Currently browsing May 2008 monthly archives.

Tucson Mortgage update: Why It Will Be Easier To Get A Mortgage Approval Today Than Monday

On May 29, 2008, in Mortgage Programs & News, by Tyler Ford | Comments

Mortgage financier Fannie Mae is toughening its mortgage application decision-making process effective Monday, June 2Mortgage financier Fannie Mae is toughening its mortgage application decision-making process effective Monday, June 2, 2008.

The new guidelines will force many Americans to face higher mortgage rates, higher loan fees, or to be shut out from “prime” mortgage rates altogether. 

The new “mortgage rules” include the following changes:

  1. Higher income levels required for basic approvals
  2. Interest only loans are now considered high-risk
  3. Condos are now considered high-risk
  4. 60-day mortgage lates within 6 months are a major red flag

Not all of the changes are for the worse, though. 

In the new guidelines, self-employed borrowers will no longer be viewed as more risky than a W-2 employee.  This will help small business owners and commission salespeople get more mortgage approvals than in the past.

Fannie Mae agreed to honor all mortgage approvals granted prior to its changes, so if you’ve been putting off that pre-approval, consider talking to your loan officer before the weekend starts. 

Your mortgage approval will be much more lenient today than if you wait until Monday.

18 of 20 Real Estate Markets Show Signs Of Improvement

On May 28, 2008, in Market News, by Tyler Ford | Comments

The Case-Shiller headlines say one thing, the data says another

The monthly S&P/Case-Shiller Housing Price Index is a popular and often-quoted measurement of the housing market’s health.  The chart above is sourced from report published yesterday.

In 18 of the 20 largest metropolitan areas, home values declined at a slower pace than in the previously measured month.  The report also showed that national home prices are down 14.4 percent from March 2007. 

Unfortunately, it’s the more sensation “14.4″ figure that newspapers chose to report this morning.  If you never went further than the headline, you’d miss a key piece of analysis.

Comparing today’s market to last year’s market is a lot less valuable than comparing it to last month’s market.  That’s a better way to analyze the market’s health.

If we look beyond the headline and examine the data behind it, we see that housing may still be sagging in some areas, but it’s not sagging nearly as much as it used to.

(Image courtesy: Standard & Poor’s)

Brought to you by Tyler Ford and Todd Abelson, Tucson’s leading home mortgage team.

Looking Back And Looking Ahead : May 27, 2008

On May 27, 2008, in Market News, by Tyler Ford | Comments

The market optimism that had pushed mortgage rates lower since late-March reversed last week on ever-rising oil prices and a bleak outlook from the Federal Reserve.

When gas prices reached $3.93 Friday, it re-ignited inflation concerns and inflation, you’ll remember, is the enemy of mortgage rates.

As expected, mortgage rates spiked into Friday’s market close. 

Markets were closed for Memorial Day but re-open this morning with traders feeling apprehensive about mortgage market investments.  There are many reasons to park money elsewhere, after all.

  1. The U.S. dollar is trolling near all-time lows against the Euro
  2. Oil markets are returning incredibly high rates of return
  3. Big banks are still writing off large mortgage losses

All three of these reasons reduce demand for mortgage bonds and –  because mortgage rates move in the opposite direction of mortgage bond prices — mortgage rates rise.

This week, a few inflation-related data points will cross the wires including the Fed’s preferred inflation gauge — PCE. 

PCE stands for Personal Consumption Expenditures and it measures the cost of living for ordinary people.  It’s the Fed’s preferred measurement because PCE accounts for Americans buying more chicken when meat gets expensive, or buying more fruits when vegetables get expensive, et cetera.

PCE is different from the Consumer Price Index because CPI is a “fixed” basket of products.

If PCE is running high, expect the exodus from mortgage bonds to continue and rates to run higher.  If PCE is flat or lower, mortgage rates should fall.

(Image courtesy: www.gasbuddy.com )

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Dateline: Mortgage market news, Tucson, Arizona, Tyler Ford and Todd Abelson

www.TucsonMortgages.com

Tucson Monthly Real Estate Statistical Digest

On May 23, 2008, in Market News, Uncategorized, by Tyler Ford | Comments

april mls stats

Below is a link to the 2008 April real estate sales overview. There are a few encourage things in the April report.

  1. April pending contracts were up
  2. Active listings were down

This is encouraging because as the Tucson housing inventory levels decrease the average days a home is on the market will also decrease and values will begin to stabilize. It is all about supply and demand.

Click here for the April 2008 report:  mls digest april 2008

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Brought to you by Tyler Ford and Todd Abelson - Tucson’s home loan experts!

www.TucsonMortgages.com

How We Know That Prime Rate Will Likely Rise Before It Falls

On May 22, 2008, in Interest Rates, by Tyler Ford | Comments

Three weeks after adjourning, Federal Reserve officials release detailed minutes of their most recent meeting. The April 30, 2008 minutes were released WednesdayThree weeks after adjourning, Federal Reserve officials release detailed minutes of their most recent meeting. 

The April 30, 2008 minutes were released Wednesday and it affirmed traders’ beliefs that the Federal Reserve will not be in a hurry to lower the Fed Funds Rate again.

This is bad news for two groups of people whose borrowing costs are tied to Prime Rate, the interest rate that is 3 percentage points higher than the Fed Funds Rate:

  1. Homeowners with home equity lines of credit
  2. Americans with credit card debt

Because Prime Rate moves in lock-step with the Fed Funds Rate, it, too, has fallen by 3.25 percent since September and now rests at 5.000 percent.

With the release of the April FOMC Minutes, though, it appears that Prime Rate is more likely to increase than to decrease moving forward.

If your home equity line of credit offers a “convert-to-fixed-rate” option, now may be a good time to consider switching over.  Be sure to talk with your loan officer first, though — he/she may have alternate options for you.

(Image courtesy: The Wall Street Journal Online)

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Tyler Ford Tucson’s Home Loan Specialist

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Recent Comments

  • Tyler Ford: Great job Todd!
  • Tyler Ford: Seems as through the real estate market is picking up and home prices are stabilizing.
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