Happy New Year!


Happy New Year!  I hope this email finds all of you well and ready for a new beginning.  Have you spent some time planning what you’ll accomplish in 2009?  If you fail to plan, you’re really planning to fail!

“The rate is falling, the rate is falling!”  While those may not be the exact words he’s using, they’re similar.  I’m talking about a Master Sergeant at Eglin AFB whose mortgage we recently refinanced.  He is telling everyone in

his squadron that rates are at an all time low and what a great time this is to refinance or buy a home.  (And based on his experience he’s recommending that they talk to us first!)  He has co-workers that aren’t even aware that interest rates are as low as they are now!  See the side bar link entitled “What’s the Average Rate?” to the left for this week’s average!

I’ve talked to many people over the last month and they’ve all asked me what rates were going to do.  Are they going to go down or up?  Of course everyone that asks this is asking because they want to refinance or buy at the exact right time.  Naturally, the “right time” is when rates are at their lowest and not a tenth above that!  Well, guess what?  No one has been perfect at timing the market so well.  Honestly, if any of my clients get the absolute lowest rate we ever quote then it’s more of a lucky (albeit educated) guess, not a result of exact science or ability to perfectly predict the future, and I watch the financial markets all day long! 

That being said, I’ve been telling people that I think interest rates will continue to fall after the first of the year.  So far, I’ve been right.  Next week we’ll see if the trend continues!

The Fed was back in the markets this morning aggressively buying Mortgage Backed Securities and as a result mortgage rates have fallen rapidly today.  Let’s put this into perspective – there are almost 120 trading days from January 5 until the end of June.  The Fed will be buying $500B of Mortgage Bonds during this time – that equals approximately $4B in buying power each trading day…that is pretty good buying support, which could help mortgage rates move steadily sideways and maybe slightly lower over the first two quarters of 2009.  BUT remember that each trade has a buyer and a seller and holders of Mortgage Bonds may take this opportunity to offload some of their positions to generate cash.  So while the Fed buying is a big help, you can be sure that prices will be volatile and may not continue to fall below their current levels.

The current interest rates are likely the lowest – or within .25% of the lowest we’ll see in our entire lifetime.  We’re making history right now!  I can imagine telling my grandkids, “I remember when your Grandma and I bought our house in Florida, and our interest rate was only 5.0%, gas was only $1.69 and a loaf of bread was only $2.50!”  Believe it or not, we’re all going to say that someday! 

Are you taking advantage of this once in a lifetime opportunity?   Give me a call and we’ll make sure you do!  

We’re adding providing a professional approach to mortgage finance!


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