7 Percent Mortgage

Mortgage Rates Edge Down

Morty — Tue, 02 Sep 2008 23:37:14 +0000

Mortgage rates edged down over the long weekend with the 30-year fixed rate mortgage average slipping to near 6.25%. The jumbo and the 15-year fixed also edged down over the holiday weekend. As I mentioned previously, any ability to grab a mortgage when the national average is near 6% was a great opportunity. As things shore up for Fannie Mae and Freddie Mac, we may see a symbolic easing of the mortgage loan market.

Fannie and Freddie Secure Funding

Morty — Tue, 26 Aug 2008 01:55:59 +0000

Government sponsored entities Fannie Mae and Freddie Mac got a much needed boost today when they announced that they had sold $2 billion in short term loans. This should allow the two companies to continue to guarantee new loans and make money. Without the selling of debt, the two firms would remain in serious trouble as they are responsible for backing home loans / mortgages that continue to default at a significant rate.

Mortgage Rates End Week Up

Morty — Mon, 28 Jul 2008 00:50:50 +0000

Last week, mortgage rates ended up slightly with the 30 year fixed mortgage rates up 6 basis points to 6.39% and the 15 year fixed rate mortgage up 9 basis points to 5.95%. Some stability is coming back to the market and many believe that US interest rates will be going up to help curtail inflation from commodities like energy and corn.

Agency Mortgage Bonds Look Attractive

Morty — Mon, 21 Jul 2008 01:00:52 +0000

While the solvency of mortgage bond originators and large holders is/has been called into question lately, it seems as if the mortgage bond market is beginning to shore up. This is a good sign for real estate investors and with some confirmation may signify the overall bottom in the macro real estate markets. The well respected Aleph Blog has made this call along with others and I think this bodes well for us real estate investors.

Why Uncle Sam’s Bailout Helps Mortgage Holders

Morty — Tue, 15 Jul 2008 01:06:53 +0000

So Uncle Sam is going to move to save Fannie Mae and Freddie Mac. Super, sounds like another instance of an “avoided failure” among financial institutions. But everyone seems to be wondering, isn’t failure supposed to happen in market economies? Something of a moral hazard issue.

At least that’s what we hear. In general, despite being a real estate investor, I believe speculative investors and risky real estate investments must be punished with outright failure. Now some of that is definitely happening and what I hope is that more real estate investors now enter the game well capitalized with contingency for the same exact thing to happen again.

But alas, back to F&F. here we have an issue of something more than just moral hazard. Here we have a true crisis of confidence spurred last week when F&F bonds couldn’t attract a bid in their regularly scheduled auction for capital. The two institutions are about as sound as them come, under normal business circumstances. Odds are that the government will step in a make a bundle on their transaction. Paulson seems to want to use F&F to turn the Treasury into a government backed hedge fund and will likely profit handsomely off any purchase of F&F stock at depressed levels. The end game will help save the entire mortgage and real estate market from a cataclysmic depression.

Mortgage Rates Creep Down Last Week

Morty — Sun, 13 Jul 2008 15:04:19 +0000

In what amounts to a modicum of good news for real estate investors and homeowners, the 30-year fixed mortgage rate creeped back near my “take it” rate of 6% (using the national average, of course, local rates and credit score both affect rates significantly). The 30-year fixed rate mortgage end at 6.13%, down nearly 2% for the week. Nearly all points were down in the mortgage market, including the 15-year fixed and 30 year jumbo mortgage rates.

Dollar, Oil Move Despite Bernanke

Morty — Mon, 16 Jun 2008 19:32:55 +0000

Despite the latest hawkish tone that drove oil down and the dollar up last week, we’re seeing a new tone from analysts and traders who sent oil flying again on Monday. The dollar also retreated as many believe that the Fed cannot afford to raise rates, even by a quarter point before October. Mortgage rate markets have been little stirred by this news, but at times it takes a day or two to bake in these things making weekly trends better to follow. In any event, I stick by my 6% grab em if you can get em philosophy for the 30-year. Inflation is the beast that will need to be tamed in 2008 and the hawkish tone from the Fed will continue for the rest of the year, in my opinion. Again pay closest attention to the LIBOR rates.

Mortgage Rates in California

Morty — Thu, 12 Jun 2008 14:56:36 +0000

I have a lot of people email me and ask about what is going on in California with mortgage rates and the real estate market. Unfortunately, I do not have a great idea as to what is going on with the real estate market in California as I have been out of there for a few years now. Moreover, from what I do know about the real estate market there (for investors and a homeowners) is that you can never lump California together and make any type of generalizations. This is one of the biggest problems that I have with mainstream media when they discuss the credit crisis. I would recommend finding original content blogs (not splogs) that discuss the market, like this one that discusses the San Gabriel valley.

Mortgage Rates Going Back to 6%?

Morty — Wed, 11 Jun 2008 21:00:44 +0000

Anxious real estate investors are wondering whether or not they will get another chance to open up 30 year fixed mortgages at 6% or less. Last week the fixed ended at 5.98%, but the Fed’s recent tone of rising interest rates has led the rates to boom to 6.19% for a 30-year fixed mortgage.

Personally, I am not sure if we will see 6% before we see 7%. My advice is for someone waiting on investments is to take 6% if we see it again. Of course, I am using national benchmarks as rates vary by location and credit score, but my general thesis is that if rates fall, it offers a good opportunity for debtors as interest rates are likely to rise for the rest of 2008.

National Real Estate Investor?

Morty — Tue, 10 Jun 2008 18:17:55 +0000

There is a growing trend of ‘national’ real estate investing. This is something that I have been doing for years, not because I’m any type of genious, but out of necessity. Investors are turning to the national stage to invest as their local areas continue to search for a bottom or live in areas where credit remains incredibly tight and mortgage rates above average.

National investing can help you diversify your portfolio geographically and with the advent of technology is no longer a cost-intensive endeavor.

That said, I want to encourage people to begin following the oil and gas. What do I mean by that? Scope out areas that are due to come in line for massive oil and natural gas exploration. These areas have become some of the biggest real estate boom towns in the past and will continue to be so no matter what the downturn. An additional tip, take a look at the companies that are active in the area. The best real estate areas follow the best exploration and production companies. Since stocks are leading indicators, look up the recent stock price form confirmation on the potential success in the new development.