Ever wondered how banks and mortgage lenders determine what interest rate they offer you?Home Mortgage Interest Rates I did so I've done a little research I hope you find helpful. In some ways it's a simple method that makes sense when you look at it as a step by step process. Different lenders place emphasis on different factors so it does pay off to find a lender who finds your credit worthiness strengths important. If you do take the time to shop around you will greatly improve your chances of getting the best loan available. Some of the items on the list below are obvious but many people don't take the time to clean up their credit before they apply for a loan.

What do you make each year? As your income level rises in the eyes of the lender you become a less risking loan candidate. This allows them to offer you a lower interest rate.Home Mortgage Loans What is your Credit score? Here's a no brainer. The higher your credit score, the lower the rate. A credit score of 720 or above is now considered a good score by lenders today.

What type of closing costs are included in the loan? Many types of mortgage loans include something called “points” this is basically a payment of one percent for each point made as a prepayment within your closing costs. Mortgages with points offer a lower interest rate throughout the term of the loan.

Happy Friday, everyone!

The Labor Department reported earlier this morning that 85,000 more jobs were lost in December than were created. Revisions to prior month’s figures showed the economy actually added 4,000 jobs in November rather than losing 11,000 as was initially reported. The government’s “do-over” for October resulted in reported job losses of 127,000.

The majority of economists had projected a headline payroll loss in December of 8,000. These same economists are now blaming their wide miss on December job market conditions on the weather — pointing out two major storms blanked the Northeast and Midwest during the data survey period.

In my judgment, the fact the national jobless rate reminded at 10.0% in December is the most significant and telling element of the entire report. The detail in this morning’s report showed there were 929,000 “discouraged workers” who had given up looking for a job, up from 642,000 a year earlier. The bid “so what” factor behind all this mumbo-jumbo is significant. If these people were still actively looking for work and had been counted as unemployed in the latest survey period — the national jobless rate would have been 10.4% or higher. Since the current story from the labor sector strongly suggests employment growth will remain puny for sometime yet to come – today’s job report is supportive of steady to potentially lower mortgage interest rates.

Looking ahead to next week — Uncle Sam will take center stage from Monday to Thursday. He’ll be in the credit markets looking to borrow roughly $100 billion in the form of inflation index 10-year notes on Monday, 3-year notes on Tuesday, 10-year notes on Wednesday and 30-year bonds on Thursday. Wednesday’s 10-year notes and Thursday’s 30-year bonds will likely exert the most potential upward pressure on mortgage rates.  —Larry B

Todays Rates:

30yr Fixed- 4.75% 0+1

15yr Fixed- 4.25% 0+1

FHA/VA 30yr- 5.00%

USDA 100% financing- 5.00%

Any and all questions can easily be answered over the phone or via email any time.

Sincerely,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph

UA website - Austin Texas Home Loans
Quick Application

ISM Index data will set the tone for trading this week. The employment report will be the most important release but it doesn’t arrive until Friday. This will be the first full week of trading this year. It will be interesting to see how traders react to the recent spike in rates after the various shortened trading sessions.

This year begins in a similar fashion to last year. Last year at this time 30 year fixed rate mortgage interest rates were historically low. Most pundits predicted little or no opportunities for more refinancing. Mortgage interest rates did spike higher from time to time throughout the year but overall the Fed did an excellent job of keeping rates in check. Unfortunately now the Fed’s $1.25 trillion mortgage backed securities (MBS) purchasing program is nearing the end and the future remains uncertain. The good news is that 30 year fixed rate mortgages remain low but once again future predictions are all over the board. 

What will occur in the future, economic recovery or added weakness will continue to be debated. There is no certainty in predictions. Data can be used to support both sides of the debate. What we can be certain of is the fact that until the economy gains some stability, mortgage interest rates are likely to be volatile. Historically, mortgage interest rates seem to improve slowly. In contrast, when rates increase, it is often fast and furious. One negative day often erases a week of positive improvements.

It is possible for mortgage interest rates to push lower considering the Fed still has a few hundred billion dollars of MBS purchasing left. However, we are in unprecedented times. The Fed has clearly signaled they want rates to stay low but also want to exit the market. The Fed isn’t the only player in the mortgage bond market and there are many others buying and selling the securities. Remember that the Fed does not directly dictate that mortgage interest rates will be at a certain percentage. Rates are determined by the supply and demand for mortgage-backed securities.

The Fed kept rates in check for 2009. The big unknown is how they will exit the market without causing major disturbances this year. While there have been signs of improvement in the housing sector, the last thing we need is higher rates. Without the Fed buying mortgage bonds rates may very well head considerably higher. Now is a great time to take advantage of favorable rates.

More in the day!

Hey, gang!

I hope your weekend was relaxing and you don’t have too much last-minute shopping to do.

With nothing in the way of new macro-economic data to guide them the few mortgage investors still at their desks appear to be taking their directional cues for mortgage interest rates from trading action in the stock market. In today’s early going a solid rally in the stock market is exerting noticeable upward pressure on mortgage interest rats.

Today’s Urban Austin Mortgage Rates:
30yr fixed- 4.625% 0+1.5
15yr fixed- 4.125% 0+1.5
FHA/VA- 4.75% 0+1.5

USDA 100% financing- 4.75% 0+1.5

*These low rates are ONLY offered through Urban Austin Mortgage. The application process is FREE, simple and you can receive an approval in just a few hours. Let’s get to work!

Respectfully,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph
Austin, TX Home Loan – Quick Application