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From the desk of Rand L Miller, April 13, 2006
Have a Happy & Safe Easter Celebration
I thought that you might like an update on Real Estate/Finance News. Rates have recently increased to the mid 6% range. This is the highest rates have been since 2002. Rates across the board have increased. It is expected that rates will increase to about 6.9% by year end. If you want to refi before rates increase more call me.
Fixed Rates
are up.
As you can see, rates are climbing, they have almost gained a full 1% increase
since Jan 06. Part of this is caused
by the increased strength of the economy.
“Mortgage rates continued to creep up following the unexpected drop in March’s unemployment rate. That drop indicated there may be some upward pressure on wages in the near future, which could lead to a rise in inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist. “And the threat of a higher rate of inflation, as we all know, invariably leads to higher mortgage rates.
Adjustable Rates
are on the move upward
This
is an interesting chart. When you look at the trend of ARM rates,
it
almost feels like you're on a rollercoaster at Six Flags. What is not
shown is the longer term index figures. I don't know if you
remember but
rates increased in 1987 to about 11% and also up to 18% in the early
1980's.
Hopefully that won't happen again. But it definitely should make
you consider fixing your ARM if you're not able to hang on if rates
continue to rise. Fixed rates are a great tool to protect yourself from
future ARM spikes. I still feel most
comfortable with a 30 year fixed rate. But then again you won't see me
down on the gambling table in Las Vegas. If your risky and interested in
adventure, continue to ride your adjustable mortgage. if you're
conservative, NOW may be a good time to fix your rate, no surprises,
regardless of what happens with the economy. Call me.
Credit
Cards they will kill you
I hate to talk about credit cards, because the topic makes me sick. When I see how these credit companies gouge their customers. They advertise how you should go on vacation, spend as much money as you like, zero interest for 3-12 months, then they sucker punch you with a 30% rate, not because you were late, but because your credit score dropped due to high credit use. This is so abusive, yet they get away with it. I know people should know better, but I hear so many horrible stories of this abuse. One solution, though could be to consolidate part of the debt with a lower rate mortgage. If you discipline yourself to pay extra every month [with a fixed 2nd mortgage or equity line] you can pay off the debt quicker and at a 1/3 of the cost. Equity Lines now are as low as Prime 7.75% that's low compared to 30% on many credit cards. If you want to save money on your credit cards call me for a Low Fixed 2nd mortgage or Equity Line.
When should you
Refinance?
The old rule of thumb was "if your rate is at least
1% more than the new proposed interest rate." This rule still may apply in
certain situations, but there are other good reasons to justify a
refinance ie: 1.) Even though your rate is less then 1% above the new
proposed rate, you still may save $100-$200 per month, this savings over
years can accumulate to a very substantial amount, ex. 15 years x $100
saved p/m = $18,000. 2.) If you currently have an ARM [Adjustable Rate
Mortgage] or short term fixed rate [3 year, 5 year or 7 year fixed],
reason, if you don't want to risk riding an interest rate roller-coaster
in the future, fix your loan for 30 years. 3.) If you need to pull cash
out to fund home improvements or consolidate debts, this can allow you a
lower interest on the extra cash needed.
Need help
with...Credit Problems?
If you have late payments, paid or
unpaid collections, charge-offs, bankruptcy or repossession, you may need
the help of a good credit-cleaning program. Try www.CreditCleaners.Net this
service can clean or correct credit problems, remove lates and raise FICO
scores. It can even fix problems caused by a Bankruptcy. Call me for
details.
If you have any questions regarding purchasing, refinancing or investing in Real Estate just give me a call or send me an email. I look forward to offering you candid advice with facts and figures, to help you feel confident when you make your Real Estate Finance related decisions.
Any questions just call or email me.
Sincerely,
Rand L Miller, Mortgage Manager
(661) 286-1450 or (631) 754-1328 or (800) 644-5363