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.

Who To Believe While Shopping Your Loan

I was reading a blog on Money Magazine today about the best way to find a home loan. You can see that edition at this link (Money Magazine)
Sarah Max explained,
"When the easy money was flowing, you could get a great deal on a mortgage from just about anyone. But in today's credit-challenged world, all the avenues for finding a mortgage come with their own set of problems."

This is simple and a great intro to where we are at now in the industry. She went on to explain how the many banks have become very tough and tightened their standards and so forth. You see, brokers really have no direct relation with the money they loan, and that many times leads to a situation where more brokers than bankers would be willing to loan and "push" a loan that a banker or bank my turn down. Sarah makes mention of this in her message.

This is where I start to wonder, "is the helper trying to help the shopper in this case, speaking of Sarah with Money Magazine writing an article targeting the needed help of mortgage shoppers, or is she helping advertise the mortgage lead generating giants in our industry that typically support the broker and banker portions that established business by pushy sales rather than honestly earning referrals. Let me be clear though...I am not saying all bankers or brokers that purchase leads are not to be trusted, but I would place a bet on it that if you did the research you'd find there are more less qualified Loan Officers working primarily on purchasing leads rather than the Loan Officer who has made relationships through honesty and hard work. "Bonds between people keep one honest. If you don't have a bond with someone, you have nothing to lose"...for being dishonest that is.

Now this is where Sarah crosses me a little on whether she's helping the shopper or the major lead company. Sarah says,
"And while online lending sites hold the promise of one-stop shopping, some have developed a reputation for playing bait-and-switch on rates and not fully disclosing fees. All this adds up to a major shopping hassle. If you want to get the best rate, you'll need to tap at least two of the sources below. Scour the Web. Shopping for a mortgage online has come a long way from the days of one-size-fits-all rate listings. At some sites, including Bankrate.com, MortgageMarvel.com, and Zillow.com, you can now shop anonymously and get accurate rates. Keep in mind that all these sites act as referral services, so eventually you'll have to close the deal with a bank or mortgage broker."

The aforementioned lending website companies as I may bring attention to are lead generating companies. Sarah even mentions that you will shop their rates and fees and eventually be dumped onto a banker or broker. There is very little accountability between the bankrate.com type company and the lead purchaser loan officer for the receiver of the lead to be, should I say, less than straight forward or not slippery. That being said, Sarah is suggesting to avoid the "bait and switchers" and mentions it nearly just like that, yet she suggests to her readers to check with these lead generating sites that sell their leads to entities with more probable numbers of bait and switch type loan officers. THAT is why I wonder if maybe a blog such as this is contradicting...efforts to educate and help mortgage shoppers crossed with the demand for advertising and keeping relationships with the people who probably advertise with them, creates a less than conducive atmosphere sometimes.

Here is what I suggest. Those large "engines" such as the aforementioned bankrate.com's and so forth are large enough that they know they have to be on target when advertising and therefore will list their rates and fees pretty accurate to current competitive market costs...lending laws watch them closer than the small guys and therefore they are held more accountable many times. Now since it is obvious that today's market isn't forgiving to the person who prioritizes the "cheapest" loan, but first prioritizes the evaluation of trusting the loan officer with the most competitive rate, use the big "engines" to gauge what is competitive and then shop different lenders by your personal character "radar". If you feel rushed or feel like you are being pushed at all, trust in the old adage, "if it's a good deal, it don't have to be committed on today". Be sure YOU the buyer/shopper define committed right. Committed should mean to you in the mortgage industry, I've spent money. A lender may say, "sir, I realize you are shopping and I feel like rates will be higher tomorrow. Do you mind if I lock your loan?" As long as they don't require upfront non-refundable money if you don't use them, and you intend on using them if it works out, let them lock it for you.
Best of luck in your home shopping!

Renting a Home vs. Buying a Home...things that make you go, HUH

Here’s a quick note to let you know how I can help you or anyone you feel comfortable introducing me to, in making the decision whether they should stop renting and buy now, or stay where they are at.

If you are like me, you know at least one or two people who are renting an apartment and you have probably wondered, "why do they not own, I know they both or he/she has a decent job." Sometimes there are legitimate reasons for renting, and sometimes people can buy and either don't know they can, or just have put it off for so long, they need a friend or family member to help them bring it back to their consciousness...but most of the time when people find out that in today’s economy they can buy a home for 30 percent less than they could a year or two ago – they get excited!

The next time you’re in a conversation with a friend, family member or neighbor and they mention that they’d love to take advantage of this buyers’ market and buy a home that’s selling for 30 percent less than it may have been selling for a year or two ago, would you stop, take out your cell phone, look up my number (469-450-2723) and call me immediately? I’ll send you our free report, How to Stop Spending Money on Rent and Own a Home Instead, because it will give them all the answers they need now to make a smart decision about what to do next.

Leave the Middle for Your Mortgage Planner and the End for you, Mr. Bottom Line Thinker

This message is for those bottom line type buying a home or refinancing for the 2ND, 3rd, 4Th, and 5Th time. You only know enough to endanger the possibility of having correct expectations. In mortgage, it's not the loan consultants job to meet your expectations, but it is his job to set your expectations and then try to exceed them. It doesn't matter how many loans you have been involved in, you have no business setting your own expectations except of course for what you pay and the obvious...the middle is best set by your mortgage planner.
Many of those ultra macho, "I'm a spunky business thinker" type when it comes to knowing about getting a loan, think they are the "Bo knows" of mortgage because they have a history of closing loans. Quote me if you like, in the mortgage industry right now, June 2009, there are NO EASY loans...only a little exaggeration there, but "Mr thinker" reading this should not think that he knows mortgage and because he makes a million dollars a year and is only buying a $200k home, he is the exception, and "this should be easy". STOP it. Just for a minute TAKE ADVICE and turn your "I'm getting sold radar" off and not just hear, but listen and realize that you might not know it all.
For the bottom line thinkers, John Maxwell says, you have the "ability to focus on results and maximize return to reap the full potential of your thinking". Mr bottom line thinker, relieve yourself from thinking you might have a clue in how the transaction process might go for your transaction so you can not just hear but listen to your mortgage planner tell you what the transaction process is going to look like, so your expectations are 100% advised expectations and not 50/50 expectations...50 being your own and 50 being your advised. Remember, you aren't a transaction or process thinker when you are outside your strong suit. You are a bottom line thinker and if you want to be happy at the end of the transaction where your bottom line gratification happens, then let the middle be led by your advisor.

Mortgage Planner Small Print Disclosure: Notice there are no explanations of why you should be sure and set your goal to have 100% advised expectations right now rather than 50/50. If the mortgage planner your talking to exudes a character that you can't trust for that 100% and let go of your 50%, then it's time to switch. If I tried to explain why the transaction process in mortgage is shifty and why, I wouldn't know to whether to start at number 1 reason, or number 50 and if I started anywhere in between, it would not end up being a good example for one of the reasons your loan has turbulence within the middle of your transaction.
Love, Listen, and Learn from your Mortgage Planner for Life and if you can't do all three, maybe it's time to change.

Frisco Home Sales and Average Prices...Expectations for Future Foreclosures

Home Sales up
Given what our market has been through, lets think with our common sense and jump to some apparent obvious conclusions about what we would expect. With the enormous number of foreclosures, and short sales that have a negative affect on house prices, and the fact that so many buyers were eliminated from the buying game when mortgage qualification guidelines tightened, we know why and where the drop in home prices on average came from. Right? That all seems like commons sense. Now that value of all homes in America just about are less than they were a year or more ago, anyone buying those homes today would be buying them at a lower amount then before...more common sense. So when we here reports that the number of homes sold in April or May this year is a little from last year, but the average price per home is less, we shouldn't be pessimistic and say, "who cares that the number of homes sold increased cause prices are down". That is not a fair statement because the homes sold today have to be less on average and the number of homes sold increasing is the best first sign we can expect. Right?
CNN reported, "Existing home sales rose 2.9% while the median sales price fell 15.4% to $170,200".

Average Sale price down
Lets not worry so much about the average sale price of homes just yet. America saw too many job losses and pay cuts for us to have a bustling appreciation on sales prices just yet. Let Americans get some placebo going in the right direction and as we start making an extra dollar, we'll get right back on into our good ole American ways...spend and leverage "babe"! Once that happens, then we can focus on home prices. Keep this note on your fridge though, over correction is in the forecast for 2010 and mortgage rates are expected to be in the high 7% range at best...they might have started that assent last week by the way the volatile market is playing out. We had two interest rate "worsenings" just today.

The foreclosure numbers haven't stopped, and there are more to be expected.
Forbes reported that in March the unemployment rate went to 8.5%, the highest in 25 years. Economic forecasters figure that we'll see a continued problem in foreclosures at least through this summer and fall.

Lowest Interest Rate In History...30 year fixed

What is the standard for the lowest interest rate in history?Freddie Mac, one of the governing bodies of home loans in America, reported that their survey on rates goes back as far as 1971, and 4.78% last week was the lowest National average for a 30 year fixed loan. As of today, the rates have worked their way above that standard again, but word and hope is that they will return and break that record once again before 2009 ends. "Place your bets though", because banks and lenders are VERY stingy with their money right now and the trend shows that the lower rates get, the harder they make it for economic data to influence the recent minuscule drops we have seen compared to the healthy increases from said economic data on the adverse side.
President Obama made note in a recent home refinance talk about his recognition of these record breaking rates, and said further, "But he warned people to watch out for scam artists." He was speaking about the lenders asking for up front money to refinance a home...this is typically a non-reimbursement fee they call application fee. Many lenders collect for an appraisal up front, but this money is sometimes reimbursable and in the end is used directly toward the cost of the appraisal rather than padding the pocket of the "scam artist" type loan person. So, do not get this mixed up with the "scammer's" upfront fee.