The Chris Jones Group » market watch

Rates Drop Below 5%

chrisjones — Wed, 17 Dec 2008 19:05:00 +0000

So here we go. The Fed has essentially signalled that it will fire all of its guns at once and explode into space (first to reply with that reference wins lunch), and that has turned the markets upside down. The 10-year bond is up a massive 200 basis points in the last 24 hours, but the FNMA/FHLMC bonds, though they were strongly up yesterday, are not following up today. There is a lot of profit-taking going on.

Therefore we are sitting in a curious spot. Rates are very good, better than I’ve seen them in 4 years, but not as good as I would have expected them to be based on yesterday’s news. We are getting a big negative move in mortgage bonds today, giving back almost everything we got yesterday. That means that rates are changing program-by-program, lender-by lender about every half hour. You want a fantastic rate, you have to have someone standing by with his finger on the trigger.

That’s what I do. I need a couple pieces of information from you and a target rate, and I can be ready to lock when we hit the rate you want. But you have to email me and let me know you’re in the game.

More later.

What is Rate Watch?

amyjoyates — Thu, 16 Oct 2008 03:56:58 +0000

Rate Watch by Chris Jones is broadcasted Monday through Friday via email. You can expect to read information on current rates and commentary by Chris Jones, Resident Magician and industry tracker. on what is happening in the industry and how it may affect you. It is a quick, easy, and accurate way to learn what the rates are in today’s market.

Chris Jones understands how the market works, and the products it produces. He understands how everything from the weather to CNBC reporting influences the mortgage rate you pay. He can’t always forecast accurately which direction rates are headed, but he knows the landscape. Chris Jones is a tracker. He is the guy to talk to. He can help anyone with a mortgage, or anyone that works with people in real estate, save money on mortgage interest.

Summary of Rate Watch by Chris Jones, Resident Magician

* It’s FREE
* It contains current information (straight from the market to you)
* Learn from an experienced voice (Chris Jones, of course)
* It’s by referral only (no spam –ick!)
* You can use it to pick your own mortgage rate.

How Much Does My Interest Rate Really Matter?

chrisjones — Thu, 17 Apr 2008 14:14:00 +0000

Inflation is the big problem this week, and it’s pushed mortgage interest rates to their highest level in 2 months. Today’s market news – bad earnings from nearly everyone and higher-that-expected jobless claims – should push bonds higher, but right now the market traders have decided that stocks are good and bonds are bad, and nothing is going to change their minds, apparently. So let’s spend a moment talking about interest rates, and why they are NOT the end-all and be-all of mortgages.

First, interest rates aren’t very high, on a historical basis. 6.25% sounds like a lot, but most people can remember 7.5% fairly recently, and some can remember 12%. Business still got done.

Second, let’s look at the real difference between 6.25% and 6% mortgage interest rates. On a 30-year mortgage, beginning balance of $250,000, the payment difference is $41/mo ($1498 vs $1539). That’s less than $500/yr, or .1% of the gross annual income of a typical homeowner for a home with that kind of loan. Suppose your company comes to you and says “in order to cut costs and keep the company alive, we’re going to have to cut everyone’s salaries. The cut will be .1%. Please don’t kill us.” Anyone going ape over that? Over what amounts to one family trip to Wendy’s every month? Yet there are borrowers that have attempted suicide when their rate rose by an unexpected .25%.

Third, keep in mind that on fixed-rate loans, you pay with the house’s money, to use a gambling term. Every year inflation rises, and that means that every year the effective payment on your mortgage DROPS. Know how we talk about “real dollars” as a way to price things? That, say, gasoline, despite its huge runup recently, is still cheap in 1975 dollars (costs less now than it did then, actually)? Well, in 2015, you’re going to be paying your mortgage with 2015 dollars, and if things go the next 7 years the way they have the last 7, that will be the equivalent of paying only $1249, a $250/mo cut in real dollars, more than 6x as much as the difference between 6% and 6.25%.

Bottom line? Don’t panic when rates rise. If you’re refinancing, just hold your cards, tell us what rate you want, and we’ll tell you when it gets there (hey, a stockbroker for mortgages – for FREE!). If you’re buying, just buy. The cost of a new heater will be 25x as much as any difference in your interest rate, so don’t waste energy on irrelevant things.

30-year rates at 6.25% this morning, although there are bonuses for credit over 720 and for larger loan sizes and for lower loan-to-value ratios, so you need to check with a pro to know where you are for sure. Bryan – still 6.125%. Hang in there.

P.S. Although we do this for free, we get up at 5:30am to do it and we’d be grateful if you’d do us the favor of passing along some names of other people that would like this service. We think Rate Watch is valuable, and if you do, let us know.