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Thursday, October 30, 2014

What are Japanese Candlesticks? Why are they important?

I watch the bond market, stock market, futures, inflation, unemployment, housing demand, refinance and home purchase activity, world news, national news, political developments, gas prices and yes, I even watch the weather for signs of what the market will be doing in the future.

Giving reliable advice to my clients as to whether they should LOCK or FLOAT their interest rate when they have a mortgage application with me is a major goal of mine.  Their decision (based on my advice) has long term consequences and if they (and I) choose wisely so that they can maximize their investment return on their mortgage.

A mortgage is another form of investment strategy, but this is a whole blog post to come in the future.  I look forward to talking about the value of a "Big FAT 30 year mortgage" in a future Blog Post.

But today, what I want to talk about is what I use to gauge what is going on in the market TODAY, right this moment, and is something available to me and it's called "Japanese Candlesticks".  I would like to explain why this is valuable and important to me AND to my clients who are relying on my expertise and guidance,

What you see below is today's Japanese Candlesticks Chart (4%, 30 year bond yields) and it is showing lots of green "candles".  Green is Good!  It means that mortgage rates are improving or the market is favorable.  The last green candle on the far right of the chart (right next to the S1 in the blue box) is today's market activity.

Tomorrow's rates should (unless the market changes dramatically overnight or in the early hours of trading in New York tomorrow morning) be about the same, possibly better than they were today.

Yesterday's rates were worse than today's (the red candle shows a lower price, higher mortgage rate than today's), and so forth backwards.  Over the past 17 trading days the rates have been close to, above or just below the best rates in 17 months (best since May 8, 2013).

The S2 line, below the candlesticks, is the FLOOR of SUPPORT and with the rates close to this floor, if the bond prices begin to break below this floor, like happened yesterday for two hours, we COULD see the mortgage bond prices begin to deteriorate and we could see these great rates go away  (go up!) and this could be forever or temporarily, that is the gamble of NOT taking advantage of rates today.  

Call me today if I can help with analysis for your mortgage refinance or purchase.  :)

Wednesday, October 29, 2014

What's FHA financing all about?

FHA loans in 1991:
When I became a mortgage loan originator in 1991, I couldn't believe that there was a loan product which allowed all of the down payment to be gifted!  "Are you sure this is true?", I asked my mortgage lender buddy who had come over to the mortgage department at the bank we were with just 6 months before.  "It's true!  Can you believe how great of a program it is?"  That was my first impression of how great the FHA loan was because it lowered the barriers to home ownership for first time buyers.

FHA loans today: 
The FHA loan is a great fit for first time home buyer's and others with specific lending needs.  Since 1991 I have learned much about lending and about FHA.  I now know that FHA is a loan insurer not a lender, and that the loan is available to both first time home buyer's needing 100% financing (Utah Housing Loans/State Bond Programs), and it's a great alternative for buyer's who have less than perfect credit (my company, Primary Residential Mortgage, has a 580 credit score FHA loan program!).  FHA offers streamline loans to allow homeowners to lower their interest rate with NO COST (ZERO will be added to their existing loan balance, no appraisal required).

With FHA rates at their lowest in 17 months ( June, 2013), this is a great time for buyer's and current FHA loan holders to utilize purchase and refinance options!  Call me today for a more thorough analysis and discussion about what program's fit your needs the best.

Tuesday, October 28, 2014

Lots of buyer activity for Q4, 2014

The fall months are no longer a real estate dead zone, and there is still plenty of action happening after Labor Day through Christmas.  An article in the October 18, 2014 Ogden Standard Examiner said that Davis County home sales were up 7% and Weber County were up 4% when compared to the same August time in 2013. Pending sales (homes under contract which will close in October) were up 22%, showing significant momentum for home sales as we enter into the beginning of Q4.  
fall sellers
By Brendon DeSimone on 26 Sep 2014
Fall officially began Sept. 23, but that doesn’t mean you should scrap plans for selling your home this year. In fact, October, November and December can actually be good months to sell. Now is the time to plan for it if you’ve even considered putting your home on the market.