Florida Mortgage Rate Update 3-8-2009

Subject: Florida Rate Advisory - 03/08/2009

There is a release of three economic reports that will affect the bond and St. Petersburg, Florida mortgage markets. All of the data will be posted late in the week. One three reports is considered to be of high importance to the Florida mortgage rates, but this does not mean it will be a quiet week in Florida mortgage rates. The most movement should come during the latter part of the week, but there should be movement every day.

The most important report will be posted Thursday morning when February’s Retail Sales data is released. This report is extremely important to the financial markets- it measures consumer spending. This month’s report is expected to show a decline in sales of approximately 0.4%. If it reveals a larger decline in sales, the bond market should rise and Florida mortgage rates will likely fall. If it reveals an increase, I expect to see bond prices fall and Florida mortgage rates rise Thursday morning.

There will be two economic reports posted Friday morning. The first is the release of January’s Goods and Services Trade Balance. This report gives us the size of the U.S. trade deficit. The report is the week’s least important piece of news and likely will not influence Florida mortgage rates much.

Also on tap Friday is the University of Michigan’s Index of Consumer Sentiment for March at 9:45 AM. This index provides a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably hurt the stock markets and boost bond prices, leading to lower Florida mortgage rates. If the index rises, indicating that confidence is rising and spending will likely rise, we may see Florida mortgage rates move higher late Friday morning.

It is expected to show a reading of 56.3.

Overall, it will likely be another active week in the Florida mortgage market.

Thursday should be the most important day of the week with the Retail Sales report due. The 10-year Treasury Note auction is scheduled for Wednesday while the 30-year bond sale will be held Thursday. Results of both sales will be posted at 1:00 PM ET on the sale days. If investor demand was high, bonds may rally during afternoon trading, however, weak demand could lead to selling and an increase to Florida mortgage rates.

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Florida Mortgage Rate Update 3-6-2009

Thursday’s bond market has opened positive because of early stock weakness. The major stock indexes are showing big losses after yesterday’s rally. The Dow is currently down over 200 points while the Nasdaq is down over 40 points. There will likely be an improvement in this morning’s Florida mortgage rates and St. Petersburg mortgage rates of .125 - .250

This morning’s economic news reported statistics that are normally not good for bonds and Florida mortgage rates. The Productivity revision revealed a lower level of worker output than was expected. The report showed a decline in output of 0.4% compared to the increase of 1.0% that was forecasted and the 3.2% gain that was estimated last month. It  showed a significant upward revision to the Unit Labor Costs portion of the report that raises wage inflation concerns.

The outcome of these reports was not expected.

The second report of the morning wasn’t positive either. The Commerce Department reported that Factory Orders fell 1.9% in January. This was stronger than analysts’ revised forecasts of a 3.5% decline, but today’s reports also revised December’s orders lower by 1.0%. That seemed to have offset the higher than expected reading, but this report is
considered to be of medium importance- its impact has been minimal.

The Labor Department reported that 639,000 new claims for benefits were filed last week. This was lower than expected; a decline from the previous week’s total.

February’s Employment report comes out at 8:30 AM ET tomorrow. The unemployment rate, number of new jobs added or lost and the average hourly earnings reading will be shown. The best combination for the bond market and
Florida mortgage rates would be an increase in the unemployment rate, a large drop in payrolls and little or no increase in earnings. Current forecasts are calling for 0.3% increase in the unemployment rate to 7.9% and approximately 650,000 jobs lost during the month. All these items factor in when looking at Florida Mortgage Rates.

Florida Mortgage Rates 3-3-2009 Update

Yesterday’s bond market opened positive following significant losses in the stock market. Yesterday morning, Florida mortgage rates and St. Petersburg mortgage rates improved by approximately .375 of a discount point.

There were two pieces of economic data released yesterday and both showed stronger than expected results. The first was January’s Personal Income and Outlays data that showed personal income rose 0.4% while spending rose 0.6%. Both readings were higher than forecasts, but the income reading was well off expectations. Analysts were calling for a decline in income of 0.2%- consumers had much more income to spend than thought and apparently spent more of it than they had expected.

This is usually considered negative news for bonds and Florida St.Petersburg mortgage rates.

The Institute for Supply Management (ISM) reported late yesterday morning that their manufacturing index for February rose slightly to 35.8. Forecasts had called for a decline in the index- manufacturer sentiment was higher in the month than thought. This is usually bad news for bonds and Florida mortgage rates because a strengthening manufacturing sector would indicate and increase in economic activity.

Following a recent trend, negative economic news has been offset by the even worse performance of the stock market. Week after week we have been seeing scenarios that usually push bonds lower, but they rise because of the extraordinary circumstances in the stock market. Who knows how long this trend will continue? The Dow is at its lowest level in approximately 12 years. Investors are selling stocks and moving funds into the safety of bonds. The result is a nice rally in bonds and Florida mortgage rates that may continue for a couple of days.

Tomorrow’s only relevant data is the Fed Beige Book during afternoon trading. This report details economic activity throughout the country by region. The Fed relies heavily on t his data during their FOMC meetings, so look for a potential reaction during afternoon trading tomorrow. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises. Stay tuned for more Florida Mortgage rate updates.

Bond Market Update For January 2009

Last Week’s bond market opened in negative territory as investors continued to fret about upcoming debt sales. The stock markets rebounded somewhat from Tuesday’s sell-off. The bond market was down 15/32, which pushed yesterday morning’s Florida mortgage rates higher by another .250 discount point.

The New Home Starts report came out on Wednesday: Home builders cut new developments a sixth time in a row during December and brought construction to a new low. Housing starts decreased 15.5% to a seasonally adjusted 550,000 annual rate compared to the prior month, the Commerce Department said. This lowers mortgage credit demand, which falls along with falling housing starts.
This drop was expected and should not have a drastic affect on Florida mortgage rates and St.Petersburg mortgage rates.

The Labor Department gave us the Unemployment statistics this morning.
They were expected to say that 548,000 new claims for benefits were filed. The actual number turned out to be 589,000. This higher than expected rise in claims is good for bonds and should help push Florida rates down a bit.

I would lock my mortgage rate if I lived in Florida, specifically in Pinellas and Hillsborough Counties, and my closing were taking place in the next 20 days. Florida rates seem to be trending upwards in the short term. I would float if my closing was taking place outside of 20 days; Florida and St. Petersburg rates have a good chance of dropping with another rate cycle.

Second Mortgages - Overview

A second mortgage is a secured loan that is considered “subordinate” to another loan against the same property, which can have more than one loan against it. The original loan that is registered with the county or city is referred to as the primary loan or first mortgage. The reason a second mortgage is considered subordinate is because if the loan goes into default, the primary loan gets paid off before the second loan is addressed.  For this reason, second mortgages are considered riskier for lenders and will typically come with higher interest rates than those of first mortgages.

Qualifications For a Second Mortgage

Lenders will look at the following items when they are considering your application for a second mortgage:

• Low debt-to-income ratio.
• High credit score
• Solid employment history
• Significant equity in the first mortgage.

Rates of a Second Mortgage

With a fixed rate loan, the interest rate is set for the life of the loan. Adjustable rate mortgages (ARMs) come with periodic interest-rate adjustments. If the terms of your loan allow the lender to adjust or change the interest rate, make sure you fully understand when the mortgage company has the right to change the rate, any limits on how much the interest or payments can change, and how often the rate can be adjusted.  

Costs of a Second Mortgage

Many mortgage lenders charge a fee for lending you money, which is typically a percentage of the loan and referred to as points. One point is equal to one percent of the amount borrowed. If you were to borrow $10,000 with a fee of eight points, you would pay $800 in points. The number of points lenders charge can vary, so it’s important to shop around. You always want the fee in writing before taking the loan. Many states have a limit on fees a lender can charge on a second mortgage loan.

Length of a Second Mortgage

Second mortgage loans can continue for as long as 15 or 20 years or they may require repayment within one year. You  will need to find one with terms with the best match your individual needs. If you want to borrow $20,000 for improvements on your home for example, you probably wouldn’t want a loan that you must repay within 1 - 2 years because the monthly payments may be too high.

Potential Downside of Second Mortgages

A second mortgage can occasionally be the catalyst to foreclosure when a borrower defaults on their home loan. The second mortgage lender then purchases the primary mortgage, which may not be in the rears, then forecloses - leaving the homeowner to lose their home to the second lien holder.

Florida Mortgage Rate Update 3-8-2009

Subject: Florida Rate Advisory - 03/08/2009

There is a release of three economic reports that will affect the bond and St. Petersburg, Florida mortgage markets. All of the data will be posted late in the week. One three reports is considered to be of high importance to the Florida mortgage rates, but this does not mean it will be a quiet week in Florida mortgage rates. The most movement should come during the latter part of the week, but there should be movement every day.

The most important report will be posted Thursday morning when February’s Retail Sales data is released. This report is extremely important to the financial markets- it measures consumer spending. This month’s report is expected to show a decline in sales of approximately 0.4%. If it reveals a larger decline in sales, the bond market should rise and Florida mortgage rates will likely fall. If it reveals an increase, I expect to see bond prices fall and Florida mortgage rates rise Thursday morning.

There will be two economic reports posted Friday morning. The first is the release of January’s Goods and Services Trade Balance. This report gives us the size of the U.S. trade deficit. The report is the week’s least important piece of news and likely will not influence Florida mortgage rates much.

Also on tap Friday is the University of Michigan’s Index of Consumer Sentiment for March at 9:45 AM. This index provides a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably hurt the stock markets and boost bond prices, leading to lower Florida mortgage rates. If the index rises, indicating that confidence is rising and spending will likely rise, we may see Florida mortgage rates move higher late Friday morning.

It is expected to show a reading of 56.3.

Overall, it will likely be another active week in the Florida mortgage market.

Thursday should be the most important day of the week with the Retail Sales report due. The 10-year Treasury Note auction is scheduled for Wednesday while the 30-year bond sale will be held Thursday. Results of both sales will be posted at 1:00 PM ET on the sale days. If investor demand was high, bonds may rally during afternoon trading, however, weak demand could lead to selling and an increase to Florida mortgage rates.