Great News! The 10 year treasury note is at 3.56. I am sure you have all heard that the Fed has lowered interest rates again. Let me explain a few important things here when they lower the Discount Rate. Long Term Interest Rates react to the Economic data in the Economy, things like the GDP (Gross Domestic Product) numbers, the CPI (Consumer Price Index) numbers, the PPI (the Price Producer Index) numbers, the Employment Cost Index numbers, and the Jobs Report (that comes out the 1st Friday of every month). So when the Fed lowers the rates it doesn't always affect the long term interest rates. For example GDP numbers came in below expectations on January 30th (showing a slowing Economy) and the rates got better.
Friday, Jobless Claims numbers came in very high and many more people than expected are filing for Unemployment. Not a good sign for the Economy and it proves that more people are losing their Jobs. When more people file for Unemployment, the Unemployment numbers obviously increase and when the Economy shows signs of slowing down, Interest Rates get better due to this Recessionary related information.
One of my favorite things to talk about on the radio right now is this strong likelihood we are headed towards a recession. I got this from a blog on OCRegister.com. I love this!
A One and-a Two…
Housing Plummeting ~ Check Credit Crunch ~ Check
Fed Cutting Interest Rates ~ Check Administration Panicking ~ Check
Dollar Dropping ~ Check Oil Prices Rising ~ Check
Gold Prices Rising ~ Check Subprime Market Totally Gone ~ Check
Markets Crashing ~ Check Inflation Rising ~ Check
Manufacturing slowing ~ Check Manufacturing Inventories Rising ~ Check
Now, how's our Economy doing? Does it seem like there is a possibility of a Recession? They are actually referring to what we are going thru now and comparing this to the Early 1980's when Jimmy Carter was the President ~ Stagflation! What that means is that they think the Economy is headed towards a Recession and we have Inflationary concerns all at the same time. Not good! Almost seems like an Oxy-moron!
What happens to Interest Rates when we have a Recession? That's right! They come down. Read this carefully! Please, Please do not pay Closing Costs this year! My feeling is that Rates are going to continue to come down this year. That is my prediction! For the last 6 years, Solomon Financial has been promoting No Point, No Fee, No Closing Cost Loans. Every time the interest rates drop, we can refinance you to the lower rate for Absolutely ZERO COST. If you knew 3 weeks ago that interest rates were going to drop by a 1/2%, please don't tell me that you would have paid Points, Fees & Closing Costs if you knew you could refinance to the lower rate for absolutely ZERO COST! Our Average Customer has Refinanced with us 4 times since May of 2002. Each time they did it at ZERO Cost and their Loan Balance didn't go up one penny after the Refinance was completed. If your Loan Balance is $300,000 when you start the Refinance, it is going to be $300,000 when you are done.
It is surprising to hear that about 70% of homeowners do not know what kind of loan program they are getting into. We are hearing a lot of misinformation out there in this industry. It is so unfortunate and embarrassing, quite frankly to be associated with the industry's bad name. To this day, we get client after client thinking they are getting quoted a 30 year fixed or a no cost loan (and worst of all given incorrect options for the client's portfolio). When our loan consultants take a close look at the proper documents from the mortgage companies out there, we discover that if the client had not called us, they would have gotten duped and spent money on erroneous and/or exorbitant fees! That is why we have a AAA rating on the Better Business Bureau and we have been serving consumers like you since 1990.
When you refinance, it is like grabbing your Mortgage Statement, crossing out your Interest Rate to the lower rate, keeping your Loan Balance exactly the same as it reads on your mortgage statement & just lowering your payment. Now, if you continue to make the same exact payment you were making prior to the Refinance, you actually get rid of 12 months of payments for every 1/8% you lower your Interest Rate. So, let's say you're 6.625% on your loan right now. We lower you to 6.125% today at Zero Cost, you would actually save 4 years worth of payments if you continue to make the same payment you were making prior to the Refinance.
Let's say your payment is approximately $2,000 a month. Now, for every .125% we lower your payment we would save you $24,000. Since, we are lowering you by 4/8's of a percent or a 1/2 point, we would save you $96,000 over the life of the loan, just by lowering your rate a 1/2 point! That’s a lot of money!
We can prove this to you on our mortgage calculator on our website. One of my famous lines here at Solomon Financial is, "Humans may lie, but the mortgage calculator does not. It's humans lying about the numbers." What we do is take you to our website & actually do the calculations with you right over the phone. All we need to do is take a look at your credit report or read the numbers off of your mortgage statement so we can show you the Numbers and how much you will save! We can show you the exact amount & the exact number of months we can shave off of your term.
So the bottom line is, right now is a great time to Refi! We are 3/4 of a percent from the all-time record low of June of 2003. We have seen rates drop on 30 year fixed mortgages drop a 1/2 of a percent in the last 3 weeks. In my 17 years in this business, I have never seen interest rates drop this fast. Take advantage of this time folks. Tell your friends and anyone else that has a loan that you care about! Now, is the time!
WHY NOW?
The guidelines are getting more difficult, the Asset Reserve Requirements are increasing & home values are dropping. If you have equity and good credit you are fine. However, if you are close to 80-90% loan to value, you better do something sooner, rather than later.
A lot of our old clients are calling us back because they hear the news, too. If rates come down again, remember we can do it again all for ZERO COST. There is enough evidence to suggest that rates could go up as quickly as they came down. CPI numbers showed the Economy is growing at 4.3%, above the Fed's comfort zone of 3-4% annual growth. The market has totally ignored this data because of 1 word ~ FEAR. FEAR OF WHAT? FEAR OF A RECESSION! Take advantage of these low rates today.
This is exactly what we talk about on the Radio every week. So tune in every Saturday at 4 pm (PST) on 97.1 FREE FM in LA. Or you can listen online anywhere in the world at www.971freefm.com.
Recent Comments