Good News For Mortgage Rates

This morning’s economic headlines brought some good news of lower inflation, and Bonds are enjoying a nice pop higher as a result. The Fed is also likely breathing a sigh of relief as their recent decision to pause has some confirmation. What does this mean for you? Mortgage rates aren't jumping any more (for the moment) and have even gone down a touch. We anticipate this to continue for the immediate future.

Call me with any questions!

THE TECHNICAL STUFF:
Yesterday the Fed decided to take a pause in raising short-term interest rates leaving the Fed Funds Rate at 5.25%. What does this mean? The Fed thinks inflation is probably back in check.

What is interesting is that the vote to pause wasn't unanimous. Richmond Fed President Jeffrey M. Lacker had voted for another 25bp rate hike. Because the hike wasn't unanimous, the mortgage market is jittery because we don't know if the Fed is taking a temporary break from raising rates or if rates will rise again in the fourth quarter.

Here's the relevant language in the Fed's latest statement: “…[I]nflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.” This meands that the Fed will closely monitor economic reports for the next few months, and this will determine whether we see another rate hike in the near term.

WHAT DOES THIS MEAN FOR MORTGAGES?
We have been seeing a move towards lower mortgage rates, and I believe this will continue. In spite of today's news about a foiled terrorist plot, the bond market is pretty stable today. While a turn for the worse is certainly possible, I am optimistic for better rates in the next few weeks.

As always, feel free to call me with any questions about mortgages!

Peter

More Insight Into Credit Scoring

There is a great column on realtytimes.com which offers insight into credit scores and highlights the difference between the score you can buy online and what you will see when I review your credit in our first meeting. I welcome the opportunity to review your credit report with you, call me today to set up a meeting! I can be reached at 414.453.7620.

"Not messing with a good thing is sound advice for consumers. Why? Because trying to improve your score could actually result in a lower score, not a higher one. Some steps to a higher number are counterintuitive, such as opening a new account and closing out an old one, a step that you could really mess up your score. "

Read the whole article HERE.

Lunch On Us This Friday!

We will be hosting another Lunch On Us at KLM this Friday, August 4. Feel free to stop by our office for lunch and conversation from 11:30 to 1:30. I hope to see you here!

Peter

Testimonial

I would like to offer my accolades to Peter Kazaks for excellent customer service throughout the entire process of my new home purchase.

As a first-time buyer, I knew nothing about the home closing routine. Peter demonstrated patience and understanding from beginning to end. He assured me that no question was a stupid one, and Peter was thorough in explaining processes and procedures. For many, legal and economic issues as it relates to the home-closing process can be confusing, and Peter conveyed this information in a manner that was easy to comprehend.

In sum, Peter was confident in his skills, he instilled confidence in me as a buyer, and he made the closing process seamless and comfortable. Peter clearly has a mastery of both the mortgage industry and people skills, and I would gladly recommend him to anyone seeking a mortgage lender.

Thank you,

Lindsey Kriete

The Economy In Brief: Strong Bond Market is Good for Mortgage Rates

Bonds have enjoyed a nice recovery over the past two days and are modestly higher so far today. Friendly commentary from Fed Chairman Ben Bernanke has been the primary driver of the recent rally. Mr. Bernanke sparked the rally on Wednesday when he told Congress the economy seems to be moderating and inflation remains contained, and continued with similar comments in yesterday's testimony.
Further backing up Bernanke was yesterday afternoon’s weak Philly Fed Manufacturing Index, supplying further evidence the economy is indeed slowing down. In fact, as a result of the weakness shown in the latest economic data...combined with Big Ben's comments over the past few days...the Fed Funds Futures are now predicting only a 33% chance for another 25bp rate hike at the August 8 Fed meeting – down from about a 90% chance just a couple of days ago.
Bonds are also getting a boost on safe-haven buying due to the escalating fighting between Israel and Hezbollah. In recent months, traders haven't purchased Bonds on a flight to quality, but the continuing conflict between Israel and Hezbollah is bringing concerns that countries like Iran and Syria may get involved, which would further escalate the conflict and possibly interrupt oil supply. For the time being, oil prices are off their recent highs, which has helped to soften inflationary pressure and support Bonds at current levels.

Millionares In The Making

Financial awareness is crucial to building an adequate nest egg. While most blog readers are probably thinking about not only a home but their financial future, I have posted in the past about the negative savings rate in the U.S. That being said, we can all use some inspiration from time to time to keep us on track and making responsible financial choices. One source of inspiration I keep an eye on is the "Millionares In The Making" feature on CNN.com. I suggest regularly checking the site linked HERE and also bookmarked on the right side of this blog so you can read what others have done to ensure their long term financial stability. Make no mistake about it--real estate is a consistent theme with the people featured as Millionaires In The Making!

5 Ways to Kill Your Credit

I talk about responsible use of credit in my home buying seminars, I counsel clients about it in one on one meetings. A solid credit profile can save you hundreds of dollars every month when it comes to financing a home. Is it really worth saving $5 to open that new retail credit account? Probably not...

CNN.com has posted one of the better articles I've seen on "what not to do" when it comes to credit. I suggest you take a few minutes to read it by clicking here.

Action in the Market

The bond market is not doing well today due to events of the last few days. From today's MMG:

A few big headlines are bringing the action back in a hurry after the long holiday weekend. First, North Korea test fired six missiles over the Independence Day Holiday, one of which was long-range and capable of reaching Hawaii or Alaska. Japan and other surrounding countries, as well as the US, are protesting the actions of North Korea, and are threatening economic sanctions against the rogue nation. Normally this type of geopolitical news would create a “flight to quality” and help Bond prices improve, as they are viewed as a safe haven, but another headline has forced Bond prices lower this morning.
A payroll survey released by the world’s largest paycheck processor, Automatic Data Processing, Inc. (ADP), showed an increase of 368,000 new jobs, the largest monthly increase in employment since the ADP Index was created five years ago. While their numbers are not always accurate, this sure provides some evidence that Friday’s Jobs Report may come in much hotter than expected. The current expectation has been for about 160,000 new jobs created during June, and remember that last month’s Job Report showed a fairly wimpy number of 75,000 new job creations during May. We had expected a stronger number last month, so seeing a hot number this month – along with a potential upward revision of last month’s number – wouldn’t come as a surprise, especially given the ADP findings this morning.

Lunch Is On Us!

You are invited! Picking up right where we left off last fall, the first of our monthly summer "Lunch On Us" get togethers is coming up on Friday, July 7. Join us at our offices for fun, food, and friendship! We'll be grilling out, so bring your appetite!

Friday July 7, 2006
11:00 a.m. to 1:30 p.m.

KLM Mortgage Offices:
7119 West North Avenue
Wauwatosa, WI 53213
(click here to see a map)

This Week's Mortgage Market Guide

From this weeks installment of the MMG:

With Bond prices moving lower for thirteen straight days, home loan rates have been climbing higher.

For last week, there wasn't much economic news of note, so what gives? It appears the market is weighing heavy in advance of next week's big plate of economic news, which includes the highly anticipated Fed meeting on Thursday, June 29th. Inflation still appears to be a concern, so it's a lock that the Fed will increase rates by another .25%, and they may go further yet. And when the Fed hikes the Fed Funds Rate, it impacts many other lending rates, such as for Home Equity lines, credit cards, car loans, business loans...they've all been moving higher over the past two years of hikes, and it looks like the hits will keep on coming. It may be time to consider restructuring your outstanding debt, so please call me for ideas and strategies that may make sense as rates continue to climb.

A New Business: Bayshore Realty

Through my involvement in the Apartment Association of Southeastern Wisconsin I have gotten to know Nancy Haislmaier, Graig Goldman, and Maggie Haughton of Landlord Liquidators. Recently they left the realty firm they were affiliated with and have established a new company, Bayshore Realty. Congratulations to the team, I am sure the change will allow them to provide the same excellent service with even better value.

From the Bayshore Realty website:

"We are an experienced team of brokers and agents ready to help you achieve your real estate goals. Our services include both investment and residential real estate. In keeping with our commitment to you we offer variable commisions and an 'ala cart' menu of services. Our staff includes both buyer and seller specialists that are in tune with your needs."

Testimonial

Dear Peter:
Thank you for your professionalism and for answering all our questions in a timely manner. The re-finance was a great experience. I have, and will continue to recommend you to my friends and family who need a mortgage.
Brian and Nicole Hudson

Success!

The First Annual KLM Fore! Kids Golf Outing was a success! We had beautiful weather, and 80 golfers took to the links to benefit Children's Hospital of Wisconsin. Thanks to all who played and donated items to the silent aution and raffle. I look forward to doing it again next year!


Pictured above:
Joe Doyle, First Franklin
Me
Justin Dumke, Financial Resource Services, LLC
David Sengstock, Poulos, Sengstock, Budny & Ludwig

Peter

One Week Until Tee Time!

The KLM Fore! Kids golf outing is a week from today! We still have space available, please contact me at peter@klmmortgagegroup.com or 414.453.7620 if you would like to join in the fun for a great cause.

Peter

Making an Insurance Claim?

Insurance companies are working together to maintain an extensive database of information pertaining to your home.

"You probably know that it’s not a good idea to make too many claims on your homeowners insurance policy because your insurer could drop you."

Read all about it here.

A Personal Note...

Success! After racing in a few sprint distance triathlons last year, I have been training for my first Olympic distance triathlon. Last weekend I traveled to central California to race in the Wildflower triathlon. The distances are 1.5 k-swim, 40 k-bike, 10 k-run. I beat my goal time of three hours on this very hilly course by just over two minutes. Training and racing in this event was very rewarding, and I plan on returning next year.

Do You Know Someone on Medicare?

KEY DATE FOR MEDICARE - The deadline for the 43 million eligible American seniors to sign up for Medicare’s prescription drug coverage without penalty for calendar year 2006 is 2 weeks from today (5/15/06). Enrolling after that date for 2006 coverage will cost +1% more each month or an individual can wait until the next open enrollment period which begins on 11/15/06 for 2007 coverage. The 5/15/06 deadline is the end of an initial 6-month enrollment period that began on 11/15/05 (source: Medicare).

Who Is Buying A Home?

"Last year, 21 percent of all U.S. homes were purchased by unmarried women, up from 10 percent in 1985, according to the National Association of Realtors."

Interesting article on the fact that single women make up an increasing percentage of all home buyers. I have seen this in my business and have had great fun helping single women buy their first home, divorced women buying by themselves for the first time. While the experience may seem frightening at first, my clients have told me that after they have made the decision to buy and moved forward, the whole process can be empowering.

Read the whole article here.

Golf and Economic Updates

KLM is sponsoring a Charity Golf Outing for Children’s Hospital on June 8, 2006 at the Silver Spring Country Club. Join us for golf, lunch & dinner. Be one of our Captains or a Sponsor. The KIDS and KLM will thank you. Bob Reitman is attending!

Last week the Fed raised the Fed Funds Rate by another .25% as expected. Fed Chief Ben Bernanke did indicate there were still some inflationary concerns. The financial markets despise uncertainty and this caused home loan rates to increase by .125%.

This Friday’s Jobs Report will likely determine the course of directions for Bonds and Home Loan Rates. Good economic news tends to be good for stocks, but inflationary pressures threaten to continue to pull money away from Bonds, causing pricing to worsen and home loan rates to rise.