Market Update (2/22/2010)

Is the end near? Mortgage bonds took a beating last week driving rates a little higher. We are still seeing exceptional rates, but we are also seeing higher rates than we did just 10 days ago. We have been here before, but we are now so close to the end of the Fed’s mortgage backed security purchase program that any move higher strikes fears that rates will continue on an upward trend. We are also continuing to see huge supplies of government auctions that is adding competition to mortgage bonds and leading to more concern over inflation.

Market Update (2/18/2010)

There was some concerning inflation data released this morning. The Producer Price Index, which measures inflation at a wholesale level, has been ticking higher for several months now. We as consumers do not always see this inflation right away but eventually companies will start charging more for their goods because these goods are costing more to make. The bond market watches inflation very closely. We will continue to keep you updated.

Another little known fact about the homebuyer tax credits

You do not have to sell your home in order to qualify for the tax credit that is available to repeat homebuyers. The only restriction is that you have lived in and owned the home for 5 consecutive years out of the most recent 8 years before purchasing the new one.

Little-known fact about the first-time homebuyer tax credit

Owning a home outside of the United States within the last three years does not disqualify an individual from claiming the first-time homebuyer tax credit if they purchase a home in the US before June 30th.

Market Update (2/9/2010)

Over the next month, you are going to start to hear more and more talk about the Fed’s mortgage backed security purchase program. In fact, Fed Chairman Ben Bernanke is scheduled to speak tomorrow to members of the House Financial Services Committee about the Fed’s plan to end this program on March 31st. Nobody knows for sure what this will mean for mortgage interest rates. I have heard experts say the impact will be anywhere from 0.5% to 1%. The one thing that I do not hear any experts say is that rates will stay the same or go down as we approach this date.

More information on the waiver of the FHA flipping rule

Below is a website that you can visit that has all of the information concerning the recent release by HUD that they are waiving the requirement that homes need to be owned by the seller for at least 90 days before they can be sold to someone that is using FHA financing. The most important piece of information that I took from this new rule can be found in condition #2 concerning requirements if the new sales price is more than 20% more than the seller's acquisition cost. This wording can be found at the bottom of page 1 and the top of page 2.

http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Market Update (2/4/2010)

Rates are still holding steady ahead of tomorrow’s Jobs Report. Current expectations are for the Jobs Report to show 15,000 jobs created in January and for the unemployment rate to remain at 10%. Our strategy right now for all new transactions is to lock in the interest rate ahead of this report. Not that we necessarily think the report is going to be better than expected, but we know that rates have a lot more room to go up than they do to go down. In other words, we are going to see rates of 5.5% before we will ever see the rate at 4.5% again. The risk of rising rates is not worth the reward.

Market Update (Groundhog Day)

Like the 1993 classic “Groundhog Day,” today’s rate sheet is looking very similar to yesterday’s rate sheet and Friday’s rate sheet and Thursday’s rate sheet, and… (I think you get the picture.)

The value of mortgage backed securities has not changed much since the middle of January and neither have interest rates. This could all change this week because the always-important Jobs Report is set to be released on Friday. We will have more information about this report over the next couple of days. In the meantime, enjoy these low interest rates because they will not last forever. Right?

Have a great day and enjoy the 6 more weeks of winter. Go to the link below to see Punxsutawney Phil’s prediction this morning.

http://www.youtube.com/watch?v=I8VeiYh9TbI