Bob Howe
Senior Loan Consultant
Residential First Mortgage
(949) 852-0400 ext. 219
bhowe@OrangeCountyLender.com
www.OrangeCountyLender.com

U.S. Treasury Bonds
Maturity Yield Last
Week		 Last Month
5 Year 4.56 4.53 4.63
10 Year 4.65 4.62 4.71
30 Year 4.83 4.79 4.89

Treasury Market Summary: 

 

Once They Fell, They Couldn't Get Up :  Treasuries just could not keep it together today, even given a batch of bond positive reports, end-of-week safety buying or reports of increased terror threats.  Trade once again seemed to allow itself to get in trapped by the machinations of stocks which found a way to own the data better than the bonds could.  The week ahead offers a batch of relevant data & the CPI carries more cred than the producer end does, while the report of foreign flows will also be closely checked-out & of course, housing data will be sporting its upwardly mobile marquee status.  The week could be a bit of a minefield, especially if stock-jockeys continue to ride the trend hard, potentially taking the shine off even highly-bond friendly reports (witness today).  The curve trade got caught in its own confining range, spending the latter part of the session swishing around either side of mid-session levels, heading out right there with the 2-10-yr yield spread going off at -2.8, somewhat less inverted than the start of the week.  The buck is heading into the weekend offered against the euro & only modestly bid on the yen. The dollar managed to make some headway through the week against the common currency while against the yen, it mostly jogged on the spot. Spot gold is up at 671.15 (+5.50) while crude oil is higher at 62.40 (+0.59). Next week brings a rash of data, including CPI, manufacturing & housing & an outbreak of Fed-speak.

 

 
 

 

Economic Indicators for this week that could impact the mortgage or real estate markets include...

Finding the Right House
Before you actively look at homes to buy, it's necessary to know how much you can qualify for. Ask a mortgage lender to determine how much you can buy with your down payment and closing cost money and what your monthly payments will be.
Know Your Credit Worthiness - Look at your credit report before you go to a lender. It is not uncommon to find problems with reports, especially if you have a common last name.
After you see your credit report and any problems are cleared up, get pre-approved with a lender. Take the steps necessary to get a letter from the lender stating you are "pre-approved" for a loan in a specific price range. It's important to have this letter before you make a contract offer to buy real estate. Once your pre-approved, you know what price range of homes you should be looking at.

What Kind of House is Right?  Determine the specifics you want or need in a home.
- What are your day to day and future needs?
- Do you enjoy swinging a hammer?
- Older houses have great charm, but may need updating.
- New homes offer the latest energy efficiency and design features.
- Larger lots can give room for additions and swimming pools.
- A fixer upper can dramatically increase in worth.
- A PUD may have private recreational facilities such as a pool and play parks.
- A condo or town-house will relieve you of yard work and exterior maintenance.
Sit down with your real estate agent and make up a wants and needs list. Knowing your price range, your agent can determine in what neighborhoods or towns to start looking. You may find that you are limited to where you look based on your situation.
There is no sense in wasting your or your agent's time in areas out of your price range.

Wants and Needs
- Price range
- Building style/design
- New construction
- Remodeled
- Fixer upper
- Minimum # bedrooms
- Bathrooms
- Family room
- Fire place
- Office/den
- Hardwood floors
- Swimming pool / Spa
- In-law quarters
- Workshop
- Central air conditioning
- Parking facilities
- Yard size
- School district
- Work locations
- Special zoning or location

With a list of houses that you can afford to buy, drive-by them and check out the surrounding neighborhood. Next make an appointment with your real estate agent to view the interior of the ones you are interested in.  After you have narrowed your selection to few houses it is important to visit them at different times of the day. Visit them during the morning commute time. If you visit only during the middle of the day, you might not notice if the street in front of the home is used as a minor thoroughfare or a shortcut. This is also a good time to find out how you emerge from you residential area into traffic on a thoroughfare or how long it takes for freeway access. Go back after dark and walk around the block. You might notice that headlights from approaching traffic shine into the home or hear sounds from a nearby night club or park that you were not aware of.

After previewing a number of homes, you will want to preview some a second time.
This is the time to make measurements, ask questions and make a closer self-inspection.
When you want to make an offer, ask your agent for sales comps to arrive at an offering price.
A "seller's market" or "buyer's market" can have big effect on how much to offer. There is no sense in making a low offer on a well priced home in a seller's market.

A properly written contract will allow a buyer a number of outs if certain items are not met or approved. Get a copy of a typical real estate contract prior to making an offer and have your agent go over it with you.

One should consult with a qualified real estate planning professional prior to implementing any real estate planning strategies. If you are an estate planning, insurance, estate, tax or financial planning professional receiving this newsletter, please call our office and introduce yourself to us.  We are always seeking to grow our referral network and expose more service professionals to our client base.