Massachusetts Mortgage Loans

The tax credit for first time home buyers and trade up home owners expires in less than 70 days.

If you are buying in Massachusetts and need a Massachusetts Mortgage call me today. 800-941-5616

According to the National Association of Realtors (NAR) pending home sales rose in June marking the fifth consecutive month of gains. This is an encouraging sign of life for the US housing market.

NAR says it's pending home sales index rose 3.6% to 94.6 from the upward revised reading of 91.3 in May.

The 94.6 was much higher than economist's expectations of 91.2.

When was the last time there were 5 consecutive months of gains with pending home sales? July 2003.

If you are considering purchasing a new home while prices remain low and mortgage rates are still near all time lows give me a call. we will determine the best mortgage loan that will meet your long and short term goals.

 Homebuyer tax credit of up to $8000 ending soon

On July 30th, 2009 the Mortgage Disclosure Improvement Act will become effective. The underlying initiative of the MDIA is to provide ample time for a borrower who makes a written application for a home mortgage to review a Truth In Lending Disclosure in advance of incurring any expenses, excluding reasonable credit report fees. The Truth In Lending Disclosure is better know as a TIL.

The Mortgage Disclosure Improvement Act has a major impact on the timing of the TIL that can effect the closing date of residential mortgage loans. The intention of this article is to help all parties of a purchase or refinance mortgage loan transaction understand how the MDIA can affect a closing date.

No fees, other than a credit report fee, may be paid by the consumer until after the consumer has received the initial TIL. The TIL is considered received by the consumer three business days after it has been mailed, not including the day of mailing, then the appraisal fee and any other up front fees may be collected for further processing of the loan application.

This is very important for the timing of a loan closing since an application must include income and asset verification at the time of signing a loan application for a TIL to be produced. Any delay of this information up front will likely affect the time necessary to order an appraisal to make the application complete for a timely closing.

Furthermore, if the Annual Percentage Rate (better known as the APR) should change prior to closing then a new TIL must be produced and a 3 day mail time and 3 day review time must be allotted to the consumer. Under this circumstance a closing can take place on the 7th business day from mailing. Some of the factors that could effect the APR changing from the initial TIL being issued is a consumer locking a rate after the application is made, (Example maybe the borrower changes from a loan with no points to paying points to lower the rate) any rate lock extension fees should a loan not meet the closing date anticipated at the time of the initial rate lock, and any closing agent fees that may change prior to closing.

Business days are defined as Monday through Saturday excluding federal holidays. As an example lets assume a loan application is made and a TIL is produced on a Monday. Tuesday would be day 1 of the 3 day mail time required. Friday would be the first day the appraisal and any other up front fees necessary for processing the loan application can be collected.

Here is another example and why it will be very important to consider all variables when locking a mortgage rate. The application is taken at 6PM on a Friday evening. Although we may be ale to send the application that night to the lender they are most likely not working on Saturday or Sunday to receive the application and send the TIL. The earliest the TIL would be created and sent would be Monday. Leaving 3 business days for the receipt of the TIL, the earliest possible day for ordering the appraisal would be the following Friday. One week has past since the time of application.

Star Mortgage is taking a proactive approach to the MDIA by suggesting to all consumers to make application on purchase transactions as early as possible, lock in the terms of their loan as early as possible, and requiring closing agents to provide preliminary HUD settlement statements at the time of the title order being placed by Star Mortgage that will list all their fees.

Knowing that not all transactions are alike, if all parties to a purchase or refinance transaction can understand the possible timing implications; my hope is that your loans will still continue to close as smoothly as you would expect them to.

Please feel free to call Jeff Drew at Star Mortgage at 1-800-941-5616 or email me at Jeff@StarMortgage.com should you need further clarification. Thank you for your continued business.

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened down slightly following early stock gains and a much stronger than expected manufacturing report. The stock markets are showing early strength with the Dow up 98 points and the Nasdaq up 38 points. The bond market is currently down 4/32, but we will likely still see an improvement of approximately .125 of a discount point in this morning’s mortgage rates due to gains late yesterday.

The Commerce Department reported this morning that Durable Goods Orders rose 1.8% last month. This was much stronger than the 0.9% decline that was expected and the third increase in orders out of the past four months. This indicates that manufacturing activity, at least in big-ticket items such as machinery, vehicles and electronics, is strengthening quicker than many had thought. This would be considered bad news for bonds and mortgage rates.

May’s New Home Sales was also released this morning, showing that sales of newly constructed homes fell slightly last month. Analysts were expecting to see a small increase in sales. However, this data only represents approximately 25% of all home sales, so its impact on trading and mortgage rates is usually minimal unless its results vary greatly from forecasts.

This week’s FOMC meeting will adjourn at 2:15 PM ET today. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting. But, market participants will be looking at the post-meeting statement for any hint of what and when the Fed’s next move may be. Look for an update to this report shortly after the markets have an opportunity to react to what the Fed says.

The only relevant economic data scheduled for release tomorrow is the final reading to the1st Quarter GDP and weekly unemployment claims. The GDP data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Last month’s first revision showed a 5.7% decline in the GDP. This month’s second and final revision is expected to show the same decline.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Links

Daily Mortgage Interest Rate Updates for Massachusetts

http://daily-mortgage-interest-rate-update.blogspot.com/

Massachusetts Mortgage Loans and Rates

http://massachusetts-mortgage-loans.blogspot.com/

Massachusetts Refinance Mortgage Loans

http://massachusetts-refinance-mortgage-loan.blogspot.com/

Massachusetts Mortgage Advice

http://massachusetts-mortgage-loan-advice.blogspot.com/

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week will likely prove to be very active in terms of mortgage rate movement due to the economic data and other events that are scheduled. There are six economic reports scheduled for release, but in addition to the data another Federal Open Market Committee (FOMC) meeting will be held and another round of Treasury sales are on the calendar. Together, we have the makings of a potentially volatile week in the financial and mortgage markets.

There is no relevant economic news scheduled for release tomorrow. Tuesday brings us the first data with the release of May’s Existing Home Sales report. The National Association of Realtors will give us figures on home resales. This data helps us measure housing sector strength and mortgage credit demand, but it is one of the week’s less important reports. It is expected to show an increase in sales from April to May. The only important release scheduled for Wednesday is May’s Durable Goods Orders, which gives us an indication of manufacturing sector strength. It is known to be quite volatile from month to month and is expected to show a decline of 0.5% in new orders from April to May. A larger decline would be the ideal scenario for the bond market and could lead to a decline in mortgage pricing Wednesday.

Also Wednesday is the release of May’s New Home Sales that is similar to Tuesday’s Existing Home Sales report. This report tells us how well sales of newly constructed homes were last month. It is also expected to show a rise in sales, but will likely not have much of an impact on mortgage rates because this data is considered to be of low importance to the markets. The FOMC meeting that begins Tuesday afternoon will adjourn Wednesday afternoon. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting. But, as we have seen so many times in the past, it is the post meeting statement that often creates the most volatility in the markets. They could give an opinion of the overall economy or inflation, hinting at a possible future move or lack of one. Statements like these could cause a knee-jerk reaction in the markets and possibly mortgage pricing Wednesday afternoon.

The only relevant economic data scheduled for release Thursday is the final reading to the1st Quarter GDP and weekly unemployment claims. The GDP data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Last month’s first revision showed a 5.7% decline in the GDP. This month’s second and final revision is expected to the same decline. May’s Personal Income and Outlays data will be posted Friday morning. This report gives us an indication of consumer ability to spend and current spending activity. Analysts are expecting to see an increase of 0.2% in income and a 0.4% rise in the spending portion of the report. Smaller than expected increases should be good news for the bond market and mortgage rates.

The second report of the day and the last important data of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. An upward revision would be considered a negative for bonds. Also worth noting is the fact that the Fed will be selling $104 billion in new debt this week. These sales may influence trading enough to affect mortgage rates. There are sales every day except Friday but the two most likely to affect rates are Wednesday and Thursday’s sales. If they are met with a strong demand, we could see bond prices rise some during afternoon trading. This could lead to afternoon improvements to mortgage rates. But, the sales draw a lackluster interest from investors, mortgage rates may move higher during afternoon trading.

Overall, tomorrow will likely be the quietest day of the week. The most active should be Wednesday due to the importance of the data and FOMC meeting. Friday’s news may also affect mortgage rates, but likely not as much as earlier days. This would definitely be a good week to maintain constant contact with your mortgage professional.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...
 ©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of a couple important pieces of economic data in addition to some moderately important reports. The first data is April's Personal Income and Outlays data at 8:30 AM tomorrow. This report gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.2% decline in income and spending. Weaker readings would be considered good news for bonds and mortgage rates.

The Institute for Supply Management’s (ISM) manufacturing index will be posted late tomorrow morning. This highly important index measures manufacturer sentiment. A reading below 50 means that more surveyed manufacturing executives felt that business worsened during the month than those who felt it had improved. Analysts are expecting to see a 42.0 reading in this month's release, meaning that sentiment strengthened slightly during May. A smaller reading will be good news for the bond market and mortgage shoppers while an unexpected increase could contribute to higher mortgage rates tomorrow. There is no relevant data due to be posted Tuesday, but Wednesday has two reports scheduled for release. The first and possibly the only relevant news is the Commerce Department’s release of April's Factory Orders data late morning. This manufacturing sector report is similar to last week's Durable Goods Orders release, but also includes orders for non-durable goods. It can cause some movement in the financial markets if it varies from forecasts by a wide margin, but it isn’t expected to cause much change in rates this month. Current forecasts are expecting to see an increase in orders of 0.3%.

The second report of the day may have a noticeable impact on the markets or be a non-factor depending on its results. The Institute for Supply Management will release its services index late Wednesday morning. It is expected to show a reading of 45.0, with the same principals as Monday’s manufacturing index. If this reading varies greatly from forecasts, we may see volatility in the markets and mortgage rates. However, if its results are in the general area of expectations, it will likely have no influence on the markets and mortgage pricing.

The revised 1st Quarter Productivity and Costs report will be released Thursday morning. This data measures employee output and employer costs for wages and benefits. It is considered to be a measurement of wage inflation. It is believed that the economy can grow with low inflationary pressures when productivity is high. Last month’s preliminary reading revealed a 0.8% rate, but I don’t think this piece of data will have much of an impact on the bond market or mortgage pricing unless it varies greatly from its forecasted revised reading of 1.2%.

Friday’s sole report is arguably the single most important report that we see each month. The Labor Department will post May's Employment data early Friday morning. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate climb to 9.2% with approximately 550,000 jobs lost during the month. A higher than expected increase in the unemployment rate and a larger drop in payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates Friday. However, stronger than expected numbers may lead to a spike in mortgage rates Friday.

Overall, tomorrow or Friday are likely to be the most important days of the week as they bring us the two most important reports on the agenda. If they give us weaker than expected results, we will probably close the week with lower mortgage rates than tomorrow’s opening levels. However, if we see stronger than expected readings in those two releases, I expect mortgage rates to move higher on the week.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that if you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com