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12.08.2009

Your Rights under Fair Credit Reporting Act (FCRA)

Your Credit Rights

Key Rights Contained in the Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) is a federal law that regulates how credit reporting agencies use your information. Enacted in 1970 and substantially amended in the late 1990s and again in 2003, the FCRA restricts who has access to your sensitive credit information and how that information can be used.

We can help call 1-800-792-0068 770-792-7979 ext 611

Summary of Rights

The FCRA is a complex piece of legislation and contains numerous provisions not discussed on this page. Below are several important features of how the FCRA that are designed to help consumers (for the complete text, visit the Federal Trade Commission). The FCRA protects you by ensuring that credit reporting agencies:

Disclose your credit report to you upon request. Credit reporting agencies must give you the information in your file if you ask for it and provide the agency with proper identification. See "To Receive Your Credit Report" below for more information.

Limit access to your information. A credit reporting company may not provide your credit report to any party that lacks a permissible purpose, such as the evaluation of an application for a loan, credit, service, or employment. Permissible purposes also include several business and legal uses. For details, see the FCRA.

Get your consent before providing your information to an employer. An agency may not give your credit information to an employer or potential employer unless you first give that employer written permission to request your credit.

Investigate disputed information. If you tell a credit reporting company that your file contains inaccurate information, the agency must promptly investigate the matter with the source that provided the information. If the investigation fails to resolve the dispute, you may add a statement explaining the matter to your credit file. For more information, see Correcting Errors in Your Report.

Correct or delete inaccurate information. A credit reporting company must correct or, as the case may be, delete from your credit file the information that is found to be inaccurate or can no longer be verified from your credit file. The credit reporting company is not required to remove accurate data from your file unless it is outdated or cannot be verified.

Delete outdated information. In general, negative information that is more than 7 years old (10 years for bankruptcies) must be removed from your file.

Remove your name from marketing lists upon request. Creditors and insurers may share information in your credit file with marketers who send you unsolicited offers. To request that the three credit reporting agencies not share your information with marketers, call 888-567-8688.

Disclose your credit score to you upon request. For a fee, you may get your credit score. In some mortgage transactions, you will get credit score information without charge. See "To Obtain Your Credit Score" below for more information.

Add identity theft and active duty alerts. Identity theft victims may place fraud alerts and active duty military personnel serving away from their regular duty station may place "active duty" alerts to help prevent identity theft.

Remedying the Effects of Identity Theft. If you are, or believe that you are, the victim of identity theft, you have specific rights under the FCRA. These rights will help you deal with the effects of identity theft. Click here to view a brief summary of the rights designed to help you recover from identity theft.

To Receive Your Credit Report

This chart outlines fees by state for requesting one or more copies of your credit file within one calendar year (unless otherwise stated).

State Free Fees

California

$ 8.00

Colorado 1 per calendar year $ 8.00

Connecticut

$ 5.00 for the first report , $ 7.50 for each additional report within 12 months

Georgia 2 per calendar $ 11.00

Maine 1 within 12 months $ 5.00

Maryland 1 within 12 months $ 5.00

Massachusetts 1 per calendar year $ 8.00

Minnesota

$ 3.00 for the first report, $ 11.00 for each additional report within 12 months

Montana

$ 8.50

New Jersey 1 within 12 months $ 8.00

US Virgin Islands

$ 1.00

Vermont 1 within 12 months $ 7.50

All other states

$ 11.00

*Unemployed 1 within 12 months

*Welfare 1 within 12 months

You are entitled to one free report during any 12-month period no matter where you live, if you:

Are unemployed and intend to apply for employment in the next 60 days

Are on public welfare assistance

Believe your file contains inaccurate information due to fraud

You are also entitled to a free report if you have received notice of an adverse decision (such as denial of credit, insurance, or employment) within the past 60 days

To receive your free Equifax credit report:

Visit www.equifax.com/fcra (This is the quickest and easiest way to gain instant access to your credit report)

Call 800-685-1111 -OR-

Write to:

Equifax Information Services

P.O. Box 740241

Atlanta, GA 30374

When requesting a credit report by mail, be sure to include your full name, current address, Social Security Number, and most recent former address for file-matching purposes. Also include a personal check made payable to Equifax Information Services LLC, based on the state rates above.

For immediate access to your online Equifax Credit Report™ Click here. A $11.00 service fee may apply.

Under the FACT Act amendments to the Fair Credit Reporting Act you are entitled to one free credit report disclosure in a 12 month period. To request this free annual disclosure you must contact the Central Source. To contact the Central Source on-line, please click here to www.annualcreditreport.com. You can also contact the Central Source to request this free annual disclosure by calling toll free (877) FACTACT or by using the mail request form available at the central source website by clicking the following link www.annualcreditreport.com

To Obtain Your Credit Score

By law, you are entitled to obtain your credit score. There is a fee of $7.95 to obtain your credit score from Equifax Information Services. To request your credit score, please contact:

Equifax Information Services LLC

PO Box 105252

Atlanta, GA 30348

or call 1-877-SCORE-11

If you are in the process of obtaining a mortgage, you may be entitled to free credit score information. Contact the person making or arranging your loan for further information.

Remedying the Effects of Identity Theft

Remedying the Effects of Identity Theft

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How To Increase Your 2009 Mortgage Interest Tax Deduction

Posted: 08 Dec 2009 06:45 AM PST

Mail your January 2009 mortgage payment in December 2008 to get an extra tax deduction For many American homeowners, interest paid on a mortgage is tax-deductible in the year in which it was paid.

Knowing that, eligible homeowners can increase their 2009 tax deductions just by making their January 2010 mortgage payment before the end of the year.

By paying in 2009, the mortgage interest paid can be applied against 2009's itemized tax deductions even though the payment isn't technically due until 2010.

It can reduce your tax burden come Thursday, April 15, 2010.

And lest you think you're paying the mortgage "in advance", remember that mortgage interest is paid in arrears; a payment due January 1 accounts for interest that accumulated in December 2009 anyway.

Tax planning is a complicated issue and not all homeowners qualify for mortgage interest tax deductions. Check with your tax professional before making tax planning decisions.

If you don't have an accountant you trust, call or email me anytime; I'm happy to make a recommendation to you.

12.07.2009

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What's Ahead For Mortgage Rates This Week : December 7, 2009

Posted: 07 Dec 2009 06:45 AM PST

Unemployment Rate December 2006-November 2009 Mortgage markets finally reversed course last week, selling off with fury and causing prices to plummet.

When bonds prices fall, rates rise.

The action broke a multi-week winning streak, much to the disappointment of rate shoppers everywhere. Rate hikes came in stages.

First, early in the week, mortgage bonds fell out of favor as traders booked profits ahead of the November jobs report and as concerns over a Dubai Default waned.

Then, on Friday, when the jobs report was ultimately released, it showed a net loss of just 11,000 jobs in November and dip in the Unemployment Rate to 10.0 percent.

Mortgage markets got hit again.

Now, since bottoming last Monday, mortgage pricing is worse by more than 100 basis points. As that figure relates to rates, it's a jump of anywhere from a quarter- to a half-percent.

Last week was a bad week to not be locked in. Unfortunately, this week may not be much better.

Without much data due for release, momentum should lead mortgage rates higher. Amid a few confidence surveys and a speech by Fed Chairman Bernanke, the biggest news on the week will be Friday's Retail Sales report.

Retail Sales matters to mortgage rates because consumer spending accounts for two-thirds of the economy. And now, with jobs data looking stronger, Retail Sales are expected to show a modest increase versus last month.

If the data comes in better-than-expected, mortgage rates should rise -- much like they did on the jobs data. On the other hand, if the data is weak, expect rates to retreat.

So far this season, Holiday Shopping has been mixed.

Mortgage rates tend to rise faster than they fall so if your homebuying or refinance needs are immediate, it may be prudent to lock your rate rather than to wait and see what happens with the economy and this week's momentum.

Despite getting worse last week, mortgage rates are still very low.

12.04.2009

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Falling Unemployment Rate Leads To Higher Mortgage Rates Today

Posted: 04 Dec 2009 06:56 AM PST

Non-Farm Payrolls November 2009 This morning's jobs report is causing mortgage rates to rise, capping a week during which rates have already jumped 3/8 percent off all-time lows.

The government's November Non-Farm Payrolls report reinforced the notion that the recession is nearly over, if not over already.

Just 11,000 jobs were lost last month -- much fewer than analysts had expected -- as the Unemployment Rate fell to 10.0%.

If it seems strange to be talking economic recovery while Americans are still losing jobs -- 7.2 million since 2008 -- remember that data always needs context.

See, analysts view employment figures as a lagging indicator for the economy. This is because business owners tend to make hiring decisions based on how business has been -- not on how it will be at some point in the future.

The jobs report rarely reflects the "right now". As an example, job loss peaked in January 2009 -- 4 months after the height of the financial crisis.

We saw the same pattern during the Recession of 2001.

According to government data, during the last recession, job loss peaked in October 2001 but the recession ended the very next month. It wasn't until October 2002 that employment went net positive on a monthly basis.

And this is why investors are cheering November's jobs report. Better-than-expected numbers and a falling Unemployment Rate show that the economy is improving.

Unfortunately for rate shoppers, better-than-expected data is pushing mortgage rates higher. Rates are expected to open 0.250% higher versus yesterday's close.

12.03.2009

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Store Credit Cards : The Hidden Cost Of "Instant Savings"

Posted: 03 Dec 2009 06:45 AM PST

Credit Score makeup 'Tis the season to do shopping -- and get bombarded with offers to open credit cards.

The deals are tempting, too. "Open a charge card today" and save up to 20% on your purchase. Considering that the average Black Friday ticket was $343, that's $68 saved per store.

For big-ticket items like televisions, the savings are even bigger.

But for people in the market for a new home -- or looking to refinance -- taking advantage of in-store savings could be a long-term money loser.

Every time you apply for a credit card, your credit score drops.

According to myFICO.com, "new credit" accounts for 85 out of 850 possible credit scoring points. New credit is defined by such traits as:

Number of recently opened accounts
Number of recent credit inquiries
Time since credit inquiry(s)
Proportion of accounts that are recently opened to all open accounts

Shoppers with few open credit cards are more likely to see their scores drop that shoppers with many cards.

Regardless, a credit score is worth protecting because of how mortgage rates are made. A conventional mortgage applicant with 20% equity whose FICO is 720-739 will be offered rates 0.125% higher than a comparable applicant at 740.

For 700-719, the rate increases by 0.375%
For 680-699, the rate increases by 0.750%
For 660-679, the rate increases by 1.250%

Having a low credit score can be expensive.

It is okay to take advantage of in-store savings during the holiday shopping season, but it's also important to be aware of how your credit score may be affected.

If you're not applying for a mortgage in the next six months, you'll likely be alright. But, on the other hand, if you know you'll need your FICO soon, consider whether saving 15 percent on a $343 ticket is worth the long-term cost of a higher mortgage rate.

12.02.2009

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Pending Home Sales Data Forecasts Higher Home Values Next Month

Posted: 02 Dec 2009 06:45 AM PST

Pending Home Sales Index October 2009 When a home seller accepts a contract on an MLS-listed property, the property's status changes from "Active" to "Pending".

This means the home is scheduled to sell, but not yet sold.

Each month, the National Association of Realtors® tallies the number of pending homes and publishes the data as the Pending Homes Sales Index report.

In October, for the 9th straight month, the index gained. It's the longest such streak in Pending Home Sales history.

Because a "pending" home sale is just a contract between buyer and seller, it's not as important to the economy as actual home sales. However, the Pending Home Sales Index can be a fine predictor of future activity.

Historically, 80 percent of homes under contract "close" within 60 days, and most others close within 120 days. Recent Existing Home Sales data corroborates this. Home sales activity is at its highest pace in nearly 3 years.

The Pending Home Sales Index does have some shortcomings, though:

It doesn't account for newly constructed homes, a small but important part of the real estate market
It doesn't track For Sale By Owner properties and other non-MLS listed homes
Its sample set is small, measuring just 20 percent of all MLS-listed sales

Despite this, however, Pending Home Sales is a terrific measure of real estate market strength. Homes are going under contract at a dizzying pace. It's thinning out home inventory supplies and pressuring prices to rise.

This chain reaction is what makes Pending Home Sales Index worth tracking. As the number of homes under contract increase, home prices can't be far behind.

12.01.2009

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New Home Supplies Plummet, Pressuring Home Prices Higher

Posted: 01 Dec 2009 06:45 AM PST

New Home Supply October 2009

The supply of newly-built homes fell to its lowest levels since 2006, offering additional proof of a housing market in recovery.

Home supply is defined as the amount of time it would take to sell the current inventory of homes at the current pace of sales.

In October, for the 8th consecutive month, home supplies fell. Since peaking in January 2009, it's now down by almost half.

Lower supply leads to higher prices. This is Economics 101.

Furthermore, supply is expected fall into 2010. According to the government, builders are breaking ground on new homes at a declining pace, even as sales ramp up.

Builders are cheering the October New Home Sales report, but its the everyday sellers of "existing homes" that have real reason to celebrate.

See, as builders clear out their respective inventories and turn profitable, there's less reason for them to offer the types of over-the-top purchase incentives that characterized the last 12 months of selling.

With fewer builder incentives, the playing field levels between large corporations and individual home sellers.

And while this is happening, buyers are eagerly taking advantage of low mortgage rates and federal tax credits for buying homes. It's pressuring home prices higher overall.

Since January 2009, the average sale price of a newly-built home is up 6 percent.

11.30.2009

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What's Ahead For Mortgage Rates This Week : November 30, 2009

Posted: 30 Nov 2009 06:45 AM PST

Jobs are in focus this week Mortgage markets improved last week on stronger-than-expected economic data and safe haven buying.

The holiday-shortened trading week amplified what should have been modest gains into large ones.

Conforming mortgage rates dropped by about a quarter-percent last week, dropping them near their best levels of the year -- and of all-time.

Oddly, mortgage rates are falling as the U.S. dollar weakens. This is atypical because mortgage bonds are repaid in U.S. dollars. When the value of the dollar is falling, therefore, the value of holding mortgage bonds become less over time.

Investors are snapping up bonds with fury, however. Partially because of lingering concerns related to Dubai, and partially because of faith in the U.S. economy's long-term health.

This week, those beliefs could be shaken to the core -- specifically because of Friday's jobs report.

It's no secret that the economy is growing. Housing is improving, banks are re-capitalizing, and businesses are making capital investment. However, employment is lagging.

More than 4 million jobs have been lost this year and the unemployment rate is north of 10 percent for the first time since 1983. Consumers are worried for their jobs and are guarding their wallets the holiday season as a result.

The economy can't grow without consumer spending, though, and that's why Friday's job figures will play an especially large role in mortgage markets. If employment data goes positive, stock markets will rally at the expense of mortgage rates.

Conversely, if data looks worse, mortgage rates should dip.

Either way, it's a gamble. If you haven't looked at the benefits of a refinance lately, waiting until Friday to see what happens may be ill-advised. This is because the last two times mortgage rates fell this low, markets corrected within 48 hours, sending rates soaring higher.

Rates look good today. Consider locking something in before rates have reason to rise.

11.27.2009

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One Reason Why Mortgage Rates Are Back To All-Time Lows

Posted: 27 Nov 2009 06:55 AM PST

FOMC Minutes November 3-4 2009 Home affordability improved this week after the Federal Reserve released its November 3-4, 2009 meeting minutes.

The FOMC Minutes is a companion to the Federal Reserve's post-meeting press release. It's released 3 weeks after the Fed adjourns and details the internal debates that shape our nation's monetary policy.

As compared to the press release, the minutes can be rather lengthy. November's press release featured 428 words, the minutes offered 6531.

However, this extra level of detail shapes markets and mortgage rates. With Wall Street unsure about the economy's path, investors look to our nation's central bankers for guidance.

The Fed has made several points clear:

The economy shows tell-tale signs of improvement
Unemployment threatens the recovery
Inflation pressures are low, for now

Overall, the FOMC Minutes paint the economy as in a state of measured repair, and under tight federal surveillance. Investors like this message and, as a result, stock and bonds markets are improving.

If you haven't checked mortgage rates lately, make a point to do that. In the wake of the FOMC Minutes, conforming mortgage rates are now hovering near their all-time lows set exactly 1 year ago.

11.25.2009

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The Home Price Index Shows Home Values Increasing. Case-Shiller Agrees.

Posted: 25 Nov 2009 06:45 AM PST

Home Price Index October 2009 It's official -- home prices are no longer in free fall.

According to the Federal Housing Finance Agency, the Home Price Index posted its first quarterly increase since 2007 last quarter.

The news was reported Tuesday.

The Home Price Index is an interesting metric. It's huge in its scope, accounting for every home sold in the country that backs a mortgage bound for Fannie Mae or Freddie Mac with two notable exceptions:

It doesn't track new construction
It doesn't track multi-unit homes

Because the Home Price Index makes these specific exclusions, and because it doesn't account for FHA and jumbo mortgages, some analysts discount the HPI's relevance. They prefer the private-sector Case-Shiller Index instead.

Now, to be fair, the Case-Shiller has its own set of flaws, too.

For example, it excludes condos and co-ops, and only tracks sales in 20 cities nationwide. But, of all the private home valuation models, Case-Shiller is the most well-known and most widely-used.

The Case-Schiller Index was also released Tuesday and the report showed the same results as its government-issued counterpart -- home values increased between the second and third quarter.

When the Home Price Index and Case-Shiller Index reach similar conclusions, markets tend to buy-in. Home buyers should, too.

Home values have likely bottomed and are starting to turn higher, as shown in two separate reports. High sales volume and dwindling supply are contributing factors. So are low mortgage rates and a tax credit.

If you're on the fence about buying a home, at least consider your options. In 2010, homes are unlikely to be as cheap to buy, or as cheap to finance.

11.24.2009

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Existing Home Sales Blow Past Expectations

Posted: 24 Nov 2009 06:45 AM PST

Existing Home Sales October 2009

Another month, another piece of evidence that the housing market is in recovery.

Existing Home Sales surged in October as the nation's homebuyers took advantage of low mortgage rates, low list prices, and, for some, a generous tax credit.

Home resales are 23 percent higher versus a year ago and home supply is down to 7 months nationwide.

Inventory hasn't been this low since February 2007.

The news shouldn't be surprising, however. The same real estate trade group that produces the Existing Home Sales report also publishes a monthly report meant to predict future home sales called the Pending Home Sales Index.

Pending Home Sales have been through the roof since mid-May.

So, with pending home sales showing no signs of slowing and 80% of pendings turning into actual, closed sales, we can expect existing home sales volume to rise in the coming months, too. Especially because Congress extended the home buyer tax credit to include (1) "Move-up" buyers and, (2) Buyers with higher household incomes.

It's terrific news for home sellers. The housing market turnaround means higher sale prices and fewer concessions to buyers long-term.

To buyers, on the other hand, the news isn't so good. The window to find a "deal" appears to be closing quickly.

11.23.2009

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What's Ahead For Mortgage Rates This Week : November 23, 2009

Posted: 23 Nov 2009 06:45 AM PST

What drives mortgage rates this week Mortgage markets worsened last week on a mixed bag of economic data. Inflation data came in soft, but so did the start of the holiday shopping season.

For the first time in a month, mortgage rates worsened last week, adding roughly 0.125 percent on conforming fixed-rate products, and a little bit more on ARMs.

Despite rates worsening, there was still some good news for home buyers and would-be refinancers. Mortgage rate volatility was markedly lower than in recent weeks. You could shop for mortgage rate last week and actually take your time about it.

This is in stark contrast to the last month or so over which mortgage rates changed every few hours, on average.

This week, though, because a heavy data calendar is combining with a holiday-shortened trading week, rates aren't likely to stay as tame.

Monday: Existing Home Sales
Tuesday: Consumer Confidence, Home Price Index, Fed Minutes
Wednesday: New Home Sales, Personal Income and Outlays

Each of these data points are market-movers by themselves. In tandem, however, they could really shake things up. Then, at the tail end of the week, markets will react to Black Friday.

If stores look full Friday and initial receipts appear high, stock markets should rise at the expense of bonds, leading mortgage rates higher.

Additionally, expect that mortgage rate changes will be amplified because of low trading volume. This could work in your favor, or out of your favor -- depending on the market direction.

With mortgage rates at such low levels and unlikely to fall much further, locking a rate is advisable. If you choose to float, though, keep your loan officer on speed dial because when rates do rise, they're going to rise quickly.

11.21.2009

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Should You Consider A 15-Year Fixed Mortgage?

Posted: 20 Nov 2009 06:45 AM PST

Comparing 15-year mortgage rates to 30-year mortgage rates

For today's home buyers and homeowners that can manage the higher monthly payments, 15-year fixed rate mortgage rates look attractive as compared to comparable 30-year products.

The 15-year/30-year interest rate spread is near its 5-year high.

Despite lower rates, however, homeowners opting for a 15-year fixed mortgage should be prepared for its higher monthly payments. This is because the principal balance of a 15-year fixed is repaid in half the years as with a standard, 30-year amortizing product.

As compared to 30-year terms, 15-year products repay 3 times as much principal each month.

Versus a 30-year, 15-year fixed mortgages have a few downsides worth noting. The first is that, because 15-year mortgages are heavy on principal and light on interest, homeowners who itemize tax returns may have to claim a smaller mortgage interest tax deduction at tax time.

Another negative is that the sheer size of the payment. If you run into fiscal trouble down the road, the only way to reduce the monthly obligation is to refinance into a 30-year product and that costs money to do.

In other words, be sure you can manage the payments over the long-term before you opt for a 15-year term. If you can manage it, though, the rewards are tangible.

At today's rates, a 15-year fixed and 30-year fixed costs $230 extra per $100,000 borrowed.

11.19.2009

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Housing Starts Are Down And Why It's Terrific News For Sellers

Posted: 19 Nov 2009 05:13 AM PST

Housing Starts October 2009

A "Housing Start" is a home on which construction has started and, for the 4th straight month, national single-family housing starts held steady last month.

When the demand for homes grows faster than the number of homes for sale, prices increase.

As recent home sales data confirms, buyers currently outpace sellers and one consequence of this is an increase in multiple-offer situations this year.

It's no wonder home prices are up across so many neighborhoods.

October's Housing Starts report is yet another piece of housing data foreshadowing rising home prices into 2010.

Building Permits were also down in October, a potential demand-to-supply imbalance magnifier. Without permits, there's no future construction. This drains supply. Meanwhile, tax breaks and low rates tend to stimulate demand and, right now, we've got both.

Therefore, so long as demand remains semi-constant into the New Year, expect home prices to rise.

In many markets, they already are.

11.18.2009

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The 2010 Conforming Loan Limits

Posted: 18 Nov 2009 06:45 AM PST

Conforming loan limits since 1980

A conforming mortgage is one that, quite literally, conforms to the mortgage guidelines set forth by Fannie Mae or Freddie Mac.

Each year, the government sets the maximum allowable loan size for a conforming mortgage, based on "typical" housing costs nationwide.

Loans in excess of this amount are typically called "jumbo".

While home prices increased from 1980 to 2006, so did conforming loan limits. Since then, however, as home prices have dipped, the conforming loan limit has held.

Now, in 2010, for the 5th consecutive year, the government set $417,000 as the nation's conforming mortgage loan limit.

The 2010 conforming loan limits, as released by the government, are:

1-unit properties : $417,000
2-unit properties : $533,850
3-unit properties : $645,300
4-unit properties : $801,950

But conforming loan limits don't apply to all U.S. geographies equally. As a result of various economic stimuli since 2008, the government now considers certain regions around the country "high-cost" areas. In these areas, conforming loan limits can range to $729,750.

There are less than 200 such areas nationwide. The complete list is published on the Fannie Mae website.

11.17.2009

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Simple Real Estate Definitions : APR

Posted: 17 Nov 2009 06:46 AM PST

APR on Reg Z APR is an acronym for Annual Percentage Rate. It's a government-mandated calculation meant to simplify the comparison of mortgage options.

A loan's APR can always be found in the top-left corner of the Federal Truth-In-Lending Disclosure.

Because APR is expressed as a percentage, many people confuse it for the loan's interest rate. It's not. APR represents the total cost of borrowing over the life of a loan. "Interest rate" is the basis for monthly mortgage repayments.

The main advantage of APR is that it allows an "apples-to-apples" comparison between loan products.

As an example, a 5.000 percent mortgage with origination points and fees will almost certainly have a higher APR than a 5.500 percent mortgage with zero fees. In this sense, APR can help a borrower determine which loan is least costly long-term.

However, APR is not without its shortcomings.

First, different banks includes different fees into their APR calculations. By definition, this spoils APR as a choose-between-lenders, apples-to-apples comparison method.

And, second, when calculating APR, "life of the loan" is assumed to be full-term. When a 30-year mortgage pays off in 7 years or fewer -- as most of them do -- APR comparisons are rendered moot.

In other words, APR is just one metric to compare mortgages -- it's not the only metric. The best way to compare your mortgage options is to review all the loan terms together and determine which is most suitable.

11.16.2009

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What's Ahead For Mortgage Rates This Week : November 16, 2009

Posted: 16 Nov 2009 06:45 AM PST

University of Michigan Consumer Sentiment Mortgage markets improved last week as foreign buyers of mortgage debt helped to push mortgage rates to a 4-week low.

It marked the 3rd consecutive week that rates improved, breathing extra life into this year's ongoing Refi Boom.

Fixed-rate, conforming mortgage rates fell about 0.125 percent on the week. ARMs did about the same.

There wasn't much data to move mortgage rates last week; investors worked mostly on momentum and trends. However, the Friday University of Michigan Consumer Sentiment survey release garnered some attention.

After worsening in August and September, consumer sentiment fell for the third straight month in October. Analysts worry about what it could mean to the economy. Holiday Shopping season is here and consumer spending fuels the economy. If households hold the purse strings tight, our nation's budding economic recovery may stall.

In a scenario like that, employment rates won't rebound so fast, but rate shoppers might not mind. Slower-than-expected economic growth tends to suppress mortgage rates, helping to improve home affordability overall.

This week, data comes back into focus.

At 8:30 AM ET today, the government will release October's Retail Sales report. This one should be closely watched for its ability to change rates. A weak report should drag rates down, and a strong one should push rates up.

Then, on Tuesday and Wednesday, look for PPI and CPI -- two key inflation indices. Inflation causes mortgage rates to rise so if either of these reports comes in hotter-than-expected, rates will almost certainly rise.

And, lastly, also on Wednesday, we'll get the Housing Starts report for October. Don't expect the markets to move on this one, but keep an eye on the data anyway. Housing markets remain crucial to economic recovery.

Despite rates hovering near recent lows, remember that markets change quickly. A rate quote from the morning is rarely valid by the afternoon and, when rates rise, rates rise fast.