Tucson By Choice!

The bond market anticipates future inflation, and demand today for longer term bonds (10 - 30 year) was much less than anticipated. 

The result?  Interest rates, after falling to historic lows this past three weeks, are headed back up. 

• If you're a REALTOR, light a fire under your buyers.
• If you're a buyer, it's time to jump in.

The only thing that I can see pushing bond yields back up (and interest rates down) would be the government stepping in and purchasing bonds.

Don't count on it.

 _____________________________

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Call me if I can help you with a purchase or refi mortgage;
(520) 349-9090

photo courtesy Spaceball on Flickr

The US 10 year bond is an indicator of mortgage interest trends in the United States.  Geithner's Treasury department will sell 60 Billion of 10 year bonds this week, but the US Dollar isn't the only game in town.  Investors are starting to believe that the sky isn't actually falling, and they have other options.

10 Year bonds in other currency denominations are looking for buyers too.  The yields in these two daily charts from Bloomberg.com show that Geithner and company will have to pay more to attract those buyers, or they won't be able to sell the bonds.

What does that mean to you and me?

At the same time that your home value is falling, interest rates are rising again.  That's a problem for individuals who are focused on the promise of cheap money in the mortgage markets.  Eroding home values are the greater danger to your ability to refinance your present loan. 

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Think of me as your Tucson mortgage expert.

Call me if I can help you with a purchase or refi mortgage;
(520) 349-9090

charts courtesy Bloomberg.com

It floors me when buyers tell me that on the advice of their CPA or Financial Advisor, they're waiting for the new administration to bring down mortgage rates to 4.5% before pulling the trigger. 

• We're within half a percent of that number right now.
• If someone like Secretary Paulson can't get it right (Banks' `Catatonic Fear' Means U.S. Consumers Get No Relief From TARP Plan ) what on earth makes you think that Joe Financial Advisor or Jane CPA has the ear of God?

I believe that we're in the eye of a worldwide financial storm.  If you live in Florida or the east coast, you really understand the metaphor.  Maybe you're thinking that the storm is over. 

A mentor who lived through the holocaust in Europe used to tell me "There are possibilities in life, and there are probabilities.  Possibilities are endless.  Probabilities are a much narrower set of numbers. Act on the basis of probabilities.

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Think of me as your Tucson mortgage expert.
Call me if I can help you with a mortgage to buy your next house:  (520) 349-9090

• VA Loans:  100% purchase loans for active or honorably discharged veterans
• FHA Rehab loans for fixer uppers: up to $35,000 on top of the purchase price
• Kiddy Condo loans instead of shelling out big bucks for your student's housing
• Conforming conventional loans
• USDA Rural Home Loans, including purchase loans for Manufactured Homes.

The last time interest rates on fixed rate, 30 year mortgages were this low, Joe Frazier was still the World Heavyweight Champion, and the main contender was still known as Cassius Clay.

Freddy Mac's weekly mortgage rate survey began in April of 1971.  During that time, 30 year fixed rates have never been lower than they are right now.  Never!

It's the best news you can imagine if you're in the market to refinance your present mortgage, or if you're in the market to buy a home.

That's not to say that there won't be hurdles.  The very best rates are reserved for the lowest risk borrowers.  But even borrowers with credit issues in the past can expect to benefit from the current climate.

If you're an Arizona homeowner or buyer, and you would like to talk, call me at (520) 320-3683, or email me at themiraclemike@yahoo.com.  Please put the words ACTIVE RAIN in the subject line of your email so I'll know it's not spam and delete it by accident!

I've been in the office since 5:30 this morning.  Time's a'wastein'!  Grab that phone.

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Think of me as your Tucson Arizona mortgage expert.
Call me if I can help you with a mortgage to buy your next house:  (520) 320-3683

photo courtesy of Life Magazine & Google

With the 10 year bond opening this morning at (and maybe below) a yield of 3.25%, mortgage rates will be more attractive than they have been this year.

REALTORs:  If your buyer is sitting on the fence, tell them that this low-interest-rate opportunity will likely evaporate once the Big Three learn their fate.  Whether the congress gives auto industry money, or hangs them out to dry, the bond market is likely to consolidate its gains, and that means that this little mini-boom in financing will be over.

BUYERS: There's no better place to put your money to work for you than real estate right now, IHMO.

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Think of me as your Tucson mortgage expert. 
(520) 349-9090

That's the DOW performance this morning there on the left.  News of the globally coordinated cut in interest rates initially propelled the market higher, only to see them fall again.  That's usually good for lenders, agents and buyers of real estate. 

Lower market, lower mortgage rates.  Right?  Not this time.  The banks are raising rates.

The 10 year bond yield, which more or less predicts moves in 30 year fixed interest rates (not always) rose this morning as traders began to sell bonds in anticipation that this multi-government "fix" might not work.

Here's the reason.  This isn't a crisis of fundamentals in the banking industry worldwide.  It's a crisis of confidence in the ability of the best and the brightest to make the right decision.  Cheap money won't buy confidence.  Only leadership will do that. 

My recommendation today as a mortgage professional?  If you like it, LOCK it! 

I'm Mike in Tucson, your preferred Tucson, Arizona mortgage lender.

Think of me as your Tucson expert.