Springfield MO home loans, real estate loans, home finance information – Elite Financial Group

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The Feds next meeting is around the corner

December 8th, 2009 6:50 PM

The Fed is meeting December 15th and 16th, and its actions could impact home loan rates! Don't Wait. Call me before the Fed acts so we can review your situation and determine if there's anything you need to do.

Posted by Tim Singleton on December 8th, 2009 6:50 PMPost a Comment (0)

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Reports & Auction Results I am Watching this Short Holiday Week

December 28th, 2009 10:56 PM

Reports & Auction Results I am Watching this Short Holiday Week:

*Bond Market closes early on Thursday

** Bond & Stock Market closed on Friday

Monday Treasury Department Auction - $40 Billion in 2 year Notes, $118 Billion in all will be auctioned this week

Consumer Confidence on Tuesday - 10am (EST) on Tuesday. 49.5 was the reading last month and expected to climb up to 53.0.

The Chicago PMI – Wednesday – 9:45am (EST). This report is used to predict the ISM report, last month it came in at 56.1, indications are leading to a slightly lower number this time around - 55.1?

Initial Jobless Claims- Thursday – 452K were reported last week, down from 480k just the week before.

With a short week, huge auctions and few reports out demand for MBS (mortgage back securities) may be very low this week, thus may having a negative impact to mortgage rates.

Posted by Tim Singleton on December 28th, 2009 10:56 PMPost a Comment (0)

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The Federal Reserve and Mortgage Rates

December 17th, 2009 7:32 PM

The Federal Reserve and Mortgage Rates
Understanding What Causes Interest Rate Movement

Yesterday ‘Big Ben’ (Ben Bernanke), the Chairman of the Federal Reserve announced that they would be leaving the Fed Fund rate alone and may not touch it for an "extended period." In fact the Fed policymaker, who was just named TIME’s person of the year, will keep this key interest rate near zero as "economic activity is likely to remain weak for a time." So what does that mean to you and your mortgage?

Consumers are often misled when it comes to the subject of the Federal Reserve and how it affects mortgage interest rates. Often the media is the culprit causing the confusion. Many times, the Fed has taken action that caused mortgage interest rates to move in a direction other than what consumers expected, because the media provided weak reporting on the subject.

The Federal Reserve affects short-term interest rate maturities, the Fed Funds rate, and the Overnight Lending rate. These factors have a direct impact on the Prime rate. If you took only this into consideration, you may mistakenly conclude that changes made by the Fed will cause a similar movement in mortgage interest rates. However, mortgage interest rates are dictated by the trading of mortgage-backed securities, which trade on a daily basis. The real dynamic at the heart of interest rate movement is the relationship between stocks and bonds.

Stocks and bonds compete for the same investment dollar on a daily basis. There is literally only so much money to be invested. When the Federal Reserve feels that interest rates need to be decreased in an effort to stimulate the economy, this reduction in rates can often cause a stock market rally. When the market becomes bullish, the money to invest in stocks comes from the selling of mortgage-backed securities.

Unfortunately, selling mortgage-backed securities to fuel stock market rallies causes interest rates to go up, not down.

Historically, there have been many times when the Federal Reserve has increased interest rates. Stocks then sell off in fear that the increase will affect corporate profit margins, and the liquidated stock assets need a place to park until the next rally comes along. The safe haven is found in mortgage-backed securities which cause mortgage rates to drop.

The daily ebb and flow of money is what matters most when it comes to the movement of mortgage interest rates. I make it a point to continuosly monitor interest rates for my clients, and advise them of opportunities to manage their mortgage debt at a better rate. This is the foundation of my business model as a Trusted Advisor.

Posted by Tim Singleton on December 17th, 2009 7:32 PMPost a Comment (0)

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Rates Have Hit All-Time Low Levels Again!

December 3rd, 2009 10:11 PM

Rates Have Hit All-Time Low Levels Again!

In case you haven't caught the news, home loan rates have done it again, dropping to their lowest level...ever. Not only has the 30 Year Fixed rate returned to its lowest all time level, rates across the board are at their lowest levels.

Yes, that means, go ahead and choose your flavor – 30 Fixed, 15 Fixed, 5/1 ARM or 1/1 ARM – all loan types hit their lowest levels of the year! For the weekly Freddie Mac survey of all lenders, this is the first time that all have been at their lowest level.

You must understand, though, that rates are artificially low! Last November, Ben Bernanke and the Fed put into place a program to lower rates. That program though is nearing its end, as the Federal Reserve has purchased over $1 Trillion of mortgage backed securities this year and with less than 20% of allocated funds left in the program, rates are sure to increase. The only questions remaining are by how much and when.

The chart above shows the 30 Year Fixed Rate over the last 11 months. The first red arrow shows what took place when interest rates shot up in May, rising nearly 0.75% in a matter of days. And just as when the holidays come and go this month, the rates that are available today are likely to take off as well, only this time for good.

Interest rates that were in effect prior to the implementation of the announcement of the Fed's program last year were well above 6.00% and a return to those levels cannot be ruled out. If you are looking to refinance or currently shopping for a loan, lock your loan quickly to take advantage of the lowest rates we are likely to ever see in the future.

Remember, the reason I wanted you to see where rates have been this year is also to see how quickly they can rise. If you would like to know how I can help you, call me today. Waiting could cost you an opportunity to have an even bigger smile on your face when you say "Happy Holidays!" this month.

Posted by Tim Singleton on December 3rd, 2009 10:11 PMPost a Comment (0)

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