Utah Rates, Programs, Purchases or Refinaning by Utah's Mortgage Guy

Last week w actually saw mortgage rates stop climbing and level off because of the many weaker that expected economic reports

1)  Consumer Confidence numbers were weaker than expected

2)  New Home Sales are weaker than expected

3)  Jobless Claims higher than expected

Also Fed President Bernanke stated that the Fed is committed to keeping "rates low for an extended period of time" which is a good sign that inflation numbers should remain low in the near future.

If I were looking to lock in my rate this week I would do so prior to Wednesday because thats when we could see rates become unstable.  The main reason for this will be the employment reports for February will be coming out.  With out a turn around in unemployment there will be no sustainable recovery for our nation.

Weaker than expected unemployment could cause mortgage rates to go Lower, but better than excepted unemployment could cause mortgage rates to rise quickly.

As I have always said rates get worse a lot quicker than they get better.

Please let me know if I can be of service to you or your family and friends.

Kelly Whytock

This week could be full of ups and downs in the market.  With last weeks huge stock market losses rates benefited from the flight to the safe haven of bonds.  This week so far building permits are down for December and we have lots of earnings being posted.  This could have investors bouncing back and forth trying to make money where ever the markets shows promise.  Lets hope it is in the Mortgage Backed Securities that keep all of our rates low.

Email me for any questions you might have regarding your specific mortgage.

Have great day.  Kelly Whytock

Finally some other industries other the the Real Estate Lending Industry is getting some regulation.  The Federal Reserve has posted the following rules that will go into effect February 22nd.

Among other things, the rule will:

• Protect consumers from unexpected increases in credit card interest rates by generally prohibiting increases in a rate during the first year after an account is opened and increases in a rate that applies to an existing credit card balance.
• Prohibit creditors from issuing a credit card to a consumer who is younger than the age of 21 unless the consumer has the ability to make the required payments or obtains the signature of a parent or other cosigner with the ability to do so.
• Require creditors to obtain a consumer's consent before charging fees for transactions that exceed the credit limit.
• Limit the high fees associated with subprime credit cards.
• Ban creditors from using the "two-cycle" billing method to impose interest charges.
• Prohibit creditors from allocating payments in ways that maximize interest charges.

Consumers can learn more about changes to their credit card accounts by accessing a new online publication. "What You Need to Know: New Credit Card Rules." It explains key changes consumers can expect from their credit card companies as a result of the new rules. The Board plans to release additional "What You Need to Know" publications in conjunction with other major rulemakings.

Thanks for suscribing and as always please let me know how I can help you or your friends and Family.

Kelly Whytock

First Time Home buyers can still get the $8000 tax credit for buying a home as long as it is closed by November 30th.  A first Time Home buyer is anyone who has not owned a primary residence in the last 3 years.  The best part is as long as the home is kept for 3 or more years none of the money has to be repaid.

The other $4,000 available right now comes from a Home Run Grant from the state of Utah.  The qualifications are 1)  has to be a new home never lived in, 2)  A partially completed home, 3)  or a home to be built. 

With 15 year rates at 4.0% and 30 year fixed rates as low as 4.5% today this could be the best time ever to buy a home.

Call me today at 801-253-HOME and lets get you in on the best rates and incentives EVER!!!

I hope many of you now understand that mortgage rates are determined by the price of Mortgage Backed Securities (MBS). They are NOT determined by the Federal Reserve, the Federal Reserve sets a whole different set of rates for example banks offer each other for bank to bank loans.

So will rates go up? Yes.

So what is going to cause these historically low rates to go up?

It is simple; the Federal Reserve has been using government funds to buy Mortgage backed securities at the rate of about $20,000,000,000 (yes 25 billion) per week for the lat 10 months. Well the piggy bank is running out and instead of just purchasing MBS at he same rate until they run out of money they announced last week that they are going to taper the amount purchased slowly until the entire 1.25 TRILLION allocated is gone.

What does this mean for rates?

Rates will start rising and I am predicting based on historical numbers that we will see rate go up .5% by the end of the year and another .5% by the end or March which is about when the feds 1.25 TRILLION dollars set aside for the purchase of MBS should be depleted.

So get those refinance loans submitted today because this truly could be the end of ALL TIME LOW RATES.

Thats right!!!  Anyone who is planning to take advantage of the $8000 tax credit from the IRS must close on their home by November 30th 2009.  This tax credit is for anyone who has not owned an owner occupied home in the previous 3 years from the day they close.

Yes there is a good chance that some type of extension of this program will be implemented in the next 90 days it is far from a guarantee.  So if you or someone you know has been sitting on the fence have them call me today.  

RidgeView Mortgage is offering 15 year fixed rates as low as 4.25% and 30 year fixed rates as low as 4.75%.    So with these great rates, low home prices, and an $8000 tax credit from uncle Sam this is without a doubt the best time ever to buy your own home.  Call me today 801-253-HOME.

Today’s Housing market continues to stabilize, and although home prices are going up, the decline certainly seems to have subsided. Existing Home Sales came in better than expectations this month, touching their highest level in years.

Now to INFLATION, the Labor Department reported that the Producer Price Index (PPI) fell more than what was expected. Meanwhile, the Core Producer Price Index (PPI) - which strips out food and energy prices - was in step with expectations. In the past 12 months the overall PPI has dropped a record -6.8%(going back to 1947), when data was first collected on PPI. This decrease in prices is very reflective of a recession, but also points to the power of the cost reductions through technology and productivity gains.

Remember, inflation is a big arch enemy of Bonds and home loan rates. Although it's good news that inflation is not currently an issue, with an enormous amount of government spending, who really knows what the full consequences will be down the road. This will be something I will be watching in the weeks and months ahead.

On to the job Market. Initial Jobless Claims were reported at 576,000, which was a higher than expected, ironically after a string of better-than-expected reports recently. Claims readings will need to be in the below 450K's before the Unemployment can stabilize and start to improve we have a ways to go.

Most news of the week was not necessarily positive but Stocks found ways to take a ride higher, finishing last week on the positive side and at the highest levels so far this year. The Dow surged ahead by 155+ points closing at 9,504, the S&P gained 18 points to 1,026 while the NASDAQ rose 31 points ending at 2,020. Bonds and home loan rates were under pressure, and found it hard to maintain any good momentum. With 3 more Treasury auctions scheduled for this week the pressure for rates to go up could increase.

Please call and let me know if you have any questions about your own home loan situation, and how I can be of service to you. Or just call to say hi

Thanks Kelly Whytock

Well Utah is a great place to live and we are always featured in magazines, the news, or other media outlets for our great communities.  But this time we are getting featured for our great numbers of Foreclosures in those communities.

I have said it before and I will say it again now may be the single best time in the last few decades to purchase a new home.  Lets take a look at the many benefits for First-Time home buyers :

1)   $8000 tax credit if they close by 11-30-2009

2)   Interest rates near all time lows

3)   House prices in some ranges have dropped 20-30% in the last 3 years and if you steal a short sale or foreclosure home you may even be saving 50% or more over the last person who bought the home.

There is no doubt about it now is an incredible time to by.  If you have been thinking about it then give me a call and lets find the once in a lifetime deal for you today.

Til Next Time

Utah's Mortgage Guy

Many of you may have refinanced or made a purchase of a new home since May 1st 2009.  So you are fully aware of the new appraisal guidelines that the goverment put into place.  Everything I have experienced about this new "Home Valuation Code of Conduct" rule has been negative.  So why are goverment entities trying to add more regulation to the mix?

That answer is complex and concerning.  The more goverment regulation there is the harder it is to get a great rate and great service from a smaller lender or Mortgage broker like me.  If we have to have full time staff just to track all these new regulation we become unable to pass any sort of savings and service benefits to borrowers.  At the end of this month it will be nearly impossible to close  home loan in less than10 business days.  Although it is already tough to do so i had 4 clients in the last 60 days sign their closing documents within 8 business days of me taking there application for a loan.  That is great service that will now be practically impossible. 

The goverment thinks by slowing the process down they are helping consumers.  But the opposite is true.  Longer processing times means longer lock periods, which means higher rates.  Also the save borrower that wants to time things just right now has to wait at least 3-7 days from application to order their appraisal.  And if the scenario changes they have to wait another 3-7 days to close once we are ready for closing documents to be drawn.

I stress the importance of using a reputable Loan officer that knows the rules in this environment.  If you make the wrong choice you could loose out on the rate you wanted because your lock may expire.  And there is nothing more frustrating to hear than when a new client comes to me to tell me about the last guy that totally messed up their loan for them.  Stay in touch and please remember I would love to help your friends, family, and coworkers get the best advice and service for their next loan.

Signed,

Utah's Mortgage Guy, Kelly Whytock

There has been a .75% swing in interest rates in the last 3-4 weeks.  30 year fixed rates were as high as 5.5%.  Fortunately we are seeing the rates come back down this week and look like they will be below 5% again soon.  I really think that there are so many people that are waiting to see if rates will get below 4%.  That just cannot happen.  Its kind of like gas getting below $150 per gallon.  It cannot ever stay there because that is cheaper than the cost to get the gas refined to the pump.  Banks cannot find investors to by the packaged Mortgage backed securities at a rate that low, the return is just to low on their money.

So please take a good look at whether now is a time to refinance for you.  Call me and lets look at the options.

Many of you may have a Freddie Mac or a Fannie Mae loan and the are specials loans that have been created by the "Hope for Homeowners Plan"  that can allow you to refinance even if you have zero equity right now. 

My goal is to get everyone a rate below 5% before they permanently go above 6%!!!  Call me Today!!!

Wow. That is my first thought for this weeks blog.

As traders try to read the economic indicators they are going back and forth between stocks, bonds, and treasuries. The result has been a .5% swing in interest rates in the last 10 trading days.

Today rates are worse by .25% again. And the indicators are the economy is hitting a bottom and likely with start to slowly accelerate for the better. This means that traders are going to stop investing in mortgage basked securities (what interest rates are tied to) and flood money into the stock market.

If you need to refinance or are buying this summer, I suggest you move sooner than later. There is a very good chance we are seeing and end in sight for rates below 5%.

Please let me know if I can do anything for you or your friends and family.

This last few weeks has confused many people as to why rates have not fallen.  There are sevaral factors that are working against getting back to 30 year fixed rates getting to 4.5% again.  Many investors are not putting any money into buying mortgage backed securtities so the only real buyer is the US Treasury.  They bought 26 Billion dollars worth of MBS last week alone and rates still went up. 

Stocks are taking big hits based on losses companies are posting and it looks like the Jobless claims on Friday should be very hard to swallow.  This should allow rates to get a little better this week so call me if you are one of those fence sitters waiting to get better rates.

Wednesday we get more information about the economic stimulas plan and how it may help homeowners.  We look forward to see it the Obama administration can put together a REAL program that does actually help borrwers before they just get to frustrated sitting on hold waiting for a live per to talk too.  I personaly think that the program will be only offered through the bank you are currently with and most servicing lenders are 2-3 monhts backlogged with the loans they have now.  So this new program might not help many because of the true lack of access to it.

Let stay in touch an as always please post you comments and questions on the blog so we can address them.

It seems that just when things are bad for value, they are going to get worse. Even though in Utah our values are doing pretty well compared to the rest of the nation it has been a real challenge getting a value that allows many people to take full advantage of current record low rates in Utah. And things will get worse with the new legislation that is going into effect in the next few months for the entire nation.

For those of you that are not aware the geniuses at Fannie Mae and Freddie Mac were sued by the state of New York. The VERY SHORT version of the case was that the 2 lending giants allowed for too much communication (good or bad) between Lenders and appraisers. The state of New York felt this led to inflated values and bad loans which hurt entire community’s home values because of foreclosures. Well it looks like New York controls the country because soon the entire country will have a new set of appraisal ordering rules to abide by.

On May 1 2009 Fannie Mae and Freddie Mac will no longer purchase closed mortgage from any lender that allows the Loan Officer or anyone involved with loan production to order an appraisal and/or talk to the appraiser about the appraisal at any time. Yep sounds ridiculous? Well it is. I will have to soon just hope I get a competent appraiser and hope he knows your area well enough to get you fair market value.

So what can you do? The first thing is to refinance now before the rules go into effect and you are spending big money for appraisal that you cannot use because appraisers will not longer be chosen by ability, experience, or competence... just by the fact they are on a list that they will randomly send them appraisals.

The few tests of this system I have heard about have resulted in one lender from Arizona having values 10% lower on average for the 10 appraisals he ordered through this new system? Why? Because if an appraiser has zero reason to use the top 5 out of 10 comps instead of the bottom 5 out of ten comps then he will use the worst 5 always. This will result in less scrutiny from an underwriter and less work due to fewer conditions from the lender. An appraiser now may just come up with "worst case" values instead of a fair opinion of value that he justifies in the appraisal based on size, condition, location, and many other factors.

This new rule alone could send values in Utah lower by 5 to 10%. Scary but it is here and it sounds like it is too late to change it.

As always call me for any questions and/or concerns regarding your homes value or your current home loan situation. We still do FHA refinance and purchases, VA refinance and purchases, Conventional refinance and purchases, and jumbo loan refinance and purchases. I lend only in Utah.

There is much speculation about where home loan rates are heading.  right now the plan is for the federal goverment to spend 600 Billion yes Billion to buy mortgage Backed Securities which are the item that controls home loan rates in the United States for most loan products Fannie Mae and Freddie Mac offer.

This amounts to about 4 billion a day which is more than the average amount of bonds bought and sold daily.  this very well could keep rates in Utah low for the next 6 months.

But Beware if there is a bump in the market rates will rise faster than they have fallen.  Rates are at there lowest point in history so do not procrastinate!!!  Lets get your Purchase or refinance loans in process and get yo the home loan you have dreamed about today.

With all of the craziness going on in the Mortgage Financing arena right now it is still actually very easy for 95% of people to get great rates on a home loan.  We offer FHA, VA and Conventional home loans.  We also still have many out -of-the-box loans for those of you that have to use stated income or bank statement documentation.

Mortgage rates are moving between 5.25% and 6% APR 5.5% to 6.25% for a 15 year fixed rate right now and moving between 5.625% and 6.5% APR 5.875% to 6.75%.  This is still below average rates for the last 35 years.

Those looking to purchase should take note that home sales were up in September for the first time in almost 2 years.  This is that blip that might tell us the housing market is ready to bottom out and start rising.  Leave no doubt that this is the time to buy a new home.

Please let me know what questions you might have.  Also please refer your friends and family to RidgeView Mortgage and Utah's Mortgage Guys.  We will mkae sure the get the best loan for the lowest fees and rates possible.

Call today to talk rates Loan Options ro whatever you would like...

Kelly L Whytock "Utahs Mortgage Guy"

RidgeView Mortgage, Inc.

Owner / Mortgage Advisor

10468 S. Redwood Rd.

South Jordan, UT 84095

Phone: (801) 253-HOME(4663)

Fax: (801) 365-3847

Cell: (801) 580-7830

Email: Kelly@UtahsMortgageGuy.com