I just don’t know if they can. Rates as low as 4% for a 30 year fixed loan are virtually unprecedented in our life time. If you are waiting for rates to go lower I just don’t think they are going to. I reveiwed the history of the ten year bond recently and over the last 60 years there has been only one other time the yeilds have been this low and that was during the economic freefall we experienced in 2008. If you look at the average values of real estate in 2006 coupled with the 2 percent higher interest rates and look at the demand then, one can only assume we are at the bottom looking up. Call me with questions or concerns. Happy to help all of Sonoma County home owners. “Hunt for your loan”.

Spring has Sprung and shortly, there is going to be a buying demand of Sonoma County Real Estate like there is every spring. But two coinciudental things happened yesterday and today that are going to effect that.
It was reported in Money Matters that Santa Rosa Real Estate had the highest appreciation in the country over the last month…6%. Buying demand has already started. Also, interest rates rose about a .25% becuase the Gov’t is trying to sell more t’bills and people aren’t buying so they are having to make them more attractive by raising the note rates. Interest rates are rising. Do you find that coincdental? Do you also find it coincdental that gas prices go up in the spring right before the big driving season. NO I didn’t think you did. The Gov’t has also stated it isn’t going to buy any more Mortgage backed securities after March. That too will put pressure on rates. And then there is the tax credit for home purchasers, first time and old hands, that expires at the end of April. Believe me when i tell you, that now is as good a time as you may have for the next 30 years to buy that home. Think about it…5%, 30 year fixed finaincing plus 8000 dollars back to you after you close and more inventory to select from than there will ever be. Now is the time ladies and Gentlemen. You need to get preapproved for a loan BEFORE you shop for that home so go to my website and fillout the online loan application and we will have you running in mere moments. Next month will be more difficult…I assure you. Also if you want free access to the MLS drop me a line and i can set you up for FREE.

Today, Australia raised its “fed rate” or equivalent there of signalling to the rest of the world that according to one G20 country, the worst is over.  The stock market has rallied and attempts to sell 39 billion dollars worth of 7 year notes is going poorly.    They will have to raise the yeild in order to attract investors which will in turn put pressure on Mortgage backed securities to follow suit.  Gold has hit a record high of $1400 as a knee jerk reaction to inflation fears.  Are you seriously waiting for rates to get any better? 

I know that I locked most of my clients last week and they all got sub-5% rates if they were willing to spend a a little on discount points.  What is the point of buying a 30 year fixed rate if you don’t paln to keep it for a while?  And if you are going to keep it then you should invest in the cash flow that a lower rate will bring. Typically, a point of discount, will pay itself off in about 2 to 3 years.  So don’t wait.

If you are a Sonoma County Resident with a home Mortgage then it would behoove you to give me a call or drop me an email and see what I can do for you.  It shouldn’t take more than about 15 minutes and we could save you hundreds of dollars in mortgage payments

So what does that mean for first time home buyers or any home buyer for that matter?  It means that mortgage loan rates are coming down.  It means that if you are looking for a home in Sonoma county, from Petaluma to  Healdsburg , to purchase that you can now effectively either buy more home or pay less for it.  It is going to be your Choice!

When looking at your purchase  loan transaction, the lender is going to look at your total income vs your total housing payment.  This is known in the biz as a DTI ratio or Debt to Income ratio.  The debt includes your Principle and Interest payment plus your Insurance and property Tax payment computed on a monthly basis (PITI).  This divided by your gross income is going to be your front end ratio.  When you add all of your other debts together which might include but not be limited to your car payment, school loans, credit cards and alimony or child support , add that to your PITI and devide the total by your income you get a back end ratio.  Typically lenders would like to see  front end ratios in the high 20’s to low 30’s % and a back end ratio should not really exceed 45% .   If rates come down then your overall cost (PITI) is lower and there for you will be able to either buy a more expensive home or your real este mortgage loan payment will be less.

If this all seems really complicated, it is.  That is why it is important to work with a local lender that really knows his loan programs.  If you are buying property in Sonoma county you should use a lender that is an expert in sonoma county real estate mortgage loans.  And that is where I come in.  I have been around the block so to speak, 28 years as a  real estate broker, and my many satisfied customers will vouch for the excellent service I provide.  I really don’t believe that an online lending institution can handle your local needs nearly as well as I can.  I can help you decide just how much debt you are comfortable with.

For a free consultation please contact me, Hunt Conrad, at hunt.conrad@prospectmtg,com

If you would like to try out a FREE service called the Home Buyers scouting report which gives you access to your local MLS follow this link

http://www.greatrealestate.com/SearchRealestate.aspx?ID=7A803C6EAFFB4338AA8542A6D62

Bonds followed their recent trend lower in early trading. Pressuring Bonds lower is the strength in the Stock market as well as the exorbitant amount of Bond supply hitting the markets next week.
In related news, the New York Federal Reserve is continuing to purchase Mortgage Backed Securities. However, their efforts are just not enough to absorb the flood of new closed and securitized mortgages that are hitting the market after the heavy refinance activity recently.
Overall, Bonds have muscled back higher from the lower levels seen earlier this morning. Therefore, I recommend floating for now, as we watch to see if Bonds can regain some ground. I will continue to monitor the situation and keep you posted if a change occurs.

Bonds woke up angry this morning following yesterday’s sell-off, and are now struggling to regain their footing and move back above an important level of support.
On the news front, Initial Jobless Claims were slightly higher than expectations and continue to be a drag on the economy. However, continuing claims fell by 148,000 to 6.69 million, which is the largest one-week drop since November of 2001.
Next week brings another round of Bond supply from the Treasury, which could weigh on the Bond market. Therefore, I recommend locking but I will let you know if Bonds are able to reverse course and muster another rally.
Currently rates are trading in the 5.5% range for a 30 day lock on a 30 year conforming loan for a point in origination.