Sarasota Mortgage Rates | The Mortgage Skinny

Here’s a quick excerpt that I found to be interesting. It always amazes me with the infinite amount of variables that affect the market and economy. Weakening factory orders may lead to lower rates. Lets take a closer and in depth look at this…

 Factory orders data is a monthly report released by the US Census Bureau. The realease is officially referred to as The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories, and Orders.

The manufacturing sector is a major component of the economy. Investors use the factory orders report to attempt to determine the direction of the economy in the future. Orders are generally believed to be a precursor to activity in the manufacturing sector because manufacturing typically has an order before considering an increase in production. Conversely, a decrease in orders eventually causes production to scale back; otherwise, the manufacturer accumulates inventories, which must be financed.

The stock market typically likes to see strong factory orders data indicating a surge in future production. On the other hand, bonds typically like weaker figures.

Despite some positive spots in the US economy, manufacturing continues to struggle. If the factory orders data shows a significant increase, stocks may rise on the data. This scenario is likely to pressure mortgage interest rates higher. However, a factory orders report showing continued weakness may help to push mortgage interest rates lower.

The next report for Factory Orders comes out on Wednesday, April 4th, 10:00am. Be sure to use the knowledge provided above to determine what the economy and interest rates are doing. Come back again for another weekly report on the economy. Also be sure to take a look at the employment report coming out on Friday as this will be the most important release nest week. If you see an increase in unemploymnet or a large decrease in payrolls you might be seeing lower rates!

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Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages.

Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage payment.

The numbers are staggering if you look at it this way. If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over the next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when the property value goes up!

However, if you were to purchase your own home or condominium, you would be well on your way toward building equity within that same five-year period. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up. In fact, you would have the option of refinancing to a lower interest rate at some point in the future should interest rates drop, and this would cause your monthly mortgage commitment to go down. Read the rest of this entry »

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As a Mortgage Planner, it’s a necessity to have the essential knowledge of ”what’s going on” in the market place as well as the economy. I read many publications to keep me on track and I would like to share a few things to watch for the week of March 12, 2007. Unfortunately rates do not follow one indicator. There are too many economic events that effect where rates are going for both short and long term. The best we can do is follow what current economic indicators are doing and try to analyse what they’ve done historically and try to make an educated prediction from there. What a mouth full. So here is a quick blurb for the week.

Mortgage bond prices fell pushing rates higher last week. The beginning of the week saw bonds rally as former Fed Chairman Greenspan continued to weigh upon the financial markets. He was quoted as seeing a “one-third probability” of a US recession this year. The employment report last Friday erased the improvements when unemployment came in stronger than expected @ 4.5%.

For the week, interest rates on government and conventional loans rose by about 1/8 of a discount point. The consumer price index Friday will be the most important event this week. Retail sales, producer price index, industrial production, capacity utilization, and consumber sentiment data will also be important.

Why Data is Important
One of the easiest and most important things ito do when making a decision whether to float or lock a loan is knowing what data is going to be released. Economic releases are important because they provide a snapshot of a portion of the economy. In addition this is the last full week of data heading into the Fed Meeting March 21, so the market may be more volatile than usual.

I would like to see this website be an asset to you. From this point on I’ll try my best to give you a market update with the upcoming economic indicators and fed meetings etc, in hope that it will help to further educate you. So when the time to lock in an interest rate comes, you’ll know.

Source: Mortgage Market Information Services, Inc

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Until recently, seniors 62 years of age and older have not had the best choices when it came to getting cash from their homes. Traditional home loans only offered the option of either selling one’s house or borrowing against its equity.

With reverse mortgages coming on the scene, seniors now have some additional cash-flow alternatives. This type of loan allows mature borrowers to convert their home equity into tax-free income without leaving their current home or making mortgage payments - and they do not need an existing income to qualify. 

How a Reverse Mortgage Works
Reverse mortgages are probably best understood when compared side-by-side with traditional home mortgages, otherwise known as “forward” mortgages. The following table shows the differences between the two:

Both loans incur debt against your home, and both affect equity, but they do so in different ways. Traditional home mortgages require making monthly payments to a lender. With a Reverse Mortgage, payments are made to you. Read the rest of this entry »

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One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate and lower monthly payments. By refinancing, the borrower pays off their existing mortgage and replaces it with a new one. This can often be accomplished with a no-points no-fees loan program, which essentially means at “no cost” to the borrower.

In the no-points no-fees scenario, the mortgage consultant uses rebate monies paid by the lender to pay off non-recurring closing costs for the borrower. These are “one time” fees such as escrow or attorney fees, title insurance, document preparation, tax service, flood certification, processing and underwriting fees, etc. The borrower is still responsible for recurring fees such as interim insurance, property taxes or insurance policy payments.

Refinancing typically occurs when mortgage interest rates drop significantly, but borrowers with recently improved credit scores (from paying off credit card debt, making mortgage payments on time, etc.) are often candidates for better interest rates as well. If you haven’t checked your credit score in a while, it’s a good time to call a mortgage consultant.

The question most asked is, “But why should I go back into a 30-year loan?”

There are two schools of thought on this subject, and the mortgage consultant should work hand-in-hand with the borrower’s financial planner to determine what works best for their mutual client. Read the rest of this entry »

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Many people these days are looking to purchase too much home for what they can afford. Buying a home for $400,000 when your house hold income is only $30,000 does not make sense and it has to do what’s called your debt to income ratio. Most people do not qualify for their dream home because of this. How does the debt-to-income ratio work?

The debt-to-income ratio indicates how high your debt is as compared to your income. The higher the ratio, the higher a credit risk you are. The ratio is a calculation of your total monthly debt payments divided by your monthly gross income.

Example:
Total debt payments = $600
Total monthly income = $3000
Debt to income ratio = 20% (600 / 3000)

The acceptable debt-to-income ratios and calculations vary slightly among lenders (some include the sought-for mortgage in their debt payment totals.) However, even if your debt load is high, an excellent credit history (or credit score) can make it possible to qualify for a mortgage loan. Read the rest of this entry »

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