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Frank Daniels

Phone: (512) 301-9373

Fax:     (512) 301-9374



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A newsletter provided for my clients, professionals & consumers in the Orange County area.  The purpose of the newsletter is to remain informed of current consumer topics and pending economic indicators that effect the mortgage and real estate markets.

U.S. Treasury Bonds
Maturity 12-14 12-13 Last
5 Year 4.46 4.37 4.45 3.85
10 Year 5.17 5.09 5.15 4.53
30 Year 5.58 5.53 5.60 5.02

The general trend for interest rates this past week was slightly in the upward direction.  Keep in mind, interest rate pricing for consumers is closely tied to bond pricing. Usually when bonds lower, yields on those bonds rise and so do interest rates. This rule is usually true when the opposite occurs as well.   



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


Building Permits  18-Dec.
Housing Starts  18-Dec.
Trade Balance  19-Dec.
Leading Indicators   19-Dec.
 Initial Claims 20-Dec.
Treasury Budget 20-Dec.
GDP 21-Dec.
Personal Income 21-Dec.

 Is The Refinance BOOM Over? It Might Not Be To Late!

Millions of Americans have rushed to refinance their mortgages this year to take advantage of falling rates. But there are plenty of other homeowners who haven't -- and should. With rates on 30-year fixed mortgages just a whisker away from their 30-year low, more than one in four homeowners could still refinance profitably. There's a window of opportunity thatís going to close pretty quickly.  For people with adjustable-rate mortgages, the argument for refinancing is particularly compelling. Indeed, many mortgage lenders believe everyone with an adjustable-rate loan should consider refinancing, except those who are planning to move within a year or two.


Adjustable-rate mortgages are home loans that carry a fixed interest rate for a set period of time -- often five years or less -- and then "adjust" up or down every year afterward based on the performance of Treasury notes or other benchmarks. With rates sinking, a borrower with an adjustable-rate mortgage might be tempted to stick with the same loan when its initial term ends, because it probably will "adjust" to a low rate. But Treasury yields are likely to rise when the economy recovers. As a result, many adjustable-rate borrowers could find themselves with a far more expensive loan in a few years and no opportunity to refinance.


Refinancing isn't a winner for many people with fixed-rate mortgages whom have had their mortgages for a long period of time. If you have paid off a big chunk of your mortgage and you are eating away at the loans principal, refinancing can be counterproductive. That is because the first years of a mortgage are mostly consumed paying interest rather than principal, and if you refinance a bigger percentage of your monthly check will start going to interest again.


When does it make sense to refinance a fixed-rate mortgage? In the old days, the rule of thumb was that borrowers needed to see a drop in mortgage rates of two percentage points before refinancing. That is because the fees lenders charge can offset savings from lower monthly mortgage payments, but increased competition has helped push fees down. The larger the mortgage, the less rates must drop before refinancing makes sense. That is because some refinancing fees are fixed no matter what the size of the loan. And since borrowers with giant mortgages save more money by reducing their interest rate than people with small loans, they don't have to wait as long before the lower monthly payments outweigh the upfront fees.


Homeowners with a loan of more than $150,000 or $200,000 might be able to profitably refinance although rates are only slightly lower. Borrowers with "jumbo" mortgages -- which normally carry higher interest rates than conventional loans -- may have a double incentive to refinance. A jumbo loan is any mortgage whose value is greater than $275,000 and next year that ceiling is being lifted. First off, a refinanced jumbo can yield big savings from lower interest rates. But some jumbo borrowers could get an extra boost by refinancing out of their jumbo and into a conforming loan. A few lenders are now extending their best interest rates to borrowers whose loans exceed $275,000. That means some borrowers that couldn't squeeze into a regular mortgage when they bought their home could now qualify. 


The purpose of this newsletter is not to solicit business, or to give legal or tax advice. The purpose is to stimulate thought for our clients and those professionals we network with. The loan professional who has made this information available specializes in providing financial solutions for those buying, selling or refinancing real estate.

Visit:  FrankDaniels.net  |  Mission Statement  | Realtor Partners |  Professional Partners | Case Studies  |  Testimonials Newsletter  


Frank Daniels is a full service mortgage solutions provider, approved with numerous lending sources throughout the state.  He provides conventional, non conforming and jumbo, in addition to cash out loans.  He assist customers with great credit, bad credit and no credit.  Frank also assists individuals who are self-employed and require both full documentation and no documentation loans. He assists individuals & professionals with their financing needs whether buying, selling or refinancing real estate.   If he can be of assistance or to be added/removed from his distribution list,  email him directly.  Your request will be immediately honored.


 Frank's Contact Information: Direct Phone: 512.301.9373  | Fax: 512.301.9374 | E-mail info@frankdaniels.net

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