Rates
Well it has been two weeks since I last blogged, and really nothing happened until the last 4 days.
Rates have improved dramatically over the last 4 days, anywhere from .125% to .25% improvements, so what is up….
Well 1st is the Saber rattling going on with North Korea. There is fear that if the war does break out, there will be a major economic downturn because of the affect it will have on S. Korea and Japan, both HUGE trading partners with the US and major manufactures of electronics and automobiles.
A war in the Korean would result in loss of life and loss of economics, both would take the economy.
Also today, unemployment numbers came out. The expectation was for between 150,000 to 190,000 job growth last month in the US.
Boy were they off, total job growth was 88,000, ouch!
There was speculations that the government is behind this lack of job growth:
-Obama care and Sequestration.
-Here is a quote that puts things into perspective:
Two things are contributing to what now appears to be a declining economic outlook. First, the sequester; it is beginning to bite as cuts in spending are now taking a toll on job growth. Congress and the Administration still very dysfunctional, didn't’t have the common sense to come to agreement to avoid the automatic cuts that were set in motion in 2011 when the Pres. and Congress could’t agree on a budget and instead pushed it down the road. Down the road is now; the cuts have to be made because it’s the law. The second issue, just beginning to have its major negative consequence for job growth, ObamaCare. The health care bill is now beginning to be implemented, with full implementation in 2014. Employers now fully realizing the costs, are going to be less willing to add new hires and will only occur in businesses where it is absolutely necessary. Meanwhile, employers are using temps and driving current employees to increased production. Tempered hiring plans suggest companies are confident in their ability to meet demand with the existing workforce as federal budget cuts cloud the economic outlook. The absence of sustained and bigger gains in employment and earnings underscores the Federal Reserve’s view that more progress is needed before record monetary policy stimulus can be scaled back. Unfortunately the Fed’s QE is having less impact as the easing continues; no significant job growth has occurred, and likely will remain impotent in stimulating the economy.
Chart above is showing us a nice push up (Green) which is causing rates to go down. By looking at this chart we have seen rates pushed down quite a bit in a short peiod of time, so that would indicate a correction. But until everyone cools it out in the S. China Sea, volitility will stay!
With this continuing, we foresee rates holding at these lows and with the potential of going a little bit lower, so right now we are recommending locking, unless you are the gambling type, a little risk here could potentially pay off in a lower rate.
Important dates/Lending changes!
Well April 1st has passed and the only joke was on the American Consumer. FHA increased their monthly MI from 1.25% to 1.35% on April 1st. And if that wasn’t enough…
June 3rd, FHA monthly mortgage insurance will become permanent on all FHA loans closing after 6/3/2013.
Right now, if you have an FHA loan, you can potentially get the monthly MI removed after 5 years. Appraisal and a few pieced of paperwork. But it will automatically fall off after 15 years, roughly.
Now, after 6/3 the only way you will be able to remove FHA mortgage insurance will be to refinance out of FHA and into a Conventional Product.
THANK FHA!
Rural Development.
Well Kuna was granted a last minute stay of execution on 3/28/2013. The death nail for Kuna was 3/27/2013, whereas Kuna would not be eligible for Rural Development 100% financing.
But with a stroke of a pen, the government gave Kuna a reprieve. So now Kuna stay of execution will be good until 9/30/2013.
Sell them while you can, no telling how many times Kuna will be saved.