Mortgage second

Mortgage Rates This Week: A Ton Of Potential Economic Influences

This week brings us a lot of news that can potentially influence mortgage rate movement. The Existing Home Sales report from January will be posted tomorrow. This is one of the lesser important reports of the week, believe it or not, along with Wednesday’s New Home Sales report. They measure housing sector strength and mortgage credit demand, but usually do not have a significant impact on bond trading or mortgage rates.

The first potentially influential report will be released Tuesday morning when the Labor Department’s Producer Price Index (PPI) for January is announced. This factor measures inflationary pressures at the producer level of the economy. There are two pieces of the report that are watched; the overall reading and the core data reading. The core data is more important to the market because it does not include more volatile food and energy prices. If it shows stiffly rising prices, fears of inflation will likely rise, hurting bond prices and leading to higher mortgage rates on Tuesday morning. But, a smaller than expected increase or better yet a decline in core prices would be good news for the bond market and mortgage rates. Analysts are expecting to show a increase of 0.3% in the overall reading and a 0.2% rise in the core data.

Also, Tuesday morning will bring us the release of February’s Consumer Confidence Index (CCI). This Conference Board index measures consumer confidence in their personal financial lives, giving a measurement of consumer willingness to spend. Since consumer spending makes up over two-thirds of the economy, this data is huge in terms of gauging economic activity. It is expected to show a decline in confidence from 87.9 in January to 82.5 this month.

Wednesday will bring us the Durable Goods Orders data from January. This report gives us an important measurement of manufacturing sector strength by monitoring orders at U.S. factories for items expected to last three or more years. A larger drop than the 4.0% that is expected would be good news for the bond market and mortgage rates. This data is very volatile from month to month, so large swings are actually quite normal!

Thursday morning will reveal the first of two revisions to the 4th Quarter GDP (Gross Domestic Product) reading. Forecasts are calling for a 0.8% reading, indicating that the economy was a bit stronger in the last quarter of the 2007 than most initially thought. It will be interesting to see where this figure falls and what its impact on the markets will be. Actually, higher levels of activity are bad news for the bond market (as I mention in almost every single one of my “what to expect in rates” or “how the Fed rate relates to mortgage rates” postings.

On Friday we will get two fairly significant reports. The first is January’s Personal Income and Outlays data, which gives us a measurement of consumer ability to spend and consumer spending habits. Current forecasts call for an increase in income of 0.2% while spending is expected to rise 0.2%. Larger increases would be negative for the bond market and could drive mortgage rates higher. Smaller than expected increases will probably push mortgage rates slightly lower Friday.

The last report coming out this week is the University of Michigan’s revision to their Consumer Sentiment Index for February. Current forecasts show the index revising slightly higher than previously thought. The preliminary reading was 69.6 and is now expected to stand at 70.0, indicating that consumer sentiment was stronger than previously thought. This index is important because it helps us measure consumer confidence.

So, look for plenty of movement in bond prices and mortgage rates this week! I think we will see the most movement on Tuesday and/or Wednesday, but any of this week’s reports can cause movement in rates. Don’t forget, stay in touch with your trusted mortgage broker this week if you have a deal pending, and as always, if you are buying or selling a home, don’t go it alone, be sensible and smart, use a trusted Realtor®!

By: Jamie Woods

If you are shopping for a mortgage it is important to understand the Good Faith Estimate mortgage lenders are required to provide you. This estimate will allow you to compare loan offers from a variety of mortgage lenders. The Good Faith Estimate will help you make an informed decision as to which mortgage offer is best for you; here is what you need to know about the Good Faith Estimate.

Mortgage lenders are required by law to provide you a standardized form known as the Good Faith Estimate three days after receiving your application. The Good Faith Estimate outlines all costs and fees associated with the mortgage you are applying for. Never commit to a mortgage without carefully reviewing the Good Faith Estimate.

This form is useful as it allows you to comparison shop mortgage offers based on fees lenders charge. The form can be confusing for the initiated; here are things you should consider using the Good Faith Estimate when shopping for a mortgage.

Points

The Good Faith Estimate will list any discount points the lender requires at closing. Make sure you are getting something in exchange for paying points; Points are generally paid up front in exchange for a lower interest rate. The conditions for the required points should be clearly outlined by the lender.

Interest Rate and Lender Fees

Your interest rate should be clearly explained on the Good Faith Estimate. This should have the actual interest rate, not just the introductory rate. If you are applying for an adjustable rate mortgage it should also outline the timeframe your lender will use when adjusting the interest rate and whatever caps are included.

Title Fees, Escrow, and Closing Costs

The closings costs include any escrow fees, title insurance and search, and taxes should be itemized on your Good Faith Estimate. Pay close attention to closing costs as these are subject to negotiation and vary form one lender to the next. If your title insurance is less than five years old you might save money by having the policy reissued; contact your title insurer to find out if this is a possibility. Shopping around for title insurance could also net you a lower price.

While the Good Faith Estimate is an excellent way to compare fees from various loan offers, it is still an estimate; these fees could go up at closing. To learn more about shopping for the best mortgage loan and avoiding common homeowner mistakes, register for a free mortgage guidebook.

By: Louie Latour

Based on interest rates, Atlanta Mortgages can be divided into two types namely fixed rate and adjustable rate loan. In the case of a fixed rate loan, a monthly payment including the principal and the interest will never change for the duration of the loan.

These types of mortgages are available for different maturity periods ranging from biweekly to 30-year. The rate of interest also increases with the increase in the maturity period of the loan.

Adjustable rate mortgages offer an introductory rate of interest in the beginning for a fixed time period and later an adjusted rate based on the market index rate. The rates of interest of these mortgages fluctuate with market rates of interest on securities like the six-month Certificate of Deposit (CD), the one-year Treasury Security or others. Adjustable rate mortgages have a lifetime cap which protects the borrower from the monthly payment going too high too fast. The interest payments under adjustable rate mortgages are lower than those under fixed rate mortgages.

In Atlanta, mortgage rates differ throughout the city-and throughout Georgia. Generally rates range from 4 to 6 percent. For instance, the 30-year mortgage holds an interest rate of 5.3 percent in the case of Metro Atlanta’s best home mortgages. A borrower can find plenty of useful information via online research directories.

A mortgage calculator gives you an idea as to how much a borrower has to pay every month for a home loan. Information required for using the mortgage calculator are the amount of the loan, the expected interest rate, which is an estimate based on current interest rates, and the period of loan.

By: Jimmy Sturo