Atlanta Real Estate Blog

Mortgage bond prices rose last week pushing mortgage interest rates lower. Consumer confidence came in weaker than expected helping rates rally Tuesday morning.  The ADP employment report showed more job losses than expected.  The employment report Friday morning confirmed the ADP payroll data indicating the US economy shed 263,000 jobs in September. ("Mortgage-speak" for -the bad news for the economy meant that mortgage bonds (with fixed interest yields) looked more attractive => their prices rose which reduced their yields => which lowered interest rates.)

For the week, interest rates fell by about 7/8 of a discount point. ("Mortgage-speak"  for - they fell 0.875%, i.e. , if rates began  the week at 5.00%, they ended the week at 4.125% -

            HUGE MOVE! => cuts your monthly mortgage payment by $$$)

Example: You're getting a loan for $100,000 to buy a home.  Last week, rates were 5.00%.  The mortgage factor per $1,000 for a 5.00% loan is $5.38. This week, rates are 4.125%.  The mortgage factor per $1,000 for a 4.125% loan is $3.85.

So, last week the same loan cost you    

=> $100,000 * $5.38= $538 / monthly payment

       ======

       $1,000

This week, the same loan costs you

=> $100,000 * $ 3.85 = $ 385 / monthly payment

        ======

       $1,000

So,you save $ 153.00 per month by buying now!    (**)

(**)This is an illustration only.  Rates are subject to change and are not guaranteed.  Confirm current details and your situation with your mortgage lender.

Another round of Treasury auctions hits the market this week.  Solid foreign demand will help rates remain the same or improve.  Signs that foreign demand is diminishing will not bode well for mortgage interest rates. Weekly jobless claims set for release Thursday will carry a bit more weight than usual due to the lack of other economic data.

Work With a Mortgage Professional - Don't Go It Alone

Obtaining a mortgage is often a confusing and frustrating task.  It's confusing because mortgage financing is complex.  The good news is that this complexity provides consumers with options and choices best suited to fit their needs.

Everyone's financial position is unique.  Some people have large cash reserves that can be used for downpayments while others want to get into a home with as little money down as possible.  Credit ratings vary from person to person.  In addition, future plans vary. Some people plan on staying in their home for the rest of their lives while others only plan on staying for a few years.

These facts alone make comparing your mortgage to your neighbor's based on rate alone a flawed endeavor, yet many people attempt to do so. Admittedly, everyone wants a good deal.  However, comparing rates is only one component of theentire mortgage.  Other variables include the term, down payment requirements, income qualifications, credit ratings, reserve requirements, current debt, prepaid points, and many more.

A mortgage professional takes all of these variables, unique to you and your situation, and helps you obtain the mortgage loan that meets your needs.  The service they provide is time consuming andcomplex.  However, the rewards of dealing with a professional carry forward throughout a borrower's life.  Making wise financial decisions today helps to pave the way for a safe and secure future.

If you need amortgage, please call me (404)-384-2274. I have several that have been consistent, competitive, and reliable lenders that our clients have successfully used.

Tags: mortgage interest rates fell last week, mortgage illustration, Treasury auctions, consumer confidence lower, ADP employment report, more unemployment, large cash reserves, down payment, downpayment, credit ratings, future plans, income qualifications, reserve requirements, current debt, prepaid points, credit score, homebuyer, home seller, homeseller, ATLShortSales.com