Weekly Review - June 27 - July 1

It is always – Only a Matter of Time! The hardest part of my job is to give news that is not wanted. However, when faced with reality it is better to approach it head on then to stick your head in the sand so here goes:

• Since the MBS market opened on Monday the FNMA 4.0 security has lost over 1.5 points in price. A move of this size and speed is unlikely to be reversed quickly. It has happened before, but chances are it will be quite some time before we see rates and prices like we did last Friday.

In English, it means that rates are higher and that the trend to reverse them may prove to be difficult in the short term. This isn’t to say that rates aren’t still favorable, because they are…but intuitively the consumer is so spoiled because of the recent low trend in rates, that when they go up people act shocked as if it shouldn’t happen. The good news is that rates are still below 5% on a 30 YR Fixed, the bad news is that how long is really…Only a Matter of Time!

Some other links and News from this week:

• Paying off a Mortgage Early – Did you know that the evolution of the 30 YR Mortgage Term is relatively new. It actually started after the Great Depression (the original one not the one from 2008.) It was created because people were making less money and needed to “afford a home” on their small salaries. So Bankers (in all their glory) decided that if you just extend the term, the cost is less and voila – increased affordability. The bad news is that before then, they were often less than 10 year terms and the country was in a lot less debt. But you can always be one of the few to say that you actually “own your home” as opposed to leasing it from the bank until they take as much money from you as they possibly can. Check out the article on ways to pay-off your mortgage early and see if it might work for you. If nothing else, call 602-670-3272 for a free consultation and we can discuss your options.

• Electricity Costs High as Summer Heat Increases – Every year at this time, people remember why Arizona can be so much fun. Mostly it’s the 115 degree heat but it is also the electricity bills that come with it. It is Christmas time when you open the bill, except the gift goes to the electricity company because the Sun decided to bake your air conditioner into submission. This isn’t even just Arizona, it’s all over the nation (see 97 degrees in Minnesota). But again, we face reality and can make choices as to what we can do. First let’s be mindful and stop giving money to the electric companies. You can see that just a few simple ideas may help to lessen the gifts you give to the electric company. Unless of course you are a giving person, then by all means – be as wasteful as you want.

Have a Happy 4th of July and enjoy the time celebrating the Country and the time you have with your family. They are lasting memories and you will hopefully share in many more to come.