How Long Can Rates Stay This Low?

MBS multi-year Rising Wedge coupled with ultra safe haven trade - the case for even lower rates in weeks to come

Bonds have been trading in a clear, long-term Rising Wedge, after the steep decline in late 2010. In many cases - the Bond will continue to rise over time right into this apex - meaning that rates could end up lower in the weeks ahead - but potentially not without volatility.

Which way will Bonds break out of this Rising Wedge is the $64,000 question that will be answered in the weeks ahead. We could see a continuation higher out of this trend - which could mean even lower rates.

A lot will depend on Europe and Friday's Jobs Report - which will then influence what the Fed does at the next Fed Meeting on June 20th. Will there be more QE and if so, how will the Bond perceive it? If the Bond reacts negatively like it has on past official QE announcements - then the next couple of weeks leading into the June 20th Meeting will really present a wonderful opportunity to line up your clients to get a mortgage as Mortgage Bonds creep towards this apex. This is a technical and fundamental opportunity for rates that won't last forever - help clients see this. One thing we know for sure - when prices break to the downside out of a Rising Wedge - the price action to the downside is typically very fast - like people exiting a building when someone yells "fire".

What To Do With Your Extra Time

Three Must-Read Personal Finance Books

by admin on January 11, 2012

There are many informative and interesting books about managing your personal finances out there. These three are some of the best stand-outs to make a change in the way you view and handle your money.
1. The Intelligent Investor by Benjamin Graham
The author of this book is considered one of the best financial investors of the century, and his advice is still extremely relevant since its original publishing in 1949. His stock market strategies are highly well-respected, and this book will give you a deeper understanding of how to invest your money.
2. The Total Money Makeover by Dave Ramsey
This bestseller is a great overview to managing your finances. It covers getting out of debt, investing, saving for emergencies, college, paying off your mortgage, and much more.
3. The Millionaire Next Door by Thomas Stanley and William Danko 
This book explains what people not just in Beverly Hills or the Upper East Side are doing to make themselves financially successful. It goes over the seven common key traits that the authors have found that wealthier people possess, maybe even your next door neighbor, and shows you how to cultivate them for yourself.
Do you have any favorite personal finance books that belong on this list? Add them to the comments!

Advantages of Paying Points!

Many people think paying points to buy down the interest rate is a waste of money.  If you are going to stay in the home or keep the loan long time it may be in your best interst to pay points to obtain a lower interest rate.

Today points buy you a lower rate than int he past:

.50 point lowers the rate by nearly .20%Historically .50 point lowered the rate by .125%

• Points paid on a purchase transaction are a tax deduction in the year of the close of escrow
• Paying points can dramatically reduce the interest rate on the loan
• Lowering the rate lowers the payment, lowering the income needed to qualify
• A lower rate saves the buyer thousands of dollars over the life of the loan
• There’s never been a better time to buy down a rate

Foreclosures Could Become Rental Homes!

The White House is aiming to improve the housing market with a new initiative – turning foreclosed properties into rental homes. According to the Wall Street Journal, the Obama Administration is seeking input from investors on launching this potential new program.
                              
The video below explains the idea in detail. Do you think this program would help the housing market?

Tagged as: foreclosure, renting

Getting Married? Register for Your Down Payment!

Many newlywed couples face a daunting down payment soon after marriage. This has gotten only more difficult as larger down payments are required since the reemergence of conservative underwriting standards.

A recent article in the Scotsman Guide discussed a new trend at weddings that can ease the financial burden: down payment registries.

“Homebuyers hoping to avoid the typical barrage of plates, glasses and cutlery now have a choice,” explained the article. Couples can learn about down payment registries from their loan officers and using that money as a gift fund for their new home.

Websites allowing secure payments for wedding guests to contribute is the common method, as down payment registries online can allow guests to see the homes a couple likes and feel more involved in the process, as opposed to just sending cash.

For more information about these registries, read the full Scotsman Guide article here and talk to your mortgage professional about it.

7 Things You Should NOT Do When Applying for a Home Loan!

This is a list of things to steer clear of when you are seeking to obtain financing for a home. If you do any of these things, please contact your loan officer immediately.

Even if you have been pre-qualified, we can help you re-qualify.

1. Don’t buy or lease an auto!

Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.

2. Don’t move assets from one bank account to another!

These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.

3. Don’t change jobs!

A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

4. Don’t buy new furniture or major appliances for your “new home”!
If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet the closing costs.

5. Don’t run a credit report on yourself!
This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.

6. Don’t attempt to consolidate bills before speaking with your lender!
The loan officer can advise you if this needs to be done.

7. Don’t pack or ship information needed for the loan application!
Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.

Inexpensive Home Maintenance Tasks Can Prevent Big Expenses in the Future!

For a few hours’ time and a small investment, you can do a lot to protect your property. Even renters can ensure comfortable surroundings with some of these tips.

Get energy efficient. If you have not yet installed a programmable thermostat, now is the time to do it. You can reduce your cooling costs by 10 percent, according to the U.S. Department of Energy. Thermostats cost $40 to $70.

Seal around the tub and shower. Cracked or poorly sealed caulking around tubs, showers, and sinks can lead to water damage to floors, walls, and the ceilings below, say experts writing in Money magazine. When you see cracks or gaps, buy a $5 tube of caulking and reapply.

Prevent fires. Check your fire extinguisher to see if it’s still charged. If you need a new one, buy an extinguisher that works on both kitchen and electrical fires. The National Fire Protection Agency recommends one that is labeled ABC. Cost is about $40.

Test the sump pump. Before a heavy rain floods your basement, test your sump pump to see if it works. Pour water into the well around it. Raising the water level should make it go on.

Prevent shocks. Electrical outlets near water in the kitchen and bathroom should have ground fault circuit interrupters that protect from a shock They have “test” and “reset” buttons. If you need one, the GFCI costs about $10, but you should hire an electrician to install it.

Service the garage door. Spray penetrating oil such as WD-40 into the hinges and rollers so the door will open and close more easily. Test the safety reverse mechanism by placing an object in the door’s path to see if it stops. WD-40 costs about $7.