March 27th Moorings

Hello and welcome to this week’s edition of Moorings. Before we get into any news, let’s take a look at rates and where they are at. Currently a borrower looking to purchase a home with five percent down and adequate credit history, income, assets and other qualifying factors would expect to have an interest rate of 4.75% with a one percent origination fee or 5% with no fee.  This is large unchanged from last week several weeks before that with only a minor one eighth percent change at any given time. That scenario is based on a qualifying credit score of 740 or more, whereas going down to a score of 640 (the minimum allowed), causes the scores to go up to 5.375% and 5.625% respectively. Just this past week I had a former client who had always had stellar credit but due to a mistaken address on a bill, they had a $17 collection fee show up on their credit which impacted her score enough to drastically change the rate on a loan for a vacation home that she was looking at purchasing. Like I’ve said many times before, it’s imperative that you keep an eye on your credit score and keep it at 740 or above.

In major financial news, the United States Treasury Department announced it is going to begin selling some of its massive Mortgage Backed Securities holdings. This is important to anyone looking to purchase or refinance a home. That’s because this announcement immediately pushed Bond prices significantly lower, as Traders tried to get their own positions sold. Think of it as a financial game of musical chairs… in which no one wants to be the last one standing with a mitt full of 4% Mortgage Backed Securities in a 5% market. This isn’t the last we’ll hear about this – and since home loan rates are tied to Mortgage Backed Securities, this creates the potential for home loan rates to rise in the near future. Fortunately, home loan rates are still at very attractive levels for now, despite the Bond market taking a hit for most of last week. So if you’ve been thinking about purchasing or refinancing a home, this is the time to see how you can benefit before rates possibly move higher. Because as bad as it was to lose some Bond pricing in the last few days, prices could move significantly worse depending on how they hold on.

In more local news, I thought I would give a brief update on Wrightsville Beach real estate. Year-to-date there have been 14 homes sold on the Island at an average selling price of $923,429. These homes sold at an average of 88% of their listing price and were on the market for an average of 240 days. While perhaps not the best of statistics there is at least some movement in this market including one property that sold for nearly $3,000,000. Well that’s it for this week, until next, Be Blessed and Numbers 6:24-26 be on you.

March 21st Moorings

Hello and welcome to this week’s edition of moorings, your source for local and national mortgage industry news. The notion of “it’s a small world after all” was especially evident last week, with both the news in Japan and the Middle East impacting our markets. Here’s what happened, and what the impact was on home loan rates.

The first thing to understand is the concept of “safe haven trading.” At times of global unrest and uncertainty, like with last week’s nuclear ‘crisis’ in Japan and the ongoing fighting in Libya, Traders will park their money in “safe” investments like United States Treasury Bonds. Along with this they also buy Mortgage Backed Securities for a higher yield, which is how home loan are traded. Moving with one another, when Bond pricing improves, MBS pricing improves and our home loan rates improve… which is what we saw last week. But it’s also important to understand how incredibly volatile this situation is. A “safe haven trade” is just that… a trade, which is short-term. Should events around the world become more stable, this safe haven trade can unwind very quickly… with Bond prices and home loan rates worsening as a result.

Another thing to note is that Bonds and home loan rates are facing some additional headwinds that could hamper their improvement. If Japan sells some of their Treasury holdings to help finance the recovery and reconstruction, like they did in 1995 after the Kobe earthquake, this could spur a sell-off in Bonds overall, which would cause Bonds and home loan rates to worsen. In addition to this possibility, the market is also dealing with the problem of inflation both here and abroad, in developing areas like China. Inflation has always been the enemy of Bonds and home loan rates. The bottom line: if inflation is allowed to grow, it can be very difficult to rein in and control, and this will hinder improvement in home loan rates, which of course effects a great deal of other industries including home builders and real estate. Add the Fed announcement on Monday morning that they are systematically selling off their MBS (Mortgage Backed Securities) that they hold and zoom the market nosedives. I say all this to show that market volatility is with us everyday, and there is no way anyone can justify a prediction of lower rates in the longer term.

So with all the changes happening in the marketplace and the world, let’s take a look at where interest rates actually are right now (as of Monday). As of today a borrower with a 740+ credit score, adequate income, assets, and qualifying factors should expect to be able to obtain a mortgage with an interest rate of 4.75% with a one percent origination fee, or 5% with no origination fee, which is slightly better from last week. As is always the case, these short-lived improvements in mortgage rates should be pounced upon by anyone who has been considering refinancing their home or even purchasing a new home. Sitting around and waiting for bottom of the rate market rarely every benefits anyone, since the bottom will come and go before you can say the word go. Take advantage of the incredible gift of low rates that history is handing you and lock in on either a purchase or refinance.

Well that’s it for this week and once again, we extend our thoughts and prayers to not only those affects by the many difficult issues around the word, but also the men and women serving in the armed forces that help and protect us, all around the world. Until next, Be Blessed and Numbers 6:24-26 be on you.

Nonstop flights to Chicago added from Wilmington International Airport

American Eagle airlines will fly two daily roundtrip flights between Wilmington and Chicago O’Hare, American Airlines said Monday.

The service by the American Airlines regional affiliate begins July 2 and will be operated with 44-seat Embraer jets.

One flight will depart from Wilmington to O’Hare (ORD) at 6 a.m. and arrive in Chicago at 7:20 a.m. The other will leave ILM at 5:15 p.m and arrive at ORD at 6:40 p.m.

Flights from O’Hare to ILM will leave Chicago at 1:35 p.m.and 8:25 p.m. and arrive in Wilmington at 4:45 p.m. and 11:35 p.m., respectively.

Original Article

Alpha Mortgage Corporation

Wilmington, NC Mortgages

(910) 256-8999

(800) 457-0714

March 7th Moorings

Hello and welcome to this week’s edition of Moorings, a source for local and national news on the mortgage and real estate industries. Rates have again remained unchanged, hovering at approximately 4.875 to 5.125%, depending on origination fees and credit scores. In national economic news, the Jobs Report last week was definitely a positive. The Jobs Report showed that 192,000 jobs were created in February, with a gain of 222,000 jobs in the private sector. As expected, there were also upward revisions to the prior two months, which added 58,000 more jobs than were previously reported: another positive! What’s more, unemployment lines were a little shorter last month as the Unemployment Rate fell to 8.9%, down from the prior month’s reading of 9.0%. This represents the best reading on the Unemployment Rate in nearly two years, not great BUT the best bad report in two years!

So what does all of this mean for the housing market and home loan rates? In terms of the housing market, the continued improving trend for the job market is good news, as people tend to avoid purchases when they’re concerned about losing their job or not being able to find one. In terms of rates, February’s Jobs Report suggests that the Fed’s Quantitative Easing 2 Program (or QE2, which is their plan to purchase $600 Billion in Treasuries through mid-2011) will continue through the end of June as originally planned. This is because the report was good, but not a blowout reading… and Fed Chairman Ben Bernanke said earlier last week that we need to see a long stretch of sustained job growth in order to remove the present stimulus actions. As I have said before in this column, as the governments buying of mortgage backed securities continues rates have remained at their current lows. When the government ends this program, hopefully in a gradual manner, rates will likely rise as the amount of mortgage investors goes back primarily into the private sector. Obviously this is our hope for long term stability, which is probably just wishful thinking, as a quick and sudden decision to end the government’s buying would cause rates to sky-rocket for a short time in a knee jerk reaction. While it may be short-lived, such an action is never what we want to see.

So what does all of this information mean to the consumer? Well home loan rates are still very attractive and barring any major changes in US economic policy we hope to see them remain fairly level until summer. This is never an assurance though, as changes in other countries politics and economics can also have a drastic effect on our own economy, as we have seen with gas prices and the ongoing conflicts in the middle-east currently. It is NEVER a good idea to sit on the fence when you know you are ready to refinance or purchase. Call your mortgage provider and start the paperwork so you can be sure to not get caught in a changing market with volatile rates. Until next week Be Blessed and Numbers 6:24-26 be on you.