Don’t Give Up On Getting Your Loan

05/07/21 • 54 min

Mortgage Mom Radio airs weekly focusing on topics that will educate our listeners around mortgage lending. This week Debbie returns from her Mommy Makeover to peel back the curtain a little on the last couple weeks. She then continues on to inform everyone interested in a refinance that you have not missed your window, interest rates are still great for refinancing right now! Debbie and Heidi also go on to discuss loan options most people don't consider and important things to know about filing taxes if you are near closing on a home. A Look Into the Markets "Can you take me High Enough?" by Damn Yankees This past week we watched long-term rates, like mortgages, improve slightly despite a surprising comment from Treasury Secretary, Janey Yellen. Let's break it all down and look at what's on tap for next week. "It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat" - Treasury Secretary, Janet Yellen Janet Yellen was being interviewed on Zoom when she unleashed this seemingly innocent and likely honest comment. Well, it sent shockwaves across the stock market, pushing the NASDAQ down as much as 400 points on Tuesday alone. Yellen was once the Fed Chair, and in that former role, it would be her duty to share comments on monetary policy. As Treasury Secretary, it is not her role to discuss rates. Especially, considering the active Fed Chair Jerome Powell saying over and over just days earlier at the Fed Meeting that "now is not the time" to raise rates. There is big pressure on the Fed to help keep rates low. First and foremost are the upcoming "Plans" being debated in Washington D.C. The American Jobs Plan and American Family Plan are estimated to cost another $4 trillion, on top of the $1 trillion-plus still not spent from the American Rescue Plan. All this spending must be paid for by selling new bonds in the market. What we as a country can't afford now is higher rates as the expense to service all this new debt will be an enormous burden. Sell in May and Go Away Stocks, especially the tech-laden NASDAQ, may have used Yellen's comment as a reason to sell – but some of the downward pressure in stocks may be a seasonal phenomenon called "Sell in May and Go Away". The idea is that stocks generally underperform during the summer months when many take vacations, thereby creating lower trading volume, larger price swings and more risk. As you could imagine, the pain in stocks was a gain for bonds. The 10-year yield declined to 1.56%, down nicely from 1.75% from just a few weeks ago. If the summer selloff in stocks continues, we may see further improvement in rates. Opportunity knocks again With the recent improvement in rates, many more people can still benefit from a refinance and it will certainly help drive the purchase market. However – any rate improvement could be short-lived – here's three reasons why locking at today's rates may make sense: Treasury Secretary Janey Yellen's comments for higher rates, was honest. Lumber and other commodity prices are soaring – higher rates would cool that off. There is growing pressure on Fed Chair Powell to start "tapering" bond purchases. Again, in response to "frothy" assets like stocks and real estate. We are going to see higher inflation numbers over the next few weeks – what we don't know is how high the numbers will be or how bonds will react. Bonds do not like inflation – it's like kryptonite to Superman...a killer. Bottom line: Rates have improved of late, but the good times may be relatively short-lived. Those thinking about locking in today's rates should do so. Looking Ahead Next week we will get a reading on consumer inflation by way of the Consumer Price Index (CPI). It is forecast to come in above 3% year over year – mainly due to year over year increases in oil and commodities. This will be the first time in 50 years since headline year over year consumer inf...

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The Importance of Choosing the Right Real Estate Agent

Mortgage Mom Radio airs weekly focusing on topics that will educate our listeners around mortgage lending. This week Debbie is joined by newcomer to the Mortgage Mom team, Heather Kilpatrick, to continue the Homebuyer Workshop series by explaining the role of the real estate agent and why it is very important to find the best one for you. A Look Into the Markets "Oh yeah" - "Oh Yeah" by Yello ("Ferris Bueller's Day Off") In the absence of any meaningful economic report this past week, we watched bond prices rise while rates inched lower. Oh yeah!!! Let us break down what is going on and look into next week as the boredom ends. The Path of Least Resistance Rates have been steadily improving over the past few weeks as consumer inflation fears have waned. With a nice trend in place and no news to knock bonds down, prices continued their path of least resistance: higher. How high? Mortgage-backed securities, which are where home loan rates are derived, closed at their highest level since March 2nd this past week, and the 10-year yield hovered near 1.55%, also the lowest in nearly two months. FOMC Blackout Period The Federal Open Market Committee (FOMC), which meets eight times per year to discuss economic conditions and determine whether to hike or lower the Fed Fund Rates, can always move the market when they speak or during interviews. However, the FOMC has established a blackout period where FOMC members are to limit their public speaking and interviews. The current period is April 17 through 29th. When Fed members are not talking or sharing their views, the markets can't react to any perceived positive or negative statements. The quiet ends next week when the Fed delivers their Monetary Policy Statement on Wednesday at 2:00 p.m. ET. More on that below. Bonds Regaining Some Shine A couple of interesting trends happened this week which could bode well for rates in the near-to-intermediate term. First, stocks struggled a bit this past week, and when they dropped, rates also declined. This is a typical market reaction, but something we have not seen much of this year during the steady increase in rates. If stocks continue to stumble and we see a seasonal, "Sell in May and go away," reaction, it could leave room for further rate improvement. Second, the 20-year bond auction this past week was well received. This means the buying appetite for Treasury securities was very good despite the recent improvement in rates/yields. If this trend continues, it will help keep long-term rates relatively low. Housing en Fuego March existing-home sales showed the median price rose by an annual record-breaking pace of 17.2%. This scorching rise is due mainly to an anemic 2.1 months of available inventory for sale. Homes sold in 18 days on average, another record low. This is all good news for someone selling a home, but as we know, it is rough for folks purchasing one. With rates ticking back down, vaccinations administered, and economies reopening, we should expect continued strength in housing and hopefully more inventory available for sale. Bottom line: This is an amazing moment to take advantage of the current interest rates as the present improvement in rates could be short lived. Looking Ahead As mentioned, it's Fed Week. The FOMC will deliver its Monetary Policy Statement as well as its outlook on the economy on Wednesday. There is zero chance of a rate hike. And there is likely no chance the Fed mentions "tapering" of any bond purchases; let's hope so. For when the Fed stops buying bonds, rates will move higher in a hurry. We will also get some high-impact reports like Gross Domestic Product and the Fed's favored gauge of inflation, the Core Personal Consumption Index (PCE). Moreover, there will be a ton of corporate earnings, which could impact both stocks and bonds/rates. We are LIVE on YouTube every Wednesday at 5 PM. Watch us record our show! Ask us your questions right in the feed,

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Experian Boost and Its Affect On Your Mortgage Loan

Mortgage Mom Radio airs weekly focusing on topics that will educate our listeners around mortgage lending. This week Debbie and Heidi discuss the new Experian Boost feature and explain everything you need to know if you are about to apply or are in the middle of applying for a mortgage. In This Issue "It is not in the stars to hold our destiny, but in ourselves." - William Shakespeare Sell in May and Go Away - When stocks go down, so do rates. 2021 Housing Market Predictions - After dealing with a year of uncertainty in 2020, the housing market looks to hit it big in 2021. Turn an Old Dresser Into a Unique Sink - This simple DIY project can turn an antique into a stunning sink for your bathroom. Q&A: Can You Qualify for a Mortgage Without Credit? - Is it possible to obtain a mortgage, even if you don't have any credit to your name? Knowing what options you have can help you purchase a home. Please feel free to forward this newsletter to friends, family or co-workers who may find it helpful. What To Watch Sell in May and Go Away - Explained Each spring, the same phrase pops up for stock investors: "Sell in May and go away." It's important to track, as generally stocks go down, and so do rates. That question is whether or not stock market investors will see “Sell in May and go away” this season. Yahoo Finance tells us that the full axiom was originally, "Sell in May and go away, and come on back on St. Leger's Day.” It has its roots in the city of London. Financial professionals would go on holiday in May for approximately four months to escape the summer heat and return for the St. Leger derby in mid-September. Traders and bankers in the U.S. appropriated the aphorism over the years and condensed it to its current form. The current form is based on the historical tendency for the stock market to produce its best gains between Halloween and May Day (the so-called “winter” months) and to produce well-below-average returns the other six months of the year (the “summer” months). We did not see “Sell in May” last year, as the stock markets were on a big surge higher after the huge losses seen in March due to the shutdowns. But with stocks at record high levels and high market volatility, there is a possibility of a move lower in stock prices after earnings season winds down at the end of the month. Despite never-ending stimulus, which stocks love, they cannot go straight up, and corrections big and small are always healthy and expected. If this were to occur, it could shift some investing dollars from stocks into bonds, which would help to further stabilize or cap the recent rise in mortgage rates that was seen from mid-January until the end of March. If "Sell in May" does not take place this year, do not get too worried. The Federal Reserve continues to try and hold rates at historically low levels and will do so until we see full employment and ideal inflation. Can mortgage rates increase marginally if the economy continues to grow? Yes, that would be normal in an an expanding economy. If the economy is strong, and if the job market continues to rebound, modestly higher rates should not be a deterrent to homeownership. Bottom line: Rates are still historically low, and now is still a great time to either refinance or consider purchasing a home. Source: Mortgage Market Guide Housing News 2021 Housing Market Predictions The housing market is tricky to predict, especially since 2020 was a year full of unpredictability. Although no one can forecast what will happen with entire certainty, housing trends can give you an idea about what to expect when it comes to buying or selling a home. It should come as no surprise that 2020 saw huge fluctuations in the housing market as the country was hit with massive amounts of unemployment and extensive shelter-in-place orders. However, the housing market saw an uptick in pending home sales and rebounded much faster than other sectors of the eco...