Blogging About Loans: Ruth Vogt, WR Starkey Mortgage (LMB#100023827)

Mortgage Rate Indicators for Denver

Rates are still inviting home buyers to buy. Especially a good time for first time homebuyers to get under contract and take advantage of the home buyer credit. Move up buyers might qualify, too. Call today! Must be under contract by the end of the month! Ask me to discuss mortgage rate indicators when you call so we can decide if now is the time to lock in your interest rate!

Market Comment - Week of April 12th, 2010 Mortgage bond prices rose last week, which helped mortgage interest rates improve slightly. The first portion of the week was generally bond friendly as the Fed minutes showed real concern about the economy's ability to recover with so many job losses. Stocks and bonds generally traded inversely as the DOW tested the 11,000 mark a few times during the week in up and down trading. Unfortunately a large portion of the improvements was erased as oil prices traded around $87/barrel and inflation fears emerged. Despite this, rates still managed to improve by about 1/4 of a discount point for the week. The consumer price index Wednesday will be the most important release this week. The abundance of important economic releases has the potential to result in a very volatile week for mortgage interest rates. If the data shows signs of weakness we could see rates improve. Economic Factors Economic Indicator Release Date Time Consensus Estimate Analysis Trade Data Tuesday, April 13, 2010 $38 billion Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. Consumer Price Index Wednesday, April 14, 2010 Up 0.1%, Core up 0.1% Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates. Retail Sales Wednesday, April 14, 2010 Up 0.2% Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates. Business Inventories Wednesday, April 14, 2010 Up 0.1% Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates. Fed "Beige Book" Wednesday, April 14, 2010 None Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates. Industrial Production Thursday, April 15, 2010 Up 0.2% Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates. Capacity Utilization Thursday, April 15, 2010 72.5% Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. Housing Starts Friday, April 16, 2010 Down 2.1% Important. A measure of housing sector strength. Larger than expected decreases may lead to lower rates. Oil Inflation fears tied to rising energy prices have reemerged. At one point oil prices rose near $87/barrel last week causing many analysts to revise forecasts. Goldman Sachs and Morgan Stanley both predict oil prices will rise above $100/barrel next year. The concern is that rising energy costs could permeate through the markets and damage economies around the globe that are struggling to regain footing. Inflation, real or perceived, generally erodes the value of fixed income securities causing prices to fall and rates to rise. This could pressure mortgage interest rates higher further stifling a recovery in the US housing sector.

WR Starkey Mortgage, LLP - A different kind of company...where people come first!

6025 South Quebec, Suite 110 Englewood, CO 80111      rvogt@wrstarkey.com www.MyLenderOfChoice.com    Ruth Vogt Business Development Manager (LMB100023827) Work: 720-489-0712 Fax: 720-489-0273 Other: http://www.dora.state.co.us/real-estate/index.htm

©2010 Design by WR Starkey Mortgage, LLP NMLSR #2146. This is not a guarantee of financing. All borrowers must meet certain underwriting guidelines and credit criteria. Rules and Regulations may apply.

Short sales might be the only way out for many. But taking that direction may haunt sellers for years (and dollars) to come.

First there is the obvious financial impact of a short sale. The waiting period to buy a new home is at least two to three years and also depends on the loan type. For instance, a new FHA loan can be applied for after two years as long as they were current on their other installments and the mortgage of the previously owned home.

But wait... don't most banks require you be delinquent before they even consider a short sale?? Therefore you need to plan on a minimum of three years after a short sale to even hope to assist them in purchasing another home.

But here's something that may be even more surprising. Despite the Mortgage Debt Relief Act of 2007 some may still owe IRS after all! There were a few exemptions to this act to include:

• homebuyers that took a cash out refinance and spent the money on something other than home repairs will most likely need to claim the amount of the short sale as if it were earned income.
• investment or second homes are still subject to the tax liability.
• multi-million dollar homes are also not covered by the Mortgage Debt Relief Act.

Interesting how this information is suddenly coming to light now that we're deep into tax season, isn't it???

NOTE: always contact your accountant or CPA for issues requiring tax advice.

If the law of gravity is, "What goes up must come down", then the law of mortgage interest rates has to be, "What comes down must go up". No one can argue that rates have recently been the lowest we've seen for a long, long time. And we knew it wasn't going to last forever, but somehow we got lulled into a false sense of "low rate security". Even though the recent incline has been slight thus far, experts are suspecting rates will continue to rise. But no one is sure how long or how fast they'll go up.

Why the expectation of a rate increase? Because last Thursday was the last day since 2009 the Fed would be buying mortgage backed securities. If this is all "mortgage mumbo jumbo" to you, listen to this brief video from MSS to help you get a better understanding of why mortgage rates are so volatile.

I can't help but pout. I have been noticing all the pictures everyone is posting with blossoms budding out on the trees, and tulips and daffodils bursting colors of the rainbow. And here I sit looking out my window wondering if we will ever see the signs of spring? Even the fish are getting tired of hibernating and ready for some warmer weather!

Yes, I'm definately having a serious case of cabin fever right now. I know that in about two months, I'll be tired of fighting the weeds, mowing the lawn, and keeping the pond clear of algae. ***sighs*** But right now, I'm getting pretty sick of the snow! Looks like the kids will be hunting eggs in doors again this year.

I am certain that when all this snow melts, we'll see green! FINALLY!

Be preapproved to buy a home in Castle Rock, Colorado

Castle Rock is a rather small, sleepy little community located just off I-25 between Denver and Colorado Springs. The butte located on the east side of the interstate is what gave inspiration to the name, Castle Rock.

It's just as important to be preapproved to buy a home in this little town as it is when making an offer for a home in the city. In a previous post I explained the difference between being prequalifed and being preapproved to buy a home. The focus of this post is WHY you'll want to be preapproved to buy a home!

When you have been preapproved for a home loan it allows you to shop with confidence. But more importantly the seller of a property will look at your offer more seriously than an offer from a buyer who has only been prequalified. Many times a seller will take a lower offer from a buyer who has taken the time to be preapproved to buy a home as there is less risk of taking their home off the market only to find out weeks, sometimes months later that the prequalified buyer can't actually get approved for their loan!

Another advantage of completing the steps to be preapproved to buy a home is that many lenders can offer an interest rate lock even if you haven't found your actual home yet! This is especially comforting in a market where there is concern about interest rates going up. A higher interest rate means a smaller. less expensive home when you're targeting a maximum monthly house payment. This type of lock usually allows you 30 days to find your home and an additional 30 days to close on the property.

For more information on how to be preapproved to buy a home call me today!

Mortgage Rate Indicators for Denver

Today's market was a little rough with cost of financing jumping up a bit. Temporary blip or a sign of what's coming just around the corner? No crystal ball is giving a certain answer to that question. Just stay in close communication with a lender who is keeping a close eye on the mortgage rate indicators!

Market Comment - Week of March 22nd, 2010 Mortgage bond prices rose last week helping mortgage interest rates improve slightly. We started the week on a positive note with rates falling amid tame inflation readings. The producer price index fell 0.6% and the core rose 0.1%. The headline figure was the lowest since July 2009. Weekly jobless claims showed the employment situation remained poor. Unfortunately we saw the market fall a bit pushing rates higher Thursday afternoon following the announcement of the size of the upcoming Treasury auctions and amid fear of future rate hikes. Rates fell about 1/8 of a discount point for the week. The durable goods and gross domestic product data will be the most important releases this week. Supply concerns will continue to weigh heavily upon the bond market with the continued record Treasury auctions. If foreign demand falters mortgage interest rates could be pressured higher. Economic Factors Economic Indicator Release Date Time Consensus Estimate Analysis Existing Home Sales Tuesday, March 23, 2010 Down 0.9% Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates. 2-year Treasury Note Auction Tuesday, March 23, 2010 None Important. $44 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. Durable Goods Orders Wednesday, March 24, 2010 Up 0.5% Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates. New Home Sales Wednesday, March 24, 2010 Up 1.5% Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. 5-year Treasury Note Auction Wednesday, March 24, 2010 None Important. $42 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. 7-year Treasury Note Auction Thursday, March 25, 2010 None Important. $32 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. Q4 GDP third estimate Friday, March 26, 2010 Up 5.8% Important. The aggregate measure of US economic production. Weakness may lead to lower rates. U of Michigan Consumer Sentiment Friday, March 26, 2010 71 Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates. Gross Domestic Product The Gross Domestic Product (GDP) is one the most important reports during any given quarter. GDP is a measure of US economic output and spending. The report is significant in that it provides investors, analysts, traders, and economists with a comprehensive report of the direction of the economy. In addition, it also influences the decisions of Federal Reserve policy makers, Congressional budget employees, and corporate financial planners. GDP is the sum total of goods and services produced by the United States. The initial report is often based on incomplete data. Therefore, additional revisions are released over the following two months. There are often substantial differences between the initial release and the revisions. The mortgage-backed security market generally responds favorably to weaker GDP growth. While revisions generally don't move the market like the original release, they still have the potential to cause market volatility if vastly different from the prior releases. Be cautious heading into the data this week.

WR Starkey Mortgage, LLP - A different kind of company...where people come first!

6025 South Quebec, Suite 110 Englewood, CO 80111      rvogt@wrstarkey.com www.MyLenderOfChoice.com    Ruth Vogt Business Development Manager (LMB100023827) Work: 720-489-0712 Fax: 720-489-0273 Other: http://www.dora.state.co.us/real-estate/index.htm

©2010 Design by WR Starkey Mortgage, LLP NMLSR #2146. This is not a guarantee of financing. All borrowers must meet certain underwriting guidelines and credit criteria. Rules and Regulations may apply.

Be preapproved for a home in Castle Rock, Colorado.

Whether you are renting or just thinking about a new home, the first step is to be preapproved for a home before you ever start looking for the home! First, you need to know what a preapproval means, and then I'll give examples on why you need to be preapproval for a home in my next post.

Many lenders and real estate agents will ask you to at least be prequalified before you start your search for a new home. While that's a good start, it's not enough! A prequalification merely indicates that your credit has been pulled, and your income is sufficient to qualify for a maximum monthly payment based on your verbal disclosure. To be preapproved for a home, however, a formal income analysis can get a little tricky. Not all income is always considered acceptable income for the purpose of obtaining a final loan approval. In order to actually be preapproved for a home, your income will be scrutinized to assure a minimum of a two year history in the same line of work has been established. Also, the income must continue usually for three years. When commissions, bonuses, overtime, etc, is being used, there must be an acceptable history of such. To be preapproved for a home means your source and breakdown of income has been examined by an underwriter.

The next step to be preapproved for a homeis to have your liquid assets reviewed. Even if you are obtaining a no down payment loan such as a CHFA loan, lenders may want to see that you have "reserves" or excess funds remaining after closing to cover unforeseen housing expenses should they arise. Copies of bank statements are usually provided to show you have sufficient liquid assets. Sometimes a review of the bank statement may trigger additional questions by the underwriter. If so, it's wise to provide explanations right then in order to to be preapproved for a home before you go shopping for one.

And even though I mentioned the credit report review, there are so many things on a credit report that one set of eyes might miss when the goal is to be preapproved for a home and not just prequalified. Depending on personal circumstances there may be additional documentation that may be requested to be preapproved for a home that might not be asked when simply being prequalified. Once you get the paper work out of the way, you'll be able to enjoy the hunt for your perfect home!

HOORAY! For those of you that either know me or have been reading my posts, you know that I recently broke my hip while on an out of town business trip to New Orleans. Three weeks ago last Sunday, to be exact. I was told to expect to be using a walker for 6 weeks (yes, I teared up over that one!) BUT today I graduated to crutches. ***cheers*** And I'm pretty sure I'll be using just a cane maybe by the end of the week. We'll see???

And what do I attribute my faster than expected recovery to? YOU! Thank you all for your prayers and words of encouragement.

Heartfelt gratitude,

Ruth

Stay posted for further stories of success, my friends!

Mortgage Rate Indicators for Denver

Experts will be keeping a close eye on the rates between now and after the end of the month (when the Fed is expected to stop buying mortgage backed securities). If interest rates only go up .25% to .75%, then the belief is that our market is healthy. If rates go up higher, it will be interesting to see what, if anything, the Fed does.

All Mortgage Rate Indicators are saying the same thing: Play it safe, and get your interest rate locked in while they are still low!

Market Comment - Week of March 15th, 2010 Mortgage bond prices fell last week applying slight upward pressure on home loan rates. The market remained very volatile within a narrow range. With the lack of data the first portion of the week, oil prices factored into trading. Oil remained above $80 a barrel, which reignited inflation concerns. The retail sales report released Friday was much stronger than expected, indicating the US economy may be getting stronger. Rates rose about 1/8 of a discount point for the week. The Fed meeting Tuesday afternoon will be the most important event this week. The inflation data from both the consumer and producer sides will also take center stage. Signs of inflation are generally not received well by the mortgage bond market. If inflation remains in check, mortgage bonds could benefit. Economic Factors Economic Indicator Release Date Time Consensus Estimate Analysis Industrial Production Monday, March 15, 2010 Up 0.1% Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. Capacity Utilization Monday, March 15, 2010 72.3% Important. A figure above 85% is viewed as inflationary. A decrease may lead to lower mortgage interest rates. Housing Starts Tuesday, March 16, 2010 Down 0.6% Important. A measure of housing sector strength. A larger than expected decrease may lead to lower rates. Fed Meeting Adjourns Tuesday, March 16, 2010 No change Important. Few expect the Fed to raise rates, but some volatility may surround the adjournment of this meeting. Producer Price Index Wednesday, March 17, 2010 Unchanged, Core up 0.1% Important. An indication of inflationary pressures at the producer level. Decreases may lead to lower rates. Consumer Price Index Thursday, March 18, 2010 Unchanged, Core up 0.1% Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates. Leading Economic Indicators Thursday, March 18, 2010 Up 0.2% Important. An indication of future economic activity. A smaller increase may lead to lower rates. Philadelphia Fed Survey Thursday, March 18, 2010 17.5 Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. Producer Price Index The producer price index is a measure of prices at the producer level and is important because it is the first inflation report to be released each month. Investors are typically able to gain an initial indication of inflationary pressures from the release. If producer prices are increasing, there is a tendency for producers to pass the increases on to consumers in the form of higher priced goods. It is important to note that the PPI is only a measure of goods, while the consumer price index is a measure of goods and services. It is possible for the price of goods to remain stable, while the price of services increases. In this scenario PPI would do little to warn of a change in inflationary pressures, while the CPI report would provide an indication of the inflationary effects of the service component. This distinction between the two reports shows why most analysts view the CPI as a more accurate indicator of inflation. Nevertheless, market participants still gain valuable insight into potential volatility in the financial markets from the PPI release. Be cautious heading into the inflation data and Fed meeting this week.

WR Starkey Mortgage, LLP - A different kind of company...where people come first!

6025 South Quebec, Suite 110 Englewood, CO 80111      rvogt@wrstarkey.com www.MyLenderOfChoice.com    Ruth Vogt Business Development Manager (LMB100023827) Work: 720-489-0712 Fax: 720-489-0273 Other: http://www.dora.state.co.us/real-estate/index.htm

©2010 Design by WR Starkey Mortgage, LLP NMLSR #2146. This is not a guarantee of financing. All borrowers must meet certain underwriting guidelines and credit criteria. Rules and Regulations may apply.