Ricardo Bueno's Blog

The average 30-year fixed rate dropped to 6.69%, down from 6.73% last week.

The average 15-year fixed rate dropped only slightly to 6.37%, down from 6.38% last week.

The 1-year ARM on the other hand dropped to 5.69%, down from 5.72% from last week.

We can attribute this slight decrease in interest rates to weak Economic Reports from last week and continuing credit concerns; low Home Sales reports reflected a weakening housing market. We're seeing a slight decrease in interest rates because as we know, lower interest rates boost home sales.

Let's take a look:

Seasonally-adjusted home sales are down for the 4th consecutive month. They have now reached the lowest levels since November of 2002.

New Home Sales have encountered the heaviest decline since January.

Total Existing Home Sales (in the first half of this year), are 9.3% lower than sales in the first half of last year.

Year-to-date New Home Sales are down 21.7% from last year.

The Fed Funds Rate:

The Week Ahead ~ Outlook:

Continuing credit concerns are deterring investors and combined with continued housing market weakness (especially after this last week's Home Sales reports), we can anticipate slight interest rate cuts. But don't get excited just yet, we're still seeing continued bond market volatility and we're in line for another busy week full of Economic Reports.

For a view of the Economic Calendar, you can visit http://www.bloomberg.com/ or visit Ana Connell's (your Burbank Real Estate Specialist) version of The Week Ahead for a clearer description of what to expect.

Recommendation: As I mentioned last week, there still exists bond market volatility amongst continuing subprime market concerns and continued housing market weakness. I would still advise to lock-in a rate if it works for you (the consumer), or for your borrower (if you're an agent representing a buyer). If you're going to float, do so with caution! I'd be happy to advise you of any positive inter-day rate changes, simply send me an email at rbueno@wilshire-financial.com

Related Articles:

Credit concerns are spreading, says Bernanke By Krishna Guha inWashington and Richard Beales, Michael,MacKenzie and Saskia Scholtes in New York

Other Interesting Articles:

100% Financing On Jumbo & Super Jumbo Loans w/No PMI - Here's How  

2nd Mortgages v. Home Equity Lines of Credit (HELOCs)

Free 24-Hour Recorded Information | All About Mortgages

Thank You!

Ricardo Bueno- Residential | Commercial | Construction Investment Advisor

866.934.3444

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

"It's not always wise to refinance and here's an example why." - R.B.
 
Client #1:
Has a 5.75% Interest Only 1st mortgage and a 7.875% Fixed Rate 2nd mortgage (30/15). She currently owes $399,000 between both mortgages and the value of her property is no more than $410,000 - $415,000 (if that!). Since she bought the property 1.5 years ago she has seen very little appreciation in the face of a challenging market. Below average sales have significantly reduced the value of her home.

Does she qualify for a refinance? She has excellent reserves, strong tax returns...everything for a Full Doc submission and the ability to qualify for a new fixed rate loan at 100% financing (in this case, 80/20 financing). This client wants to refinance out of her Interest Only product into a Fixed Rate mortgage because she is frightened by the thought of owing more than her home is worth. So when she makes her monthly mortgage payment, she wants to know that it is being applied towards the principal on her mortgage and is therefore contributing to the growth of her equity. 

Reasons why not to refinance:

• Your property is located in a declining market. Many homes have sold far below market value and this has hurt the existing value of your home. If you were to refinance, even in the face of reduced costs, you face the chance of being forced to pay out-of-pocket expenses rather than rolling those costs into the loan. Although you have the reserves to invest into the costs of refinances, those reserves can be best used in alternative investment vehicles. I would not consider this a prudent investment.
• Your reasoning behind this refinance is more for peace-of-mind. And although you can afford the increased cost of a 30-Year Fixed fully amortized payment, the payment you have NOW offers great flexibility. If your concern is in paying down the principal, it's as simple as sending in a partially higher payment. And if in any given month you don't want to, or can't afford to send in that increased payment, well there in lies the great flexibility of the interest only payment you have now.

Am I wrong in turning down business?
I pride myself in giving my clients professional and prudent financial advice. Could I have searched for more comps and received a slightly higher appraisal value to justify sufficient value for closing costs? Sure but at a risky and unwise cost to my borrower especially in the face of tightened guidelines where you're up against the possibility of having a value cut. And not to mention that the new loan would not benefit my borrower to any degree. She's not holding an adjustable rate mortgage. She has an interest only at a great rate and simply put it's a flexible product for her. If she's concerned about not making payments towards the principle, it's as simple as sending a higher check towards her payment at the end of the month. And if in any given month, she cannot send that additional payment, she has the flexibility of reverting to the interest only payment.

At the end of the day I don't want to be this guy →

I pride myself on providing professional, ethical, and innovative financing solutions! And at the end of the day, my clients see value in that. So much so that I obtain referral business and the certainty of conducting their refinance or purchase loan now and later.

Question: so when have you turned down business and why did it make sense?

  Thank You!

   Residential | Commercial | Construction Investment Advisor

   866.934.3444

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshrie Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA.

In 1991 while most of the block was vacant, One Colorado was the project that let the forefront for the redevelopment of Old Pasadena. It's now the hot spot for all retail, restaurants, entertainment and business offices here. Whether you're shopping, looking for a place to have lunch or dinner, or you work here, there's always something to do out on the boulevard. Their website explains it best, "the urban experience is fresh and the retail caliber high." -- (One Colorado Website; Quick Facts).

So what's going on this week in the Courtyard? Kids Day in the Courtyard | Thursday, July 26th

Why is it important? We all work long hours and sometimes don't spend much time with family. Make it a fun day, stop by and enjoy the festivities. Spend time with your kids taking them to this mini-circus and enjoy the evening.

The Hope Street Youth Circus 

Come join all of the fresh young talent as they bring the life and party of a real circus here to the courtyard for everyone to enjoy. Watch kids juggle, ride unicycles, etc. All the life and fun of a REAL circus! So spend time with the kids tomorrow and heck, let out your inner child. Have fun! It's not just work-work-work.

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

Ricardo Bueno is Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA. The city of roses!

Let's Recap:

The average 30-year fixed rate mortgage remained unchanged at 6.73% from last week.

The average 15-year fixed rate mortgage is at 6.38%, down from 6.39%.

The 1-year ARM on the other hand is up to 5.72%, a .01% change upward from last week.

As you can see, not much of a change in interest rates. In last week's Economic Calendar we were looking for inflationary data and their impact on mortgage interest rates and as you can see, the week's economic indicator's didn't have much of an effect on this data. Therefore we see interest rates holding relatively steady, reflecting changes of only .01% points.

Did you know that at this time last year...

the average 30-year fixed rate mortgage was averaging 6.8%...

the average 15-year fixed rate mortgage was averaging 6.41%...

and the 1-year ARM was averaging 5.8%.

Interesting how there's a slight shred of truth when you hear media advertisements of rates still being at historic lows. But don't get over-excited...we all know markets have a cyclical nature and rates have been on the overall rise over the recent couple of weeks and as I stated last week, they appear to have a reached a new plateau with estimations of an ease over the long-term.

The Fed Funds Rate:

The Fed Funds Rate is currently holding at 5.25%. As previously stated in earlier weeks, we do not anticipate a change to the Fed Funds Rate during August 7th's meeting. Although the economy has strengthened a little bit, core inflation has moderated as well thereby giving no reason for the Fed Funds rate to change.

The Week Ahead ~ Outlook:

Last week we were focusing on inflationary data and their effect on the interest rate market. This week is going to be much busier with six economic reports scheduled.  These reports should drive bond trading and rate re-pricing. We'll not only be looking at rates changing in the day-to-day, we'll also be looking closely at inter-day pricing changes for those A-paper clients as these reports are released.

For a view of the Economic Calendar, you can visit http://www.bloomberg.com/ or visit Ana Connell's (your Burbank Real Estate Specialist) version of The Week Ahead for a clearer description of what to expect.

Recommendation: Although we didn't see much of a rate change from one week to the next, there still exists bond market volatility amongst continuing subprime market concerns and continued housing market weakness. I would still advise to lock-in a rate if it works for you (the consumer), or for your borrower (if you're an agent representing a buyer). If you're going to float, do so with caution!

secure a locked rate for your client. With bond market volatility, it is not a prudent move to let interest rates float. As you can see, the 30- and 15-year fixed rates are up from last week.

Thank You!

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

866.934.3444

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

Wilshire Financial, Inc. and I (Ricardo Bueno) are helping non-prime clients restore their credit. In the process we hope to gain customers for life!

Using Arbitration to Improve Client Credit Scores

Undesrtanding consumer protection laws is important. This is where Wilshire Financia Inc. holds a competitive edge in having in-house legal council that understands and knows what steps are necessary to follow through on any arbitration claim in order to remove possible unlawful collections or judgments.

At Wilshire Financial, Inc. we'll run your credit report, review it with you, and create a road-map to successful credit recovery.

You're the passenger and we're the pilots and we're going to do everything right to get you to where you want to be as smoothly as possible.

Personalized Assistance to Restore Your Credit

1. After we run your credit, we undergo a one-on-one consultation where we do a thorough credit review.

2. We open a Credit Maintenance file so that we can review your credit monthly and quarterly.

3. You sit through our Understanding Credit presentation.

4. You're given a copy of our Understanding Credit presentation and booklet.

5. We schedule weekly/monthly and quarterly follow up appointments, during which time you'll have access to your credit and appropriate review representative 24/7 to answer any questions/concerns that you might have.

The Resources to Sustain and Preserve Your Credit

Understanding debt-reduction and implementing a plan to get there is an important element of developing an improved credit score. But understanding this alone is not sufficient recovery and knowledge to sustaining and preserving your credit. We're going to develop you understanding of credit and successful financing living further by implementing an understanding of:

                                                                      Increasing Cash-Flow

                                                                           Managing Debt

                                                               Creating An Emergency Fund

                                                                        Proper Protection

                                                     Building Long-Term Asset Accumulation

                                                                     Preserving Your Estate

The whole reasoning behind this extended service is that we do not want our clients to be forced into a situation of bankruptcy or foreclosure. Every year poor credit corresponds to thousands of dollars in expenses that could otherwise be saved towards retirement.

We want to give our clients not only the opportunity to restore their credit, but also the opportunity to have choices and opportunities to better their lives through a heightened sense of financial well being.

Product Hi-Light:

Non-Prime Credit Comeback Program

This program allows your qualified non-prime borrowers to lower their interest rates by paying their monthly mortgage payments on time.

• Rate decreases .375% each year for a period of up to four years. Note that all payments must be made on-time in each eligibility period.
• Total interest rate reduction can add up to 1.5%
• The minimum starting interest rate is as low as 7.6% and can be potentially reduced to as low as 6.1% over the course of the first four years on the loan.  

This is a reward program that benefits borrowers for making on-time payments. The rate, payment and savings that could be derived are as follows:

Original Loan Amount:                           $190,000

Starting Fixed Interest Rate/(APR)       7.6%/(7.96% APR)

Term (Years):                                        30-Year

                             Interest Rate   |   Monthly Payment   |   Monthly Payment Reduction

Start Rate                          7.6%                 $1,341.54                        N/A

After 1st Year               7.225%              $1,292.91                       $49

After 2nd Year              6.85%                $1,244.99                       $97

After 3rd Year              6.475%               $1,197.81                       $144

After 4th Year              6.1%                  $1,151.39                       $190

***Note: For more information on this particular loan product, you can reach me directly at 866.934.3444 ext. 111.    

Other Interesting Articles:

Healthy Financial Living

2nd Mortgages v. Home Equity Lines of Credit (HELOCs)

Free 24-Hour Recorded Information | All About Mortgages

Thank You!

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

866.934.3444

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

Let's Recap:

The average 30-year fixed rate jumped to 6.73% from 6.63%.

The 15-year fixed rate also jumped to 6.39%, up from 6.3%.

The 1-year ARM on the other hand held steady at 5.71%.

We can attribute last week's surge upward in interest rates to strong services and employment reports.

The Fed Funds Rate:

The Fed Funds Rate is currently holding at 5.25%. As previously stated in earlier weeks, we do not anticipate a change to the Fed Funds Rate during August 7th's meeting. Although the economy has strengthened a little bit, core inflation has moderated as well thereby giving no reason for the Fed Funds rate to change.

The Week Ahead ~ Outlook:

Mortgage interest rates have reached a new plateau and although we have seens signs of interest rates rallying up and down over the past couple of weeks, we can expect rates to remain where they currently are over the next couple of weeks and months ahead. But keep in mind that there are still concerns over continued housing market weakness and the subprime mortgage market. These two elements are creating volatility within the current bond market.

This week we'll be looking closely at inflationary data and how that data affects mortgage interest rates.

For a view of the Economic Calendar, you can visit www.Bloomberg.com or <Click Here>.

Recommendation: secure a locked rate for your client. With bond market volatility, it is not a prudent move to let interest rates float. As you can see, the 30- and 15-year fixed rates are up from last week.

Thank You!

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

                                                               FREE 24-HOUR RECORDED INFORMATION

                                                                                  Call (888) 359-8550

                                                             and enter any of the following extensions

EXT.         TOPIC

200        Should I refinance today?

210        Which mortgage is right for me? There are so many options!

215        Should I choose an adjustable rate or fixed rate mortgage?

220        How can I refinance and get rid of ALL my debt at the same time?

230        How do the no-point, no-fee programs work?

240        What can I do to repair my credit?

For additional information on any of the above referenced topics, you can reach me directly at 323.810.2175.

Coming Soon...

First Time Home Buyer Webinar & Teleconference

Thank You!

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

866.934.3444 ext. 111

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!

Let's Recap:

The average 30-year fixed rate dropped to 6.63% from 6.67%.

The 15-year fixed rate dropped to 6.3% from 6.34%.

The 1-year ARM on the other hand rose from 5.71% from 5.65%.

Mortgage interest rates dropped ever so slightly this week due to mild spending and inflation reports.

The Fed Funds Rate:

Like last week, the Fed Funds Rate is still currently holding at 5.25%. And as I stated last week, there is no anticipated change in the Fed Funds Rate during the next August 7th meeting.

Outlook:

A rise in the services sector combined with a strong employment report caused Treasury yields to increase on July 5th. Then on July 6th yields surged even higher due to a relatively strong June employment report.

Although we see a very slight decrease in the 30- & 15-year fixed rates an increase in the 1-year ARM suggests some still present market volatility. Lock-in your rates to secure a lower fixed rate amid slight up & down rate fluctuations.

For a look at this week's upcoming reports you can view the Economic Calendar at www.bloomberg.com or <Click Here>.

Other Articles of Interest:

Visit last week's Mortgage Week In Review.

Thank You!

Ricard Bueno - Residential | Commercial | Construction Investment Advisor

866.934.3444 ext. 111

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA 91101 - The City of Roses!

Let's Recap:

Last week the average 30-Year Fixed Rate dropped down to 6.67% from 6.69%.

The 15-Year Fixed Rate dropped to 6.34% from 6.37%.

The 1-Year ARM on the otherhand dropped to 5.65% from 5.66%.

Although interest rates didn't rally downward too heavily, it's better than the upward trend that we've been seeing over the past few weeks.

The Week In Review:

Durable goods orders as well as signs of continuing housing market weakness are the cause for the slight drop in mortgage interest rates last week.

Fed Funds Rate:

The Feds Fund Rate is currently holding at 5.25% and we believe that it will remain in it's current position after the next meeting scheduled for August 7th. Why? Well, although an economic rebound presses the need for a rate cut, moderation in core inflation presses the need for a rate hike.

The Week Ahead/Outlook:

We'll be looking at Manufacturing & Housing Reports (ISM Manufacturing Report on Monday & Home Sales Index Report on Tuesday) this upcoming week to deduce their impact on interest rates.

For a look at the Economic Calendar, you can visit http://www.bloomberg.com/ or <CLICK HERE>.

This Week's Product Hi-light:

Non-Prime Credit Comeback Program

This program allows your qualified non-prime borrowers to lower their interest rates by paying their monthly mortgage payments on time.

• Rate decreases .375% each year for a period of up to four years. Note that all payments must be made on-time in each eligibility period.
• Total interest rate reduction can add up to 1.5%
• The minimum starting interest rate is as low as 7.6% and can be potentially reduced to as low as 6.1% over the course of the first four years on the loan.  

This is a reward program that benefits borrowers for making on-time payments. The rate, payment and savings that could be derived are as follows:

Original Loan Amount:                           $190,000

Starting Fixed Interest Rate/(APR)       7.6%/(7.96% APR)

Term (Years):                                        30-Year

                             Interest Rate   |   Monthly Payment   |   Monthly Payment Reduction

Start Rate                          7.6%                 $1,341.54                        N/A

After 1st Year               7.225%              $1,292.91                       $49

After 2nd Year              6.85%                $1,244.99                       $97

After 3rd Year              6.475%               $1,197.81                       $144

After 4th Year              6.1%                  $1,151.39                       $190

***Note: For more information on this particular loan product, you can reach me directly at 866.934.3444 ext. 111.    

Other Articles of Interest:

100% Financing On Jumbo & Super Jumbo Loans w/No PMI - Here's How  

2nd Mortgages v. Home Equity Lines of Credit (HELOCs)

Thank You!

Ricardo Bueno - Residential | Commercial | Construction Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA - The City of Roses!