NOW HIRING!
ARE YOU READY?
ARE YOU READY to provide real finance solutions to consumers and earn additional income NOW?
ARE YOU READY to build a consulting business that allows you the opportunity to use your talents to help others as you help yourself?
ARE YOU READY to work with a team that is passionate about helping others avoid getting ripped off by predatory lending practices?
ARE YOU READY to manage a nationwide team of consultants and receive bonuses on team production as well as your own?
ARE YOU READY to feel good about who you are and what you do?
ARE YOU READY to find a way to build a nest egg that will allow you to retire the way you have always dreamed of?
If so, we have the Solution!
REAL FINANCE SOLUTIONS is a consumer advocate consulting system that allows you to build a profitable business on a full time or part time basis. Exceptional training provided. We’re ready when you are!
Visit us online
RealFinanceSolutions.com or Email Boyd@RFSweb.net
Tuesday, June 16, 2009
What Consumer Sentiment Surveys Mean To Housing Markets
Posted by Ed Holingshead: 16 Jun 2009 08:00 AM PDT
Americans are feeling better about their budgets right now, raising the possibility of a full economic recovery.
According to a University of Michigan and Reuters, Consumer Sentiment rose for the fifth straight month in June.
Consumer Sentiment is now at its highest levels since September 2008, the month in which Lehman Brothers failed, Fannie Mae and Freddie Mac were nationalized, and the global financial crisis is believed to have peaked.
Rising confidence levels are important to the economy -- and to housing --because a confident consumer is more likely to make the big-ticket purchases that propel the economy forward.
This includes buying new homes.
That said, the Consumer Sentiment Survey has its flaws.
For one, the survey's sample set includes just 500 families. This is hardly a cross-section of America. Secondly, when people feel better about their finances, it doesn't always lead to additional consumer spending -- it could lead to more saving.
What people say they'll do and what they actually do can be two very different things, but if consumer spending does increase in the months ahead, expect home sales to benefit on the willingness of families to "take more chances" and expect mortgage rates to suffer on concerns for inflation.
Posted by Ed Holingshead: 16 Jun 2009 08:00 AM PDT
Americans are feeling better about their budgets right now, raising the possibility of a full economic recovery.
According to a University of Michigan and Reuters, Consumer Sentiment rose for the fifth straight month in June.
Consumer Sentiment is now at its highest levels since September 2008, the month in which Lehman Brothers failed, Fannie Mae and Freddie Mac were nationalized, and the global financial crisis is believed to have peaked.
Rising confidence levels are important to the economy -- and to housing --because a confident consumer is more likely to make the big-ticket purchases that propel the economy forward.
This includes buying new homes.
That said, the Consumer Sentiment Survey has its flaws.
For one, the survey's sample set includes just 500 families. This is hardly a cross-section of America. Secondly, when people feel better about their finances, it doesn't always lead to additional consumer spending -- it could lead to more saving.
What people say they'll do and what they actually do can be two very different things, but if consumer spending does increase in the months ahead, expect home sales to benefit on the willingness of families to "take more chances" and expect mortgage rates to suffer on concerns for inflation.
Wednesday, June 10, 2009
Want To Know Why Mortgage Rates Are Up Over 1.125 Percent In 10 Days?
Posted By: Ed Holingshead 09 Jun 2009 08:00 AM PDT
Since Memorial Day, conforming mortgage rates have jumped by more than 1.125 percent, adding thousands of dollars to the annual cost of homeownership.To the casual observer, the moves may seem random. There's a reason this is happening, however. It starts with inflation.As an economic force, inflation erodes the value of the U.S. Dollar. Left unchecked, it drives up the Cost of Living as each dollar "buys less" at the supermarket, gas station, or anywhere else.But with respect to mortgage rates, inflation's impact is more immediate.
Because inflation devalues the dollar over the long-term, it renders long-term mortgage bonds a less attractive investment for traders. If bond investors are repaid in U.S. Dollars, after all, it would make the investment worth less if the dollar is in an inflationary freefall. Therefore, in situations when inflation is likely to present, we find that traders often sell out of their mortgage bond positions which, in turn, drives down the bond prices. Then, because bond yields move in the opposite direction of bond prices, rising rates are the inevitable result.
Lately, Wall Street is fearing inflation for a number of reasons:Job losses are slowing, adding to consumer spending expectationsGas prices have risen 41 days in a row. The federal government is increasing the money supplyThese 3 factors -- plus a few others -- are all coming to a head around the same time and traders are getting defensive with their portfolios. As a result, they're selling their mortgage bond positions and it's driving mortgage rates higher.Rates may continue to trek toward 7 percent through July and August, or they may retreat toward 5 percent. We can't know for sure. What we can know, though, is that volatility in rates should continue until the economic picture gets more clear. That could be next week, or next year. For now, be ready to lock at a moment's notice. Mortgage rates are changing quickly.
Posted By: Ed Holingshead 09 Jun 2009 08:00 AM PDT
Since Memorial Day, conforming mortgage rates have jumped by more than 1.125 percent, adding thousands of dollars to the annual cost of homeownership.To the casual observer, the moves may seem random. There's a reason this is happening, however. It starts with inflation.As an economic force, inflation erodes the value of the U.S. Dollar. Left unchecked, it drives up the Cost of Living as each dollar "buys less" at the supermarket, gas station, or anywhere else.But with respect to mortgage rates, inflation's impact is more immediate.
Because inflation devalues the dollar over the long-term, it renders long-term mortgage bonds a less attractive investment for traders. If bond investors are repaid in U.S. Dollars, after all, it would make the investment worth less if the dollar is in an inflationary freefall. Therefore, in situations when inflation is likely to present, we find that traders often sell out of their mortgage bond positions which, in turn, drives down the bond prices. Then, because bond yields move in the opposite direction of bond prices, rising rates are the inevitable result.
Lately, Wall Street is fearing inflation for a number of reasons:Job losses are slowing, adding to consumer spending expectationsGas prices have risen 41 days in a row. The federal government is increasing the money supplyThese 3 factors -- plus a few others -- are all coming to a head around the same time and traders are getting defensive with their portfolios. As a result, they're selling their mortgage bond positions and it's driving mortgage rates higher.Rates may continue to trek toward 7 percent through July and August, or they may retreat toward 5 percent. We can't know for sure. What we can know, though, is that volatility in rates should continue until the economic picture gets more clear. That could be next week, or next year. For now, be ready to lock at a moment's notice. Mortgage rates are changing quickly.
How To Receive A Cash Gift For Downpayment
Tighter mortgage guidelines since late-2008 are forcing home buyers to make bigger downpayments. Anecdotally, the change has led to a surge in buyers taking gifts of cash from family members.
If you're among those accepting a cash gift from family, it's important to know that you can't just deposit the money in your bank account.
There is a proper way to accept a cash gift and it requires 3 distinct steps:
Complete and sign an acceptable gift letter
Document the gifter's withdrawal of funds with teller receipts
Document the giftee's deposit of funds with teller receipts
See, mortgage lenders pay close attention to gifts-for-downpayments. For one, lenders have to make sure that downpayment cash is "clean" (i.e. not laundered). And, secondly, they want the gift to really be a gift and not a loan-in-disguise.
This is why lenders will often require that a signed, dated letter accompany the home loan application.
As an example:
I am the [relationship to recipient] of [name of recipient] and this letter serves as evidence that I am gifting [name of recipient] [amount of gift] to be used for the purchase of the home at [complete address of property].
This is a gift -- not a loan -- and there is no expectation of repayment.
Signed, [Signature of gifter]
To further appease lenders, gift recipients should make sure that gift funds are not commingled at the time of deposit. If the gift is for $12,000, for example, the bank's deposit slip should indicate that a $12,000 deposit was made -- nothing more, nothing less.
Don't add a random $50 check to the deposit, in other words. If you have a separate deposit to make, make it as a subsequent transaction with its own receipt.
It's also worth noting that gifting funds between family members can create both legal and tax liabilities. If you're unsure about how donating or receiving a gift may impact you, call or email me directly. If I can't help you with your questions, I can refer you to somebody that can.
Posted by Ed Holingshead on June 10, 2009
NOTE: Gift funds are reviewed in the Real Finance seminar and a gift letter form can be downloaded by designees from the members only website. Email Boyd@RFSweb.net for additional information.
Tighter mortgage guidelines since late-2008 are forcing home buyers to make bigger downpayments. Anecdotally, the change has led to a surge in buyers taking gifts of cash from family members.
If you're among those accepting a cash gift from family, it's important to know that you can't just deposit the money in your bank account.
There is a proper way to accept a cash gift and it requires 3 distinct steps:
Complete and sign an acceptable gift letter
Document the gifter's withdrawal of funds with teller receipts
Document the giftee's deposit of funds with teller receipts
See, mortgage lenders pay close attention to gifts-for-downpayments. For one, lenders have to make sure that downpayment cash is "clean" (i.e. not laundered). And, secondly, they want the gift to really be a gift and not a loan-in-disguise.
This is why lenders will often require that a signed, dated letter accompany the home loan application.
As an example:
I am the [relationship to recipient] of [name of recipient] and this letter serves as evidence that I am gifting [name of recipient] [amount of gift] to be used for the purchase of the home at [complete address of property].
This is a gift -- not a loan -- and there is no expectation of repayment.
Signed, [Signature of gifter]
To further appease lenders, gift recipients should make sure that gift funds are not commingled at the time of deposit. If the gift is for $12,000, for example, the bank's deposit slip should indicate that a $12,000 deposit was made -- nothing more, nothing less.
Don't add a random $50 check to the deposit, in other words. If you have a separate deposit to make, make it as a subsequent transaction with its own receipt.
It's also worth noting that gifting funds between family members can create both legal and tax liabilities. If you're unsure about how donating or receiving a gift may impact you, call or email me directly. If I can't help you with your questions, I can refer you to somebody that can.
Posted by Ed Holingshead on June 10, 2009
NOTE: Gift funds are reviewed in the Real Finance seminar and a gift letter form can be downloaded by designees from the members only website. Email Boyd@RFSweb.net for additional information.
Subscribe to:
Posts (Atom)
