February 14, 2017
Since the Federal Reserve first implemented Quantitative Easing, they have taken the proceeds from those purchases and reinvested them back into the Bond market. Why should you care? The Bond Market is one of the key factors that drives interest rates and when bond investment goes down the interest rates could go up.
Right now the Fed pumps $8-9 BILLION a week into Mortgage Backed Securities (MBS) and Treasuries. If it withdraws all, or a portion of that amount, rates could go up immediately. Fed Reserve Chairwoman Yellen will speak to the House & Senate this week and everyone in our industry will be listening to hear clues around where they are heading.
Offers letters as Income
When buyers change jobs, it can affect the home buying process. Or when relocating to a new City and they would like to only move the family that one time! At First United Bank, we can move forward and close that loan with just an offer letter. As long as your client has a history of employment in that line of work, or just graduated from school with a degree, we can close that loan before they start that new job.
February 6, 2017
Stock market indexes were mixed with little change to either these or the bond market. This lack of activity is not surprising as investors were likely spending more time observing political activity rather than tracking economic news and 4th Qtr. earning reports–many of which were very positive and exceeded expectations.
Various Fed. presidents, who are voting members of the Federal Open Market Committee (FOMC), made statements around the future of interest rates. Charles Evans, the Chicago Fed. President indicated that the pace of interested increased needed to be slow given the current circumstances. Meanwhile, the San Francisco Fed. President Williams came out to say that three rate hikes were reasonable in 2017. Based upon the latest CME Group 30-day Fed. Fund future prices, the current probability of a March 15 rate hike of 25 basis points is 13.3%, a May 3 rate hike is 35.5% and a June 14 rate hike is 68.2%.
Cash-Out Loans help with High-Ticket Items
If you, or one of your clients, are approaching a major expense a cash-out loan lets you leverage your home’s appreciation without having to sell. Whether it’s funding college, a down payment on an investment home or a kitchen remodel, a cash-out loan enables you maintain a lower rate than a home-equity loan or most credit cards. It’s your money–you might as well use it while rates are still historically low.
|Geoffrey Davis, Mortgage Loan Consultant
February 3, 2017
And we have the Jobs Report, as expected, higher than estimated. So why are Bonds liking this news and giving us lower Mortgage rates? Mostly it is because of the Unemployment Rate moving up to 4.8% as the household survey saw losses upwards of 30,000 jobs, wow! So it is great jobs are coming, just disappointing so many are still without meaningful work or have given up.
Geoffrey Davis, the Frisco Mortgage Guy!
February 2, 2017
So tomorrow we get the Jobs Report number and going off a few reports this week – we are going to see an increase in the number of folks working! Yesterday’s ADP report showed 246,000 jobs created and the Initial Jobless Claims, a measurement of those filing for unemployment declined by 16,000.
So I am going to say lock your loans in today, ahead of tomorrow’s Jobs number because if that number comes in higher than predicted, it will benefit Stocks more than it will benefit Bonds.
Granted, I still see light and if you can float past this week, lower rates are coming!
Geoffrey Davis is The Frisco Mortgage Guy! 214-529-9622
November 17, 2016
Today Janet Yellen prepped the markets for a December 14th #FED #RateHike. It’s unfortunate that she didn’t do this after the election and maybe #MortgageRates would not have moved up over the last few days. #RateIncreases are likely to be gradual unless the FED continues to put-off a rate increase too long. Meanwhile, Jobless Claims are down to lowest they have been since 1973.
November 16, 2016
Special election just announced to fill the seat of exiting Frisco City Councilman. Packets available today at City Hall!
November 15, 2016
Eric Rosengren, the Boston #FED President and a voting member, spoke this morning that a #FED #RateHike is “plausible” with a job market near full employment and rising inflation. The #BondMarket rallied, up 20 basis points–but will it be enough momentum to start lowering #MortgageRates? Mr.Rosegren voted for a rate hike back in September but then voted to not raise in October. All this back and forth is causing more disruption, not less.