My New Blog

Rates have decreased and are very attractive right now. This is the time to buy if you are considering it. There is a lot of in the market right now with the debt ceiling debate and poor employment situation. Below is some commentary (not mine) and advice that now is the time to lock if you are closing within 90 days.......

Rate Lock Advisory - Friday Jul. 29th



Friday’s bond market has opened up sharply after this morning’s key economic data showed much weaker than expected economic activity. The stock markets are reacting as we would expect them to, with sizable losses, but are well above earlier lows. The Dow is currently down 62 points after losing over 150 points earlier. The Nasdaq is now down 6 points, up from the 41 points drop it was showing a little while ago. The bond market is currently up 26/32, which will likely improve this morning’s mortgage rates by approximately .250 - .375 of a discount point.

This morning had three pieces of economic data released, one of which is the single most important report we see each quarter. The preliminary reading of the 2nd Quarter Gross Domestic Product (GDP) is that release, coming early this morning. It showed that the economy grew at an annual rate of 1.3% in the second quarter of the year. This was well below forecasts of a 1.7% pace, meaning that the economy was much weaker than many had thought. Also worth noting was a significant downward revision to the 1st quarter’s GDP that was changed from 1.9% to a measly 0.4%. The age of the revision limits its influence on trading today, but it does show that the economy came precariously close to contraction last during the first three months of the year.

The second report of the day was the 2nd Quarter Employment Cost Index (ECI) that measures employers' costs for wages and benefits. It came in showing a 0.7% increase, indicating that employers had to pay more for wages and benefits than the previous quarter. This could become a concern if the pattern continues at the current trend because wage inflation easily spreads to other parts of the economy, making long-term securities such as mortgage-related bonds less attractive to investors.

The final report of the day came from the University of Michigan, who updated their Index of Consumer Sentiment for July. They announced a revised reading of 63.7 that was a very slight change from the preliminary reading of 63.8 and current forecasts of the same. Rising levels of consumer sentiment is bad news for the bond market because consumers that are more confident about their financial situations are more apt to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, the bond market prefers to see waning confidence. We would ideally have liked to have seen a decline in confidence, but due to the importance of the GDP reading, it would have taken a significant revision for this data to have much of an impact on today’s rates.

This morning’s trading in stocks and bonds is being fueled mostly by the GDP reading that raised concerns about the ability of the economy to continue to grow on its own at a pace sufficient enough to lower the unemployment rate. With such a slow rate of growth during the first half of the year, many analysts now need to adjust their full year and future estimates for the economy and timetable of Fed action to monetary policy. Today’s news makes it extremely unlikely that the Fed will raise key short-term interest rates anytime soon and in fact may need to take additional measure to boost activity rather than slow it down to control inflation. In other words, the GDP report was overwhelmingly good news for the bond market and mortgage rates, both short-term and long-term.

Next week is very active in terms of relevant economic data being posted. It starts with an important report Monday (ISM Index) and closes with the almighty monthly Employment report Friday morning. There are plenty of releases in between also. In addition, Tuesday is the deadline for raising the debt ceiling or the U.S. is likely to default on some of its obligations. Weekend news out of Washington on that subject will also heavily influence the markets and rates Monday and Tuesday. Look for details on next week’s events in Sunday’s weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

The Federal Goverment Extends The $8,000 Tax Credit For First Time Homebuyers and Add's a $6,500 Credit For Repeat Buyers Ubtil The End of April, 2010. Call For Details or Click on the Link Below for FAQ's.

Details On Homebuyer Tax Credits

First Time Homebuyers Programs Available Through The State of Indiana

The Indiana Housing and Community Development Authority (IHCDA) is a state organization that offers special loan programs for first time homebuyers. The FIRST HOME programs offer low fixed rate mortgages as well as down payment assistance for those who qualify. Borrowers must be below a certain income based on family size and property location. Dilger Financial Group, a division of Main Street Financial, is an approved lender with IHCDA. Here are some specifications on the IHCDA programs:

First Home - (Bond Program)

Normally below market fixed rate - Currently 5.375% 30 year fixed FHA, VA, USDA.

For first time homebuyers (unless property is located in IHCDA targeted area)

Owner Occupied Properties

Acquisition Limits - $237,031 in Hamilton/Marion Counties

Income Limits - Based on family size

First Home Plus - (Bond Program with Down Payment Assistance)

Normally below market fixed rate - Currently 5.375% 30 year fixed FHA, VA, USDA

Down Payment Assistance, settlement costs, 6% to a max of $7,500

For first time homebuyers (unless property is located in an IHCDA targeted area)

Acquisition Limits - $200,160 in Hamilton and Marion Counties

Income Limits - Based on family size (lower limits than First Plus)

Other IHCDA Programs

*MCC - Mortgage Credit Certificates – Borrowers get a tax credit up to $2,000 per year to help subsidize their mortgage payments

*Market Stabilization Program - Owner Occupied Foreclosures, $15,000 credit towards rehab, down payment and settlement costs

Call me to discuss any of these programs or visit the website below to determine eligibility.

IHCDA website - www.in.gov/ihcda/

Thank you!

Steve Jackson
Mortgage Consultant
Dilger Financial Group, LLC

A Division of Main Street Financial, Inc.
317-590-6629
Fax: 317-536-9643
steve@indymortgagesource.com
www.indymortgagesource.com

How To Claim A Credit Of $15,000 (Or $23,000!) On The Purchase Of A New Home

The Indiana Housing & Community Development Authority (IHCDA) has rolled out a new program designed to help facilitate the sale of foreclosed properties in Indiana. The program is funded by money that Indiana received from the Federal Government as part of the stimulus package. You may be eligible to receive a $15,000 grant from the State if you purchase a foreclosed property that is deemed to be in “an area of greatest need” by HUD. This means you can purchase the home with no money out of pocket!

This credit may be used for:

1) Down Payment Assistance

2) Closing Costs, Points, and Pre-paid Items

3) Repairs

Here are some key points on this program:

1) Property must be a foreclosed property.

2) Must be located in an eligible area. Check here for eligible properties: http://indianahousingnow.org/ProgramGISLookup.html

3) There are income limitations on this program. Check here for income limits based on family size. http://www.in.gov/ihcda/files/MSP_STAND-ALONE_INCOME_LIMITS.pdf

4) Bank must sell you the property at a 10% discount. Sales price cannot exceed 90% of the appraised value.

5) The credit is forgiven after 10 years and partially forgiven in years 6-9.

6) Property residence only.

7) Buyer does not have to be a first time homebuyer.

If you are a first time homebuyer (meaning you have not owned a primary residence in the past 3 years), you may also receive the $8,000 Federal Tax Credit for first time buyers, if you close before December 1^st of 2009. You can find details of the $8,000 credit here: http://www.indymortgagesource.com/$8,000housingtaxcredit

Between these two programs, you have the opportunity to take advantage of free money from $8,000 to $23,000 for the government. That coupled with the historical low interest rates and extraordinarily low home prices, make this perhaps the best time ever to purchase a new home! Call me for further details on these programs and to begin the search for your new home today!

Steve Jackson
Mortgage Consultant
317-863-2092
Fax: 317-536-9643
steve@dilgerfg.com
www.indymortgagesource.com