(302) 703-0727

(302) 703-0727

1 Year T-Bill – What is it?

John Thomas July 17, 2007 Tags: ,

1 Year T -Bill what is it?

One-Year/12-Month Constant Maturity Treasury (CMT)

This is an index published by the Federal Reserve Board based on the average yield of a range of Treasury securities, all adjusted to the equivalent of a one-year maturity. The US Treasury determines the yields on these securities by using the “daily yield curve”. The daily yield curve is based on the closing market-bid yields on actively traded Treasury securities in the over-the-counter market. This index tends to be volatile and responds quickly to changes in economic conditions. Keep Reading...

Mortgage Brokers – Proof that Less Costly Option for Sub-Prime Borrowers

John Thomas July 7, 2007 Tags:

Study Reveals Brokers Are Less Costly Option For Sub-Prime Borrowers
New Study Finds Factual Evidence That Consumers Pay Less With a Broker

Washington, DC. October 18, 2006  Brokers are a more cost-effective option for consumers in the subprime home loan market, according to a joint study released by economists at George Washington and Oklahoma State universities.

The study compared sub-prime loans originated by brokers and traditional lenders such as banks between 1995 and 2003. Its findings reveal that the reason brokers originate more than 50 percent of all residential loans is that they are a more efficient and cost-effective option for consumers. Keep Reading...

COFI Index – What is it?

John Thomas July 6, 2007 Tags:

Cost of Funds Index (COFI)

This is a monthly cost-of-funds index (COFI) reflecting the weighted-average interest rate paid by a particular Federal Home Loan Bank District savings institution on savings and checking accounts. The 11th District is the one most commonly used, which covers Arizona, California, and Nevada. The COFI index is published on the last day of the month and reflects the cost of funds for the prior month. COFI usually lags behind market interest rates in both up and down markets, which means that loans tied to this index rise and fall more slowly than interest rates in general. Keep Reading...

Real Estate Investing Seminar July 26th

John Thomas July 6, 2007 Tags:

Free Delaware Real Estate Investment Seminar on Thursday, July 26th from 6:30 PM to 8:30 PM at Primary Residential Mortgage’s Office in New Castle, DE.   The Seminar is for New Real Estate Investors. The seminar will show participates how to analyze potential investments, how to acquire the proper financing, what loan programs are available for investors with the current mortgage market and much more. Each participates will receive a Free Audio CD on Real Estate Investing and a Free Investors Kit which includes most forms needed to get started in Investing. Please Call 302-703-0727 and ask for John Thomas to register. The seminar will be at 42 Reads Way, New Castle, DE 19720. Keep Reading...

MTA Index – What is it?

John Thomas July 3, 2007 Tags:

MTA
Monthly Treasury Average (1 year MTA)

This index is determined by averaging one-year Treasury bills each month over the prior 12 month time period. This is an index used to set the cost of various variable-rate loans, particularly adjustable-rate mortgages. The use of the 1-Year MTA as a loan index is relatively new. The MTA generally fluctuates more than the 11th District Cost-of-Funds Index (COFI ­ see below), although they both track each other closely.

Note:
The MTA index is often used in what is commonly referred to as “Option ARMs”. This product type can create terrific cash flow and payment stability for your customer in the early years of the loan but requires education on the consequences of the different payment options, such as negative amortization. Keep Reading...

Financial News – Week of July 2, 2007

John Thomas July 3, 2007 Tags:

Sales of new single-family homes fell 1.6% in May, far better than the 6.2% decline Wall Street had anticipated, the Commerce Department said June 26. The median price of a new home fell 0.9% to $236,100 in May, down from $238,200 in May 2006.

Existing home sales fell 0.3% in May to 5.99 million units, the slowest sales pace in four years, the National Association of Realtors said June 25. The median price of an existing home was $223,700, down 2.1% from a year earlier, marking the 10th straight month that the price has shown a year-over-year decline. Keep Reading...

LIBOR Index – What is it?

John Thomas July 2, 2007 Tags: , , , ,
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LIBOR Index

LIBOR Index – What is It?

London Inter-Bank Offered Rate (LIBOR)

LIBOR Index is the rate of interest that member banks of the British Bankers’ Association charge when they lend money to one another in the wholesale money markets in London, somewhat similar to our Fed Funds Rate.  In fact, the LIBOR Index tends to closely track the US Fed Funds Rate. LIBOR Index is a standard financial index that is used globally and in US capital markets.  The Wall Street Journal publishes the LIBOR index on a daily basis.

In general, changes in the LIBOR Index have tended to be smaller than changes in the Prime Rate.  There are several LIBOR maturities much like U.S. Treasuries, but the 1-month and 6 month are the most readily used and available LIBOR indexes for mortgage loans.  Although they are becoming increasingly more common in use for consumer loans and ARMs, LIBOR Indices have traditionally been a reference figure for corporate and commercial financial transactions. Keep Reading...

Feds Hold Feds Fund Rate at 5.25% on June 28, 2007

John Thomas June 28, 2007 Tags: , ,

Feds Fund Rate Held at 5.25% on June 28, 2007

The Feds released their statement today about their meeting over the last two days and decided to keep the Fed Funds Rate  at 5.25% as everybody expected.  The feds noted improvements in inflation but were skeptical that inflation may still become a problem which leaves the door open for them to raise rates later this year if need be.

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

John R. Thomas – NMLS# 38783 Keep Reading...