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Pending Sales Reach Highest Levels Since July 2007

Pending sales report shows buyers may be finding the bottom in Real Estate

The Pending Home Sales Report, an index to reflect homes that are under contract but not yet closed, has risen to the highest level since last summer (up 7.4% over the previous month).  Does this mean we have hit bottom?  No one will know that until we have the advantage of hindsight and are able to see it on the charts.

But, one fact remains true.  Prices can only come down so far before those on the sidelines can no longer stand around and watch.  With nationwide housing prices at levels of 2003, it begs the question, how much farther down can we go?  Obviously there are other economic factors at play, and the economy is complicated and a little scary right now.  But, the foundation for the current down turn was the over-inflated real estate market, and clearing out the existing inventory is crutial to starting a broad recovery.  Another important reminder to sellers is that the majority of homes being sold are actually foreclosures.  If you have a home you would like to sell, but don’t need to sell, now is still not the time.

Stay tuned for more updates, and check out the latest mortgage rates at


$7,500 Tax Credit Available Through Dec. 31

Are you going to take advantage of the home buyer tax credit available through the end of the year?

For those of you interested in buying a home, but you are still on the fence about the current market, don’t forget that the window is closing for the housing stimulus tax credit good through the end of the year.  This tax credit is good for first time buyers (buyers who have not owned a home in the last 3 years), and it is available up to 10% of the purchase price to a maximum of $7500.

While your decision to buy a home should not be based solely on incentives, it is equally important not to ignore those incentives if you are serious about buying.  The difference between buying a home on December 1st and January 10th could mean significant tax savings for your 2008 return.  Be sure to contact your tax advisor for specifics and qualifying criteria.

For more information on qualifying for a mortgage, visit or call 850-221-8334.

Monday October 6, 2008

Mortgage rates are down and so is the stock market.

Stocks are down today amidst continued concerns for global economic slow downs.  As of 9:24 A.M. (Central Time), the Dow has dipped below 10,000 for the first time since October 2004.  According to traders, this is due, in large part, to the increased uncertainty of the global economy and corporate earnings as we begin the 3rd quarter corporate earnings season.

As usual, when there is a selloff in stocks, people tend to move their money over to bonds, and today is no exception.  Mortgage bonds are up over 70 basis points leading to stronger monrtgage rates this morning.  If you were waiting to lock your loan, today would be a good day for it considering the major move of the index over levels of resistance.

You can see where today’s rates are currently at

Fannie Mae And Freddie Mac Get Taken Over

Markets react to the government takeover of mortgage giants Fannie Mae and Freddie Mac.

I wrote a post last thursday about how the bond market was looking good to align yourself for a refinance.  Then, over the weekend, the government stepped in and took control over Fannie Mae and Freddie Mac, and what a difference it has made.  At the time of this post, mortgage bonds are trading nearly 70 basis points higher than the close on Friday, and the Friday numbers were already steller.

So the post Thursday that suggested it might be a good time to refinance has now become a battle cry.  If you have been waiting for the right time to refinance your home, it is time to get the application started and wait for the right day to lock your rate.  If this trend continues, we may very well see rates below 6% on a 30 year fixed this week.  This morning, rates are as low as 6.125%, and there will likely be an improvement on those later today based on current market conditions.  You can check current rates at

Thursday August 28, 2008

Here is how the market is shaking out today.

Today, the preliminary Gross Domestic Product report came in at 3.3% above expectations of 2.7%, and well over the previously reported 1.9%.  The final number for this report is not due out until next month, but the preliminary reading has people exiting bonds and buying stocks today.

Because of this, you might want to lock your rate if you have a loan in processing.  Additional pressure on bonds is being created by oil prices trading above $120 per barrel again on fears of Hurricane Gustav and how it will affect the 3500 oil drilling platforms in the Gulf of Mexico.  if there is significant damage done to oil drilling operations from Hurricane Gustav, we may see a greater spike in oil next week, creating even more pressure on the bond market.

Lots of uncertainty on the horizon, but prudence may be the word of the day in my advice to lock in and protect from potential loss.

Existing Home Sales Better Than Expected

Does today’s existing home sales report mean that we have finally hit bottom?

Existing home  sales for July came in at 5.0 million ahead of estimates at 4.9 million.  Despite this seemingly positive news, stocks are down today fueled by uncertainty with Fannie and Freddie, and traders are moving money into mortgage bonds searching for more security.

Mortgage bonds are currently up slightly today, and we can continue to watch bonds to determine where mortgage rates are going to go in the next 24 hours.  Over the last few days of trading last week, mortgage bonds broke through both the 25 day and the 50 day moving averages.  This could be a positive trend longer term if they can hold these levels.  Currently, bonds are trading in a sideways channel between the 50 day and 100 day moving average.  Today is probably a good day to float your rate pending any major movement.  If stocks start to recover, it would be prudent to lock your mortgage rate to hedge against pending corrections in the futures market.

The Economics Of McCain Vs. Obama

With so many campaign speeches and TV ads, what is really going on with the positions of the candidates?

Let me qualify this post by saying that I am not a fan of either candidate, and as usual, the presidential election doesn’t come down to the best man for the job; but rather the lesser of the available evils.  If you read this blog, chances are you are in the real estate business, the mortgage business, or you are a consumer looking at a mortgage or buying a home.  Let’s take a look at the positions of the candidates to see where they stand on issues that affect the economy and the real estate business as a whole.

I have heard the Obama campaign accuse McCain of being out of touch, pro big business, pro oil and generally against the plight of the average american.  At the same time, the McCain camp accuses Obama of being an elitist celebrity.  My number one issue in the election is the economy and how they individually plan to address the larger issues facing us domestically.


I watched a speech given by Barack Obama where he claimed that it is somehow the duty of the government to step in and impose a “win fall” tax against big oil companies as Americans are struggling financially at the pump and looking for relief while oil companies are making record profits.  On the surface, I thought this was genius as a campaign slogan.  I mean, what American wouldn’t want to stick it to somebody about the current state of gas prices.  But, here is the flip side of that Robin Hood logic.  A business (any business), is in business to make money for it’s shareholders.  It is not criminal to make a profit, nor is it worthy of an apology.  Oil companies are making record profits for their shareholders in the last few years, and those shareholders are….you.  They are your portfolio, your retirement fund, your mutual fund, or any number of places where you can realize a portion of the profits that the evil oil companies are making.

Picking and choosing companies that are making “too much money”, and taxing them punitively for their efforts is as un-American as anything I have ever heard from a politician, in fact, it borders on socialism.  As I was watching this speech, I couldn’t help but notice the roar from the crowd in support of this punitive taxation.  I’m not sure which is more frightening, a presidential candidate blatantly pitching socialism as a way to solve our problems, or a crowd of followers eating it up with a spoon.

I have also seen TV ads accusing McCain of offering big oil companies up to $4 Billion in incentives at a time when they are already making record profits.  i don’t know if those numbers are accurate or not.  But, what they are not telling you in those ads is that the US has one of the highest corporate tax rates in the world, and McCain is in favor of reducing the corporate tax rate from 35% to 25% to keep businesses here and help stimulate growth.  I’m sure that oil companies will benefit from this plan, but so will every business in the country.  For those of you who have seen jobs race oversees to India and China for lower wages, it is because we live in a global economy and businesses are open to make money.  If you over tax businesses, they will not have the money to grow, expand and hire new workers.  By going overseas for this, they help to offset the taxation received in the US, and it is this same taxation that has lead thousands of companies to relocate their headquarters offshore to avoid the over taxation of the current US tax code.

One item that directly affects real estate is the capital gains tax.  Obama is in favor of almost doubling the current tax from 15% to 28%.  This means that if you are a real estate investor, your profits on a house flip will be cut in half.  It also affects the sale of stock, not only in your personal portfolio, but within your mutual funds and retirement accounts.

Based on what I’ve seen, I really have a hard time understanding why a working tax payer would vote for higher taxes.  I know there are other issues in an election such as social programs and obviously the war in Iraq, but volunteering to raise taxes for the sake of “change” seems very much like shooting yourself in the foot.

I’m sure this post will rub some people the wrong way, and that is not my intent.  I just believe that the road to prosperity is through free market capitalism.  You can’t tax your way to prosperity any more than you can borrow your way out of debt.

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