3 Big Things: What happened to mortgage rates this week?, The Fed is meeting next week. What could that mean for us? and Don’t wait for rates to go up anymore! Refinance NOW!

Hey there, it’s Bruce Woodburn at CrossCountry Mortgage and WDBO radio and it’s time again for the three big things you need to know. Now, I’d really like you to pay very close attention to this because I think it’s super important that we all really understand what’s going on in the market and how does that really relate to you? So I’m gonna tell you how it relates to you and I, so we’re gonna cover refinances again. We’re going to cover what happened in the bond market this this week and what is likely to happen or potentially going to happen next week and the following weeks after.
  1. So let’s start with the first things first. What happened to mortgage rates this week? Well, on Monday, The bond market was up. So rates improved a little bit. On Tuesday, it was up even more, they improved a little bit. Wednesday, not so much. Okay, we lost 13 basis points on Wednesday, 28 basis points on Thursday, not a good day. And Friday today, midday it’s already down 19 basis points. When you look at that, what is the basis point do and how does it affect somebody that might be wanting to get a new mortgage? Well, for every 100 basis points would mean that you’re going to pay another point. That’s what it means. So if we lost just in three days, 65 basis points. That means whatever was at zero points on, on Tuesday would cost you 5/8 of a point, which on every $100,000 would be about $650. So that’s how it affects you. Now, what does that trend look like? Because I see things going up and down all the time. I mean, I watch the market day in and day out so that I can be a better professional service person to you. Now, what’s going on? It’s because of economic news. Now, the Fed has announced that they are tapering back on purchasing mortgage backed securities. So what does that mean? What does that mean to you the consumer? It means that the reason our rates have been low for so long is because the federal government is purchasing mortgage backed securities. In a normal market, private enterprise would purchase mortgage backed securities, institutional money. Meaning that banks, mortgage companies and insurance companies are buying mortgage backed securities, but they’re not. So who is in order to keep rates down? The federal government has to do it. Well, the Feds have been announcing that they’re going to taper meaning they’re not going to buy as many. So they were buying $10 billion dollars a month. Now they’re only buying $4.5 billion a month. And they’re threatening to to reduce that more and more until they’re out of the market completely. Well, that’s going to drive interest rates up.
  2. So that’s one of the things then we have the Fed is meeting on Wednesday September the 22nd at two p.m. And they are going to be announcing their monetary policy, which means that this could go in either direction for us. I’m not real optimistic about it, but we have been hovering on the 200 day moving average on the bond market and we have dropped below the 100 day moving average. On Thursday, it dropped below it two days in a row, below the 200 day moving average. That means a new trend can start and it’s not positive for interest rates.
  3. So the third thing that you need to know is that I’m going to go back to what I did last week and the week before and that is that 81% of you that should refinance have not refinanced yet, 81% that’s the national average, 81% of the people that are listening to this should have refinanced, the rest of you, maybe not. Why would we refinance? Drop the rate, lower your payment, reduce the loan term to a 15 year or 20 year loan. You save tens of thousands if not hundreds of thousands of dollars by doing that. You can consolidate your debt. Get rid of all your consumer debt, let’s pull some money out of the equity in your property, wipe out debt. Then let’s take the money that you were paying towards all the junk you’re paying for and put that towards a mortgage and now you become debt free with no mortgage at all. How about home improvements? I know you guys have been thinking about redoing your kitchen, your bathroom, your yard and your landscaping and putting up a new fence. Now is the time to do it. Now, Is the time to do it. Don’t wait for the rates to go up another quarter of a point, do it. Now call me today or pull out equity maybe to buy another house. I’m getting a lot of calls on that right now Bruce. I really think it’s a good time to invest in real estate. Yes, it is a good time to invest in real estate. I’m also attaching a chart. I don’t typically do this. These are Japanese candlesticks. These are the things that I read that give me indicators as to whether you should float or you should lock when you are looking at a refinance or purchase transaction.

I hope this was helpful to you. It is a little esoteric, it’s getting a little deep in finance, but that’s my job and I promise. I’ll always keep you informed. Thank you for the opportunity to help you and I hope this was good information for you to share with your customers, your friends and your family have a great day.

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