On the 31st of October, the Fed announced its second consecutive decrease in rates, cutting another 0.25% from the Fed Funds Rate. This change could directly impact millions of American borrowers.

Are you one of them?

Adjustable Rate Mortgages
If you currently have an ARM that is scheduled to reset in the next 14 months, then today's news is good for you. Now is the time to investigate your options. Even if you have a pre-payment penalty or you're behind in your payments, don't delay. There may still be options available to get you out of your ARM and into a mortgage you can afford, including FHA or the new FHASecure program introduced by the President.

Important: The FOMC does not meet in November, so ask yourself this: Can you really afford to roll the dice until its next meeting in mid-December?

Buying at the Bottom of the Market
If you're looking to invest in real estate in the next six to twelve months, and recent rate cuts have inspired you to start taking action, now is the time to prepare yourself for intense credit scrutiny. There are a lot of great real estate deals to be had today. But if your credit doesn't stand up in today's tight-fisted credit environment, then you could easily miss out on an exceptional opportunity.

What's the point of taking advantage of discounted home prices if you can't qualify for the right mortgage or interest rate that makes it all worthwhile? Get pre-approved now and know exactly what you can afford. And with the right REALTOR® on your side, you can have incredible negotiating power in a buyers' market!

Refinancing – Know Your Options
While rate cuts often spark ideas of refinancing, this may not be the best choice for everyone. In some cases – especially in a market where home values are declining – refinancing may be impossible or disadvantageous. Call me today for a free mortgage review. Based on your individual goals and financial needs, we can explore every available option for you and your family.

I look forward to hearing from you soon.

Monday's bond market has opened flat with no relevant economic news scheduled for release today. The stock markets are showing losses with the Dow down 60 points and the Nasdaq down 12 points. The bond market is currently unchanged from Friday's close, but we still may see a slight increase from Friday's morning rates.

This week is very light in terms of economic releases for the markets to digest, especially compared to last week. There are two monthly and one quarterly reports on tap, but only the quarterly one can be considered to be highly important. This makes it quite likely that we will see a fairly quiet week in the mortgage markets, assuming that the stock markets do not repeat last week's volatility.

The first piece of data scheduled for release comes Wednesday morning with the release of the 3rd Quarter Productivity report. The productivity index is expected to show a level of worker productivity during the third quarter similar to last quarter's final reading of 3.1%. This would be good news for the bond market because high levels of productivity helps the economy to expand without inflationary pressures being a concern.

The final two releases of the week will be posted Friday morning. The first is September's Goods and Services Trade Balance report. The second will be November's preliminary University of Michigan Index of Consumer Sentiment during late morning trading. Neither are considered to be major market movers, but with little data being posted this week we may see some movement in rates as a result.

Overall, look for a fairly quiet week in the mortgage market unless something totally unexpected transpires. As long as the stock markets remain fairly calm, I am expecting to see little movement in mortgage rates. However, I am extending the lock recommendation to short and mid term periods. This is not an indication that I necessarily feel mortgage rates will rise. It means that the risk versus reward scale is leaning towards the risk side. If mortgage rates are not likely to improve during that time frame, then there is little reward of continuing to float. Accordingly, a lock recommendation is appropriate in my opinion.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2007

Friday's bond market has opened in positive territory despite the release of stronger than expected economic news. The stock markets are currently showing sizable losses with the Dow down 95 points and the Nasdaq down 9 points. The bond market is benefiting from the stock weakness again, currently up 10/32. This should improve this morning's mortgage rates by approximately .250 of a discount point.

The Labor Department gave us today's key data with the release of October's Employment report. It showed that 166,000 new jobs were added, which exceeded forecasts of 80,000 by a wide margin. However, offsetting that news was a downward revision of 14,000 to September's jobs and smaller than expected increases in average hourly earnings for October and September. The unemployment rate remained at 4.7%, as it was expected to do.

September's Factory Orders data was also posted this morning, revealing a 0.2% rise in new orders for both durable and non-durable goods last month. The latest forecasts were calling for a slight decline in orders. However, this data is no important enough to trump the Employment report results and stock fears in the market. Therefore, it has had little impact on this morning's mortgage pricing.

After the very busy week that this was, next week is going to seem very light. There are only a couple of relevant economic reports scheduled for release and they don't start until Wednesday. This will likely mean that the stock markets will again be in the forefront and a major influence on bond trading and mortgage rates.

Look for more details on next week's events in Sunday's weekly preview. I am holding the float recommendations through today to capture the expected pricing revisions we may see later today. But, I do expect to shift to a lock recommendation, for at least the immediate term period, early next week. If closing next week, it may be a good idea to lock a rate after this afternoon's pricing is posted.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2007