Blog Category: interest rates

historical rate chart

220 Year History of Interest Rates

A while back, I published a chart of interest rates that went back about 40 years. I did this in an attempt to show that the recent increase in interest rates, as well as future interest rate increases, is not a major event when put into historical context. Interest rate history is almost as important as current interest rates.

I want to put this into a larger perspective. How about looking at a 220-year history of interest rates? Read More

Truth Lie Street Sign

9 Mortgage Myths To Stop Believing

Buying and financing a new home can be a daunting task and many of us turn to friends and family for advice. Watch out for mortgage myths. The only experts in the mortgage field….are the experts in the mortgage field! Friends and family might not be the experts they think they are. The mortgage guidelines and interest rates are changing so frequently that unless someone is in the mortgage field as a full-time job, you should only take advice from a mortgage professional. Read More

Percent Character rates

96.5% FHA Loans vs. 95% Conventional Loans

FHA Loans vs Conventional loans is an important discussion. Since you can no longer drop the MIP on an FHA loan, I wanted to show a comparison between a 3.5% down payment FHA loan and a 5% down payment Conventional loan. I think it may encourage some buyers to save up a bit more to get 5% down for a Conventional loan. Read More


Add-ons? What are those?

Mortgage Add-ons? What are those? Most people are not aware that Fannie Mae and Freddie Mac have a whole chart of pricing “add-ons”. Add-ons are an amount usually expressed in discount points. These points are added on to the “base rate” in certain situations. Each 1.00 point is 1.00% of the loan amount. Another example is that a .25 point is a .25% of the loan amount. On a $400,000 loan a .25% point is $1,000.

Some examples of situations when mortgage add-ons are required: Read More

Percent Character rates

APR (Annual Percentage Rate) Is A Poor Judge Of Character

APR (Annual Percentage Rate) is a poor judge of character. Annual Percentage Rate, or APR, is a legal requirement that mortgage lenders must disclose on one of their disclosures called a “Truth In Lending” statement. It is not a useful way for the consumer to measure the cost of a mortgage.

It is supposed to be a way for lenders to express their closing costs in terms of a percentage. The thinking is that consumers can simply ask lenders for the APR, and can quickly shop mortgage loan offers by analyzing this one number. But things are not that simple.

APR makes no intuitive sense to most consumers, it does not cover all the costs, and does not take into account differences in a consumers’ time horizons, tax rates and opportunity costs. A more accurate way to measure the cost of a loan is to simply take a more involved look at the interest rate and the closing costs from the lender only. To compare loan offerings between lenders the consumer need not look at title costs, per diem interest, tax escrows or state/county recording and transfer taxes. None of these aforementioned costs is dictated by the lender or is part of the loan itself.

Let’s take an example on a mortgage loan for a property in Washington, DC. Read More

rising prices

Are Interest Rates Too High?

Interest rates are becoming a hot topic lately. With interest rates shooting up approximately 1% in about a month, there is plenty to talk about. It seems that some people were only in the housing market as a result of give away mortgage rates. When I hear someone exclaim surprise when I quote a 4.5% interest rate, because they heard rates were at 3.5% six months ago, it actually shocks me that people are surprised.

Read More

Percent Character rates

Average Interest Rate

I get a lot of excited questions based on information people see on the latest average interest rate news. This data is usually published monthly by the media, so it is a regular source of misleading data.

It is a compilation of a lot of different interest rate quotes and variables, that do not apply to everyone’s exact situation. Also, it is a national average figure, with interest rate quotes from across the country that may not apply locally, and many times also includes interest rate quotes with points. But most consumers do loans with 0 points. Hence, the numbers you see on TV or in the newspaper always looks artificially low. Read More

interest rates

Bond Market Report – April 2019


The 10 Year Treasury Bond is at 2.56% as of last Friday. This is about the same as the last time I posted 10 Year Treasury Bond data in early January.

On 01-03-2019 the 10 Year Treasury Bond was 2.55%.

The 10 Year Treasury Bond is not a direct correlation to mortgage rates. It is simply a good to know historical information on treasury bond rates.

Below are some interesting historical numbers*:

In 2018 the average yield of the 10 Year Treasury Bond was 2.91%.

In 2017 the average yield of the 10 Year Treasury Bond was 2.33%.

In 2007 the average yield of the 10 Year Treasury Bond was 4.63%.

In 1997 the average yield of the 10 Year Treasury Bond was 6.35%.

In 1987 the average yield of the 10 Year Treasury Bond was 7.18%.

In 1977 the average yield of the 10 Year Treasury Bond was 7.42%.

Where is the 10 Year Treasury Bond headed next?

*The source for these numbers comes from:

cocktail party

Cocktail Party Chatter

There is nothing worse for a mortgage lender than the current cocktail party chatter going on about interest rates. It seems to be a main topic at the water cooler, over coffee, on Facebook, and at cocktail parties. Who got what rate? Who got the lowest rate?Rates, rates, rates. No talk about service or experience, and no talk about execution. It reminds me of the talks I hear about related to who has what car or what house, who took what vacation, etc. Interest rates are the current cocktail party chatter, and it is not good for me. Why? Read More

wheat man 1866559 1920

Corn, Salt, Wheat and Mortgages?

Let’s do a quick lesson that may take us back to our school days. I want to make sure everyone knows what a commodity is and is not.

What is a commodity?

A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market. The market treats a commodity as equivalent or nearly so no matter who produces it. Examples are corn, salt, wheat, petroleum and copper. Read More


Current Mortgage Rates

I am sure many people want to know where current mortgage rates are at all times, but especially after the recent stock market debacle where the DOW was down almost 1,000 points at one point in the day. Of course, the story line we are hearing is that the mistaken input of a fat fingered trader at Citi is solely responsible for the error. That story is meant for an entire other blog post, but if anyone believes there are not checks and balances in place to protect from those sorts of simple mistakes, then I have a bridge for sale. Read More

interest rates are up

Current mortgage rates

Everybody is asking about current mortgage rates these days. And everyone knows they are higher! But are they high? And what exactly are they? How are they determined? Let’s take these questions one by one.

Are mortgage rates high?

Looking at the historical numbers, today’s rates are average. You might possibly consider today’s rates a little above average. I wrote this blog with charts that show historical rates. This is a good reference point. You will see that mortgage rates don’t routinely get as low as 3% or 4% over history. Even 5% is rare. If anyone is waiting for rates to go as low as they were in 2020 and 2021, they’ll likely be waiting a long time.

You can click here to watch this video for a short review of my take on historical rates.

What exactly are mortgage rates now?

Mortgage rates can’t be quoted in generic terms. If you want to get a quote that is anywhere near accurate, you need to discuss details with a mortgage lender.

Mortgage rates change due to a few variables. Some of those variables are:

  • Credit score: Obviously a higher credit score is better to get more competitive rates.
  • Down payment: Surprisingly a larger down payment does not necessarily guarantee better terms. A 5% down payment loan typically has mortgage insurance. That mortgage insurance may cover the lender up to 30% of the value of the home. Between 5% down payment and 30% PMI coverage that is 35% of safety for the lender. And that 35% of protection is more valuable than a 20% down payment. This means that a 5% down payment loan may have slightly better terms than 20% down. But there are scenarios where higher down payments may provide better terms. This is why you need to talk to a mortgage lender in detail.
  • Loan Size: Mortgage rates will vary based on loan size. You need to talk to a mortgage lender to see if your loan amount is Conforming, Conforming “High Balance”, or Jumbo. Read more about loan size.
  • Debt ratios: There are times when higher debt ratios may impact your mortgage terms.
  • Property type: Certain property types can come with higher mortgage rates. Condominiums, 2-4 unit multi-family properties, and other property types can come with higher terms.
  • Mortgage type: Rates will vary depending on if you are considering a fixed rate, a buydown mortgage, or adjustable rate mortgage.

A mortgage borrower will pay a much higher rate who wants to buy a condo with 5% down, who has a lower credit score, for a condo. And a mortgage borrower will get lower terms who wants to buy a single family home, with 20% down, and a high credit score.

How are rates determined?

The Federal Reserve determines mortgage rates, correct? No. The Federal Reserve is one lever of many that may have an impact. Mortgage rates are more affected by the free market. Keep an eye on inflation, economic news, and the general economy. This blog I wrote discusses the Federal Reserve and the economy in more detail.

It is also important to note that mortgage rates can change each business day. Rates move up and down daily, just as frequently as you see daily stock market moves.

What are current mortgage rates? As you can see that is a complicated question. You can fill out this form to see terms for your scenario. There is no fee required, no credit pull needed, and no obligation. After seeing numbers you can decide if it is time to get pre-approved.


Contact me to discuss your scenario, your local housing market, or other questions. Click here to schedule a call or you can email me directly.

interest rates are up

Did The Coronavirus Make Mortgage Rates Go Down? Did the Federal Reserve Just Cut Mortgage Rates To 0%?

Mortgage rates did indeed go down after the Coronavirus spread and financial markets started to panic. But the Coronavirus and mortgage rates aren’t directly connected.

People considering a refinance continue to contact me for low rates, but now that rates have spiked it may no longer makes sense.

The recent mortgage rate reductions we saw may be gone for a period of time, but the rate changes are not as drastic as the media made it sound. Read More

Federal Reserve Has No Control

The Federal Reserve has no control? When it comes to interest rates, the Federal Reserve is fairly irrelevant. All it does is adjust its rates to those set by the market. If you plot the yield on T-bills against the discount rate, you will see that the former leads the latter. Despite all the rhetoric about it, the Fed has not kept rates artificially low, just as it did not make them soar in the 1970s. The market sets the rates, and the Fed follows. Read More

online shopping

Getting A Good Rate: Priceless. Rate Shopping Online: Useless!

Everyone wants to get the best deal reasonably possible when getting a mortgage. I say reasonable, because although some lending sources advertise what seem like unreal rates, most consumers are smart enough to discount what appears to be a free lunch. The reality is that even with hundreds of competitors, rates never vary by much more than 1/8% in rate. But hey, who does not want every 1/8% to be in their favor?! I do. So go for it. But here is the problem with shopping for that best 1/8% deal online: Read More


Good News For Stocks Is Bad News For Bonds/Rates

It looks like rates are edging up today, again. Here is this morning’s bond market update from MBS Online:

“MBS are down -13/32 (FNMA 30-yr 3.0 at 103.23), around 16/32 lower than yesterday at this time. Unfavorable repricing took place yesterday. Early investors may have priced at levels as high as -10/32.

Global investors have continued to shift to riskier assets today, pushing major US stock indexes to multi-year highs, and hurting bonds. Stronger than expected economic news from Europe was the main influence today. MBS prices have dropped to levels last seen in September. The Dow is up 50 points. New Home Sales will be released at 10:00 ET.” Read More

calculator with house on it

How A Mortgage Calculator Can Keep You Out of Trouble


If you type “Mortgage Calculators” into Google you will get over 2 million results and Google’s simple mortgage calculator at the top. The Google mortgage calculator will give you a rough idea of mortgage monthly payments based on a simple calculation of the interest rate and mortgage term. It doesn’t answer any details, like: how many payments do I have to pay in order to pay off my mortgage? In 15 years how much mortgage will I have left to pay if I increase my monthly mortgage payment? What happens if you want to increase or decrease the interest rate, or change the amount of years of your home loan? With all the mortgage loan calculators out there isn’t it best when you can see the big picture of your home loan payment and how it can work for you. Read More

online search

How To Find The Best Mortgage Lender

When comparing mortgage lenders there are many things to consider. If you want to save time follow the below steps on how to compare mortgage lenders. Time is valuable and these six steps should help you find a good mortgage lender: Read More

interest rates going up

Interest Only Loans

Anyone that reads my blog knows that in general I am not a fan of Interest Only (IO) loans. I have said before that an IO loan is like putting your mortgage on a credit card. But on a refinance it may make sense for a few reasons. If you have already built a lot of equity it may make sense. And if you are more interested in savings than equity building. And if you know you are not going to live in the property forever so have no interest in getting the mortgage paid off.

Read More

balloons floating through the air

Interest Rate “Float Down”

What is an Interest Rate “Float Down”? It used to be that if you locked in an interest rate, you’d have a chance at a lower rate later in the transaction and prior to closing via a “float down”. A float down may, for example, allow you to initially lock-in a 6% 30 Year Fixed rate with 0 points, only to float down to a 5.5% 30 Year Fixed rate with 0 points later in the transaction if rates fall during the processing of the loan.

Read More

Percent Character rates

Interest Rates And Your Monthly Mortgage Payment

Many people are very focused on interest rates these days and are wondering where they are headed next and how it may affect their mortgage payment. Interest rates have been historically low for a very long time. And people are starting to fear that they may increase and have an outsized impact on the cost of purchasing a home.

You can see a chart of the long-term history of interest-rates by clicking here. This chart shows that we are definitely near the bottom of where interest-rates have been over a long period of time. On the other hand, if interest-rates start to go up does it have as much of an impact as people think? Read More

down arrow

Interest Rates Are Down!

Interest rates are down, do you need to refinance? Are you looking to buy a new home?

I have noticed in the past that when rates go down, they do not seem to stay down for very long. It seems they stay down for days, maybe weeks. Right now you can get a 30 year fixed-rate mortgage for somewhere around 4.75%, and you can get a 15 year fixed-rate mortgage for somewhere around 4.25%. The specifics will depend on the loan size, your credit score, the property type, property location, etc. Read More

Percent Character rates

Interest Rates Are Going Down, Except They Are Not

A common refrain I hear from mortgage borrowers is that interest rates are going down when they are not. I had a client insist recently that he knew rates were going down. He expected a better interest rate than what he was already locked into. But I saw that rates were exactly the same as when we had first started his transaction. After researching this some more I found that Read More

interest rates

Interest Rates Are Still Low. Or Did They Go Up? Are They Down?

Interest rates rose after the presidential election. The news from the bond market according to MBS Online was “Trump has advocated for greater spending on defense and infrastructure. And at the same time he proposes to cut taxes. These policies raise the prospects for increased deficits and inflation. Neither of which are good for mortgage rates.”1 Read More

rising prices

Interest Rates Can Go Up Too

There is always another bus, right? So why not wait for the next one? I am not sure I agree. The next bus may be broken down, or out of gas, or delayed beyond a comfortable waiting period. But I am not talking about a bus, I am talking about a refinance. I hear rates are going down 1% a week, and soon banks will be giving away money for free. Do not refinance now because mortgages will be free soon if you wait. And if you wait long enough, banks will even pay you to take a mortgage. Is this true? Come on! You know my sense of sarcasm. No, it is not true. But Read More


Interest Rates Up Again… a Lot!

Interest rates are now up about 1% from their rock bottom lows of a few months ago. The inevitable interest rate increase from all-time lows is continuing. Investors have continued to sell stocks and bonds following the Federal Reserve meeting last week. It seems that if the economy performs as expected, then the Fed plans to taper its bond purchases later this year. Over the past few years, the Federal Reserve bond purchase program has helped mortgage rates decline to historically low levels. This occurrence has lifted the stock market. So any sign of the withdrawal of stimulus has hurt both stocks and bonds. Read More

Percent Character rates

Interest Rates, 3% or 15%?

Everybody likes to offer an opinion on where the stock market is headed next, or where interest rates are headed, among many other things. So I’ll jump into the fray and offer my opinion as well. I think Read More


Latest Bond Market News

I am going to continue to post, when appropriate, updates from the service I use called MBS Quoteline, that updates me on the bond market. Remember that in general, inflationary news is bad for the bond market and interest rates, and deflationary or recessionary news is positive for the bond market and interest rates. The news for today is: Read More

interest rates

Latest Bond Market Report – January 2020

The 10 Year Treasury Bond was at 1.822% on January 10th 2020.

It was 1.847% as of October 28th 2019.

So you can see that rates have been fairly flat for the last 2+ months.

The 10 Year Treasury Bond is not a direct correlation to mortgage rates. It is simply good to know historical information on Treasury bond rates.

Read More

interest rates

Latest Bond Market Report – June 2019

The 10 Year Treasury Bond was at 2.08% as of last Friday*. This is the lowest it has been in a long time.

QUESTION: But what does this mean for mortgage rates?

ANSWER: In general, mortgage rates are flat recently, but down over the last few months.

QUESTION: Do mortgage rates rise and fall in lockstep with the 10 Year Treasury Bond?


QUESTION: What variables affect mortgage rate quotes.

ANSWER: Loan size, loan type, property type, credit score, down payment, debt ratios, and more.

Where are the 10 Year Treasury Bond, and more importantly mortgage rates, headed next? Check back here to see!

*The source for the 10 Year Treasury Bond quote comes from here:

interest rates

Latest Bond Market Report – October 2019

The 10 Year Treasury Bond was around 1.8% as of October 28th 2019.

The 10 Year Treasury Bond is not a direct correlation to mortgage rates. It is simply good to know historical information on treasury bond rates.

On August 2nd 2019 the 10 Year Treasury Bond was 1.846%.

On September 3rd 2019 the 10 Year Treasury Bond was 1.461%.

Below are some interesting historical numbers:

In 2018 the average yield of the 10 Year Treasury Bond was 2.91%.

In 2017 the average yield of the 10 Year Treasury Bond was 2.33%.

In 2007 the average yield of the 10 Year Treasury Bond was 4.63%.

In 1997 the average yield of the 10 Year Treasury Bond was 6.35%.

In 1987 the average yield of the 10 Year Treasury Bond was 7.18%.

In 1977 the average yield of the 10 Year Treasury Bond was 7.42%.

Where is the 10 Year Treasury Bond headed next? Stay tuned!

*The source for these numbers comes from:


interest rates

Latest Rate News. And Are Loan Limits Changing?

Latest Rate News TRANSCRIPT:

Justin: We are on. Hey, Brian. This is Justin and we’re here with the Mortgage Market Minute. What do you have for me today?

Brian Martucci: Well, I think the topic of the day is probably going to be interest rates and the odd thing to me is that a lot of people do not realize that interest rates are up a little bit, not a lot, but people, when the media starts to hammer the public with the fact that rates are down, rates are down and they repeat it all the time. Read More

tree being cut

Lending Tree Falls Hard…Goes Boom

One motto of Lending Tree is, “when lenders compete, you win.” Yes, I agree. But that should be expanded to be considered even somewhat accurate. If Lending Tree were my company I’d say, “when experienced, legitimate, local lenders compete, you win.” But then , I’d have just put myself out of business. So I guess I would not say that if I owned Lending Tree or some other “lead generation” website. Read More

Woman stressed over shopping

Loan Shopping

Shopping for a loan is easy, kind of like window shopping. You poke your head in the window, take a look, maybe you go in the store and ask a few questions, maybe you go to another store, who knows. You are not obligated to buy from anyone, and you are going to check every source you can TO GET THE BEST PRICE. It’s all about the best price after all (he said sarcastically).

It is all about the best price, as long as you get what you wanted in the first place. And this is the problem in shopping for goods and services, people are so focused on the price, they lose of track of making sure they are going to get what they need. You have to ask a lot of questions, and be asked a lot of questions, to ensure the process will go smoothly and to ensure you will get the price being promised. If you are not being asked a lot of questions when you ask about a mortgage, something is wrong. Read More

Percent Character rates

Mortgage rates, why so different at different banks?

Mortgage rates, why so different at different banks? Are you puzzled why Conventional mortgage rates vary so much, day to day and from bank to bank? Or do you wonder why advertised rates are different when you call a mortgage lender? Many times rates are not all that different, they are just very complicated for a bank or mortgage broker to accurately publish due to numerous variables.

Most people are not aware that Fannie Mae and Freddie Mac have a whole chart of pricing “add-ons”. Add-ons are an amount (expressed in points or rates) that are added on to the “base rate” in certain situations. Some examples of add-ons are for:

  • condos
  • investment properties
  • multi-family properties (a 2 unit, for example)
  • credit score
  • extended lock-ins beyond the standard 30-60 days
  • loan-to-value Read More
Savings Budget Investment

No cost refinancing a.k.a. no cost refi

I frequently have people ask me for “one of those no-cost refi’s”. Some people think that mortgage lenders are so hard up for business that they are willing to lose money and simply pay the closing costs for the mortgage borrower. I don’t know of any businesses where losing money is part of the process of making money. A no-cost refi actually comes with a cost…a higher interest rate.

The reality is that a no-cost refi is one where the closing costs are built into a higher interest rate. Read More


Paying Points On A Loan

Is paying points on a loan a good idea? When you buy a new home or refinance, it can be a nervous and exciting time. And getting excited and nervous causes people to over analyze and sometimes make poor decisions. Sometimes a client will ask for a lower rate by paying discount points. Each discount point is 1% of the loan amount. This is $1,000 per $100,000 in mortgage. It sounds great to get a rate that is a half percent lower than what you hear about in the news or see online (shopping for rates online is not accurate, see this story for more on that), but what about the costs? Read More

doors and choices

PMI versus LPMI versus 1st trust/2nd trust Combo Loan

Everyone likes to think PMI (Private Mortgage Insurance) is evil. People like to think they should not have to pay it, and want to find a way around paying it. There are ways to work around PMI. But like all things in life, there are trade-offs. A person really needs to look at all the options and trades-offs, and consider how long they think they are likely to spend in their new home. Then everyone needs to consider paying PMI! What do I mean? Read More

Percent Character rates

Rates Are Still Low

Interest rates remain low, and have been low, for years it seems like. Although a consumer may complain about getting 5.625% instead of 4.875%, rates have been in a very tight range for quite a long time. We have not had a rate with a ‘6’ in front of it for years. And I can remember when 6% was thought to be a very low rate!

Of course, the whole discussion of rates has to incorporate the price of what one is financing. Read More

interest rates going up

Rates Can Go Up?

Interest rates are up, not a substantial amount, but enough to remind everyone that interest rates can go up as well as down. Rates are up about .25% to .375%, depending on the loan product and some other variables. I find that insignificant. But a homeowner who wanted to refinance to a Conforming 15 Year Fixed Rate at 3.125% who is now being quoted 3.5% is astonished. First, most of us forgot that rates can go up. We thought they only had one trajectory….down. Second, when the 15 Year Fixed Rate was at 3.125%, the client was hoping for 2.875%! And if rates got to 2.875%, people would hope for a little more. The financial psyche of we humans is fascinating. The deals we get are never good enough! We always want more. Read More

interest rates going up

Should I Buy Now And Avoid Higher Interest Rates?

Should I Buy Now And Avoid Higher Interest Rates?

This is a common question I get. Potential home buyers will worry that rates are going to spike, after all, “how long can they stay this low,” goes the logic. So some buyers assume they should buy now, at any price, and avoid a future rate increase. I am not sure how long rates can stay low, they have been low for almost two decades in Japan! But, I thought for fun, we’d look at some different numbers. Keep in mind the below are based off of broad assumptions of my own: Read More

Thanks Anyway, I Got A Really Good Deal Elsewhere…

Thanks Anyway, I Got A Really Good Deal Elsewhere. Ever heard that? But never assume the person you are talking to has your best interests in mind. Always check with trusted sources, experienced sources, and always ask a lot of questions. And…eat all your vegetables, wear clean underwear, and look both ways before you cross the street. Now you are all set with good advice for life. So what is my point to all this? Read More

interest rates are up

The Government Controls Mortgage Rates?

It’s that time again, the time when people seem to think a government edict can control a massive market. I have gotten dozens of calls and emails that go something like this:

“I hear Ben Bernanke is pushing rates down again.”

“I hear the government is pushing rates down.”

“I hear rates just dropped yesterday.”

The government does not control interest rates, unemployment, economic growth, etc. Read More

news media

The Media Can Be Downright Silly

The media causes hysteria. It is what they are paid to do. As a newsperson you have to make something sound alarming even if it is not, to attract eyeballs to sell ad space. This is positively ridiculous. But I guess somehow the bills have to get paid. And in the news world, it is with ads and marketing. But it would be nice if consumers remembered this and took a harder look at some news reports and applied a little logic.

Read More

boom comic book image

The Refinance Boom is not Over? Refinance Your 30-Year to a 15-Year!

Actually, the refinance boom is indeed over. However, there are a fair amount of people that still need to refinance. For example, I know of many people who have excellent interest rates on their 30-Year fixed rate mortgages, and plan to be in their home for a long time or possibly forever. These people should consider giving up their low 30-Year fixed rate. They can get a still quite low 15-Year fixed rate and save a small fortune over time. Read More

boom comic book image

The Refinance Boom is not Over? Refinance Your Fixed Rate to an ARM!

Actually, the refinance boom is indeed over; however, there are a fair amount of people that still need to refinance. For example, I know of many people who have decided to move sooner than they imagined. I hear of consumers who thought that they would live in their homes for the long haul, but then due to circumstances that were a surprise to them, they have now decided to leave in the next few years. Read More

piggybank savings

Waiting to Buy, Is It a Good Idea?

I have had numerous clients mention recently that they may wait to buy because they want to save for a larger down payment to have a 20% down payment and avoid mortgage insurance. While it is laudable to want to have a nice chunk of down payment, waiting may not pay off. Some think mortgage insurance is a waste of money, and that they should avoid it at all costs. Again, this is commendable, but maybe not worth waiting for. I’ll show some numbers to explain further. Read More

cut debt

We Cut Nothing. It’s All Still Broken!

So the debt ceiling is all fixed? Too bad. What else will generate so much hyperbole from our politicians? There were stories of terrorism, global disaster, and economic meltdown. My favorite was this one from Nancy Pelosi who insisted the debt limit be raised massively, “We’re trying to save life on this planet as we know it today.” Rep. Michelle Bachmann worried that raising the debt limit at all would be “like saying we embrace being Greece.” It was fun to watch. Rep. Maxine Waters said the final compromise bill “may be the single-worst piece of policy to ever come out of this institution.” Maxine needs to brush up on her history, this comes nowhere close.
Read More

historical rate chart

Where are interest rates going?

It seems the general consensus is that interest rates are going to drop “because of some Federal program” or, “because the Feds are going to make them go down to boost the economy.” It seems we have more believers in and fans of central planning than I ever imagined. Let’s make one thing clear, interest rates in the long run, are controlled by the marketplace. The Feds cannot decree 3% rates for the next 5 years while we work through this economic mess. Even the Feds ultimately cannot control the marketplace. However, the Feds can impact interest rates in the short run with monetary policy decisions, and the purchase of mortgage backed securities. Ultimately the marketplace sets interest rates after taking into account inflation and deflation, government monetary policy, supply of and demand for funds, and future economic expectations.

It has also recently been discussed that the cost of funds is much higher for lenders, and the availability of credit to then turn around and extend to the public is diminishing. Hence, it is said that it is hard for banks to drop rates, regardless of what the Feds do, in light of less available and more costly sources of funds. Read More

Percent Character rates

Will Interest Rates Stay Low?

Just when everyone thought rates were on a straight trend line pointing down! A few days ago, on Friday, December 4, 2009, there was a fairly bullish jobs report. Bond yields jumped up, hence, interest rates rose a bit. For a few days, I was locking-in clients at 4.75% with zero points on a 30 year fixed-rate conforming loan. A conforming loan is a loan that is equal to $417,000 or less. Read More


Would You Get Surgery At McDonald’s?

It never ceases to amaze me how people treat the most expensive transaction that they will ever do in life as a commodity. Would you get surgery at McDonald’s if they got into the health care business because it was the cheapest place to get it? Or would you talk to numerous different doctors based on experience, referrals, track record, and interaction with their staff and systems? Read More