form of rising gas prices. Overall, it was a mixed bag for mortgage markets. The Consumer Price Index (CPI) jumped 0.6% last month.  This cost of living increase was much larger than expected and mostly […]

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How 2007 Gas Prices Are Pacing With 2006 Gas Prices

April 20, 2007

Gas prices are entering a very similar pattern to 2006 across the United States and — while it’s bad news for motorists — it could be bad news for mortgage rate shoppers, too. Last summer, gas prices averaged more than $3.00 per gallon for three main reasons: Fear of supply reduction from the Middle East Fear […]

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Whichever Way The Winds Blows

April 18, 2007

Up and down.  Up and down.  Up and down. It’s been a veritable roller coaster over the past two weeks for mortgage rates, mostly because traders can’t find the answer to the most important question facing mortgage markets: Are in the midst of inflation, or not? Everytime we see strong data in one sector of […]

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