Financing Your Gift? Beware Of Hidden Fees

Financing Your Gift? Beware Of Hidden Fees
The average American couple will spend $1,476 this year in holiday gifts, food and decor, according to a recent survey by the National Retail Federation. Many spend three to four times that amount from November to January. That said, during the nations busiest shopping season of the year many consumers will be seeking to finance gifts via credit cards, mortgage refinancing and equity lines of credit...

Today's Low Rates
Avg. Rate Points APR
30 Yr Fixed 5.76% 0.64 5.93%
15 Yr Fixed 5.33% 0.65 5.61%
1 Yr ARM 4.47% 0.55 6.81%

...Some shopper will be completely unaware of the hidden fees andoverall costs of financing extravagant gifts. That said we've put together a list of fees associated with loans used to cover debtacquired from gift giving. Compare and save.

Gifts purchased using... Added fees and charges
Credit Card 10-20% more
Refinancing 6.50-8% more
Home Equity Loans 7-9% more

From the above those who have already refinanced their home mortgages and held funds for gifts may do better in the long run. Still the best approach is not to finance gifts at all.

An alternative is prepaid gift cards. These average $25 per card without fees.

Today the Philadelphia Fed released the findings of its fourth quarter survey of professional forecasters. The contours of the report show that the consensus expects growth to slow markedly in the fourth quarter of 2005, but then accelerate to much stronger growth during the first half of 2006.

Fed fund futures were generally unchanged last week. A light data calendar and a holiday-shortened schedule helped keep most near-term contract prices stable.

Todays Best Rates

Todays Best Rates

30 Yr Fixed 5.64% 0.65 5.81%
15 Yr Fixed 5.23% 0.65 5.50%
1 Yr ARM 4.18% 0.55 6.59%

Today's Mortgage Rate News
Mortgage lenders slightly hiked rates this morning. New Fed Chairman Ben Bernanke
appointed. The Fed to maintain its plans to raise interest rates at what some suspect
will be every meeting this year.

Todays Tips:Brokers will generally contact several lenders regarding your application, but they are not obligated to find the best deal for you unless they have contracted with you to act
as your agent. Consequently, you should consider contacting more than one broker, just as
you should with banks or thrift institutions.

Guide: Ask each lender and broker for a list of its current mortgage interest rates and
whether the rates being quoted are the lowest for that day or week.

Glossary: Loan origination fees are fees charged by the lender for processing the loan
and are often expressed as a percentage of the loan amount.

Need To reduce your mortgage payments? Need cash? Want to lower your debt? Secure your
financial decisions now while rate are low.Best deals: New home mortgage, long term fixed rate home refinancing and home equity loans. 

Risk of Home Price Declines Rising

In the last eight and a half years, the country has experienced an unprecedented run-up in home prices. Over this time, the rise in home sale prices has been more than 40 percentage points higher than the overall rate of inflation. The increase is said to have begun turning in on itself.

It seems that the risk of price declines over the next two years has increased in the nation's 50 largest housing markets, according to the latest PMI U.S. Market Risk Index, whose median risk index value rose 11.6% in the third quarter.

Homes in Gotham got a little more affordable in the third quarter...or rather,prices dropped, but they still remained in nosebleed territory.

It is likely that the regions experiencing the largest run-up in home prices will see the largest fall during the crash. For this reason the New England region is especially vulnerable to a downturn in the housing market.

How would a drop in home price values impact the economy.
In 2002 a research an economic policy and research firm, cepr.net predicted the following:

The collapse of the housing bubble, implying a drop of between 11 and 22 percent in the average of housing prices , will destroy between $1.3 trillion and $2.6 trillion in housing wealth.

7) In the wake of this collapse, residential construction is likely to fall by between 0.6 and 1.3 percentage points of GDP.

8) The loss of this much housing wealth will reduce consumption by between $80 and $160 billion.

9) The average ratio of homeowner’s equity to value, at 55.2 percent, is near its low for the post-war period. A sharp drop in home prices will send this ratio far below its previous low point.

At the present time there is much wealth in ones home. Were one to attempt to capitalize on it the only way to sustain that wealth would be to turn it over into high yield investments and turn over the returns as well. In other words the equity wealth would be made to make income at a rate that offsets the mortgage payments that far exceeding the home value.

Many homeowners first lowered the mortgage rates in order to free up funds for such an investment. Other then took out home equity loans purely for the purpose of investment and debt resultant debt reduction.

Using ones home as collateral is always a last option when needing funds. Still when there is no option many have used some of the borrowed funds to invest in education, small businesses or purchase precious metals or some other more certain profit generating venture.

Offsetting debt by investing for higher returns in or to pay off debt more quickly is always the wisest course to take. 

Inflation Worries Trigger Rise In Rates

Worries about inflation and rising interest rates continued to plague bond traders on Wednesday. Fed concerns regarding inflation spurred aggressive selling of government debt and reinforced the need for further rate hikes. These factors forced lenders to edge rates up on many products.

Tip of the Day: Whether you are dealing with a lender or a broker may not always be clear. Some financial institutions operate as both lenders and brokers. And most brokers’ advertisements do not use...

Home equity loans are at attractive levels.
Your home's value has grown enormously in recent years, so you're sitting on a lot of equity. If you're looking to start a business, grow a business or invest in your education you may be sitting on a goal mine. Find out how much you can borrow and what to do with it.

Current Mortgage Rates

$30K HELOC 5.88%
$50K HELOC 5.40%
$30K home equity loan 7.37%
$50K home equity loan 7.16%
$75K home equity loan 7.04%

Get free rate quotes for home equity loans at http://www.bcpl.net/~ibcnet


30 Year Fixed 5.65% 0.59 5.76% 0.000%
15 Year Fixed 5.27% 0.53 5.48% 0.000%

30 Year Fixed Jumbo 5.87% 0.52 5.95% -0.010%
15 Year Fixed Jumbo 5.46% 0.54 5.64% -0.020%

5 Year Balloon 5.60% 0.67 6.19% 0.020%
7 Year Balloon 5.62% 0.58 6.12% 0.080%

1/1 ARM 4.29% 0.67 6.43% 0.020%
3/1 ARM 5.07% 0.50 6.10% -0.030%
5/1 ARM 5.19% 0.54 5.94% -0.030%

1/1 Jumbo ARM 4.76% 0.76 6.35% 0.000%
3/1 Jumbo ARM 5.22% 0.56 6.08% -0.020%
5/1 Jumbo ARM 5.39% 0.56 6.02% -0.030%

FHA 30 Year Fixed 5.60% 0.20 5.67% -0.040%
FHA 1 Yr ARM 4.84% 0.51 6.54% 0.120%
VA 30 Year Fixed 5.64% 0.43 5.73% -0.030%


What's the word? "Broker." When getting a loan be sure to ask whether a broker is involved. Brokers are usually paid a fee for their services that may be separate from and in addition to the lender’s origination or other fees. For more helpful tips and access to low rate financing go to http://www.bcpl.net/~ibcnet

Conventional loans: Conventional loans are mortgage loans other than those insured or guaranteed by a government agency such as the FHA (Federal Housing Administration), the VA (Veterans Administration), or the Rural Development Services (formerly know as Farmers Home Administration, or FmHA). 

Mortgage Applications in U.S. Fall to Lowest Since April

Mortgage Applications in U.S. Fall to Lowest Since April, MBA Index Shows as interest rates rise. As mortgage applications fall lenders and brokers rush to make a deal on loans. This can open the way for more competitive offerings to lure in business. Among the common offerings are cash back incentives, lower fees and rates.

The key is to know whats being offered and put it on the table. One way to do this is by making good use of online lending market places

Todays Rates
30 Year Fixed 5.66% 0.51 5.76% 0.010%
15 Year Fixed 5.28% 0.46 5.47% 0.010%
30 Year Fixed Jumbo 5.88% 0.50 5.96% 0.000%
15 Year Fixed Jumbo 5.48% 0.50 5.65% 0.000%
5 Year Balloon 5.59% 0.62 6.20% 0.010%
7 Year Balloon 5.55% 0.63 6.11% 0.010%
1/1 ARM 4.25% 0.67 6.42% -0.020%
3/1 ARM 5.10% 0.50 6.12% 0.000%
5/1 ARM 5.22% 0.51 5.96% 0.000%
1/1 Jumbo ARM 4.76% 0.77 6.34% 0.000%
3/1 Jumbo ARM 5.25% 0.50 6.08% 0.010%
5/1 Jumbo ARM 5.41% 0.50 6.04% -0.010%
FHA 30 Year Fixed 5.64% 0.18 5.71% 0.000%
FHA 1 Yr ARM 4.72% 0.80 6.55% 0.000%
VA 30 Year Fixed 5.67% 0.29 5.75% 0.000%

Why use a lending marketplace over cold calling lenders? Time and competition are the two major factors. With little time to apply for a loan and make cost and rate comparisons over the phone, many users are making use of online rate quote applications and cutting time and costs.

15-YEAR FIXED RATE MORTGAGEThe monthly payment is higher but the interest rate is usually lower and one saves half the total interest cost of the 30-yr mortgage. Terms does not allow for the maximum mortgage interest tax deduction.

The present housing industry is still booming. Homeowners are seeing astronomical gains in home values. It is a given that the housing market will peak at which time home pricing and value is expected to depreciate. How will this impact the market? Should home owners wait for the housing market to level off before taking out a home equity loan or refinancing?

Should home values tumble and reflect the homes' true market value, home owners with mortgage balances that are larger than a home's true value and face hardship that forces them to sell their home will have to come up with the difference.

To offset this problem make sure your appraiser is assessing the true value of your home. Avoid infalting tactics that could leave you high and dry in the end.

Should home owners wait for the housing market to level off before taking out a home equity loan or refinancing? There is no way of knowing when the housing bubble will burst and at what level this will leave the value of homes. So if funds are required in order to raise the qaulity of life or at the very least maintain it, getting a home equity loan or line of credit may be considered a practical investment.

As home values continue to rise many are contemplating how to take advantage of this unique investing phenomenon. There would appear to be two ways to go about it.

1. Get a home equity loan or line of credit and invest the funds into whole products with quick turn around on the retail market.

2. Sell your home. Save a portion, invest a portion in stocks, bonds and mutual funds. Create a second income. Turn over the profits until you're able to live off the proceeds.

Experienced investors believe the safest way to invest is to do so in gold, silver, Platinum or any of the metals. Silver seems set up to surpass even gold in earnings. Other investments include real estate. A secure and steady approach would be investing in bonds and mutual funds.

Housing Loss - Hurrican Katrina - Interest Rates

As the events continue to unfold in the wake of Hurricane Katrina, Gulf Coast residents look forward to a return to normal life. It will be a long time for rebuilding to take place. Water could be unsafe for years. Homeowners in the region need to take a good look at disaster insurance coverage. Hurricane Katrina magnifies the need to reexamine your insurance policy. find out exactly what it covers and get flood and fire protection.

When policyholders are displaced, the immediate need is additional living expenses to pay for food, housing, and other essentials. Typically, insurers provide such funds up to 20 percent of the amount of the policy. The insurer will pay additional living expenses to a policyholder whose home is now uninhabitable. For example, if homeowner's monthly pre-loss expenses were $2,000 (mortgage, utilities) and are $5,000 post-loss (living in a hotel, eating out), the insurer will pay the $3,000 additional cost.

Freddie Mac has announced a three-month suspension of mortgage collections.
The Federal Deposit Insurance Corp., which regulates banks, is asking financial institutions to be generous toward hurricane victims whose loan and insurance payments are due.

Recent gains in energy prices resulting partially from the hurricane, were thought to stay the Federal Reserve's rate-hike program and erase the need for additional short-term interest rate rises through year's end. But according to fed funds futures, the probability of the Fed raising rates is 90 percent for the Sept. 20 meeting tightening credit by 50 basis point.

Economic instability caused by Hurricane Katrina could steady mortgage rates and sustain the life of the housing boom. Private contractors are rushing to cash in on the unprecedented sums to be spent on Hurricane Katrina relief and reconstruction.

Americans Are Freeing Up Funds With A Home Equity Loan

Sales of new homes jumped to a record high in July, up 6.5 percent from June, the Commerce Department said on Wednesday. Refinancings last week increased as a percentage of all mortgage applications, up to 43.7 percent from 42.4 percent, the MBA said.

Home owners are looking at ways to free up funds by refinancing or opting for home equity loans. For example, a $200,000 home with a $125,000 mortgage has $75,000 in equity.

Home Refinancing AlternativesNow using a mortgage payment calculation tool compare mortgage payments at current rates with he mortgage rates in the chart. Significant savings? If so, you see the value of opting for home loan refinancing.

Cash Out Refinancing Program.This not only frees up funds per month but also puts immediate cash in hand for other purposes such as investing in stocks and bonds or pursuing a business venture or some other income generating pursuit.

Mortgage Market Snapshot
Daily Mortgage Averages Updated: 8/25/2005
-------------------------------------------------
PRODUCT RATE POINTS APR CHANGE
30 Year Fixed 5.46% 0.52 5.57% 0.000%
15 Year Fixed 5.04% 0.56 5.25% 0.000%
30 Year Fixed Jumbo 5.73% 0.63 5.84% 0.000%
15 Year Fixed Jumbo 5.29% 0.61 5.48% 0.000%
5 Year Balloon 5.36% 0.84 5.94% 0.000%
7 Year Balloon 5.55% 0.61 5.94% 0.000%
1/1 ARM 4.45% 0.64 6.25% 0.030%
3/1 ARM 4.78% 0.63 5.91% 0.010%
5/1 ARM 4.98% 0.59 5.79% -0.030%
1/1 Jumbo ARM 4.20% 0.87 6.28% 0.010%
3/1 Jumbo ARM 4.92% 0.75 6.02% 0.000%
5/1 Jumbo ARM 5.12% 0.66 5.98% 0.000%
FHA 30 Year Fixed 5.34% 0.52 5.45% -0.010%
FHA 1 Yr ARM 4.46% 0.60 6.39% 0.000%
VA 30 Year Fixed 5.43% 0.43 5.53% -0.010%

FHLMC 5.56% 5.59%
Fannie Mae 5.67% 5.71%

A Brief History Of Mortgage Rates

Did you know that lenders have been charging interest on loans for over 34 centuries.? A biblical reference reveals when and to whom interest was to be charged according to the Mosaic Law. Still the question is how much interest was charged? Was there a fluctuation in interest levels? Are ancient interest rates comparible to our day?

A mortgage rates shopping resource reports "the Greeks interest rate was sustained between 10 percent to 12 percent." So there were regular periods of fluctuation although they managed to keep their rates fluctuating to far above the 12.00 percentile. The report reveals that the Romans’ carried rates that fluctuated from 4 percent to 50 percent, depending on where in society men lived." These astonishing reports indicate that rates have been fluctuating from ancient times up to the 21st century. And the interest rates of the ancients at one time or another were comparible to todays rates.

So is there a lesson in all of this? Yes. Rates may rise and rates may fall but interest rates will always be.

Home Refinancing A Good Investment Strategy

With a wide selection of high yeild investment strategies now available it may be hard to believe there may be an investment opportunity sitting in your front yard.

Borrowers have yet another chance to lock in low long term rates as 30-year fixed mortgages are once again below 6.00% or convert out of variable rate loans, especially those loans indexed to the Prime Rate which now stands at 6.00%.

The objective is to lower your rates and reduce mortgage payments in order to free up funds to invest in high yield accounts. Once way to do this is consideringlowering your rates on home financing be opting to refinance your home loan.

Rates on 15-year,fixed-rate mortgages, a popular choice for refinancing a mortgage are still holding steady well below the 6 percent threshold. It's easy to see where the savings comes in if your current rates are 6.50% or higher. 

Home Loan Refinancing Rates Keep Dropping.

Home loan refinancing at lowest cost available now as rates have dropped.
The Fed chairman says The economy is on "reasonably firm footing" and isn't fanning worrisome inflation. Rates on 30-year mortgages fell again this week, dropping to the lowest point since the spring of 2004, according to a nationwide survey.

Still there is concern of the potential housing bubble and the economic fallout from spurting oil prices. The White House is predicting a slightly less optimistic forecast for the country's economic growth but sees an increase in new jobs.

Rates on 30-year mortgages have hit their lowest level in four months after falling for the eighth time in the past nine weeks. Low interest rates and rising incomes have made houses more affordable than they were 10 years ago. This downward trend that has helped push sales of both new and existing homes to record levels. For more home refinancing news go to http://bcpl.net/~ibcnet

Home refinancing over the past four years have saved consumers tens of thousands of dollars in home loan costs. Home refinancing may account for the increase in major spending in the auto industry, stock investments and improved education funding in the household. Finding the right refinance deal has improved dramatically over the past five years with the help of the Internet. Now refinance deal shoppers need only look at their screens to find out who offers the best rates. Cost comparison online has become the norm for web savvy shoppers. Why not home loan refinance shoppers?

Those looking for a great rate have not been disappointed. Rates have plunged for the past eight straight weeks and it doesn't look to be rising any time soon. That said consumers realizing great savings when lowering mortgage payments.

Are Rates Dipping Or Rising?

"Mortgage Rates Dip Deep"
"Adjusting to rising mortgage rates now reality"
"30-year mortgages fall for 6th week"
"Treasury bill auction sees three-year high on interest rates"
"Mortgage Rates Steady And Low"
"Home Refinance Rates Dip"

Looking at these headlines can make the mind reel for consumers trying to get a fix on where rates are and where there going. The articles themselves identify the rates being discussed. These could be short term rates or long term rates. Adjustable or fixed.

When hearing that rates are rising homeowners who failed to refinance their mortgages in the last year or two probably figure they missed the boat. Reports of rates rising have slowed refinancing compared to the wave seen in 2003 and parts of 2004. What many homeowners don't know is that the boat has apparently come back to the dock. How so?

Months ago economists projected that the interest rates which mortgage rates are tied to, would increase to more than 7 percent once Lender tack on the spread. To the contrary we're seeing rate levels at 5.35 to 5.6 percent on 30-year mortgages and around 5 percent, or even a little lower, on 15-year mortgages.This may be a surprise to some consumers who assume that rates have been rising in tandem with short-term loan rates, which the Federal Reserve Board has been pushing higher since last fall.

While rates are going up on short-term loans and home equity lines - long term mortgage rates are as low as ever.

Tip: Low rates may not last much longer. Real estate market is in its seasonal lull and stronger demand in the spring usually helps push rates higher. If you must get financing for spring and summer projects do it now.

Should I Pay Down My Mortgage Or Refinance?

Giving careful thought to paying down your mortgage is crucial to retaining your home, seeing a return on investments and financial survival. Whether you should or shouldn't is another story. There are some key factors to consider.

It goes with out saying that not paying down your mortgage would leave you with a larger debt burden over time. The issue is whether to take retain this debt or not. Still when refinancing aren't you taking on more debt?

it's not a matter of taking on more debt. Once the mortgage exists, the question then becomes whether we can pay it off early and save or reduce the overall amount of the loan by refinancing and save.

Would paying off the mortgage at a more rapid rate reduce your debt burden? Perhaps, but can you afford to make extra payments to accomplish this? If money is scarce than the alternative might be lowering the rate by refinancing first and then paying down the mortgage debt.

Once the mortgage rate is reduced commense paying down at a more rapid rate. Use the extra funds saved to improve your investment portfolio.

Rising Rates Seen Cutting Home Sales Record

While home purchasing, home refinancing and equity loans were at modest levels, home sales across the nation reached record setting levels in 2004. But rising interest rates will result in fewer new mortgages and fewer homes sold in 2005.



How will this impact loan application figures? According to Interest.com a national mortgage group predicted that loan originations and sales will still remain near record highs. That said home owners will still be rushing into the market for low rate refinancing products in an effort to lower mortgage interest rates, reduce monthly mortgage payments and save if possible thousands of dollars over the life of the loan.



The tempting factor is the offer to take on a cash out refinancing loan. Cashing in can put the borrower in a better financial position so long as some of the funds are invested in a program that results in a good stead return.

Large Percentage Not Shopping Refinance Rates

I am completed floored to find in my research that so many are not bothering to shop interest rates.



Obviosuly there is a common thread when comparing the reasons for this oversight.

I came up with three basics

1. Low credit score jidders

2. Poor negotiation skills

3. Credit card mentality


So what does it all mean?

1. Low credit score jidders: Many loan applications don't bother to consider their credit score as they were not taught to put emphasis on credit standing as a means to get the stuff they want. Perhaps inexperience and the ability to into the family treasury left them ignorant of the need to build up good personal credit standing. Now out on ones own your asked to face yourself in the mirror. Not seeing what you like you fail to negotiate other factors.


2. Poor negotiation skills: Ones credit score should be a cause of concern. But all too often when one is self-conscious about his or her credit standing the option to negotiate rates seems out of reach. Add to this fact that many never learned how to negotiate or put themselves in postion for a more successful loan agreement.


3. Credit card mentality: Another factor is that many who have opted for rather high credit card rates may do the same when seeking a loan. Some don't realize that there is a such thing as a 5.7% fixed rate loan for life.

If You're Going To Cash Out Invest Something

I read an article this week that attributed the borrowing frenzy of the early 2000's to low interent rates. But the key condition that drove this borrowing frenzy was that Fed policy had pushed the rates for new mortgages substantially below the rates of existing mortgages, making refinancing highly attractive.

That said refinancing accounted for over 50% of mortgage applications from 2001 to 2003.

Freddie Mac, said that "cash out" transactions accounted for about 50% of refinancing activity in 2001. That's a lot of cash!

Interestingly many homeowners seeking cash were refinancing with little rate incentive. These characteriscally took out much larger loans. Their main incentive seemed to be tapping into their equity for the purpose of debt consolidation. That's all fine and good. Or was it?

Sure should have to watch there debt appreciates faster than their home. Slay the dragon before it completely consumes you only seems to make sense. But when borrowing for the purpose of getting cash out one should also think in terms of creating a vehicle that brings in a steady return on the very dollar borrowed.

If you must borrow against your house which is a risk in itself, by all means make some of that cash work for you. Here are some ideas.


1. Invest in real estate property (get the grants - tax advantages and all the perks to go)

2. Start a simple but lucrative small business (low overhead essential)

3. Invest in your education - get another degree or some form of certification

4. Invest in stocks - (buy low sell high)

5. Remember that many forms of investment and self improvement come with tax deduction advantages.

That said when the chips are down and you need to draw from a second income to pay a bill or save your house... Boom! Your ready and able.

Rate Hike Leaves Refinancing Rates Low And Steady

The Federal Reserve on Wednesday raised interest rates for the sixth time since last June, as policy-makers continued their efforts to make sure a strengthening economy does not trigger unwanted inflation.

Short-term interest rates to 2.5 percent -- an increase of 25 basis points

Applications Rise
The Market Composite Index, an overall measure of mortgage applications, rose from 658.1 to 706.4 on a seasonally adjusted basis during the week ended Jan. 28, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Wednesday's Fed move allowed Treasury yields to remain steady and mortgage rates followed their lead.Home refinancing gains full sway as homeowners prepare for home maintenance projects, remodeling, landscaping vacation season. Interest rates for home refinancing are at a significant low.

Borrowers are cautioned to think twice regarding using the equity in the home to payoff unsecured debt. If you truly cannot afford the it or their is significant risk you could be heading in the direction of foreclosure. That said consider another route. Invest 50% of the funds in something that will bring in a return of income. Opt for a less risky loan deal. Reduce the risk and save your home.

Refinancing and Todays Foreclosure Issues

15-year, fixed-rate mortgages, a popular option for refinancing, dipped. Refinancing averaged 46 percent of all mortgage applications. Fixed 30-year mortgage rates averaged 5.58 percent last week, excluding fees, down 6 basis points from 5.64 percent the previous week.



Consumers opted for mortgage refinancing to lower monthly payments while reducing current interest rates. Many opted to get cash back. This option can add a significant financial burden if the borrower becomes strapped with more debt. Borrowers are encouraged to reduce the risks associated with increased debt such as losing their homes.



Foreclosures have increased 43% largely due to taking on too much credit card and mortgage-related debt. For those seeking to avoid or stop foreclosure The Mortgage Loan Search Financial Network provides detailed information and access to resources than can help. Read the 6 Steps to Stopping Foreclosure at http://www.bcpl.net/~ibcnet/

Rates Dip - Money Saved

The Mortgage Loan Search Financial Network reports an increase in mortgage refinancing over the past three business days.


Applicants are seeking to lower monthly payments, reduce current interest rates with a view to saving money over the life of the loan and get cash back .


15-year, fixed-rate mortgages, a popular option for refinancing, dipped. Refinancing made up 46% of all mortgage applications.


Despite a decline in mortgage rates to the lowest level in several months. Fixed 30-year mortgage rates averaged 5.58 percent last week, excluding fees, down 6 basis points from 5.64 percent the previous week.


Consumers are cautioned to watch out for heavy fees and avoid more debt than the budget can handle when opting for cash out refinancing loans. Home foreclosures are on the increase due to borrowers taking on too much cash.


Still ones interest rate and monthly mortgage payments can be a good way to save money for a rainy day.

Rates Drop Approvals Jump

Mortgage rates drop today while mortgage application approval rises. While new homes sales for December came in far below expectations the year ends with record sales for new homes.


Federal Reserve policy-makers are likely to keep bumping up short-term interest rates this year, a defense against an inflation flare-up now that the economic expansion is on firm footing. Experts predict a quarter-point, short-term interest rate hike tomorrow by the Federal Reserve.

Bad Advise Regarding Shopping Mortgage Rates.

Bad Advise regarding Shopping Mortgage rates.



I recently read an article that started off saying that encourage a person contemplating home financing to shop rates is bad advise. Say What? When you consider that recently overnight rates dipped and that 30 year fixed-rate mortgage averaged 5.67 percent in the week ended Jan. 20, down from last week when it averaged 5.74 percent, I say keeping an eye on rates is a big deal. Shopping rates means becoming aware of what the current rates actually are.



True bad advice is easy to give. But When a very popular MSNBC financial expert wrote an article, published in Yahoo's financial section, which implied if your FICO score is lower than 600, you can expect to pay an extremely high rate of interest on your mortgage, well the truth is the truth. Just don't settle for it.



I do appreciate the writers point saying if you have challenged credit, don't let any "professional advise giver" imply, that you can expect to pay a 9% interest rate on your mortgage. But rate watching is essential to finding a good deal.



The writer goes on to say that little pre application work, you can in fact have a 500 to 600 FICO score and get just as nice an interest rate as someone with a 680 to 750 FICO score on a standard 30-year conventional fixed loan.



But here is the contradiction. He adds that 50% of higher interest rate home buyers could have qualified for a lower interest rate conventional loan product. What? Now we're back to shopping rates? Yes we are.


Your wrap up tells it all. You say to credit challenged home buyers, you can use the FHA loan program to buy your home for far less than any alternative loan program available. Your closing costs typically will be higher, however, your rate will be equal to the prevailing conventional mortgage rate. Here you imply that one should by all means compare rates to what is on the market.



You even go so far as to say opt to pay higer closing costs to get you hands on lower rates. Good advice but what a contradiction. You say shopping rates is a bad idea yet your whole focus is on buying a lower rate.



Folks, focus on your rates and do whatever it takes to get a good one.

Where Are Mortgage Rates Headed

Overnight and into the early morning mortgage rates should hold at their lower levels.



a Fed official said that while the Committee depends on economic data for guidance, he believes that accommodation can be removed slowly, which is "Fed speak" for gradual rate increases.



The Federal Reserve's accommodative monetary policy is generating "excessive risk-taking" in the financial markets and possibly fueling speculative demand for single homes and condominiums, according to some members of the Fed's interest rate-setting group.



The Market Composite Index, an overall measure of mortgage applications, fell from 677.4 to 605.7 on a seasonally adjusted basis during the holiday week ended Dec. 31, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.