Delaware Mortgage Rates

Delaware Mortgage Rates

Doug MacGray’s Weekly Financial Update – Week of January 7, 2008

John Thomas January 7, 2008

A BAD START: The year has started off on a bad note.  (I am watching Chariots of Fire on ESPN Classic as I write this.  The Scottish runner, Eric Liddel slipped and fell but finished his race in first—I hope the markets mirror this performance in 2008).  After only three trading days, the S&P 500 is down 3.86% (2nd worst start ever), the Dow is down 3.5% (4th worst ever), and the Nasdaq is down 5.57% (worst ever).

JOBS: This past week’s bad news that was a bit of a surprise came in the form of the jobs report from the U. S. Commerce Department.  Expectations weren’t particularly high.  Analysts had estimated that we’d see about 70,000 new jobs in December.  The gain was only 18,000.  Also, the nation’s unemployment rate jumped to 5%. Keep Reading...

Is Buying a Home in Delaware in Today’s Economy a Good Idea?

John Thomas January 2, 2008

As a long term investment, homeownership is still one of the best investments for individual households. “Why?” you may ask. After all, the headlines say the housing market is down and out, with defaults rising at an alarming rate, and mortgage markets so frozen that buyers can’t get a home loan at any price.

What buyers need to realize is that housing markets, like all markets, inevitably have their ups and downs. Homeownership has a proven track record that is virtually unmatched by any other purchase in terms of its real benefits. Keep Reading...

Home Buying Tips – Features of a Succesful Budget

John Thomas January 2, 2008

Slapping together any old budget does not guarantee success at saving.  In order for a budget to be effective, it needs to be thought out and actually fit with your personal needs and spending patterns. A great budget will always include the following;

  • A clear awareness of exactly how much you’re spending and where. Start tracking every expenditure, even if it’s just a dollar or two at a time. Daily spending adds up faster than you may realize.
  • Budget for emergencies. Car repairs, medical bills, and appliances that suddenly break down can put a severe crimp in anyone’s budget.  Make sure you have money set aside for events such as these.
  • Make your income projections as accurate as possible. A budget won’t be very helpful if you overestimate your income and fall short in the end.
  • There are many types of financial planning software on the market these days, so use one to help you with your budgeting process.
  • Get the entire family involved.  Give them each a role to play in the budgeting process and make them responsible for something age appropriate.
  • Understand the vital difference between needs and wants, and budget accordingly. Needs include things like groceries and housing. Wants include things like a new car stereo and a 52-inch television.
  • Don’t beat yourself up if you fall off the budget bandwagon and splurge occasionally guilt may lead to additional expenditures! By the same token, reward yourself for a job well done.
  • Avoid credit cards. Studies show that on average, due to interest and late charges, consumers end up paying 30% more for a product than they would have if they used cash.
  • If you do have credit card debt, avoid late payments and going over your limit.  Ever-increasing fees for these infractions can really add up.
  • Your attitude is vital. You must be committed to your budget and want to make it work.

If you need help with a budget, please feel free to call me (302) 703-0727or attend one of our free budgeting seminars. Please go to our seminars page by clicking on the link at the top of the page for more information on our seminars.

If you would like to apply for a Mortgage Loan, you can APPLY ONLINE HERE, you can call John Thomas at 302-703-0727. Keep Reading...

Mortgage Forgiveness Act Signed into Law

John Thomas December 21, 2007

Yesterday, President Bush signed H.R. 3648, The Mortgage Forgiveness Act of 2007, into law, sparing homeowners the tax burden associated with canceled mortgage debt. Prior to this action, forgiven mortgage debt due to foreclosure, short sale, or deed in lieu of foreclosure, was considered taxable income. The new law, however, temporarily waives these taxes for debts forgiven (as high as 35%) from the beginning of 2007 to the end of 2009. The bill also extends the tax deduction for mortgage insurance premiums through 2014. Keep Reading...

Federal Reserve Board Weighs in on Mortgage Reform

John Thomas December 19, 2007

Today the Federal Reserve Board, under the authority of the Truth in Lending Act, unanimously voted to propose important changes to the mortgage industry. According to Business Week, the following proposed changes would affect subprime loans or those loans the Fed defines as “higher-priced mortgage loans” (loans with rates at least 3 percentage points above a comparable Treasury security for first mortgages and 5 percentage points for second loans, or home-equity loans):

  • Creditors would be prohibited from engaging in a pattern or practice of extending credit without considering borrowers’ ability to repay the loan.
  • Creditors would be required to verify the income and assets they rely upon in making a loan.
  • Prepayment penalties would only be permitted if certain conditions are met, including the condition that no penalty will apply for at least sixty days before any possible payment increase.
  • Creditors would have to establish escrow accounts for taxes and insurance.

The Fed also proposed another set of rules for all mortgages, including what the Los Angeles Times called “stricter disclosures on ‘yield spread premiums.'” These rules include: Keep Reading...

FHA Reform Bill passes Senate

John Thomas December 15, 2007

Important Legislative Update!
 

The Senate today passed their version of FHA reform – S 2338.  Although it has many similarities, this bill is different than the FHA legislation passed by the House (HR 1852 and HR 1427).  The key points of the legislation include:

  • Raising loan limits on all FHA loans including reverse mortgages
  • Lowering down payment requirements on FHA loans
  • Removing the cap on allowable reverse mortgage originations

 

Click Here for a summary of the Senate bill

 

 
Also, you can go directly to the Library of Congress THOMAS web site and search for S 2338, HR 1852, and/or HR 1427 to read the full text of all three bills.
 

The next step for all these bills is for House and Senate negotiators to try and come to an agreement on how the final version of FHA reform will look.  Once the House and Senate come to an agreement, the final version of the bill will be sent to the President for his approval.  Being that we are coming up against the end of the year holiday break, it is unlikely that FHA reform will pass this year, but if the parties are motivated enough to do the right thing, who knows what can happen!

Delaware Mortgage Rate Update – November 30, 2007

John Thomas November 30, 2007

In a speech, last night Fed Chairman Bernanke said resurgent financial strains have dimmed the outlook for growth in the U.S economy.  Bernanke’s comments are considered by many to signal a 100% probability that the Fed will cut short-term interest rates by at least 25 basis-points at the upcoming Open Market Committee meeting on December 11th.

I think it is important to note that the bond and mortgage-backed security markets have already priced-in a December rate cut of 25 basis-points and are well along the road to pricing in a 50 basis-point rate cut.

If you’re looking for additional rate and price improvement following the official monetary policy decision announcement on December 11th I’m afraid you may be disappointed. The risk is that you’ll be sharply disappointed if the Fed chooses to cut short-term rates by 25 basis points.

It is almost always surprising data or events that catch a large number of traders leaning in the wrong direction that causes big price and rate swings in the mortgage market. Experienced market participants (those that have been burned more than once) tend to live by the old market saw that says, Buy the rumor ¦ sell the fact.

Looking ahead to next week traders will be nervously fidgeting with their positions ahead of Friday’s November nonfarm payroll report (scheduled for release at 8:30 a.m. ET).

The general consensus among market participants I’ve talked to is that a headline payroll number less than 80,000 together with a national jobless rate that bumps up to 4.8% ( currently 4.7%) will make a 50 basis-point rate cut from the Fed the following Tuesday much more likely.  If the headline payroll number exceeds 110,000 and the jobless rate doesn’t budge from 4.7% — most believe the Fed will choose to be more cautious cutting short-term rates by only 25 basis points.

In case you weren’t aware of details of a government-sponsored plan to temporarily freeze interest rates on certain troubled subprime loans may be announced as early next week.

In general, the government and a coalition of mortgage-related companies and private alliances have largely agreed to extend the lower introductory rate on home loans for certain borrowers.

Exactly which borrowers will qualify for the freeze and how long the freeze will last are yet to be determined. I’ll keep you posted as this developing story gains more detail.

If you would like to apply for a Mortgage Loan, you can APPLY ONLINE HERE, you can call John Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713

Mortgage Market Update – November 29, 2007

John Thomas November 29, 2007

New orders for the long-lasting U.S. made manufactured goods dropped for a third straight month in October. Orders fell 0.4% last month after declining by 1.4% in September and 5.3% in August. Non-defense capital goods, long considered a proxy for business investment, weakened by 2.3% in October the biggest monthly decline in this index since February of last year.

Stock jocks viewed the data has an indication that the trend in manufacturing weakness may be in the early bottoming stage while bond daddies looked at the same data and see it indicating that the Fed will undoubtedly have to sharpen up their short-term rate cutting scissors. It is highly unlikely both camps will be right on their market call – so the overall picture remains muddled.

In other news of the day, the National Association of Realtors reported that October existing home sales fell 1.2%. The decline in the headline number was sharper than most economists anticipated but after a moment of indecision, most traders shrugged the number off when a closer examination of the report detail showed big drops in multi-family and condo sales while single-family unit sales remained flat.

The Mortgage Bankers of America released their weekly report on mortgage applications this morning. The report showed that mortgage applications declined 4.3% in the week ended November 23rd.  Seasonal factors likely played a large part in the decline since 30-year note rates slipped 9 basis points lower to a national average of 6.09% last week. Jumbo and adjustable note rates both moved fractionally higher during the period.

If you would like to apply for a Mortgage Loan, you can APPLY ONLINE HERE, you can call John Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713