Also, during the past week mortgage rates have been steadily rising, but as we inch closer to this month’s employment report it should result in a rate tailspin.

Stay tuned for more…

That said, you can visit our new partner for timely mortgage quote below:

Mortgageratemaster.com

Continued action in the treasuries are causing a measurable and consistent slide in long term fixed rates.  Since this market movement is not a result of any one event this week, we all have to wonder if it will continue or make a reversal to the trend we’ve seen in the past 2 months.

We are now seeing rates dip back to their September lows, so you may even be able to save money if you already have a favorable rate, especially if you were looking to take cash out or consolidate debt. Fortunately, there is much more that you can control now than 1 month ago.

We are at a period in our housing market where certain areas of the country that were hit the hardest are showing signs of recovery.  Their sharp reduction in home values is beginning to ebb and home sales are starting to appear with the bargains created.  Credit and lending is a bit more stable now with the government bank guarantees being put into place.  Combined with the recent lower interest rates, more people are seeing this as a win/win situation and are making offers on homes that will no doubt appreciate very well on the other side of the housing crisis.

The lower rates this week are also causing people with home improvement plans to finally get a good loan and begin their projects that have been a delayed into the fall.  Just as the snowball effect that lower home values and lost jobs have damaged our prosperous economy, a new and more stable economy is emerging with a kick start in credit availability by our government to restore consumer confidence and re-establish the U.S. as a resilient global leader.

As a homeowner, these lower rates are directly targeted to help you get back on track, so take advantage of these opportunities as they present themselves such as this week. I am always here to help.

It feels as if this crisis will never end. Monday and Tuesday’s bond market has opened up considerably. Rates continue to drop due to economic uncertainty and recession fears in Asian and European Markets.

Monday’s only economic data was September’s Leading Economic Indicators (LEI). This index attempts to measure future economic activity, particularly during the next three to six months. It was expected to show a decline of 0.3% but revealed an increase of 0.3%. This means that the economy may strengthen during the next few months when it was expected to worsen. However, offsetting this news was a downward revision to Augusts’ reading. What was previously announced, as a 0.5% drop in August is now believed to be a 0.9% decline. That revision is helping to offset the surprise jump in this month’s reading.

The primary focus was on Chairman Bernanke’s testimony before the House Budget Committee. He updated the committee on the status of the economic recovery, which included a prediction that the economy would be weak for several quarters. He also encouraged another economic stimulus package that may benefit taxpayers. His words are being taken as favorable to bonds, so look for some improvement as the morning goes on. If another stimulus package is given, it may result in further doom for bond markets.

There is no relevant economic data scheduled for Tuesday or Wednesday. This will likely keep bonds fairly calm unless the stock markets are volatile again. If they are volatile again, expect major reprices from major banks.

Overall, I am expecting to see a fairly good week for mortgage rates, assuming the stock markets are not wild again. The most important day was Monday and major banks showed improvements. However, just because it is a light week in terms of economic news, we should not let our guard down as the markets can implode or rally at anytime these days.

Please give me a call if you would like a quick quote or need help with your home finances.

If you have been qualified at a higher rate than you expected or denied because of your credit a FHA (Federal Housing Administration) mortgage may be your little known savior.  FHA loans are guaranteed mortgage loans that are backed by the government.  Since the U.S. government guarantees these loans the mortgage rates are (many times) better than if you took out a conventional loan. 

Here is a checklist you can use to see if FHA is an option suitable for you.  If any of the following statements about you are true a FHA loan may work for you.

• I have a high Loan to Value (loan amount divided by the value of the home exceeds 70%)
• I own a Multi-Family home
• I want to take Cash-out
• I have less than perfect credit
• I had a recent Bankruptcy
• I want to add a friend or family member to the mortgage who does not live with me to help me qualify for the loan
• My current rate has adjusted and I can not handle the new mortgage payments
• I am a First Time Homebuyer
• I don’t have a lot of money to put down on a purchase

(FHA was originally created in 1934 to help the housing industry recover from The Great Depression.  Today FHA programs are being used to help the housing industry out of the credit crisis.)

Yesterday marked the end of the 3rd quarter, which can only be described as one of the most historic and volatile on record. While history will not treat this kindly, I trust we have all learned significant lessons. A key economic report from the Institute for Supply Management reflected its manufacturing index fell to a reading of 43.5, a significant decline. This indicates manufacturers are receiving fewer orders for products as businesses curtail spending. The next important data scheduled this week is the non-farm payroll report, which is projected to show another decline in jobs—this time 105,000. And now that the 3rd quarter is over we look forward to earnings announcements, which I am sure will not be as rosy as may have been projected. What investors will also be keenly aware of are the projections for the 4th quarter and next year. At this writing bonds are improving, with mortgages better by approximately .50% and the equity markets are lower.

If you missed the window of opportunity, the time to act is now, if you have an adjustable or a rate higher than 6.25%. Many FHA loans are outperforming their conventional counterparts.

With major banks raising their lending rates overnight, mortgage rates we are used to seeing will disappear due to the credit crunch. It will cost consumers even more to borrow to eliminate that adjustable, or to consolidate their debt.

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