First Time Home Buyers
From the monthly archives: December 2008
The lessons from the Ghost of Mortgage Present are those you’d expect from the child of volatility. When banks react, they tend to overreact. The Ghost of Mortgage Present simply sees reactions and overreactions.
Ghost Lesson #1: Establish Harsh Credit Penalties
The lessons from the Ghost of Mortgage Past are those of bad habits and bad risk practices. These practices were unhealthy for everyone involved; including banks, borrowers, and the neighborhoods.
Ghost Lesson #1: Removal of Credit Risk as an Interest Rate Factor
Separating out the risks of [...]
Continue Reading →Happy and Joyous Quadruple Witching Day To You and Yours!
Quadruple Witching is when Index Futures, Options on Index Futures, Single Stock Futures and Stock Options all expire on the same day. It creates one of the most volatile and wild days of each fiscal quarter. In a year like this [...]
Continue Reading →During the holiday season, retailers bombard shoppers with at-the-register offers to “open a charge card and save 15%”.
It”s an immediate money-saver, but for Americans in the market for a new home loan, taking advantage of the in-store savings could be a long-term loser.
This is because new credit card applications are damaging to credit [...]
Continue Reading →This market is clearly volatile. Rates jumped dramatically yesterday and we’re looking at a number of things that “don’t happen” that are all happening at the same time.
The spread from the Fannie Mae rates to the end-consumer mortgage rate is 10x’s normal as the major lenders don’t know how many of these locked loans [...]
Continue Reading →When it comes to mortgage rates, sometimes it”s better to “act now”.
On Tuesday, mortgage rates fell to their lowest levels in 4 years. It happened because the Fed said it would “employ all available tools” to resuscitate the economy.
On Wednesday, however, the markets had second thoughts.
After considering the long-term implications of a [...]
Continue Reading →There is actually only one rate today. There is zero upside to paying points, but a $300,000 loan is below 5% today with perfect credit. We are starting to see rates slide (11:37 CST) as a wave of selling just overtook bonds.
This is not the refi boom of earlier this decade. This one is [...]
Continue Reading →The Federal Open Market Committee voted to cut the Fed Funds Rate by at least three-quarters percent today. The benchmark rate now rests in a range of 0.000-0.250 percent.
In its press release, the FOMC identified three key economic sectors in which activity has weakened since October. The FOMC noted that:
The [...]
Continue Reading →Rate% Points in $ Standard Fees Total Fees APR 5.000% $ 1,416.00 $ 1,575.00 $ 2,991.00 5.09% 5.125% $ 195.00 $ 1,575.00 $ 1,770.00 5.18% 5.250% $ (951.00) $ 1,575.00 $ 624.00 5.27% 5.375% $ (1,059.00) $ 1,575.00 $ 516.00 5.39%
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The Federal Open Market Committee adjourns from its 2-day meeting at 2:15 P.M. ET today.
It”s widely expected that the Ben Bernanke-led FOMC will reduce the Fed Funds Rate by a half-percent to 0.500 percent.
Fed Funds Rate cuts are meant to stimulate the economy by lowering borrowing costs for businesses and consumers; interest rates [...]
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