Home Ownership

With Mortgage Rates still low
the benefits of home ownership
are many.
This info graphic reviews some
of the values.
To me the most important
are feeling you belong, being
able to make it your own,
creating an organic garden,
and raising my family.

What are the benefits
you are looking for?

Mortgage Rates Like The Surf

Two hundred and ninety two thousand jobs are added to the economy in December versus 200k expected, I think the bond market should have moved at least one basis point. That is not the case. Here we stand this morning with the entire Treasury stack unchanged for the day. The 10yr is currently 2.14%, which is right in the middle of the range for the last 12 months. In fact the average 10yr yield for the past year was 2.135%. Additionally the 10yr is actually down since the Fed meeting when they raised interest rates and indicated they expect to raise rates around 4 times in 2016! So why is the Ten Year Bond down 15bps since December 16th? In fact why are both short term and long term rates down since the Fed announcement?

 

Falling oil prices and the glut of oil should be news to turn the Federal Reserve around, but they say that cheap prices at the pump are temporary

 

The Fed is monitoring INFLATION but in my eyes inflation has not jumped in the United States. Inflation has been below the Fed’s target of 2% for several years now. And it’s not just oil. The Bloomberg Commodity Index, which includes gold, natural gas, corn, copper, oil, soybeans, sugar, etc. is down 25% in the past year.

 

Bad news normally makes mortgage rates drop. THE CHINESE market and North Korea are bad news.

 

I don't think the gurus can ignore real job growth. Not gig second part time jobs, but real jobs.

 

Watching the stock market take some hits -- its like watching the surf on a day the tsumani sirens are singing.  The beach I walk my aged Golden Retriever is Salt Creek Beach in Dana Point California and there are tsunami signs posted on the hill. I think they went up about four years ago. Now that Honey, my Golden is 14 I don't take her down the steps as she will make me carry her home.

We have to watch the signs and listen. It used to be that the ten year bond was the tool to predict mortgage rates, today I'm not certain. Keep watching the surf, when the curve goes up... so will rates

Video of surf I took at my sister's home above in Moss Beach, California

 

Mortgage Bankers Storm Troopers

The Mortgage Bankers Association (MBA) loyal to the Empire awakened Monday morning after a two week holiday hiatus.   
The results are both for the week ended January 1, 2016 which MBA adjusted for the Christmas and New Years Holidays.

MBA's Market Composite Index, a measure of mortgage volume, was down 27 percent from the week ended December 18 on a seasonally adjusted basis.  On an unadjusted basis the Index was 50 percent lower. This is normal for holiday season as Borrowers take off work, head to the malls, movie theaters and share family dinners. 

The Refinancing Index declined 37 percent from the week of the previous report and the seasonally adjusted Purchase Index was down 15 percent.

FHA  applications increased to 14.6 percent from 13.8 percent the previous week and the VA share was up to 12.9 percent compared to 11.6 percent. 

The USDA share of total applications remained unchanged at 0.6 percent.

Average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.20 percent, its highest level since July 2015, from 4.19 percent, with points decreasing to 0.42 from 0.49.  The effective rate decreased.
Jumbo 30 year fixed rate mortgage (loan balances greater than $417,000) had an average contract interest rate of 4.09 percent compared to 4.07 percent.  Points increased to 0.35 from 0.34 and the effective rate was also higher.
Thirty-year Fixed Rate Mortgage backed by FHA had a slightly lower interest rate, 3.95 percent compared to 3.97 percent the previous period.  Points increased to 0.41 from 0.34 leaving the effective rate unchanged.
The largest change in contract rates among fixed rate mortgages was for the 15 year which rose 5 basis points to 3.47 along with a 2 basis point increase in points.  The effective rate also increased.
The average contract interest rate for 5/1 ARMs increased to 3.19 percent from 3.13 percent but points dropped to 0.32 from 0.52 lowering the effective rate.

Even with Janet Yellen predicting rising mortgage rates, over all we are only a "smidge" higher.

The Force Awakens now with mortgage bankers and Borrowers back to usual after the holidays.

With the stock market terribly earthquake volatile, I predict Borrowers will get off the fence and
move into the conservative home loan that they have been thinking about but not executing.

The time is now to lock your rate and get it closed.
Will Finn win in his battle with the storm troopers?


Caroline Gerardo
NMLS
324982

cell (949) 784-9699

---

:

• MBS Commentary: MBS RECAP: Unfazed by Strong Data and FOMC, Bonds Rally
• Mortgage Rate Watch: Mortgage Rates Nicely Lower Despite Strong Jobs Data
• Pipeline Press: Fannie/Freddie Changes; Positive Millennial Trends for Lenders; Chase Settlement
• MND NewsWire: MBA Rounds up Holiday Mortgage App Stats
• MBS Commentary: MBS Day Ahead: Global Risk and Oil Give Bonds a Head Start

Star Wars Mortgage

Star Wars Year End Statement and

Prepare for Income Taxes

A blow up version of Darth with

a cheerful Merry Christmas banner fitting in preparing

a greeting for tax time... 

January 5, 2016

Dear Friends and Mortgage Borrowers:

I imagine that you are beginning to prepare for what undoubtedly (next to submitting mortgage paperwork) is one of America’s favorite activities- filing income taxes.

Each year, the company who owns your loan will send you a mortgage interest statement that summarizes the amount of mortgage interest that you paid for the previous year. This statement may or may not include potentially tax deductible items relating to your mortgage. The mortgage interest statement is something that you should provide to your tax advisor.

Additionally, since you did close a new mortgage loan in 2015, there may be items associated with that closing that are tax deductible. At the end of your mortgage adventure, you were sent a Final Settlement statement by the escrow company and this statement should be given to your tax advisor. To save you the time and trouble of looking for this in the mountain of paper that you have from the mortgage process, I have included a copy of your Final Settlement statement for you to give to your tax advisor in addition to the mortgage interest statement.

Please call me if you have not received your 1099 - you can use a Final HUD1 from escrow or

Closing Disclosure after October 3rd with your income taxes.

It was my pleasure to help you with your mortgage last year and please do not hesitate to contact me for any future needs or with any questions that you may have.

Sincerely,

C G

Caroline Gerardo Barbeau

NMLS 324982

Eagle Home Mortgage a Lennar Homes Company

NMLS #849059 CA #813I609 Universal American Mortgage Company of California, dba Eagle Home Mortgage of California.

Licensed by the Department of Business Oversight under the California Residential

Mortgage Lending Act. RMLA #4130383, NMLS #252392. Certain restrictions apply. This is not a commitment to lend.

Applicants must qualify.