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Looking Back And Looking Ahead : April 21, 2008

April 21, 2008

The S&P 500 added 4.3 percent last week — more than during all of 2007 — in what was a good week for the economy and a bad week for mortgage rate shoppers. After Friday’s close, mortgage rates were higher by as much as 0.375% versus the Friday prior.  This reversed a trend of falling […]

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Basic Credit Scoring Tips For A Better Mortgage Rate

April 17, 2008

Credit scoring is becoming more important to mortgage pricing so now would be a terrific time to brush up on your credit education. If you understand how the system works, after all, you can make it work to your advantage. One terrific place to start your research is at myFICO.com. Published by credit scoring powerhouse […]

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Amaze Your Friends With IRS Trivia

April 15, 2008

Today is Tax Day so here’s some IRS-related trivia to share at the water cooler: Did you know… President Lincoln and Congress enacted the first income tax in 1862 to pay Civil War expenses. Did you know… The Civil War income tax was repealed in 1872, revived by Congress in 1894, and ruled unconstitutional by […]

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Looking Back And Looking Ahead : April 14, 2008

April 14, 2008

Through 5 days of see-saw trading, mortgage rates ended last week relatively flat; the downward tick into Friday’s close was a boon for home buyers this past weekend. It may be short-lived, however. Oil continues to sit near all-time highs and a slew of inflation-related data is crossing the wires this week. When inflation pressures are […]

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Are You Financially Smarter Than A 12th Grader?

April 10, 2008

Every two years, the Jump$tart Coalition issues a “personal finance” exam to high school seniors. The test highlights the importance of personal financial literacy among America’s youth and comes at an especially important juncture. Many experts — including Fed Chairman Ben Bernanke — believe that basic financial knowledge is essential for (and lacking in) teenagers.  […]

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What 98 Percent Of Traders Think About The Fed’s Next Move

April 9, 2008

In three weeks, the Federal Open Market Committee will meet again and markets anticipate another cut to the Fed Funds Rate. Based on data compiled by the Federal Reserve Bank of Cleveland at the close of business yesterday, traders put the probabilities of the Fed’s next move at: 62 percent chance that the Fed Funds Rate falls to […]

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A Simple Explanation Of “Credit Crunch”

April 8, 2008

News sources like to use the term “credit crunch” in describing the U.S. economy, but they rarely define what a credit crunch is and what it means for Americans. A credit crunch is when the amount of available loans suddenly decreases over a very short period of time. Usually, it follows a period of lending which, […]

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Looking Back And Looking Ahead : April 7, 2008

April 7, 2008

Mortgage rates edged lower last week, buoyed by a weak employment report for March. After shedding 80,000 jobs last month, the number of working Americans is lower by 232,000 so far this year. Many pundits are claiming these figures are proof of a U.S. economic recession but it’s important to keep the data in perspective. […]

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How Mortgage Rates Benefit From 3 Months Of Worsening Employment Data

April 4, 2008

For the third month in a row, the economy shed jobs, suggesting that the U.S. is in a recession. March’s monthly loss of 80,000 jobs is the largest since March 2003 and follows January and February’s losses of 76,000 each. The weak data is edging mortgage rates lower as we head into the weekend. The […]

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Simple Real Estate Definitions: Discount Points

April 2, 2008

More commonly called “points”, discount points are up-front fees charged by mortgage lenders in exchange for lower mortgage rates. The cost of one point is one percent on the loan size and discount points appear on Line 802 of the HUD-1 Settlement Statement. As a general guideline, each point paid lowers a mortgage lender’s offered interest […]

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FHA Home Loans Emerge As A Cheap Alternative For Low-Credit Score Homeowners

April 1, 2008

FHA stands for Federal Housing Administration, a by-product of the National Housing Act of 1934 and now a sub-group within the U.S. Department of Housing and Urban Development (HUD). The FHA is not a lender nor does it build homes. The FHA exists to insure lenders against loss in the event that a homeowner defaults […]

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Looking Back And Looking Ahead : March 31, 2008

March 31, 2008

Mortgage rates were up last week on weak housing data and a growing nervousness about mortgage bond quality. Rates would have been up more if not for a tame inflation reading Friday. The Personal Consumption Expenditures report fell Friday to 2.0% year-over-year, putting it back within the Federal Reserve’s comfort zone of 1-2 percent. PCE […]

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In 2008, Home Loans Are One Day Cheap And The Next Day Expensive

March 28, 2008

When mortgage rates change rapidly, it’s a fiscal challenge to shop for a home and/or home loan. Lately, mortgage rates have been especially volatile, mirroring the wild moves of the stock market. Here’s how up-and-down stock markets have been in 2008: Through last week, the S&P 500 Index changed more than 1 percent per day on […]

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The Small Statistic Within Consumer Confidence That Didn’t Show Up On The News

March 26, 2008

Consumer Confidence fell to its lowest point in three years and anybody who watches the evening news can understand why. Each day, news programs barrage Americans with tales of economic woe and American Opinion is largely shaped by the media. After enough time, the reporting becomes a self-fulfilling prophecy. But, in the Consumer Confidence report, there […]

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How Seasonal Factors Change Homeowner Vacancy Rates

March 25, 2008

Each quarter, the Census Bureau releases the Homeowner Vacancy Rate, a housing statistic the measures the percentage of homes for sale that are vacant. A home listed for sale may be vacant for several reasons including: The home has been foreclosed and the owner has moved out The home seller moved into a new home […]

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Looking Back And Looking Ahead : March 24, 2008

March 24, 2008

Conforming mortgage rates edged slightly lower for the second week in a row. Mortgage rates fell for two main reasons: The Federal Reserve offered fiscal support for troubled mortgage-backed securities A government group gave Fannie Mae and Freddie Mac permission to lend more of money to American homeowners These two actions combined to make mortgage-backed securities safer […]

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Making English Out Of Fed-Speak (March 2008 Edition)

March 19, 2008

The Fed lowered the Fed Funds Rate by 0.750% to 2.250% yesterday. Because it is tied to the Fed Funds Rate, Prime Rate also fell by 0.750% yesterday.  Prime Rate is now to 5.250%. Holders of home equity lines of credit and credit card debt benefited from the change and will see lower interest costs in […]

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Expect A Fed Funds Rate Cut This Afternoon

March 18, 2008

The Federal Open Market Committee meets today and will issue a press release in addition to cutting the Fed Funds Rate at 2:15 P.M. ET. The verbiage of the press release will be as widely watched as the rate cut itself because markets are curious about how far the Federal Reserve will go to lessen […]

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Looking Back And Looking Ahead : March 17, 2008

March 17, 2008

Mortgage rates fell last week on growing evidence of a recession, but far fewer Americans were eligible to take advantage. Mortgage lenders continue to reduce product menus and that is leaving homeowners with fewer mortgage financing options than before. As an added hurdle, Fannie Mae and Freddie Mac recently added “risk-based” fees on all conforming […]

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Mortgage Rates Fell But You May Have A Higher Rate To Pay

March 13, 2008

When mortgages began to sour last Fall, Fannie Mae and Freddie Mac instituted “loan-level pricing adjustments”. The concept is basic: For mortgage applicants with less-than-ideal credit profiles, mortgage pricing is adjusted to compensate for the added risks. It’s still a conforming loan, but with adjustments. Effective March 6, though, Fannie and Freddie’s definition of “high-risk” […]

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