Mortgage Review for November 26, 2007

Posted on: December 07, 2007

“WE’RE SO BUSY WATCHING OUT FOR WHAT’S JUST AHEAD OF US…THAT WE DON’T TAKE TIME TO ENJOY WHERE WE ARE.” Bill Watterson in the comic strip, Calvin & Hobbes And while these are certainly wise words for the upcoming holiday season – they also aptly describe the mood in the markets, as Bond Traders look ahead to the end of the coming week, with the arrival of the important Jobs Report. But maybe they should take a moment to enjoy where they are, as despite massive volatility, Bonds saw nice gains last week with home loan rates improving by about .125%.

Bond prices improved on a number of factors, including a tame read on inflation via the Personal Consumption Expenditure (PCE) index. Why? Look at it this way – if Bonds were Superman, inflation would be its Kryptonite, because of inflation’s ability to erode and weaken the buying power of the fixed return provided by a Bond. So when news arrives indicating that inflation appears to be under control, Bond prices and home loan rates improve on the favorable news.

Another interesting bit of recent news is major mortgage entities Fannie Mae and Freddie Mac will be moving to “Risk Based” pricing models, meaning that consumers with credit scores that traditionally have been considered “average” may soon be subject to higher interest rates. The best defense is always a good offense – so get in touch with me to discuss your own credit, even if you don’t necessarily have the need for a home loan in the cards at the moment. I can help you examine your credit and determine what actions could be taken to improve your credit score – which will save you dollars on all your credit across the board. I’m glad to help – just send me an email at the link above, or give me a call.

Contributed by Mitcheal Carpenter of the Carpenter Group. Give them a call at 503.594.1144 to set up your next loan.