Abba First Mortgage News

Rates are slowly rising

May 26th, 2015

Last week rates were still very, very low. But they have risen over the past month and the next question is-why are they rising now? We can be certain of this fact that there are not very many reasons for rates to be increasing. For example, our economy barely grew in the first quarter of this year. There is also no signs of inflation right now or on the horizon. On the other hand, one must remember that markets move in mysterious ways, which often leaves us guessing.

For example, are the markets predicting a big rebound in the economy for the second and third quarters? That would mean that the numbers released for economic growth in July will be watched very closely. A paper was recently released by the Federal Reserve Bank in San Francisco which has argued that seasonal adjustments to the numbers had understated growth during the first quarter.

Another factor that helps us explain recent movement in rates is the fact that oil prices are rising. While no one is expecting oil prices at their present levels will spark inflation, for a while last year many were concerned that we could be heading into a period of deflation with oil and other commodity prices plummeting at the time. Now the prices have stabilized and are rebounding slightly. Thus, the deflation factor has been removed from the equation and bond prices are adjusting accordingly. If this is the major factor, the increases should level off. However, if the economy does rebound strongly, we may see continued rate increases.  Consider this-if a bird in hand is worth two in the bush, now might be the time to pull the trigger and lock in your ABBA First Mortgage today!  Call 866-676-3349.

 

OPEN Saturday 5/23—–CLOSED Monday 5/25

May 22nd, 2015

On this Memorial Day, one of our nation’s most revered holidays, let’s pause and honor those individuals that have fought to uphold the liberties that we enjoy, and to those that have made the ultimate sacrifice to protect our freedom.  To all our veterans, as well as active duty personnel protecting our country – a tremendous thank you for your courage and your service!

 

Renter’s payments are increasing

May 21st, 2015

Rents have outpaced home prices for first time since 2012 and that is bad news for those trying to save a down payment for a new home.  Rents are increasing at a faster pace than home values. It has been reported that while homes increased in value by an average of 3% in the year to April rents were up 4% in the same period.  That doesn’t seem like a big difference but the added cost to renters will eat into spare cash that could be saved for a down payment.  Although it makes the case for homeownership stronger with mortgage payments likely to be lower than rent, the data shows that those with mortgages need around half the monthly budget for housing bills than renters.  For those who rent, it is time to make the move to home ownership and ABBA First has the experience to work with you for the best financing alternative available for your needs and specific situation.  Give us a call today!

Is our economy really improving?

May 20th, 2015

It doesn’t all add up.  Retail Sales came in flat for April, as many  consumers tucked away savings from lower gasoline prices, rather than spend  money on big ticket items. Stagnant wages coupled with mixed feelings about the  economy were a few reasons for the ease in spending. Other than the positive  reading in March, Retail Sales have been negative in recent months.  It will be  important to see if spending picks up this summer. There was some good news from the labor sector, as Weekly Initial Jobless Claims continue to hover near a 15-year low.  Really?  And the Producer Price Index, which measures inflation at  the wholesale level, came in lower than expected, down seven of the last nine  months thanks to lower costs for food and gasoline. Inflation remains  tame, which is good news for Mortgage Bonds, as inflation reduces the value of  fixed investments like Treasury Bonds. Tame inflation is also good news for home loan rates, as they are tied to Mortgage Bonds.  However, mortgage rates are steadily creeping up.  We wait to see if reality catches up to this mixed perception of an improving market and if rates are poised to come back down to the lowest of the lows that we have seen in past recent history.

Rates and rents rise

May 19th, 2015

Mortgage interest rates continue to rise despite the negative data that may support the likelihood of a more stable market.  With consumer confidence levels showing that we believe our economy is not improving, many Americans continue to struggle with the higher prices at the pump and in grocery stores.  This transcends into the arena of home ownership and whether to rent or to buy.

While some people will look to buying a home as a sensible way to escape escalating rents it’s not necessarily the case. New research from Freddie Mac has found that rather than rising rents driving demand for home purchases they are a result of demand for rentals. Despite rents having increased by 3.6 per cent last year and expected to rise 3.4 per cent above inflation this year a third of renters say they are very satisfied with their experience and another third are moderately satisfied.

Among the 38 per cent who have experienced a rent increase in their current home in the last two years 70 per cent say they cannot afford to buy, although 44 per cent have started looking. Of those that are happy in their current rental 53 per cent say they are not making any changes to spending. More than a third of renters say they cannot afford their current rent.

It may be time to pull the trigger and buy a sensible home with an affordable payment before rates rise any further.  Give ABBA First a call at (866) 676-3349 for a free, no-obligation, GFE-like quote.  See if you too can realize the dream of home ownership.

Rates are still low!

May 18th, 2015

Sometimes we lose our perspective. While rates on home loans have been increasing for the past few weeks, if you read the headlines, it seems like rates are really high right now. They are not. According to the Freddie Mac survey of home loans, the 30-year fixed loan averaged over 5.0% every year from 1975 until 2010, a period of 35 years. That is a generation in which rates have averaged over 7.0% in the long haul.

It is only since the financial crisis hit that rates averaged below 5.0% and for the past five years, the average has been a little over 4.0%. Yes, there were a few periods where rates dropped below 4.0%, including early this year. However, when you look at the difference between 7.0% and 4.0%, rates are over 40% below where they have been historically. This is why renting is more expensive than owning right now in most areas of the country.

There is another message here that we have been delivering for a while. These low rates are not expected to last forever. Every time rates increase as they have in the past few weeks, we ask ourselves–is this the end of the super low rates? We hope not. However, we keep cautioning our readers that rates are great right now and if you are thinking about purchasing a home, refinancing or even purchasing a car, now is an excellent time. You never know when this sale on money will end.  

 

Rates continue to rise

May 15th, 2015

Mortgage rates higher for third consecutive week
New data from Freddie Mac shows that mortgage rates increased for the third consecutive week for the period ending May 14.  At 3.875 percent, the average 30-year fixed-rate mortgage is just below the high for 2015. The 15-year fixed rate mortgage was up from 3.02 per cent a week earlier. There was a slight drop in the rate of 5-year Treasury-indexed hybrid ARM’s which averaged 2.89 per cent, down from 2.90 per cent while 1-year ARM’s averaged 2.48 per cent, up from 1.46 per cent.

Where are rates going?  According to analysts, rates will continue to increase slowly.  Bond traders are tired of having such low yields for longer term bonds and are considering following the leads of major investors who are diversifying their investments until bond yields increase.

Important practical tips on buying your next home-

May 14th, 2015

Finding the right home is hard enough…Choosing the right lender doesn’t have to be.

ABBA First Mortgage knows how stressful it can be purchasing a new home. Here are some helpful…practical tips to consider BEFORE you sign a contract.

1. Get to know the area you are considering. Check out the neighborhood in bad weather, like heavy rain, tropical storm, or snow. Does it flood…Does it have snow removal service…

2. Speak to some of the neighbors who actually live there…

3. Check out the school system in the area, both public and private schools…

4. Make sure to take note of the traffic flows in your desired community…this may not seem important at this point, but in the long term, will heavy traffic be a source of stress for you…

5. Pre-determine your “Deal Breakers”. These are the must haves and must have not’s. Make sure to inform your realtor up front…

6. Stick to your budget…

These simple steps will help manage your expectations and eliminate some of the stress that is inevitable in buying a new home.

 

 

Rocky start to the week

May 12th, 2015

Monday Monday, so good to me,
Monday Monday, it was all I hoped it would be
Oh Monday morning, Monday morning couldn’t guarantee
That Monday evening you would still be here with me.

(Lyrics from the song that The Mamas And The Papas made a hit back in the 70’s.)

Could they have known that mortgage interest rates are just as elusive?  Today rate watchers are looking back at  last week to the worsening that took place throughout the day yesterday; and yesterday was one of those Mondays.

Today the markets opened up with another scare as it seemed as though we were heading down the same path where we left off on Monday.  However, due to some economic data which did not meet the expectations of the analysts, the pricing of the MBS is up and so far today, we are seeing a fairly stable market with rates remaining flat as of 12 noon EST.

Where is the housing market headed?

May 5th, 2015

Will their be a housing boom this year?  Do the indicators point to more home sales this upcoming home buying season, or are buyers holding off, shying away from purchasing their home- waiting to see what the economy is going to do?

While the housing market and the demand for mortgages will continue to improve, there won’t be a “boom” this year, according to the CEO of Wells Fargo.

Speaking to CNBC, Wells Fargo CEO John Stumpf said there are stumbling blocks to a housing boom, including student debt, household formation happening later in life and the perception that credit is unavailable.

That perception, at least, is wrong, Stumpf insisted.

“It really is more available now, and still at great rates,” he told CNBC. “(It’s very affordable for housing.”

ABBA First believes in offering our buyers a very competitive rate combined with low closing costs.  Each situation is different, but our promise to treat you the way we would like to be treated ourselves, is always kept.  Call for your free quote or complete our new QUICK QUOTE online.