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Kemmer's call

April 24th, 2018 8:52 AM

Long-term U.S... government bond yields topped 3% for the first time in more than four years The 10-year yield is a barometer that influences borrowing costs for consumers, corporations and state and local governments. Mortgage rates are tied to this and have reached almost 4.5%  see this  article from Government backed funding source. http://www.freddiemac.com/pmms/ great graphs.

My concern is that the Home affordability index will lesson with higher rates = higher payments and the housing values will slow if not even drop in value. This could trigger another financial situation as so much of the economy is tied to housing.

Many people are refinancing to get cash out for improvements to there existing homes rather than buying new ones or paying off debt to free up cash flow for other investments or simply converting there adjustable rate mortgage to a fixed wile rates are still low.

I would be happy to discuss any and all options or concerns  you may have.

OR Price your own loan   http://www.firstcaliforniafinancial.com/CaliforniaMortgageRateSheet  and give me a call for a custom quote..


Posted by Kemmer Daniel Matteson on April 24th, 2018 8:52 AMLeave a Comment

November 17th, 2014 2:04 PM

The Federal Banking reserve chairman ended the quantitative easing program, which had the government buying Trillions of bonds. This was to create a large demand to keep prices down. California mortgage rates are now on the rise and will continue to rise.

If you are looking to refinance your home loan in California now is the time to see what you qualify for and what mortgage refinance programs are available to you as a homeowner in California.

So with the demand now diminished, prices will go up so in other words mortgage interest rates will rise up as they are closely associated with bonds. While the federal reserve rate remaining at historical lows, as the economy grows they will have to raise the rates and mortgage rates will again rise, especially the adjustable rates tied to those rates/indexes.

It is important if you are going to remain in your home and have an adjustable rate mortgage to know what the consequences of holding on the the low rate you have.

What is your index and Margin is the first question you should know. Libor and monthly index's are the first to go up and have the highest margins or higher rates. What is the maximum your capped out rate you can go to? This is the highest rate you mortgage can go to and what is the maximum it can go up per year. Many of these adjustable loans can go up 2% a year and you could find yourself having a much higher payment in a short time.

It is always difficult to trade up to a fixed rate.. If adjustable rate mortgages had the same rates as fixed no one would take them!
So locking in a fixed rate is going to be at a higher rate than the variable rate loan.

So the decision has to be made with the time frame of ownership you have to stay in the home. It is always better to convert to a fixed when the fixed rates are lower obviously than higher.

With the certainty of rates going up and fixed rates still at very low levels this is the time to convert to a fixed, if you are keeping your home. 

Many companies try to sell you on no cost loans at higher rates, but it is possible to buy down the interest rate and thus the payment to keep your new payment closed to what you are currently budgeted.

Give me a call and I can work out several scenarios. /options that will give you peace of mind and continual affordable ownership. 


Posted by Kemmer Daniel Matteson on November 17th, 2014 2:04 PMLeave a Comment