Rates Fall 6 Straight Weeks, and Stay Under 5% for 2 Weeks Straight

Rates Remain Under 5% for 2nd Week In a Row (see last paragraph for mention of possible extension of Tax Credit again!)

"The possibility of securing a mortgage rate below 5% has greatly improved in recent weeks, in a positive sign for would-be home buyers", said CNNMoney.com. All facts show, from Freddie Mac's report to Bankrate.com, rates have dropped.

After 6 straight weeks of rates dropping, we now wonder if forecasts for higher rates may be off on their expected timing. Maybe rates start their climb in late 2010 and we see the higher 6% rates in 2011...Warren Buffet said yesterday that he expected recovery in the housing market to be full on in 2010, so who do we believe?

Freddie Mac's (FRE, Fortune 500) weekly report said the 30-year rate slipped to 4.87% for the week ended Thursday, the lowest since May. According to the mortgage backer, last week's rates stood at 4.94%. On the other hand, Mortgage tracker Bankrate.com said the average 30-year fixed loan slipped to 5.22% from 5.25% the previous week. The 15-year fixed rate also fell, Bankrate said, to 4.6% from 4.64% the week before. Keep in mind, Bankrate.com always posts higher rates, I believe, because their main audience is Loan Officers and lenders of their competition because they do such a good job of posting cause in the daily fluctuation of mortgage rates as it pertains to stock and bond works daily. So, Freddie is more accurate as a whole.

Why are mortgage rates still dipping below 5%? Bankrate.com said that it's because of the poor employment reports. Poor stability in the growth, or at least having a lesser amount of unemployment from month to month, is a sign that economic rebound is not coming along as fast as we hoped. Therefore, investors in the stock and bond world are nervous, and when they are nervous, they pull money from risky stock and put it into bonds. When bonds are seeing more attention from investors than stock, in ratio terms, it's good for our mortgage rates. Also reported to cause this change in rates, CNNMoney said, "Now the central bank has less than $15 billion left to spend on its buyback program, which led some investors to worry that yields would soar again. So far, that's not the case."
On Wednesday, reports said Democratic congressional leaders were working to extend a $8,000 tax credit for first-time home buyers past the Nov. 30 expiration date and could even make it available to current homeowners who buy a new house...CNNMoney reported.

Biweekly Mortgage NewsLetter

If you are interested in receiving this Biweekly Newsletter every other Monday, please email me at brad.lynch@servicefirstmtg.com and I'll be sure you get them.

SFMC Advocate's Cognition Circular
September 2009
Dear Brad,
As Your Mortgage Consultants for Life at Service First Mortgage, Brad Lynch & Michael Greiner are always interested in your feedback or thoughts. Therefore, please email or call us with things you think we are not including but would like for us to include in our biweekly newsletter.
Brad - bl@fmillc.com
Michael - mg@fmillc.comWe look forward to hearing from you as always!

Sincerely,

Brad Lynch &
Michael GreinerService First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

Shattering Windows Myths
Since we are seeing so much rain lately.
- Thank ABC 7 News for this cool picture!
There are a number of outdated beliefs about storms and window safety that the Institute for Business & Home Safety (IBHS) would like to set straight. For instance, "Open the windows during a storm to relieve the pressure that could build up and cause more damage." If you've never heard this advice before, don't pay any attention to it now. If you or someone you know believes it, read on for the IBHS's expert recommendations:
1. Do NOT open windows during a storm. This doesn't relieve pressure - it just lets damaging wind and rain into your home.
2. Tape does NOT protect your windows from flying debris. It might keep more of the glass together when impacted, but will not keep it in place.
3. Window film does NOT provide much protection from the impact of debris. It does, however, hold glass shards together when the window breaks. Also, some thicker "structural" film has passed the "small missile" test, which applies to things like gravel and similarly sized objects.

Stressed Out? Take These Steps Our work lives are often filled with what can seem like unbearable amounts of stress. And while some of those stresses are unavoidable, there's a lot you can do to start to whittle those high levels of stress down to something that feels at least manageable. Here are a few suggestions: Know when to say "No." That means you have to first understand your own limits. Then set limits on others so they don't encroach on your time by pressuring you to take on tasks or responsibilities that will throw you out of balance. If possible, avoid people who consistently stress you out. If your boss is the culprit, you might not be able to do this. And you can't steer clear of everyone who inadvertently or occasionally causes you anxiety. But you can avoid people who have a history of leaving you feeling stressed after you've tried to change the situation and they haven't responded. Don't expose yourself to unnecessary environmental stressors. For instance, if you read the news on the Internet during your break, but it leaves you feeling tense, stop reading the news on your break. Do something that relaxes you instead: Go for a short walk, knit, meditate, work a puzzle. Learn to manage your time. Letting projects go until the deadline is upon you will undoubtedly cause you stress. Work at a steady pace - and don't procrastinate. Procrastination can affect the quality of your work and leave you feeling anxious and strained for prolonged periods.
About Service First Mortgage
At Service First Mortgage, we work "By Referral Only". This makes it possible for us to spend 100% of our time with our current loyal clients for life, rather than chasing down our next "deal". If you or someone you know needs a mortgage consultant they can trust, please give us a call or email us.
"Don't Keep Us a Secret"!
Service First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

In This Issue
Shattering Windows Myth
Stressed Out? Take These Steps
Quotes
Mortgage Consultant for Life Featured Article...From Recession to Recovery
Today's Rates
30yr fixed 4.875%
15yr fixed 4.375%
FHA 30yr 4.875%
VA 30yr 4.875%

Rates above do very depending on loan size, and purchase of "points".
Quotes

The best time to plant a tree was 20 years ago. The second best time is now.- Chinese Proverb My dad always used to say, "If you're falling off a cliff, you may as well try to fly. You have nothing to lose."- Captain John Sheridan Everyone driving slower than you is an idiot. Everyone driving faster than you is a maniac.- George Carlin
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Quiz Question:
To be answered in next Newsletter edition:

The terms ruck, lineout, and maul pertain to what sport?
Previous quiz answer was:
Question: What is the team of Moses Horwitz,
Louis Feinberg, and Jerome Horwitz more popularly known as?Answer: The Three Stooges.Source: www.threestooges.com
From Recession to Recovery. What's in Stake?
As we move into a recovery from recession, we don't necessarily go from a constant increase from month to month of unemployment numbers to back to average. First we see a decline in the increase...and we have. Ted Jones, Chief Economist of Stewart Title North Texas, says that every recovery in our nations history from recession was sparked by an increase in the real estate market, and we recently saw that in reports.
The Federal Reserve Chairman, Ben Bernanke said that the Central Bank plans to keep rates low. Ben's focus to keep rates low will hopefullly minimize inflation and typical mortgage rate hikes that forecasts have suggested for the coming year...although some guru's of the money world still believe we will see rates at least in the 7% range by this time next year. You can't afford the same house today if you buy in a year at 7%....that's a huge monthly difference.

Mortgage Rates as the Economy Recovers

Moving.com continues to do an excellent job of telling the public about the daily progress of our economy and how it relates to mortgage rates...just in case the layman wanted to keep an eye on the economy in publicity that can be read and understood by anyone.
Today, bonds started out in negative fashion as the morning report in retail level sales came out not just good, but better than research would have expected. That is a good sign of recovery in our economic times...as I always say, "what's good for our economy, many times is not good for low mortgage rates". In the end for today in comparison to yesterday, rates came out a tad higher...by .125% in discount point (for the layman. That "ain't" much).

This retail level establishments report is announced by The Commerce Department. This is an important report, in case you wanted to take mental note for long term memory, as apposed to trying to add the huge number of reports that we see from day to day in the Stock Market that don't necessarily have a huge influence like this one. The retail level establishments report is important as it makes up two thirds of the U.S. economy.

Furthermore, this blog is piggy backing the recent blog post I made in the Frisco Economic Forecast a couple weeks back, in regards specifically to what rates may do in the coming 6-8 months...if you haven't read it, go read it. Remember, sitting here today with the 30 year fixed FHA and Conventional rates at 4.875%, a 7% to 7.875% rate on that price range you are holding off on today will bring a monthly payment well more than $100 a month higher at the expected higher rates than the ones today. That means you will probably settle for a lesser house in 6-8 months than you would now.

August Mortgage Rates Starting to Hike...Mortgage Trend Last Couple Months

In July, the national average for the 30 year fixed mortgage at one point got as low as 5.25%. Please note, from my long experience in this industry, I'm not sure where the national average is derived because it's always .125% or .25% higher than what most people in my market are seeing. None the less, I'm just using this as an illustration of how rates have moved upward in the recent months. Today, the national average is 5.47%. That is a full .25% higher than July's best rates. Going back to May, rates were at 4.75%. So, from May to August 7th, rates have increased over a half a point, or more than .5%.
If this becomes the trend, like economic forecasters have said it would eventually this year leading into 2010, by January we could see rates hit the 7% mark. If you are waiting on buying a home, or have not checked out of your refinance "procrastinator's anonymous class" yet, this would be the time. Take a look at this first chart on BankRate.com to see what it looks like in an image...for you brain type people that need pictures to subscribe to your long term memory.
On the positive side of this mortgage interest rate hike, I received my investment portfolio statement today and I made some money. Come on economy!

The Fed Lowering rates and Your Mortgage Rate

It's today that everyone in the mortgage and financial advising world are on the edge of their seats to see what the Federal Reserve decides on the recent rate adjustment. Some think .25% and others hope .5%. Just about any veteran Loan Consultant such as myself can expect clients and prospects to start asking the question, "will I get a better rate now that the Fed lowered the rate...". The answer to that is, "not congruent to the amount that prime changes necessarily, but over a couple days, it seems that the stimulus in the market that will reside from such a move will cause a "bettering" in the 30 year mortgage rate in the short term."

If you have been waiting for a good turn in the market for rates before you start your home search, now is the time. Rates really settled to a lowest rate seen in a couple years in recent weeks, and then started upward again this week and last. My guess is that in the next couple weeks or months, rates will hold, then settle a little before they make an upward swing again. If you want to catch this window of time for best rate options, go to this link and start a Market Watch so you can start actively seeking a home.

Best of luck in your Home Search
Brad Lynch
LivingInPlano.com
LivingInIrving.com
Frisco Plano Irving Home Loans