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Looking Back And Looking Ahead : June 30, 2008

June 30, 2008

Mortgage rates improved last week, marking the first time since mid-May that has happened. The rate drop is the result of how mortgage markets interpreted the Federal Reserve’s Wednesday press release. In it, the Fed said: Inflation pressures should lessen soon Growth should remain steady this year The credit market is currently fragile Separately, none […]

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What To Do If Your HELOC Is Reduced By The Bank

June 27, 2008

A Home Equity Line of Credit is bank product that grants homeowners access to the equity in their home at anytime, usually using checks. Often called a HELOC, these equity-based credit lines function very much like credit cards: The rate is adjustable, tied to Prime Rate There is a minimum monthly payment There is a pre-set […]

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How The Fed’s Words Should Trump The Fed’s Actions Today

June 25, 2008

The Federal Open Market Committee adjourns from its 2-day meeting at 2:15 P.M. ET today.  It’s widely expected that the group will leave the Fed Funds Rate unchanged at 2.000 percent. However, it’s not what the Fed does today that has markets so interested.  It’s what the Fed will say. One of the Federal Reserve’s […]

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Making English Out Of Fed-Speak (June 2008 Edition)

June 25, 2008

The Federal Open Market Committee left the Fed Funds Rate unchanged at 2.000 percent this afternoon, as expected. In its press release, the Federal Reserve noted the co-existence of inflation and recession. On inflation, the Fed said that energy and food prices are contributing to an “elevated state” of inflation, but that it expects price […]

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Simple Real Estate Definitions: PITI

June 24, 2008

Most homeowners make four housing-related payments each month: Principal on a mortgage Interest on a mortgage Taxes on the real estate owned Insurance for the real estate owned Collectively, these payments are known by the acronym PITI but don’t let it fool you — a homeowner’s monthly expenses are still called PITI even if one or […]

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Looking Back And Looking Ahead : June 23, 2008

June 23, 2008

Mortgage rates edged higher for the fifth straight week and the benchmark 30-year fixed-rate mortgage is now at a 10-month high. One reason why rates are spiking is because the temporary jolt from higher energy and food costs is starting to look like a longer-term trend. For example, high energy prices get a lot of press, but […]

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The Midwest Flooding And Its Impact On Your Home Mortgage

June 20, 2008

Flooding in the Midwest has displaced thousands of families and caused billions of dollars in damages. It may also cause mortgage rates to rise. As the extent of the damage becomes more clear, prices for grain and livestock are soaring.  For example, a host of dietary staples are suddenly more expensive at the supermarket, including: Meat […]

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What You Need To Know About Mortgage Rate Quotes

June 19, 2008

Home buyers are often surprised when a “rate quote” from the morning won’t be honored in the afternoon.  Sometimes, the assumption is that the loan officer is just being sneaky. This couldn’t be less true. Rate quotes change in the middle of the day because mortgage markets are in constant flux.  All day, every day — […]

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Why Home Values May Rise When Home Building Falls To A 17-Year Low

June 18, 2008

A “Housing Start” is a new home on which construction has commenced and in May, Housing Starts fell to a 17-year low nationally. At first glance, this may seem like a negative for the already-battered U.S. housing market. It’s not. Falling Housing Starts reflects the broader real estate market and shows us that builders are working […]

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If That Home Is A “Good Buy”, Make Your Offer Quickly

June 17, 2008

Each month, University of Michigan researcher survey the U.S. population about their thoughts on the economy — is it improving, it is worsening, is it staying the same. May’s consumer confidence survey registered it’s lowest reading since 1980. Given the recent headlines, that shouldn’t be surprising: Unemployment is spiking Gas prices are at an all-time high […]

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Looking Back And Looking Ahead : June 16, 2008

June 16, 2008

Mortgage rates moved higher last week on lingering concerns about inflation, the fourth straight week in which rates rose. Mortgage rates are now as high as they’ve been since October 2007. Because inflation devalues mortgage bonds, market players are quick to unload them when signs of inflation are present. Last week, there were several such signs: […]

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Guess Which 4 States Accounted For More Than 50 Percent Of May 2008 Foreclosures

June 13, 2008

RealtyTrac released its most recent foreclosure statistics and if you only read the headlines, you think the entire country was on the verge of losing its homes. The underlying data tells a different story, however. More than half of the country’s foreclosure activity in May 2008 was tied to just 4 states in the union: California (28 […]

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Cancel Your PMI Before It’s Too Late To Cancel It

June 12, 2008

When homeowners borrow more than 80 percent of a home’s value, mortgage lenders often require a corresponding insurance policy called Private Mortgage Insurance. PMI provides a cash payment to lenders in the event of a homeowner defaults. But because PMI policies are designed for high LTV loans only, they usually contain cancellation options for when home equity […]

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Is The Federal Reserve Telegraphing Its Next Rate Hike?

June 11, 2008

The Federal Reserve is stumping hard on inflation this week, creating speculation that Fed Funds Rate hikes may be in store for later this month. This is a counter-intuitive development because increases to the Fed Funds Rate are typically associated with periods of rapid economic expansion. Lately, we’ve seen anything but. Witness: High levels of unemployment […]

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Why Your “Dear Seller” Letter May Be Met With A “Dear John”

June 10, 2008

Several years ago, when homes sometimes sold within hours, prospective buyers often drafted “Dear Seller” letters, an accompanying personal note to help purchase offers stand out in a multiple-bid situation. Today, some buyers are writing a different kind of letter to win a seller’s favor — a letter explaining why the buyer’s offer is so […]

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Looking Back And Looking Ahead : June 9, 2008

June 9, 2008

There was no rest for the mortgage-rate weary last week. As mortgage bonds sold off early in the week, sharp rate hikes followed. A steady stream of better-than-expected economic reports had re-ignited inflation fears, drawing money from the bond market. On Friday, however, the money flow reversed on a triple threat to the U.S. economy: The […]

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Why It’s Good News For Home Buyers When Unemployment Rates Surge

June 6, 2008

On the first Friday of every month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called the “jobs report”, today’s 2-page analysis of May 2008 shows that the economy shed jobs and that unemployment surged. This is terrific news for home affordability. That may sound counter-intuitive, so let’s dig deeper into the […]

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What Happens When Bernanke Says “Inflation” 55 Times In 5 Pages Of Text

June 5, 2008

Mortgage rates are a big deal when you’re buying a home. With even the slighest uptick in rates, 30 years of mortgage payments can get substantially more expensive and one of the most substantial threats to mortgage rates is an economic event called inflation. Inflation’s influence on mortgage rates is so large that markets can get jarred […]

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The Proper Way To Give And Receive Gifts For Downpayments

June 4, 2008

When a home buyer is gifted cash for a downpayment, there is a right way and a wrong way to receive the funds. The right way includes: Completing an acceptable gift letter Documenting the withdrawal of funds with receipts Documenting the deposit of funds with receipts The wrong way is to ignore the rules that mortgage lenders […]

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Did You Know : The Lifespan Of A Mortgage Approval

June 3, 2008

Mortgage approvals don’t last forever. A conforming mortgage approval from Fannie Mae or Freddie Mac has a shelf-life of 120 days. After 120 days, the approval expires and a mortgage applicant must re-submit his application for consideration. In addition, a mortgage approval can “expire” within the 120-day period for other reasons: Change of job status or […]

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