Vince Kingston's Mortgage Blog

A short description about your blog
Yesterday mortgage rates had one of the largest one day increases in recent history.  Within 24 hours the 30 yr fixed rate went from 4.625% to 5.375%!  Procrastination just got expensive.  Luckily charting mortgage securities in real time indicated this massive worsening before it was reflected on lenders rate sheets.  This allowed me to lock all of my existing loans before any damage had been done.  
Why this massive volatility?  What about mortgage rates going forward?  For the answer we only need to understand simple supply and demand.  The Fed is attempting to sell $134 billion! worth of treasuries this week alone.  Treasuries are bonds just like mortgage backed securities and selling treasuries is how our government funds our current deficit.  When there is an added supply with no commensurate increase in demand, the only way you entice buyers is to raise the bond’s yield or interest rate.  Since all bond yields more or less move in the same direction, this caused mortgage rates to increase dramatically due to the relative yield increase on mortgage backed securities.  This supply “problem” has only begun as the Fed is slated to sell $3.25 trillion worth of treasuries by the end of the fiscal year 2009 to pay for the stimulus packages, mortgage backed securities repurchase programs, bank and auto bailouts, and TARP funds.  It’s important to realize that given this, there is very little chance of rates improving, and a high probability that they could continue to rise.  
However this is not all gloom and doom.  5.375% is still a wildly fantastic interest rate compared to the recent historical average of around 6.5%.  Now is the time to participate in these still low interest rates.  Procrastination still doesn’t have to be that expensive.  We may not see 4.625% again in the near future, but with all this volatility, you can bet that at some point rates will momentarily improve, perhaps to 5%, perhaps lower.  When that happens, I will be there, ready to lock in the next group of borrowers.
 
I am always available for your questions.  If you would like to have rates monitored in real time on your behalf, call me today.  I will float for your target rate and secure it the moment it becomes available. 

Here is what roiled the bond markets yesterday:  the UK’s projected debt load for next year is about 67% of GDP.  The US’s projected debt load is over 70% of GDP.  So when the UK was threatened with a down grade, this automatically caused traders to fear a US down grade as well.  Mortgage rates worsened significantly on this news, and if the US is ever downgraded, we can say good bye to these low mortgage rates.  Since our debt load would indicate that this is a possibility, take advantage of these rates now while they last.  
Hopefully if your loan is closing within the next 15 days your interest rate was locked.  If your loan is closing more than 15 days from today, there will most likely be a moment where rates will stabilize and you will be able to capture better pricing if locked at the correct time.  

HVCC-what it is and what it means for borrowers

Posted by: Vince Kingston

Tagged in: Untagged 

 
Undoubtedly there were unethical appraiser/lender relationships although I see this as more of a symptom of the past than a current concern.  Those of us left in the industry are here because we always treated our clients ethically.  The vast majority of professionals would not risk their careers for short term transactional gain.  HVCC treats all lenders/appraisers with suspicion.  This is another case of well intentioned oversight gone wrong.
 
The good news is that for those who are purchasing, it is less of a consideration.  Presumably the Realtor has done a great job ensuring your not paying more than the home is worth so the appraised value is relatively assured to match or exceed your sales price.  You will see yet another colorful disclosure for HVCC added to the normal disclosures and borrowers will be required to pay upfront for the appraisal.  Hopefully, like many of the new overarching loan guidelines, HVCC will eventually be repealed.  When ethical lenders can communicate directly with ethical appraisers on behalf of their clients, the borrower’s best interests can be served.     

Last month I was able to secure 4.5% 30 yr fixed for seven different homeowners.  I love going to the signing and seeing this fantastically low rate on my clients mortgage notes.  I know it sounds strange but I feel like I am handing over the keys to a Cadillac when rates are this low.  This is as good as it gets!

To put 4.5% in perspective, the average rate of inflation in this country for the last 20 yrs has been approximately 3%.  Now follow me on this next part: since 100% of your mortgage interest rate is tax deductable, this means that the after tax cost to you of a 4.5% mortgage if you are in the 25% marginal tax bracket is 3.38%.  If we consider that incomes generally rise with inflation, this would indicate that 4.5% is as close to free mortgage money as it gets.  Don’t miss out on your Cadillac!


HUD recently announced that it would allow the $8000 first time homebuyer credit to be used up front as a down payment (FHA loans only).  The tax credit can already be claimed this year by amending your tax returns (all newly closed first time buyers talk to your tax professional!).  
This is great news…maybe.  What we need in addition to HUD approval is two fold.  First HUD does not do loans, they insure loans.  So we need FHA lenders who actually provide the loans to sign off on this.  Second, we need qualified intermediaries (read financing companies) in our area who will essentially provide the $8000 loan upfront contingent upon the first time buyer signing over rights to their tax credit.  
So far there are no qualified intermediaries in the Portland area and lenders are still scratching their heads wondering how they will implement this.  Stay tuned for more information as it becomes available.

Remember first time homebuyers must close on their loan before December 1st, 2009 in order to be eligible for the $8000 credit.  This means from now until December every home is automatically discounted by $8000.  


Vince Kingston

VINCE KINGSTON

Mortgage Advisor
www.vincekingston.com
vince@vincekingston.com

971-221-8525 direct
866-438-5923 direct fax


Newsletter Signup

Sign up for weekly mortgage rate updates and news. Everything you need to know if you are buying, selling, or refinancing!
Name
Email

Client Testimonials

  • I've worked with Vince on three occasions and he has exceeded my expectations every single time. I've been so impressed with his professionalism and knowledge of the industry that I continually recommended him to all of my friends and colleagues who are in the market for mortgage services. He has the skills and perseverance to help you achieve your goals!
    Read more...
  • Vince has assisted me with both of my mortgages and I would highly recommend his services to anyone. He and his associate, Jesse Knight, from GMAC Realty are a fantastic team who I trust wholeheartedly.
    Read more...
  • Vince is a consummate professional.  He takes the time to educate and explain the nuts and bolts, as well as the pros and cons of entire process. He is patient, listens well, and got the transactions done quickly.  Vince was recommended to me by a friend and so far I have now recommended Vince to 3 others including a family member(who, as a first timer buyer/single woman was equally pleased).  I will continue to do business with Vince in the years to come.
    Read more...
  • Vince saved my house closing when a previous company dropped the ball at the last moment. His expertise and amazingly confident attitude made me a customer for life. When I need anything regarding mortgage advising, Vince is my ONLY choice.
    Read more...
  • Vince is the only resource that my wife and I trust during these troubling economic times. He was beyond thorough in providing us with all our refinancing options, and had limitless patience for all our questions.
    Read more...
  • I have to admit, when I first emailed Vince, with my past credit history and the current economic situation, I really didn’t expect him to be able to pull off what he did. He was able to get me a 4.875% interest rate on my townhouse, which was even better then the original interest rate he had in his initial proposal. I have been through the purchasing/refinancing cycle numerous times and I found that Vince’s knowledge of the various markets, available products as well as his high degree of customer service made the entire process the easiest and most pleasant of any I have been through.
    Read more...
  • Vince is great -- very easy to work with and very knowledgeable. He is always willing to explain things as well so he's great for the first time home buyer!
    Read more...
  • Vince was able to make the home buying process for and first-timer like myself totally painless. His ability to outline my options with a no pressure attitude was above and beyond my expectations.
    Read more...
  • Vince is more than just a competent loan officer with attention to detail, he injects creativity, innovation and true customer caring into his service. He is always looking for ways to make a transaction flow, making the process more user friendly with outstanding results. His customers come away smiling.
    Read more...
  • My true experience with Vince is not offered here, but I can definitely vouch for him. I got to know his wonderful perspective on finance while hanging out with him on a long weekend ski vacation. I have since then referred 2 of my close friends to him. Both of them can not praise the man enough. They are blown away with his thought out solutions, attention to details, and most of all, he put their needs first. When I’m ready, I will work with Vince without a doubt. In the mean time, I have more than confidence in referring people to this man.
    Read more...
  • Vince helped me get my first home loan in Portland and more recently with a refinance. Both times I got VIP treatment and great loans. Vince goes the extra mile, in this case, driving in the snowstorm to pick up loan application papers so as to secure me a great rate. Then he shows up at the signing to answer any questions I may have. I highly recommend him and would turn to him for professional help with financial planning generally.
    Read more...
  • Vince kept us included in the procedure while he watched indicators and the financial markets, locking us in at the lowest rate that the mortgage market has seen in decades. Had we rushed and acted on our initial instinct to refinance immediately, we would have missed out.

     

    Read more...
  • Vince was great in helping me acquire a real estate property out of the state from where I'm from and his knowledge of the industry greatly helped from start to finish.
    Read more...
  • Vince is a very knowledgeable, flexible and easy to work with professional. Vince clearly and concisely answered our many questions during the home buying process. It was convenient and reassuring to have someone who responded quickly to our concerns with practical solutions and answers since we didn’t have the time to worry about it ourselves. Vince was an amazing advocate for us by locking us into a rate that exceeded our expectations after tracking erratic rate changes for weeks. Vince made a typically stressful and sensitive process seem controlled and effortless and we will definitely use him again when we buy our next home.
    Read more...
  • Vince is always a pleasure to work with and he is the first referral I give to my clients who are considering financing or refinancing a home. He is consistently engaging and down- to- earth... a professional and precise loan consultant.
    Read more...
  • Vince helped me get a loan for my first house. He took me from knowing nothing about buying a house and mortgages to my closing. His first time home buyer class is an incredibly helpful and generous service that he provides. Vince was never too busy for my questions and had all the answers.
    Read more...
  • Vince gave me an incredibly personal service, answering all my questions, and giving me answers to questions I didn't even know I should be asking. He guided me through the process, and has maintained our professional connection afterwards to help maintain my knowledge and confidence regarding finance. He is a great person to have on your team.
    Read more...
  • Buying a home is the single largest financial decision most people will ever make. Clearly, then, choosing the right mortgage broker is critical. I've worked with Vince for over 3 years and am continuously amazed at the level of service and passion he brings to every transaction. More than simply securing a loan, Vince educates his clients on how to best meet their overall financial goals. In a one-size-fits-all world, Vince's unique approach to finding the perfect fit for the individual is beyond refreshing. Vince is much more than a mortgage broker, he truly is a financial consultant.
    Read more...
  • Vince has all the necessary traits of an excellent financial planner/mortgage broker: - He was flexible, eager and responsive in our initial meetings - He was diligent, extremely informative, and responsive throughout the project - His follow through was organized and impeccable - He is a pleasure to work with and has a rare ability to explain complex financial ideas in an easy-to-understand manner.
    Read more...
  • Vince helped us get a great loan for our first house purchase. He was thorough and very informative through out the whole process. He made a somewhat stressful process less stressful and left us with some money in our pockets. Cheers to Vince.
    Read more...
  • Vince helped us out of a tight spot and got the best results possible for our situation when others could not.
    Read more...

You are here: Home Blog

Recent Blogs

Popular Content

About Vince

Vince Kingston - Portland Mortgage Broker Tel: (971) 221-8525
Fax: (866)-438-5923
Email: vince@vincekingston.com
Web:
www.vincekingston.com

More than ever, I enjoy helping people with their mortgage needs and providing the expert counsel every person deserves.