Today's Mortgage Interest Rate Advisory

WEDNESDAY AFTERNOON UPDATE: Today's FOMC meeting adjourned with no change to key short-term interest rates, keeping the benchmark Fed Funds Rate near 0%. The stock markets rallied following the adjournment, pushing the Dow up 200 points and the Nasdaq higher by 53 points on the day. The bond market soured though, driving bond prices lower that pushed yields and mortgage rates higher. Overall, we can expect to see an increase in tomorrow's mortgage rates of approximately .375 of a discount point unless the morning's data offsets those losses or pushes them higher.The post meeting statement did give us some insight into what actions the Fed may take to help boost economic activity since this rate can't be lowered any further. They indicated that they were ready to buy longer-term government securities such as the 10-year Treasury Note and 30 year Bond if they felt that it would generate lending. This is actually good news as it creates another buyer for all the debt that could some to market to pay for the stimulus package currently being considered. Unfortunately, the statement was not very definitive, more or less saying that it is an option available not a commitment to do so.The statement also hinted at the Fed's forecast for the economy, saying that significant risks still remain but that a ?gradual recovery? could begin late this year. In other words they expect the economy to continue to slow for most of the year before slowly rebounding. That is actually fairly favorable news for bonds, but traders apparently were disappointed by the lack of solid details of what the Fed will do, particularly regarding the possibility or likelihood of buying government securities. The result was a weak afternoon for bonds and a likely upward revision to mortgage pricing.Tomorrow morning brings us the release of December's Durable Goods Orders. This data helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show a decline in orders of 2.0%. A larger than expected drop would be good news for bonds and mortgage rates.December's New Home Sales report, the sister release to Monday's Existing Home Sales, will be posted late tomorrow morning. It is expected to show another decline in sales of new homes, but is not important enough to heavily influence mortgage pricing.If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaran teed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2009

Daily Rate Lock Recommendation - 01/27/2009

Tuesday's bond market has opened in positive territory after this morning's economic news failed to give any significant surprises. The stock markets are showing gains during early trading with the Dow up 53 points and the Nasdaq up 15 points. The bond market is currently up 6/32, which will likely keep this morning's rates near yesterday's levels.January's Consumer Confidence Index (CCI) was posted late this morning, revealing a reading of 37.7. This was a lower than forecasts of a 39.0 reading, but offsetting that favorable news was an upward revision of 0.6% to December's confidence reading. This means that consumers were more confident in their own financial situations than previously thought in December, but that sentiment has dropped in January. Lower levels of confidence are considered good news for bonds because it usually means consumers are less apt to make large purchases in the immediate future.There is no factual economic data sc heduled for release tomorrow, but we will get the results of this year's first FOMC meeting. It will begin tomorrow and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to short-term interest rate, but as is often the case, traders will be looking for any indication of the Fed's next move. However, I am not expecting this meeting to have a major impact on the markets or mortgage rates because the Fed can't lower key rates much more. There is little chance of indicating a possible rate hike in the near future, so I don't believe that this meeting will have the influence they usually do. The rest of the week is pretty busy with five relevant reports scheduled to be released over Thursday and Friday. There are two on Thursday's agenda while the most important one comes Friday along with two other moderately important reports. I am expecting to see additional movement in mortgage rates over the next couple of days, so please maintain contact with your mortgage professional.If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2009

Mortgage Rates Have Dropped!

You’ve heard interest rates are coming down. Well, Its HERE!


Interest rates recently dropped to record lows. We experienced a sudden surge in refinance activity this week. BUT, because the mortgage industry recently downsized to about 10% of it previous work force, we are already experiencing a log jam in getting loan applications cleared to close. Appraisers, Underwriters, and Closing Attorneys are having trouble keeping up due to lack of support staff. They are not hiring more personnel because no one knows how long interest rates will be favorable.


Should I refinance my home now?


The early birds are already making loan application appointments. I am already booked into next week. There is plenty of money available for mortgage loans right now. The problem I see, is when everyone realizes how low the interest rates are, the system may freeze up on overload because of lack of support personnel. The last time I saw this phenomenon, the Lenders raised rates artificially to slow down loan application activity and it lasted for several months. Then market conditions changed and rates went up, so many that could have benefited from refinancing simply missed out on the opportunity.
If you feel the rates may trickle down a little lower, you could still get the paperwork, appraisal, loan approval and title work done and FLOAT the interest rate and LOCK IN when you are ready. I must caution you that if the system freezes up, rates will certainly increase and stay at higher levels until the demand wanes, which could be 1 month, or as much as, 6 months.


NOW may be the perfect time to refinance!


With fixed rates at a record low... NOW is the best time to lock in!
If you have a higher fixed rate, more than one loan payment or an adjustable interest rate mortgage, NOW may be the perfect time to refinance with interest rates this low. Don't hesitate... put your busy schedule to the side and take advantage of the opportunity to save some money now. We offer a FREE computer calculated "Savings Analysis" which makes it easy to see the advantage of acting now.
Call me today and I'll prepare a personalized refinance saving analysis for you. There is absolutely no cost or obligation for the information I will provide to you. 1 (800) 941-5616

Oh! By the way
As always, your referrals are greatly appreciated, so please forward this email to some of your friends. Remember, our interest rates lower than what local banks can offer. Why? Because we deliver loans directly to the National Wholesale Lenders which do a larger volume of loans than any local bank and the greater the volume the lower the rate. We can handle the shopping for you through our National Wholesale Lender network and find a rate you'll be pleased with. I am sure of that.

If you wouldn't mind... help me get the word out to your friends, co-workers, and family members. When you refer someone to me for their next mortgage, you can be assured that they will receive the services you would expect from me. I am sure they will thank you for referral because I will provide them with honest, courteous and professional services, simply because most of my business comes from the referrals of all my satisfied customers.

Thanks again for your time
All the best to you and your family this holiday season

Jeff Drew, Licensed Mortgage Consultant Jeff@StarMortgage.com
Star Financial Services, Inc.
Star Mortgage® USA
www.StarMortgage.com