My prediction is the mortgage industry will begin to get busy due to LOW RATES because w/o funds we will stay in grid lock. With the availability of funds at such historical low prices, it will be the subliminal economic stimulus package the governement is looking for.
It is believed mortgage rates are going to be on the mind of the Fed this year to further stabilize the market. We believe it will be a plethora of very low rate activity this year for those that remain in the mortgage market. Many lenders have begun hiring additional operations staff to maintain the service levels and be ready for what the new year has in store.
U.S. mortgage rates, already the lowest since Freddie Mac started tracking them in 1971, have plenty of room to fall if history is any guide. The average 30-year fixed-rate mortgage is still relatively costly compared with the yield on 10-year Treasury notes, a benchmark for home loans. The difference, or spread, between them exceeded 3 percentage points last week for the first time since 1986. The gap has averaged 1.64 points during the past two decades. Add that figure to the benchmark Treasury’s yield on Dec. 24 and the resulting mortgage rate would be 3.82 percent, well below this week’s reading of 5.14 percent. It’s possible that the spread may narrow to 1.25 points because the government is “absolutely obsessed” with making home loans more affordable.
It has been projected that the 30-year fixed rate will drop as low as 4.25 percent by March, and perhaps sooner. Treasury yields held near record lows after industry reports showed falling consumer spending during the holiday season, adding to concern that an economic slump will lead to deflation. U.S. retail sales fell as much as 4 percent from Nov. 1 through Dec. 24 as households limited purchases to necessities and cut back on clothing, electronics and jewelry, according to SpendingPulse data. One of the Federal Reserve’s preferred gauges showed inflation at the lowest level since 2004, boosting demand for government bonds’ fixed income.
Look for LOW RATES for the months to come.
Monday, December 29, 2008
Thursday, December 18, 2008
Rates Keep Dropping
I wrote the article below 2 weeks ago and did not send it out until I had proof of my prediction: I mentioned that money (loans) needs to become more affordable. This week the Fed lowered the rates from a range of ZERO to .250%.
Basically their only option to help fix the economic status is to make money more affordable through lending.
Immediately after the big news, mortgage brokers nationwide began to get a surge of loan applications for refinances.
Make sure you at least prepare yourself for the possibility of tieing your biggest debt (mortgage) to a historical low interest rate.
Please feel free to comment or call me if you have any questions or concerns.
Rick
Basically their only option to help fix the economic status is to make money more affordable through lending.
Immediately after the big news, mortgage brokers nationwide began to get a surge of loan applications for refinances.
Make sure you at least prepare yourself for the possibility of tieing your biggest debt (mortgage) to a historical low interest rate.
Please feel free to comment or call me if you have any questions or concerns.
Rick
Friday, December 5, 2008
2008, Year of 'What went up, actually came down'
Wow! What a year! Big drops and big changes.
As for real estate and economic crisis, who can honestly say they saw all this coming? Well I invite you to comment on my blog. Especially if you are one who had conversations with me in 2004, 2005, & 2006. Maybe we knew each other through family, friends, work, community committees, networking clubs, training sessions, vacation trips, college, high school, sports, or today's famous way of meeting people...through the internet. I invite you to post a comment on my blog.
Why? Simply because it is a good way to socialize and learn in today's world. The internet has given us the ability to speed up the process of communication, and it would be very interesting to hear comments from people about what is on their mind today. It does not have to be about real estate, mortgages, politics, or business. Tell us about your year, what it taught you, and your experiences.
It's a way of trying to understand what everyone was thinking prior to the current market conditions, and maybe throw ideas out there on what the thoughts are on fixing the economy or other areas that need focus.
What we thought about 4 to 5 years ago is important on how we think today. What we do in the present will determine the future, and what we think about today can and will give us our status 4 to 5 years from now.
Some of us are doing great! Some of us are unfortunately not. Bottom line: we need to keep our heads up and live today like it would be our last.
As for me and my family we are very happy and are looking forward to the holidays. My wife Claudia and my kids Felipe & Angelica have a lot of joy and happiness in them. They make me laugh on a daily basis, and I try my best to give them love and laughter in return. We are hoping to plan a trip to Utah this winter for Angelica's 15 birthday, January 1st.
As for our careers, to put it in perspective, 2008 was like a tsunami that wiped out a lot of homeowners & colleagues. I've been trying to help clean up the mess. I helped people in foreclosure by short selling their home and saving their credit. I helped homeowners with adjustable rates that made their mortgage payment skyrocket to an amount too difficult to handle by modifying into a new type of loan. I helped buyers get into their first homes. I helped investors create new investments to recover from the bad ones they made. It has been a clean up year in my industry. I was not successful with everyone I met due to the challenges the lenders gave us, but it was a learning experience that will help me help more people in the future.
What's happening now? A lot of the same, but better news is starting to come up in the mortgage industry. The rates keep dropping. Two weeks ago, I was announcing that borrowers with loan amounts up to $625,500 were able to get a 30 year fixed rate under 6%. Today? Under 5.5%. Tomorrow? Could be lower. (Actually while I am writing this blog, we got a surprising jump UP in the rates. This market is very, very volatile.)
How can people benefit from this? Stay in touch with your loan representative. Your loan representative is no longer in the business? Make sure you work with someone who is very knowledgeable in this area and has experience from the 1990's or before. In the 1990's we experienced the same events of today, but in lower dollar amounts. You might notice the the majority of the loan agents still in the business today are ones who had more than 10 years experience.
What is happening today that happened in the 1990's? FHA loans are popular again. FHA are government insured loans that allow a borrower to get approved with minimal conditions. It is not a stated income program, which in my opinion was the main cause of our current economic condition(that and the inexperienced individuals abusing the system, making large commissions, and thinking about their pocket before the borrower's best interest). FHA is a program for first time home buyers that looks at compensating factors for an approval. FICO scores do not have to be great, but income documentation is a must. Unfortunately there are still mortgage predators out there (see December issue of Business Week magazine). Therefore stay in touch with someone you can trust.
REO's were big in the 1990's and they are back today. Who knew they would make such a huge comeback? When you look at the history of real estate back to 1900 and analyze the graph of real estate values, you will notice the incredible peak from 2000 to 2007. Our real estate values ventured into territories that were never seen before, and now our values need to come back down to reality as they have in the past year and will continue in the next.
So what's the good news? The price to borrow money will continue to drop. There is no other choice in my opinion. As unemployment continues to rise and real estate prices continue to adjust to the median income, money needs to become more affordable. Yes, unfortunately that will cause our U.S. dollar to drop in value, but are we the only ones in the world dropping in value? Absolutely not. All other countries are currently dropping and will continue dropping in value as well.
What we as a country have to look forward to is innovation. We've always been a country of ideas and originality. How many times have you been to another country and seen items, products, or fashions that we already seen 2 years before? We will always be ahead in the race or very close to other countries that are ahead because that is the way our country rolls.
Please feel free to post a comment or a testimonial if I have worked with or for you in the past. It would be great to hear from everyone I've met in the past and read your thoughts of today.
May you and your families have a wonderful holiday season and a prosperous new year!
Rick Izquieta
As for real estate and economic crisis, who can honestly say they saw all this coming? Well I invite you to comment on my blog. Especially if you are one who had conversations with me in 2004, 2005, & 2006. Maybe we knew each other through family, friends, work, community committees, networking clubs, training sessions, vacation trips, college, high school, sports, or today's famous way of meeting people...through the internet. I invite you to post a comment on my blog.
Why? Simply because it is a good way to socialize and learn in today's world. The internet has given us the ability to speed up the process of communication, and it would be very interesting to hear comments from people about what is on their mind today. It does not have to be about real estate, mortgages, politics, or business. Tell us about your year, what it taught you, and your experiences.
It's a way of trying to understand what everyone was thinking prior to the current market conditions, and maybe throw ideas out there on what the thoughts are on fixing the economy or other areas that need focus.
What we thought about 4 to 5 years ago is important on how we think today. What we do in the present will determine the future, and what we think about today can and will give us our status 4 to 5 years from now.
Some of us are doing great! Some of us are unfortunately not. Bottom line: we need to keep our heads up and live today like it would be our last.
As for me and my family we are very happy and are looking forward to the holidays. My wife Claudia and my kids Felipe & Angelica have a lot of joy and happiness in them. They make me laugh on a daily basis, and I try my best to give them love and laughter in return. We are hoping to plan a trip to Utah this winter for Angelica's 15 birthday, January 1st.
As for our careers, to put it in perspective, 2008 was like a tsunami that wiped out a lot of homeowners & colleagues. I've been trying to help clean up the mess. I helped people in foreclosure by short selling their home and saving their credit. I helped homeowners with adjustable rates that made their mortgage payment skyrocket to an amount too difficult to handle by modifying into a new type of loan. I helped buyers get into their first homes. I helped investors create new investments to recover from the bad ones they made. It has been a clean up year in my industry. I was not successful with everyone I met due to the challenges the lenders gave us, but it was a learning experience that will help me help more people in the future.
What's happening now? A lot of the same, but better news is starting to come up in the mortgage industry. The rates keep dropping. Two weeks ago, I was announcing that borrowers with loan amounts up to $625,500 were able to get a 30 year fixed rate under 6%. Today? Under 5.5%. Tomorrow? Could be lower. (Actually while I am writing this blog, we got a surprising jump UP in the rates. This market is very, very volatile.)
How can people benefit from this? Stay in touch with your loan representative. Your loan representative is no longer in the business? Make sure you work with someone who is very knowledgeable in this area and has experience from the 1990's or before. In the 1990's we experienced the same events of today, but in lower dollar amounts. You might notice the the majority of the loan agents still in the business today are ones who had more than 10 years experience.
What is happening today that happened in the 1990's? FHA loans are popular again. FHA are government insured loans that allow a borrower to get approved with minimal conditions. It is not a stated income program, which in my opinion was the main cause of our current economic condition(that and the inexperienced individuals abusing the system, making large commissions, and thinking about their pocket before the borrower's best interest). FHA is a program for first time home buyers that looks at compensating factors for an approval. FICO scores do not have to be great, but income documentation is a must. Unfortunately there are still mortgage predators out there (see December issue of Business Week magazine). Therefore stay in touch with someone you can trust.
REO's were big in the 1990's and they are back today. Who knew they would make such a huge comeback? When you look at the history of real estate back to 1900 and analyze the graph of real estate values, you will notice the incredible peak from 2000 to 2007. Our real estate values ventured into territories that were never seen before, and now our values need to come back down to reality as they have in the past year and will continue in the next.
So what's the good news? The price to borrow money will continue to drop. There is no other choice in my opinion. As unemployment continues to rise and real estate prices continue to adjust to the median income, money needs to become more affordable. Yes, unfortunately that will cause our U.S. dollar to drop in value, but are we the only ones in the world dropping in value? Absolutely not. All other countries are currently dropping and will continue dropping in value as well.
What we as a country have to look forward to is innovation. We've always been a country of ideas and originality. How many times have you been to another country and seen items, products, or fashions that we already seen 2 years before? We will always be ahead in the race or very close to other countries that are ahead because that is the way our country rolls.
Please feel free to post a comment or a testimonial if I have worked with or for you in the past. It would be great to hear from everyone I've met in the past and read your thoughts of today.
May you and your families have a wonderful holiday season and a prosperous new year!
Rick Izquieta
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