The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 30, 2010.

Here is an excerpt from the report:

The MBA’s loan application survey covers over 50% of all U.S. residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a snapshot view of consumer demand for mortgage loans. In a low mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out a lower monthly payment. If consumers are able to reduce their monthly mortgage payment and increase disposable income through refinancing, it can be a positive for the economy as a whole (creates more consumer spending or allows debtors to pay down personal liabilities like credit cards). A falling trend of purchase applications indicates a decline in home buying demand, a negative for the housing industry and the economy as a whole.

Plain and Simple: Refinance demand continues to bolster the mortgage market as purchases account for only 22% of new loan apps. Home buyers are utilizing the FHA for low downpayment home financing. This is no surprise given the massive destruction of wealth that has occurred over the last two years. Although mortgage rates are hovering near record lows, and will likely hit new lows in the next release as more lenders are offering 4.25% on rate sheets this week, refinance demand just isn’t what it was last spring. This proves the theory that the pool of qualified borrowers has shrunk right along with the industry, or is it the other way around?

HAS PURCHASE DEMAND HIT A BOTTOM YET?
It’s still too soon to say, especially because it’s supposed to be the summer buying season, but three consecutive weeks of index improvement is a start. We just have to hope purchase loan DENIALS don’t rise right along with the increase in purchase loan demand. That whole qualification thing should raise doubts around any uptick in Pending Home Sales.

To read the full report click the link below.
http://www.mortgagenewsdaily.com/08042010_stolen_loan_demand.asp

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There’s no doubt about it: mortgage rates are low right now. This is not only a great time to consider buying a home, but also an opportune time for homeowners to refinance.

But is refinancing always the right thing to do?

When interest rates change in your favor, it’s important to keep in mind your long-term personal finance goals. First, you’ll want to take stock of your financial situation and reflect on where you want to be in the long run. With a clear vision of your needs and intentions, you can wisely consider some reasons to refinance, and clearly evaluate the decision in relation to your personal financial objectives.

Here are some great reasons to refinance:

1. Refinance to maximize your monthly budget
By refinancing, you can lower your monthly payment. This means there’s more money each month for you and your family to spend on other expenses. Maybe you have a life changing event approaching – such as a new baby on the way – or need to save for a new car. Whatever the case, refinancing is great way to squeeze more juice out of your income.

2. Refinance to get out of debt
Debt such as credit cards and student loans are often at much higher interest rates than current mortgage rates. It’s wise to shift your debt to a lower interest rate via your home’s equity. With a cash-out refinance, you can pay down those high-interest credit cards, and you’ll pay less interest to banks in the long run.

Shifting your debt could save you thousands of dollars in interest, depending on your current debt load. If your home has equity and you also have credit card debt, you’d be wise to look into refinancing,

3. Refinance to position yourself for the future
Maybe you’re one of the lucky homeowners who is comfortable with your current payment, and are relatively debt free. Even so, the fact remains that rates are low.

But what goes down must come up, and rates are bound to creep back up as the economy recovers. Locking in a low rate now could pay off for years in the future. Right now could literally be the chance of your lifetime to get the lowest rate possible.

If you have an adjustable rate mortgage, it’s especially important to consider locking in a low rate now to avoid a higher adjustment later. While it’s true that adjustable rate mortgages are currently adjusting down, this trend may reverse in coming months if the economy rebounds as expected.

4. Refinance to cash-in on your assets
If your home has equity, that’s an asset you could be putting toward other expenses or investments in your life. Refinancing allows you to turn your largest asset, your home, into cash that might be better used for other things.

For instance, maybe you’re considering furthering your education in order to get a higher paying job. Cashing in on the equity of your home can allow you to make strategic moves like this, not only for your own financial bottom line, but to help you meet your goals for self-improvement and happiness.

In your journey toward your goals, don’t forget that refinancing your mortgage to a low rate can be a valuable tool in your personal financial arsenal. For a hassle free rate quote visit – http://www.garrick.biz/forms/rateTracker.html. With our broker/banker relationships we have options to lower your rate as the market improves, making us without a doubt, the best lender for your financing needs.

Or give me a call

Garrick Werdmuller

510.282.5456

Wow!  Rates are really rallying!!! The stock market’s reversal of fortune forced investors to reallocate their funds into risk averse assets like government guaranteed U.S. Treasuries . This sent benchmark yields lower and led mortgage-backed security prices higher which allowed lenders to reprice for the better. Mortgage rates ended the day yesterday, at the newly set 2010 mortgage rate lows.

We also received an economic report on consumer inflation: The Consumer Price Index. The CPI measures price changes on a fixed basket of goods and services that consumers purchase. Inflation is a high ranking enemy of interest rates.   The Federal Reserve has stated over and over that inflation is not a concern today and today’s release supported that belief.

Last but not least – The Feds – “The recovery in the housing market appeared to have stalled in recent months despite various forms of government support. Although residential real estate values seemed to be stabilizing and in some areas had reportedly moved higher, housing sales and starts had leveled off in recent  months at depressed levels. Some participants saw the possibility of elevated foreclosures adding to the already very large inventory of vacant homes as posing a downside risk to home prices, thereby limiting the extent of the pickup in residential investment for a while.”

Another bad omen for housing! Sadly it’s nothing new to most housing professionals. But at least inflation is low. That is a positive for mortgage rates!

For a fast accurate rate quote go to http://www.garrick.biz/forms/rateTracker.html or call me – keep in mind pricing changes daily…even if you have started the process of buying or pre approval, or especially refinancing elsewhere it is good to get a second opinion.

Garrick

The Feds statement didn’t surprise anyone. Since markets don’t like surprises, and there were none, things improved. The Feds stated “Economic activity has continued to strengthen and the labor market is stabilizing…Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit…investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability…inflation is likely to be subdued for some time.”

In the mortgage markets, as expected, “To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability. In light of improved functioning of financial markets, the Federal Reserve has been closing the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities and on March 31 for loans backed by all other types of collateral.”

The Feds have kept interest rates 1% below market levels with their purchasing of Mortgage Backed Securities for almost two years now. We are on the verge of seeing rate increases in the coming weeks. For an accurate quick rate quote visit my website.