The Mortgage Market Advisory™ The Week of January 11, 2010 Provided by Amy Arey Mortgage pricing ended the week slightly better by about .300 and kept the 30-year conforming fixed mortgage rate around 5.00%, The Employment report was weaker than expected last week and the unemployment rate remained at unchanged at 10.0%. The release of the Fed minutes was no surprise- they are committed to keep rates low “for an extended period of time.” The minutes also revealed they care contemplating the continuation or extension of the MBS purchase program which has helped keep mortgage rates low through 2009. If they do not, the market will have to organically absorb $15-$20 billion per month on it’s own- likely to increase rates due to supply/demand dynamics.

The Week Ahead: While this week will bring us a few data points that could move markets, it will mostly be about the Treasury Note auctions. We have 3yr, 10yr, and 30yr Note auctions this week (Tues-Thurs) that will be very important. If these auctions go well- we could see mortgage pricing improve slightly more this week, but if these auctions do not go well, we could see mortgage rates back on the path to going higher.

On Thursday we will get a look at how retail sales are going as well as the weekly jobless claims. On Friday we will get a look at how consumers are feeling and a view of how inflation is (or is not) working it’s way through the economy with the CPI report. Monday: No important data. We do have a 10-year inflation indexed note auction at 1:00. Tuesday: We have the 3-year note auction at 1:00 and this could set the tone for the rest of the week, although the markets will be watching the 10-yr and 30-yr much closer on Wed and Thurs. Wednesday: We get the very important 10-yr note auction at 1:00 and the Fed releases the Beige Book at 2:00. Thursday: Retail Sales – we get a look at the retail sales report and traders will be watching closely. We also get the Weekly jobless claims report at 8:30 and the 30-yr note auction at 1:00. Friday: We get a view of inflation at the consumer level with the CPI report at 8:30 as well as a look at how consumers feel with the Univ. of Michigan Consumer Sentiment report at 9:55.Mortgage pricing was a little volatile last week, but ended the week unchanged. However, mortgage rates moved up by .60 for the month of December, or down by about 200 bps in price/rebate. We are still hovering around 5.00% for a Conv. 30-Year fixed mortgage. It appears low mortgage rates will be with us at least until the Fed’s MBS purchase program comes to an end in March 2010 as scheduled.

 There are many speculating that the Fed may find a way to extend this program in some form to continue to support housing as it appears to be just getting legs under it. Low market rates in general will be with us for “an extended period of time” as committed by the Fed and Ben Bernanke. While there are discussions around possible exit strategies, none of the members seem to feel that any immediate or urgent action must be taken anytime soon relative to market rates. If the data continues to support an economic recovery, we expect mortgage rates to wander in a range from about 5.00% to 5.25% on the Conv. 30-year fixed, but to be choppy over the next 60 days.

Mortgage Market Advisory Disclaimer This is only our opinion and cannot be guaranteed to be in the best interest of any or all parties. This service is provided for informational purposes only and is not intended for trading purposes. None of the information provided constitutes a solicitation, offer, or recommendation by NHLA to buy or sell any security, or to provide legal, professional, tax, accounting, or investment advice. Every lender’s price desk has their own strategies and reactions to market movements. Our information is simply based on market movements and does not predict or report potential pricing adjustments by particular lenders.

To search for your new home, or view lending options, log onto my website at: www.TheFastestGrowingCityinTexas.com

Why Now May Be a Good Time to Consider Refinancing a Mortgage

With mortgage rates hitting record lows, it may be time to think about refinancing.

The rate on a 30-year fixed mortgage with no points hit 5.01 this week, slightly up from 5 percent last week but down from 5.97 percent this time last year, and the 15-year fixed mortgage rate hit 4.46 percent, compared with 4.47 percent last week, according to the latest data released Wednesday from Bankrate.com. These rates are at, or close to, the lowest levels since the company’s tracking began in 1985.

At the same time, the Mortgage Bankers Association said interest rates on the 30-year fixed-rate mortgages it tracks fell for a sixth straight week, remaining below the 5 percent level, “widely viewed as a psychological tipping point” according to this article.

The record lows are thanks to a combination of the Federal Reserve showing no inclination to raise short-term interest rates and investors and foreign central banks maintaining a healthy appetite for debt issued or guaranteed by the United States government, said Greg McBride, Bankrate.com’s senior financial analyst. And they come as many homeowners are finding themselves owing more than their house is worth and are having trouble making mortgage payments.

There is also a limited-time government program that helps people to refinance if they are slightly underwater. The “Home Affordable Refinance Program” is not as widely discussed as the related loan modification program. And it has been criticized by some housing experts for helping financial players profit. Still, it aims to help homeowners who have a mortgage balance equal to or greater than the value of their home refinance and obtain more affordable monthly mortgage payments.

The program is available until June of next year to homeowners who meet certain qualifications, including having loans owned or guaranteed by Fannie Mae or Freddie Mac and having a first mortgage that does not exceed 125 percent of the current market value of the home. (See if you qualify and find out how to apply if you do here).

With the risk that rates may not stay this low for long and that the government program will end, “there is a window of opportunity” for refinancing that will not be available for long, Mr. McBride said. He recommended that those who think they may not qualify for the program to double check what their home is worth to confirm this. Then, even if you don’t ultimately qualify, he suggested considering trying to refinance anyway if you are paying a higher rate on a fixed-rate mortgage or have an adjustable-rate mortgage.

“Today’s record low mortgage rates represent an opportunity for homeowners to refinance at lower fixed rates or to trade out of an adjustable rate mortgage before an inevitable increase in rates and lock in permanent payment affordability,” he said.

Are you considering refinancing in this environment? Why or why not? If so, what kinds of problems and hurdles, if any, have you run into trying to refinance? (Find more information about mortgages here and more information about loan modifications here).

Original link: http://bucks.blogs.nytimes.com/2009/12/02/why-now-may-be-a-good-time-to-consider-refinancing-a-mortgage/

With the year quickly coming to a close, it may be time to begin rethinking some of the personal finance decisions you have made and figure out if it is still the proper course for you or not.

For example, is there a pesky credit card balance you have that you’ve only been paying the minimum amount on for the past several months? Miscellaneous expenses you know you could do without, yet spend money on anyway? Been paying too much interest on a loan or mortgage that you know you could most likely refinance? Did you buy a stock that you thought was going to fly high, and it hasn’t even gotten off the ground? Now is the time to ponder these thoughts and make action plans for 2010.
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