Rate versus Price Reduction
Since the Fed’s Mortgage Backed Securities purchase program ended, the markets have seen much more volatile price swings…and rates overall are off their lows. For potential buyers who are waiting to see if home prices come down a little more, that means the wait could well cost you more money in the long run. Let’s look at an example to see why. Say a home buyer wants to buy a home that costs $300,000. But the buyer wants a better deal on the home, so she delays a transaction until the home is reduced by $10,000. If, in the meantime however, rates were to rise .75% to 6.00% and...
Read MoreInterest Rates Change Daily
Interest rates change constantly, but it is important to know that rates are cyclical. If rates are currently at historical lows then we know there is a strong probability rates will go up again, and vice versa. Certain economic indicators such as unemployment data, consumer price index, retail sales data, and consumer confidence all have an effect on mortgage interest rates. But the key factor to watch is the relationship between stocks and bonds. When the economy is slow and the stock market is “bearish,” many investors move money out of stocks and into bonds and...
Read MoreHow Does Inflation Impact Interest Rates?
As inflation increases, home loan rates typically rise, too. That’s because lenders… But What Does This Really Mean to You? The bottom line is that as inflation increases, home loan rates will rise too. That’s because lenders know that a rise in inflation actually diminishes the value of the money they receive over the life of a loan, as the money they receive for payment simply won’t go as far. So when lenders see changes in inflation or even anticipate a rise, they increase their interest rates to make up for the loss in future buying power that will happen as a result...
Read MoreWindow of Opportunity May Be Closing – Sooner Than You Think
I wanted to reach out to you before it’s too late. You may have heard that home loan rates reached record lows in October – and in fact, I’ve been slammed with emails and phone calls from clients just like you who wanted to take advantage of this wonderful situation. But – and this is an important but – it is more important than ever to act now. Over the last week, rates have started rising again due to a combination of good economic news and the Fed’s latest Treasury Security purchasing plan. In fact, over the last week rates have risen 0.25%! That’s right –...
Read MoreWhy Bad News Can Be Good for Mortgages
Although it seems like good economic news would be great for mortgage rates, the opposite is actually true. Watch as Sue Woodard, President of Mortgage Success Source, explains the dynamic between the economy and mortgages. If you enjoyed this post, why not connect with me elsewhere? If you’re looking for a mortgage in the Atlanta area, you can visit my primary Peachtree City and Newnan mortgage lender website at www.wdarrellwalters.com. If you’re interested in Free Business Boosters for Real Estate, visit www.freebusinessboosters.com....
Read MoreThe Fed Ends Its MBS Purchases: Here’s What It Means to You
You’ve probably heard that the Federal Reserve ended its Mortgage Backed Security buying program. The fact is, the Fed did what they set out to do – purchasing $1.25 Trillion in Mortgage Backed Securities and succeeding in their plan to lower home loan rates and help stabilize the housing sector. But what does the end of that program mean to the markets…and to you? First, without the Fed’s support, the markets – and home loan rates – will be much more volatile. This volatility has already begun and probably won’t end any time soon. So it’s important that...
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