The FOMC (Federal Open Market Committee) or sometimes referred to as the “Fed”, concluded its two day meeting today.

In a press release,  the FOMC announced it’s thoughts on the state of the economy today and moving forward in addition to its plans for future monetary policy. The equities and bond markets pay close attention to the statements that come out of FOMC meetings as monetary policy as set by the FOMC can significantly impact our economy and the economies around the world.

The FOMC: Extends Exceptionally Low Levels for the Federal Funds Rate at Least Through Late 2014

The FOMC made several statements that have sent mortgage rates back to all time historical lows.

1. The committee extended its “forward guidance” on interest rates stating that “economic conditions” are likely to “warrant exceptionally low levels for the federal funds rate at least through late 2014”.
2. Current economic conditions: Described as “expanding moderately”. This means that conditions are essentially unchanged, the key point being that they have not worsened, which is good.
3. The committee “expects to maintain a highly accommodate stance for monetary policy.” This tells the markets that they’re still willing and able to take measures in the future, especially in relation to inflation, which is good. This is as opposed to stepping aside and letting the market play out, which can be bad if the market can in fact, improve with some monetary intervention.

From the FOMC Press Release:

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

How The Fed’s Statements Affect You and Your Mortgage

Immediately after hearing the FOMC’s statement, mortgage rates fell back down to the all time historical lows they were at last week. This latest development is only the latest in a series of events over the past few months where mortgage rates have been at all time historical lows or set new lows. The unprecedented window is a very unique opportunity to get into a mortgage at the lowest rates we have seen in our lifetime.

We can help you understand how much you qualify for if you are purchasing a new home and help you understand what mortgage best fits your needs. We only need a few minutes with no obligation to put together a strategy that best fits your financial needs and goals for your home purchase or refinance of your existing loan.

Last week mortgage rates again hit all time historic lows. There were also signs of an improvement in housing and the economy as a whole based on some of the Economic data that was released. The markets have opened up this week with mortgage rates close to the all time historic lows of last week.

Summary of Last Week’s Positive Economic News: 

• Single Family Housing Starts: Up 4.4% over November
• Existing Home Sales: Rose 5.0%, rising for third consecutive month
• Jobs: Jobless claims hit lowest level since April 2008

The Week Ahead: FOMC Meeting and GDP

The two items with the most potential to move mortgage rates are the FOMC (Federal Open Market Committee) press conference on Wednesday and the release of GDP data on Friday.

The tone and remarks coming from the FOMC can help investors understand where the FOMC’s position on where the economy is, where they believe it is going and what type of actions, if any, they expect to be taking in the future. The market can turn on a dime for better or worse on nothing more than one unexpected statement from Fed Chairman Bernanke or other FOMC members. The market will be watching the FOMC and GDP numbers closely.

Economic Calendar for Week of January 23, 2012

• Monday - none
• Tuesday - none
• Wednesday - Petroleum Status Report, FOMC Press Conference
• Thursday - Durable Goods Orders, Jobless Claims, New Home Sales
• Friday - GDP, Consumer Sentiment

The Commerce Department released December’s Housing Starts data this week. A housing start is the beginning of a new home build (breaking ground). The data showed that new construction starts for single family homes increased 4.4% over November starts. The chart below also provides clarity in the upward trend in housing starts, a good sign the housing moving forward.

How This May Affect the Cost of Purchasing a Home in the Long Term

This data suggests that purchasing a home may be cheaper in the short term over the long term. As the market gains strength, buyers are likely to continue increasing, which could drive home values up. This coupled with the reality that we will very likely be seeing mortgage rates come of their current all time historical lows mean that we may be in a key window where purchasing a home may have significantly lower costs than it may in the coming months and years.

Positive Employment Data Released

There was also positive news coming from the the Labor Department which said that only 352,000 new claims for unemployment benefits were filed last week. This was a decline from the previous week’s revised total of 402,000. This is positive news for employment and shows increased strength in the employment sector.

Mortgage Outlook for the Week of January 23, 2012

Next week will see the FOMC meet on January 24-25. Additionally, there will be data released for Pending Home Sales, Jobless Claims, GDP and New Home Sales.

Buying and selling a home can be a strange combination of very personal feelings and very impersonal relations. Both the buyer and the seller usually have strong emotional connections to the house, but in the course of making the sale, the two parties don’t always meet in person.

If you don’t get an opportunity to met the current owners before you buy, there are important questions you need answers to that you should ask the selling agent. That being said, an unexpected visit from a former owner can give you the chance to ask lingering questions and learn more about the house from before it was yours.

What to Ask the Home Owner or Realtor Before You Buy

• How recently were the plumbing and other systems updated?
• Were there any problems during the updates?
• Are there other issues with the neighborhood, area, or the home?

What To Ask a Former Owner After the Sale

Undoubtedly, when a stranger comes to your door, it can be a little disconcerting. When it’s the former owner of your home, however, you can take advantage of the fact by asking them questions your home inspector might not have elaborated on, or about things that weren’t disclosed during the actual sale. Some of these questions can include:

• How receptive were the neighbors to renovations and updates to the home?
• Do they have any favorite contractors they can suggest?
• Do they have any thoughts for upgrades that they were considering before they sold. They may have ideas and thoughts about improving the home that hadn’t occurred to you? 
• Do they have any stories about the home’s history? 

Of course, the former owner may wish to ask you questions too. Many sellers often still feel a personal connection to the house and want to share that with you.

What Former Owners Might Say

It isn’t uncommon  for former owners return for sentimental reasons. They may have had children grow up in the home, or it might have been their first major purchase. Ultimately, they often just want to make sure you’re caring for their former residence. They even may ask you questions about your family, or how you plan to change the house to fit your tastes. In any case, meeting your home’s former owners is a chance to learn more about your home and learn about your home’s history.

This week is a shortened week due to the Martin Luther King holiday being observed today. Last week saw the market hit, yet again, all time historic lows on mortgage rates. Every time we think we’ve hit the bottom, mortgage rates set a new low. Not the worst problem to have!

There are some important pieces of data being released later in the week, but overall this is a light week for data that could move mortgage rates with Tuesday being the lightest day for data.

On Wednesday the PPI (Producer Price Index)  and Industrial Production data will be released and have the ability to affect mortgage rates. On Thursday, the CPI (Consumer Price Index) and Housing Starts are being released. Finally, on Friday, the Existing Home Sales data, released by the NAR (National Association of Realtors) will be watched by the market as well.

Economic Calendar for Week of January 16, 2012

• Monday - Martin Luther King Holiday Observed
• Tuesday - Empire State Mfg Survey
• Wednesday - Producer Price Index, Treasury International Capital, Industrial Production, Housing Market Index
• Thursday - Consumer Price Index, Housing Starts, Jobless Claims, Philadelphia Fed Survey,
• Friday - Existing Home Sales

Rates Are At or Near Record Lows, What Does This Mean For Me?

The truth is that it depends. It depends on your current needs, goals and plans for your current or future mortgage. If you are looking to refinance your existing mortgage or purchase a new home, we can help you understand what programs best fit your needs and help you decide if locking in a low rate is the best option for you. We can give you this guidance free of charge, so please do not hesitate to call us directly or request a rate quote on this site.

Once again we’re seeing mortgage rates close near all time historical lows. Again? We may sound like a broken record, but Eurozone debt issues continue to weigh on the markets, pushing mortgage rates lower. This means that there is still an opportunity to refinance or purchase a home with a mortgage that will cost you less than a mortgage would have cost at virtually any other point in US history.

Why Does Europe Affect My Mortgage Rate?

Why do rates move downward because of bad new coming from Europe? The concern in Europe is that governments there may default on their debt obligations, which would also affect US banks and other banks around the world.

Since European concerns affect the US, investors pull their money from US equities (stocks) in times of crisis and place their money in safer vehicles like bonds. The net affect of placing more money into bonds is that mortgage rates move lower. So while you may see indices in the US like the DOW and S&P performing poorly because of investor cash outflows to bonds, this positively affects the rate at which you can obtain a mortgage!

Jobless Claims, Consumer Sentiment and Beige Book Data Released

The FOMC (Federal Open Market Committee) released its Beige Book data on Wednesday and reported moderate growth since the last report. This shows that while the Economy is not recovering as quickly as many would like, it’s at least going in the right direction, which data only a few months ago indicated was not the case.

On Thursday, Jobless Claims data showed that climbed by 24,000 to 399,000 in the week ending January 7, 2012, which was slightly higher than expected.

Today, Consumer Sentiment climbed 4 from 69.9, which was slightly higher than expectations. This demonstrates that consumers are are experiencing a slight increase in confidence over the state of affairs with the Economy.

When taking out a mortgage, buyers often consider how they will get a rate that will enable them to pay off their mortgage as quickly as possible. In other words, they want the lowest rate possible, as we all do. Many times it is often only those that are approaching retirement that actually start to think about how they will pay off their mortgage. With careful planning, paying off your mortgage faster can be a realistic goal regardless of what your rate is.

Paying Down Your Mortgage

1. Pay your Mortgage More Than Once Per Month – Setting up a bi-weekly or weekly payment schedule can help you pay of your mortgage many times faster than by making a standard monthly payment. If you pay bi-weekly, you end up paying one or two extra mortgage payments per year which automatically reduces your amortization period.
2. Increase Your payments When You Have More Money Coming In – Instead of using additional funds from a raise or bonus at work for something else, put it towards your mortgage every time you make a payment.
3. Get a Reasonable Interest Rate – It goes without saying that it is important that you do your due diligence when shopping for a mortgage. While rate is only one of the factors to consider when choosing a mortgage professional, it is important that you choose your mortgage professional and rate carefully.
4. Consider an Adjustable Rate Mortgage – While an adjustable rate mortgage may not offer the security of an unchanging mortgage payment, it can provide for a smaller rate and payment due than a fixed rate mortgage. This lower rate / payment will enable you to make larger payments towards the principal, which can help you pay off your mortgage significantly faster. Keep in mind that an adjustable rate mortgage may or not make the most sense for your needs, we can help you understand the options and which ones fit your needs the best.

If you abide by some of the above strategies, it may be possible to pay off your mortgage up to a decade earlier. Not having to pay substantial housing costs later in life can help ease a major financial burden and can free up money for retirement, college education for the kids, investments or other financial needs.

This week is starting off slow with little economic data being released. Two major data releases may impact mortgage rates this week with Beige Book data (relied upon by Fed during their meetings) being released on Wednesday and Retail Sales being released on Thursday.

Some Fed members are speaking as well and the market is always listening for good or bad updates from Europe.

Economic Calendar for Week of January 9, 2012

• Monday - Consumer Credit
• Tuesday - Wholesale Trade
• Wednesday - EIA Petroleum Status Report, Beige Book
• Thursday - Jobless Claims, Retail Sales, Treasury Budget
• Friday - International Trade, Consumer Sentiment, Import & Export Prices

Should I Lock Now or Wait?

Since mortgage rates are very close to their all time historical lows, there is likely much more to gain by locking now then by waiting. It only takes one piece of news to push rates up and when they move up, they move much faster than they move down. That being said, the market may have changed by the time you’ve read this, so calling us is the most sure way to get the most up to the date guidance in whether locking makes sense for you and what loan program best fits your needs.

This week is starting off slow with little economic data being released. Two major data releases may impact mortgage rates this week with Beige Book data (relied upon by Fed during their meetings) being released on Wednesday and Retail Sales being released on Thursday.

Some Fed members are speaking as well and the market is always listening for good or bad updates from Europe.

Economic Calendar for Week of January 9, 2011

• Monday - Consumer Credit
• Tuesday - Wholesale Trade
• Wednesday - EIA Petroleum Status Report, Beige Book
• Thursday - Jobless Claims, Retail Sales, Treasury Budget
• Friday - International Trade, Consumer Sentiment, Import & Export Prices

Should I Lock Now or Wait?

Since mortgage rates are very close to their all time historical lows, there is likely much more to gain by locking now then by waiting. It only takes one piece of news to push rates up and when they move up, they move much faster than they move down. That being said, the market may have changed by the time you’ve read this, so calling us is the most sure way to get the most up to the date guidance in whether locking makes sense for you and what loan program best fits your needs.

First and foremost, we hope everyone had a safe and happy New Year’s! Here’s to a prosperous 2012!

Mortgage rates are starting 2012 near the all time record lows they reach multiple times in 2011. That’s great news for those looking to purchase a new home or looking to refinance their existing mortgage to a lower rate and or take out cash.

Mortgage Rates Moving Forward this Week

There are a few pieces of data being released this week that could move mortgage rates, but the Employment report on Friday is the big report of the week. Positive data for employment may mean that mortgage rates could move higher since mortgage rates tend to move down with bad economic news and up with good economic news.

This inverse relationship is due to investors moving their money away from stocks and into bonds (causing mortgage rates to decrease ) when bad news is reported and investors moving their money away from bonds and into stocks (causing mortgage rates to increase ) when good news is reported.

Economic Calendar for Week of January 3, 2011

• Monday - New Year’s Day Observed
• Tuesday - Construction Spending, FOMC Minutes
• Wednesday - Factory Orders
• Thursday - ADP Employment Report, ISM Non-mfg Index
• Friday - Employment Situation

Buying a home can be an exciting and somewhat stressful experience. When shopping for your new home, keep in mind that one of the most important aspects of home ownership is often neglected, finding the right mortgage.

Your mortgage is the backbone of the entire purchase, but without doing proper research, you might not be getting the best deal you can. Before you begin the home search process, consider the following ways to increase your chances of a speedy, stress-free home buying experience.

1. Get Pre-qualified Before You Start Home Hunting

Getting pre-qualified means you will better understand how much home you can afford and which mortgage program(s) best fits your needs. By giving yourself options, you’ll be able to find a lender you’re comfortable working with and a mortgage you’ll be able to afford. Once you’ve done this, you can begin your home search without worry. You will also save yourself time as shopping for homes that you can’t afford only takes up time you could be spending finding the right home you can afford.

2. Know Your Personal Finances

Knowing your financial situation prior to speaking with a lender can help speed up the process when you do seek financing to buy a home. Budgeting for your current expenses and using a mortgage calculator can help predict what you’d pay with a mortgage. From there you can make a choice about how much you feel comfortable borrowing. A secure, steady working situation will also help make you more appealing to lenders since you’ll be able to prove stable income.

With a little bit of preparation before you speak with a lender, your lender can help you make an informed decision about how much house can afford to purchase and which loan program is the best fit for your needs.

 3. Understand All the Costs Involved With A New Mortgage

When you pick a financial institution to work with, you will submitting your information, checking your credit, and being given a mortgage quote.  While your monthly payment is a vital part of your mortgage, you’ll also be responsible for paying interest, insurance and lender fees, which your lender will help you understand. Many borrowers forget about these extra fees and instead of consulting with a mortgage professional, use a mortgage calculator as their guide in how much they will have to pay for a given loan size without taking these extras fees into consideration.

Housing has been a bright spot in economic news as of late and there is more positive news coming from the housing sector. The National Association of Realtors (NAR) is reporting that existing home sales (previously occupied homes as opposed to newly constructed homes) rose in November by 4% to a seasonally adjusted annual rate of 4.42 million.

While economists say a healthy housing market should be seeing around 6 million sales a year, the data is an improvement over the sales of the past few years, putting 2011 home sales on track to be 2010 sales.

U.S. Census Bureau: New Home Construction Increases

The  U.S. Census Bureau is reporting November housing starts (beginning of construction of a new home) are also showing improvement with a 2.3% increase to 447,000 starts, a 2.3% increase over the revised October figure of 437,000. This means that there have been 3 consecutive months of improvement in housing starts.

After months of negative data being released, this data is one more signal that housing may very likely be ready for a turn around in 2012.

Home Builders Confidence Increases

The National Association of Home Builders (NAHB) is reporting that builder confidence in the market for newly built, single-family homes has increased by two points from  on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for December.  today. This increase marks the third consecutive month of builder confidence improvement.

 NAHB Chief Economist David Crowe:

“This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said NAHB Chief Economist David Crowe. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.”

Pre-Qualification: The First Step in Shopping For a New Home

The first step in shopping for a new home is getting pre-qualified so that you know how much home you can afford. We can help you get pre-qualified and help answer any questions you might have about what type of loan will best fit your needs and whether or not a rate lock makes sense for your situation. If you have questions, we can help with a no cost consultation where we put together a mortgage strategy that makes the most sense for your unique needs.

After hitting all time historical lows last week, mortgage rates have opened up this week flat, with little to no change from last week. We start the week with news of the death of Kim Jong il, which may play a role in the market in the future, but seems to have little affect on mortgage rates today.

There are several economic reports being released this week with the ability to change mortgages rates, with the GDP and Jobless Claims data being released later in the week.

Trading Volume, Volatility and Your Mortgage Rate in the Week Ahead

The markets will likely be quiet as we move into the final weeks of the Holiday Season, but low trading volume in the Equity and Bond markets can lead to volatility. Since we are at all time historical lows, waiting through the next few weeks may be risky. If you need help deciding if a rate lock is the best move for your needs, we can help.

Economic Calendar for Week of December 19, 2011

• Monday - Housing Market Index
• Tuesday - Housing Starts
• Wednesday - Existing Home Sales
• Thursday - GDP, Jobless Claims, Consumer Sentiment
• Friday - Durable Goods Orders, Personal Income and Outlays, New Home Sales