The Mortgage Man
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Monday November 10, 2008
Stocks are higher this morning following a rally in the Chinese market after a government stimulus plan for $586 Billion was announced to help relieve their struggling economy. As the stock market shows signs of life, it will continue to put pressure on bonds this week to hold their current levels above established resistance.
Also scheduled this week, the Treasury Department will be auctioning off $55 Billion in treasury notes which will no doubt put even greater pressure on the bond yield. If the yield on mortgage bonds falls, mortgage rates will go up to meet the market demand.
Watch rates carefully this week. If you have a loan in process, it would probably be prudent to lock ahead of potentially bad news in the financial markets. If you are still looking for a house, or are not ready to lock, it may cost you on your mortgage rates later this week.
5 Ways To Improve Your Credit Score – Lesson 3
What do inquiries on your credit actually do?
Don’t over shop for a credit account! If you are looking for a mortgage, find someone that you trust and are comfortable with before you allow them to pull your credit. If you are shopping for a car, get your financing squared away at your bank before you even go to the car lot. If you are shopping for a credit card, well, you know.
It is widely reported by the credit bureaus that your score is not adversely affected by inquires within the same industry during a 14 day period. For instance, the credit reporting agencies report that if you have several inquiries from mortgage companies within 14 days of each other, your scores will not be affected because it is clear that you are “shopping” for a mortgage. Well, after 11 years in the business and reviewing thousands of credit reports, I can not tell you definatively that that is true. My advice is to exercise prudence and proceed with caution.
By far, the worst offenders of the excessive inquiries are the car dealerships. Of course, I can not lump all car dealers into this category any more than you can lump all mortgage brokers into one category. What I can say is that I have seen more damage done collectively from the financing department of a car dealership than all other service providers combined. Just last week, I had a customer that during the course of shopping for a car, she went to 3 different car lots and had a total of 17 inquiries on her credit because of it.
How does that happen? Well, the dealership will pull your credit. Then they will send your application to anywhere from 5 to 10 auto loan companies for underwriting, each of which will pull their own report. The car dealers number one priority is to sell you a car. They are not concerned about the long term affects of pulling multiple credit reports. In fact, many of them don’t know the long term affects.
Inquiries in and of themselves are not some atomic bomb on your credit report. But, your scores will reflect your propensity to acquire new credit accounts. If you are having more than 2 inquiries on your credit in a 90 day period, consistently, you should probably ask yourself if you are getting in over your head….I guarantee the lenders you are applying to are already thinking it.
Stock Rally Puts Pressure On Mortgage Bonds
Stocks are rallying today sending mortgage bonds lower.
Crude Oil traded below a significant support level around $121 per barrel today, and that triggered bullish sentiments on the stock market. In addition, Consumer Confidence for June was reported today at 51.9 slightly above the 50.0 that was predicted. This is not a significant move upward, but it is the first move upward since December. With oil down and confidence up, traders are pulling money out of bonds and putting it into stocks, and this as you know is not good for mortgage rates.
If you have a loan file in processing currently, I recommend locking your rate on continued volatility in the markets.
The Mortgage Man 
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