Mortgage Information

If you're like most buyers, a home is the most expensive purchase you'll ever make, and you'll probably need some form of financing.

There are many lending institutions that offer a variety of mortgage products. Financing options and rates can vary widely, so it is important to do your research and shop around to ensure you get the mortgage that best meets your needs at the best price.

I would be happy to refer you to some very good mortgage contacts I have in the Livermore, Pleasanton, Dublin or San Ramon areas, or to help you in any other way I can to secure the best possible rate for your home purchase. 

  

 

Forecast for the Week

After a full load of economic reports last week, we'll see a little breathing room this week. In fact, we won't see the first major economic report until the Beige Book is released on Wednesday. The Fed's Beige Book - officially known as the Survey on Current Economic Conditions - contains anecdotal information on the current economic and business conditions. Although some people consider the Beige Book to be a lagging report, it can serve as a helpful indicator of the Fed's policy decisions. It reflects data from bank reports, as well as interviews with key business contacts, economists, market experts, and other sources.

We'll also see the Balance of Trade report on Thursday. Remember, a negative balance of trade - or a deficit - occurs when imports surpass exports. The US merchandise trade balance has been in a deficit since the mid-1970s.

Initial Jobless Claims will also be reported on Thursday. It does appear that over the past few weeks Jobless Claims have shown some stabilization...and while it isn't getting much better; at least it isn't getting much worse. The markets will be watching to see if that trend continues this week.

The week wraps up on Friday with the Consumer Sentiment Index and Retail Sales for May. Retail Sales will be the big economic report of the week. In last month's report, Retail Sales doubled expectations and marked the seventh consecutive monthly increase. The report can be volatile from month to month, but the recent string of improving reports does signal that the consumer is starting to spend more money.

In addition to those reports, the Treasury Department will auction off $70 Billion in 3- and 10-Year Notes and 30-Year Bonds. It will be interesting to see how these auctions perform with yields at very low levels.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

As you can see in the chart below, Mortgage Bonds have been extremely volatile since May 6, when the "Flash Crash" occurred.

Overall, Bonds and home loan rates ended the week slightly better than when they began. But the Bond market's good fortune may not last very long - so be sure to give me a call if I can help explain the current rate situation and how it might benefit you.

-----------------------
Chart: Fannie Mae 4.5% Mortgage Bond (Friday, June 4, 2010)

  

 

 

 

 

 

What's A Couple Extra Trillion?

These days, the government often tosses around "billions" and "trillions" as they talk about various programs. Here's a great way to visualize what these amounts actually mean.

Let's begin with what $1 million looks like. Believe it or not, this little pile is $1 million (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.

While a measly $1 million looked a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet.

And $1 BILLION. now we're really getting somewhere.

Next we'll look at ONE TRILLION dollars. This is that number we've been hearing about so much. What is a trillion dollars? Well, it's a million million. It's a thousand billion. It's a one followed by 12 zeros.

(And notice those pallets are double stacked.YOU are the little person in the red shirt standing at the lower left corner) So the next time you hear someone toss around the phrase "trillion dollars". that's what they're talking about.

 

 


 

Use the mortgage calculators below to assist you in making some decisions around financing your new home.

Mortgage Qualification Calculator

This calculator will help you determine how much money you qualify to borrow. The results are informal. You will be subject to a credit approval from your financial institution taking into consideration existing debt load, amount of down payment, income and other variables.