FHA has maintained its current course of business for some time without any substantial changes to its FHA Home Loan products.  In August of 2007 that all changed.  FHA Colorado Home Loans have gained significant attention in light of the subprime crisis which has plagued our countries financial markets.  FHA Colorado Home Loans have come to the rescue again, offering several home owners a better solution to their current subprime nightmare.  FHA Home Loan programs have reduced their qualifying restrictions in order to qualify more buyers, but more significantly, FHA Colorado Home Loans have increased the lending limits for all counties located in the United States.  The changes that have taken place over the last couple of years have opened the market for you to qualify for a FHA Home Loan.

The Federal Housing Administration made it easy to offer the best mortgage to first time home buyer at interest rates so competitive that mortgage lenders were required to maintain licensing agreements with the Federal Housing Administration in order to originate FHA Colorado Home Loans. The primary goal for the Federal Housing Administration was to provide Colorado mortgage companies an adequate home mortgage financing system backed by federally insured funds protecting mortgage lenders from FHA Colorado Home Loans in the event the home mortgage defaults. Due to the Federal Housing Administration ability to protect mortgage lenders from default, mortgage lenders are able to offer the best interest rates available, giving you your best mortgage option. So before we move to quickly on what Colorado real estate home mortgage option is best, we should first look to see if our mortgage lenders will qualify you for any one of the FHA Colorado Home Loans available today.  To get today’s interest rate update go to www.coloradomortgagebanking.com/news

Thank you for giving me a chance to earn your business,  Daniel

The full impact of a Colorado Home Mortgage that has an adjustable rate tied to it really depends on the type of Colorado Home Mortgage you have.  The most popular adjustable rate programs used over the last six years were the subprime loans.  These Colorado Home Mortgage Programs were designed to get high risk borrowers into homes at a rate normally just low enough to qualify.  The adjustable rate period for these loans ranged from 2 years to 3 years.  They are known in the mortgage business as two/twenty-sevens or three/Thirty-eights.  They were designed to adjust every 6 months until the rate hit the market cap rate, which is around 11%.  Pretty scary for anyone that currently has these Colorado Home Mortgage Programs.  These loans are designed so that you have to refinance after the 2 or 3 year grace periods.  If you do not refinance your Colorado Home Mortgage, you can expect your rate to jump up 2% every 6 months until it hits that Market Cap rate.  So if you had a 5% rate on this loan it would jump up to 7%, 9%, 11% respectively over time. 

The 2^nd type of Adjustable Rate Mortgages offered in the market has far less risk tied to it, and as a result, the adjustment periods are a bit friendlier.  FHA and Conventional A-Paper Colorado Home Mortgage programs have an Adjustable Rate Mortgage Option.  These Rates typically adjust only once per year and will not exceed 1% per year during that time.  This option will give most Colorado Home Mortgage clients the ability to refinance when it makes sense to them.  For example, we have several clients that got into an ARM Colorado Home Mortgage program at 3.875%.  This is a great rate and they have it locked for 5 years.  In year 6 that Colorado Home Mortgage will be set to adjust.  The adjustment can only go up 1%, therefore making the highest rate available for that year set at 4.875%.  That rate is still better then the 30 year rate currently being offered.  Year number 7 the rate could go to 5.875%, assuming worst case scenario. Again that rate is right in line with what is being offered on 30 year fixed rates.  

Much of the publicity circling around adjustable rate mortgages comes from media outlets.  These media outlets will only report the most negative aspects of the business.  A tornado hits a small town what do you see, 3 trailers hanging from a tree.  You know what I am talking about and the point I am trying to make is that you need to understand what type of Colorado Home Mortgage you are getting yourself into.  There are benefits from an Adjustable Rate Mortgage when it is done right.  Those clients that have been in their house for 5 years at 3.875% will attest to the benefits that they had.  There are so many right reasons to do an Adjustable Rate Mortgage, however the biggest wrong reason is for qualification purposes.  Many of the subprime lenders now out of business qualified these Colorado Home Mortgage programs with the lower teaser rates in order to get people approved.  What they did not do is analyze the impacts created by the adjustment for these buyers.  These borrowers were put in a position where they could no longer afford their payments at the higher interest rate levels.  This has caused many Americans to fall into Foreclosure status.

So now that we have talked about what the Adjustable Rate Mortgage is, we will focus on what you should do.

Option 1:  Refinance Your Home

Utilizing a premier Colorado Home Mortgage broker, you can get access to all programs that are available to you, not just the programs offered by that bank.  The most popular refinance for those borrowers that took out a subprime loan is a FHA Colorado Home Mortgage.  The FHA option allows for a little more risk then the conventional A-Paper loan option.  The Higher risk also allows for a higher loan to value ratio.  This is big as most Colorado Home Mortgage programs face home value issues.  You do not need much appreciation on your home to qualify.  In fact you only need 3% if you have not refinanced before, and 5% if you have.  If the rate creates payment obstacles for you and new 5 year adjustable rate mortgage might be the solution.  FHA Colorado Home Mortgage ARM products are far less volatile then subprime ARM products.  The reason that I recommend the 5 year option as a qualifying option is that it will allow you an additional 5 years to get your current situation back on track.  This is the most feasible option available for people who are not happy with the adjustment that is about to take place on their Colorado Home Mortgage program.

Option 2:  Let your Rate adjust and continue paying.

I stated above that some adjustments are not bad.  Colorado Home Mortgage programs that only adjust once a year at a rate of 1% a year may still offer a lower rate then what the market currently offers.  In these circumstances it is best to wait and refinance only when the market hits a low point.  Colorado Home Mortgage programs should be designed to meet both your current and future needs.  Refinancing should only take place when it makes sense for your long term objectives.  Many people looking to refinance their current Colorado Home Mortgage Program do so because it saves them $200 a month today.  Then they sell their home a year later.  The cost of the refinance will set you back much more then the savings you get over the next year.  Your net proceeds from the sell of that house will be far lower then the savings your received from the refinance.  So refinancing your Colorado Home Mortgage should only take place when it makes sense to do so.  Talking to your Colorado Home Mortgage broker and asking for amortization schedules will help you make that decision.

Option 3:  Sell your Home

Not the most popular option, but if you find yourself in a situation where you can no longer afford your payments selling your home will be the best option.  Hopefully you have some equity to make the sell of the home complete.  However if you are upside down on your home like many of us are, you can also go into a short sale situation.  You should contact a professional Real Estate agent to answer your short sale questions.  Colorado Home Mortgage loans have been adjusting for many people in a way that makes it impossible for them to continue making payments.  Circumstance arise that may have contributed to these obstacles, but putting your home up for sale and eliminating the threat of continued Colorado Home Mortgage rate hikes may help you save money over the long term.  

I hope that you found the information helpful, if you are looking for current Colorado Home Mortgage market updates you can check out my market blog at www.coloradomortgagebanking.com/news

I am here to help you and I would be pleased to earn your business.  If you are someone you know needs my assistance please don’t hesitate to call me directly.  My goal is to be your Colorado Home Mortgage provider for life.

Daniel   

Consumers read about economic factors that cause Colorado Online mortgage rates to change ranging from the Federal Reserve Board interest rate decisions to standard release of Economic data.  The Data used in these Economic reports allow investors the tools to predict future bond results.  If investors feel bonds will improve in price then Colorado Online Mortgage rates will drop.  Typically the decision on whether to buy bonds or equities will depend on how stable our economic outlook will be.  But how does this relate to real estate? And why aren’t Colorado Online mortgage rates more stable?  There is no secret formula to account for Colorado Online Mortgage rate behavior. In fact, it’s really quite simple. Oftentimes, like the stock market, Colorado Online mortgage rates are dictated by investor emotion and by mass media force-feeding.  That means that most Colorado Online Mortgage consumers are subjected to what investors think the market will do.  Investors make that determination from the economic data released on a daily basis.  Not only does the economic data influence investor behavior, but the media outlook does as well.  So this brings us back to Media Influence and how you should determine whether your Colorado Online Mortgage rate is the best rate available.  Contacting reputable real estate and mortgage broker professionals, and weighing what they say against your research done on the Internet or local library or bookstore should give you the edge over anyone else who simply goes with the biggest advertiser for Colorado Online Mortgage products. Educate yourself first.

It’s not unusual for Colorado Online mortgage rates or loan percentage points to change more than once per day. For example, a Colorado Online mortgage loan that is being offered at 5.875% in the morning may inflate by a .25 percent increase by mid-afternoon.  The Bond market has a continuous stream of trading that takes place, including after hour trading.  Because of this activity Colorado Online Mortgage rates almost never stand still.  Think of mortgage loan rates as a variable movement on your loan until you lock it in place.  That is why it is so important to have someone that specializes in the field and actually understands the variables to provide you with your Colorado Online Mortgage services.

The real economic factors that cause Colorado Online Mortgage rates to fluctuate include but is not limited to the following economic reports, unemployment percentages, inflation fears, GDP, CPI, PPI, and so on.  These reports account for the biggest influencer beyond current economic headlines.  Obviously when Headlines report major activity whether positive or negative the resulting influence can create Colorado Online Mortgage rate movement. Gauging what causes Colorado Online Mortgage rates to change means identifying and defining those factors that affect interest rates in a timely manner. If the data shows hesitancy and confusion about poor economic performance, Colorado Online mortgage rates may fall. Conversely, if the data shows strength in the economy and low unemployment, Colorado Online Mortgage rates may rise.

In summary, what effects Colorado Online Mortgage rates are factors that are highly subjective, but when these factors are taken together, they not only influence the buying habits of the prospective real estate consumers but the overall Colorado Online Mortgage industry.   I am in the business to be your expert advisor and would welcome the opportunity to do business with you.

Daniel

I can go into detail about where the money comes from to help finance these mortgages, but for time purposes lets also assume that Colorado Mortgage Brokers and Colorado Mortgage Bankers all get their source of funds from the same place.  The Mortgage Backed Securities market is the largest market dealing with the investment returns expected from Colorado Mortgage Portfolios.  The money used in these investments comes from investors dealing in mortgage securities right from Wall Street.  So the primary difference on what is charged on a Colorado Mortgage stems from overhead costs and profit expectations from one Colorado Mortgage Bank from another.

Now let’s talk about a Colorado Mortgage Banker.  These Colorado Mortgage Bankers are considered retail outlets for a bigger bank entity.  It is simply one division of the banks total operations.  They borrow the funds from a wholesale lender in order to issue Colorado Mortgage products back to the borrower.  Often times, they Borrower right from their own wholesale divisions.  For example Wells Fargo has a wholesale division that works directly with investors on Wall Street.  This Wholesale division offers Colorado Mortgage funds to its Retail Wells Fargo Branch and their Colorado Mortgage Broker relationships (which I will talk about later).  The Retail Branch has a Colorado Mortgage Banker that offers these products to the public.  Now the Wholesale division offers the Colorado Mortgage Funds at the same rate and cost as they do the Colorado Mortgage Brokers which they have relationships with.  The Retail Branch then is required to put in a profit margin and compensate for overhead.  Overhead expenses are not exclusive to the mortgage part of a retail bank, but instead the entire operations of the Retail Bank.  The minimum break even point for a Colorado Mortgage Banker is much higher then it is for a Colorado Mortgage Broker. 

There are two ways the Colorado Mortgage Banker can make up for the difference in cost.  One way is to charge higher fees (which the rarely do) or they can make up the compensation through a higher rate.  The higher rate allows the Colorado Mortgage Banker additional income reward to them by the Wholesale division.  This compensation difference is known as Yield Spread.  The costs for all Colorado Mortgage products are about the same as it relates to third party fees.  These fees must be paid by the borrower of the Colorado Mortgage Provider.  One way or another they are paid.  So if the third party fees are similar and the wholesale rate is similar then what really sets the Colorado Mortgage Banker apart from the Colorado Mortgage Broker is its overall cost structure and profit expectations.

This brings us to Colorado Mortgage Brokers.  Colorado Mortgage Brokers enter into relationships directly with Wholesale lenders throughout the United States.  Colorado Mortgage Brokers are not limited to the number of relationships they enter into and often find huge benefits by entering into several relationships.  Unlike a Colorado Mortgage Banker, Colorado Mortgage Brokers are not limited to only one Wholesale lender this gives Colorado Mortgage Brokers a competitive edge.  Colorado Mortgage Brokers have the ability to price out wholesale lenders and offer its borrowers the lowest wholesale rate available.  Colorado Mortgage Bankers and only offer what their wholesale lender has and if it is not competitive they too are not competitive.  Colorado Mortgage Brokers like Colorado Mortgage Bankers also have Overhead costs and Profit expectations priced into every loan.  The difference is that Colorado Mortgage Brokers only have overhead related to actual Colorado Mortgage production versus multiple lines of business in a Retail Bank.  Overhead tends to be lower and assuming the Colorado Mortgage Broker is offering you the same Profit margins their rates will most often be lower then the rates offered by a Colorado Mortgage Banker.

In summary, it is important to do you homework and not all Colorado Mortgage Brokers are on the up and up.  Colorado Mortgage Bankers typically have a small but fair profit margin built into their rates, where as a Colorado Mortgage Broker can pretty much charge as much as they want.  In these circumstances a Colorado Mortgage Banker will be you best options, however we have our price structured similar to most Retail Banking institutions and we benefit from Volume generated Profits.  This allows us to competitively price our Colorado Mortgage options and it is in rare situations that a Colorado Mortgage Banker can beat what we can offer.  It is so rare that I will match or beat any Colorado Mortgage Banker offer in order to win your business.

Finally some caution to all borrowers.  There are still many Colorado Mortgage Brokers that lack the ethical standards to provide you with an honest and accurate account of what your Colorado Mortgage will be at closing.  Bait and Switch is still a common practice and is far less likely to happen in the Colorado Mortgage Banker situation then a Colorado Mortgage Broker situation.  I can only say that with our services we are committed to ensure there are no surprises in your Colorado Mortgage Process.  This commitment is probably the biggest reason for our large referral business which we take great pride in.  We want you to be completely satisfied with your Colorado Mortgage experience and we know that working with any one of our Colorado Mortgage Brokers you can count on getting the best package available to you in the market.  Call me directly with any Colorado Mortgage questions, and take a look at www.coloradomortgagebanking.com/news for current Colorado Mortgage rate information.

Daniel

This may appear to be good for all those involved, but what buyer’s don’t know is that this practice has drastically devalued homes in several areas throughout Colorado.  Which means, that the home you thought you bought undervalue is not as undervalued as you thought.  I have several Clients that come to me stating that they are getting into a Colorado Foreclosure home with 10% or 20% already built into the value, giving them the perception that they are walking into equity.  Here is a reality check!  What makes you think that some how you found a house drastically undervalue when no one else had a chance to see it first.  Lucky?????  Not really, what has happened is that no one would buy this house at the price that is owed (Probably because it was way overvalued in the first place).  There are several reasons that the value of these homes can appear higher then they are.  The biggest cause of over inflated home prices are due to an exaggerated market felt 3 years ago, when everyone was buying, therefore the demand was greater.  People who typically could not buy a home all of a sudden could.  These individuals had no idea what values should be and they trusted the professionals working in these fields had their best interest in mind.  Unfortunately, many of these individuals were more concerned about the income they could generate and not so much about the people buying the homes.  Many homes were pushed in the appraisal process in order for buyers to qualify.  We also experienced many people qualifying for payments which after the adjustment period were guaranteed to put them into trouble.  So the next time you think you are getting a deal on Colorado Foreclosures remember that if the home sat on the market odds are it sat on the market for a reason. 

Normally when you are in the market to buy up Colorado Foreclosures you expect to get into a house that needs work.  Well all the money you spend to bring that house up to speed is not a value savings for you.  In fact it should be considered in the price of the home as you buy it.  Most people believe that they are getting a great buy, but by the time you add the maintenance and the home adjusts to the area value, you will more then likely be buying the home at value.   

Please call me for any questions related to Colorado Foreclosures.  I would be happy to give you a market analysis which can help you recognize the true value of that home.   Also Check out www.coloradomortgagebanking.com/news for current market updates.

Daniel

I do not think that the increase seen today will continue unless something unexpected happens in the next day or so.  Most of the Economic reports being released this week will have minor impacts on Colorado Home Mortgage Loan rates, and will not be enough to break any new barriers.  Most of the decreases felt in Colorado Home Mortgage Loan rates over the last couple of weeks have found its way into the Rate Sheets today, and LOCKING would be a good idea.  Those that think inflationary pressures will not creep into the news might find this week’s economic data favorable to Colorado Home Mortgage Loan rates.  We have a variety of reports due out that will create some movement.  The two reports to watch out for this week are tomorrows ISM index and Thursday Nonfarm Payroll.  These are the only two reports that could break some of the barriers we are seeing in the MBS market.

The ISM Manufacturing Index is a national survey of purchasing managers which covers such indicators as orders, production, employment, inventories, delivery times, prices, export orders, and import orders. The ISM provides a composite index of national manufacturing conditions.  Manufacturing is an important sector of the economy and the ISM index is one of the two primary national measures (the Chicago PMI is the other). Like the Chicago PMI anything reported below 50 indicates a contraction in the market.  If the Chicago PMI is a preview of what is to come in the ISM Manufacturing Index, we will see this report indicating some contraction in the market.  Colorado Home Mortgage Loan rates should decrease a bit if the report indicates contraction.  How much Colorado Home Mortgage Loan rates will improve depends greatly on what the report says.  I don’t expect any surprises in this report and because of that, do not expect any real movement to play out in the Colorado Home Mortgage Loan rate market.

Non-Farm Payrolls is estimated based on a survey of larger businesses measuring the number of paid employees working part-time or full-time in businesses or for the government.  This report typically has a big impact on Colorado Home Mortgage Loan rates, because on the inflationary implications that come from the report. The Non-Farm Payroll data is the top number of the Employment Report, one of the most highly anticipated pieces of economic data. The headline figure is often a major market mover with the labor market a strong predictor of the strength of the economy. The Unemployment Rate is obtained from a different data sample, and together the two reports provide the most comprehensive picture of the labor market.  This could be the information we need to break through the price Ceiling currently being felt in the market.  This also assumes that we do not see any additional movement in Colorado Home Mortgage Loan rates until then.  Inflation is a hot topic and if the reading comes in worse then expected, much of the inflationary fears revolving around this report will dissipate (for the time being).  Colorado Home Mortgage Loan rates will see some nice improvements and we might at that time get below the 6.0% range.  We need to weigh out the risk/reward in any decision to float or Lock.  We have hit a low point for the last couple of weeks and we will need the economic data to indicate something that is contradictory to what experts are say.  Which is that inflation is under control.  Only if this happens will rates improve to a point where floating makes sense.  Its like betting on the right horse, about a 1 in 10 shot, because of this if you are not risk adverse, then LOCKING would be a good idea.

Please call me with your Colorado Home Mortgage Loan rate questions.  I would enjoy earning your business.

Daniel

Consumer Confidence fell to a record low 50.0, which was a lot worse then the 56.0 expectation set in the market last week.  Colorado Home Mortgage Refinance Loan rates will see some improvements based on this information alone.  Consumer Confidence has a direct correlation to consumer spending, which accounts for two thirds of the economy. Consumer Confidence also has some correlation with joblessness, inflation, and real income. Typically only changes of five points or more are considered significant.  We had an 8.2 point drop from when the report was last issued and a 6 point drop from what was expected.  This should have had some strong impacts in the Colorado Home Mortgage Refinance Loan Markets, but so far it appears the FOMC is taking center stage.  There are other pressures that change consumer spending other than consumer confidence, inflation, joblessness, and regional business issues. Consumer Confidence is used to predict the direction of Consumer Spending but because of other influences, higher Confidence won’t always lead to higher Spending.  Higher Spending numbers could be in direct relation to higher inflation.  This would be bad for Colorado Home Mortgage Refinance Loan rates.  However this months report should have improved Colorado Home Mortgage Refinance Loan rates for now.

Two Other Reports released today Richmond Fed Survey and Case-Shiller Price index numbers play separate roles in the Colorado Home Mortgage Refinance Loan Markets, but not enough to be considered a mover and a shaker.  Richmond Fed Survey works similar to the Empire State report and reports on manufacturing areas.  The report indicated a reduction in manufacturing demand which is a sign that our economy appears to be retracting.  The Price Shiller Price Index which monitors price changes in 10 different cities seemed to indicate that pricing is down which should be good news for Colorado Home Mortgage Refinance Loan rates.  I only briefly talk about these because it does not impact the Colorado Home Mortgage Refinance Loan markets enough to make rates move.  However they were released today and the numbers seem to favor Colorado Home Mortgage Refinance Loan rates so I wanted to mention them.

FOMC Meeting will conclude tomorrow and reports will begin to leak in about what was discussed in the meeting.  The first thing that will be determined is the FOMC action.  Action normally relates to what the FOMC has decided to do to short term interest rates.  If no action is taken on Short-Term Interest rates, the FOMC will signal that Economic Stimulus continues to be its main course of action.  This will be good for Colorado Home Mortgage Refinance Loan rates.  If Short Term interest rates are increased then the FOMC will be combating inflation which is very negative for Colorado Home Mortgage Refinance Loan rates.  I believe that the FOMC will leave rates alone and that Colorado Home Mortgage Refinance Loan rates will react positively.  We just need to stay tuned to see if the board was split or not on this decision and we will need to watch for any major inflationary discussions.

Today the stock market saw a variety of blue chip companies reporting poor profit expectations.  Ford and GMC both have indicated considerable profit losses due to the decreased demand for low gas efficient vehicles.  Ford also announced that it would delay its release of the new Ford F-150 until projected demand warranted the release.  Colorado Online Mortgage rates should have seen bigger improvements with the release of this information, but investors were not quick to react.  I believe that investors are still concerned about the inflationary pressures reported on late last week which may be steering there current buying habits.  I would not be to concern about the lack of movement today; this is expected when investors are left without any real economic data to base their decisions on.  I expect Colorado Online Mortgage rates to react with a little more predictability early next week, when Consumer Sentiment releases their primary data on Tuesday.  We will also see some movement again on Wednesday when Durable Goods Index report its numbers.  Both these reports are expected to come in low and if these reports meet expectations, we will see Colorado Online Mortgage rates improve.  Our recommendation continues to be a FLOAT recommendation and we are hoping that the information released next week creates the momentum we need to see our Fixed Colorado Online Mortgage rate programs back down to 6.0%.  Right now we will need about two weeks of improved rate movement before we can have 6.0% offered to you. 

We have some troubling issues to face in the market especially in the financial sectors of our economy.  Today I saw a new report indicating that our current credit debt has exceeded our mortgage debt in this country.  Never before have we had Credit debt exceed mortgage debt and the results of this may not be felt for some time.  Like the mortgage industry, if it is not carefully monitored, could have even greater repercussions then what we are seeing with mortgage debt today.  Only time will tell us if we are making the right decisions by offering the amount of credit currently circulating in our economy.  Keep in mind the reason Mortgage debt is such a major issue is because just about anyone could qualify at one time.  Well it appears that anyone with a pulse today can now get credit card approval.  What has me concern with this is given the choice of what not to pay during tough financial times, normally the consumer chooses to stop paying on credit before paying on their home. 

Both my posts today came late and I apologize for that.  I also noticed that they appear to be quite negative and it should be noted that I do feel we have hope in the near future.  Our Economic system is better then any other economic system in the world and because we allow the markets to dictate market corrections we will see improvements eventually.  I will be available to you all weekend if you have questions.  Call me with your next Colorado Online Mortgage request and see how well I try to service you needs.  God Bless and Good NightJ

Daniel