Nashville Real Estate Forum

Mortgage interest rates were pressured slightly upward this week as stocks sucked the most money out of the markets and ended on a high note, giving credence to the so-called Santa Claus rally and closing on a five-month high.

The S&P 500 returned to the black for the year, and the Dow Jones Industrial average closed above a level last seen in July as investors digested signs of a recovering economy.

The Dow gained 124 points and closed the week at 12,294. The S&P 500 Index rose 11 points and settled at 1,265.33 as it crossed above its 200-day moving average and above its 2010-ending mark. The Nasdaq Composite Index gained 19 points to end at 2,618.64. For the week, the Dow gained 3.6 percent, the S&P 500 climbed 3.7 percent and the Nasdaq rose 2.5 percent.

Weekly jobless claims have fallen for three weeks in a row. On Thursday the government reported weekly jobless claims at 364,000, the lowest weekly filing since April 2008.

New U.S. single-family home sales rose to a seven-month high in November, and the supply of houses on the market was the lowest in 5-1/2 years, giving hope for a recovery in the sector.

The U.S. Congress approved a two-month extension of a payroll tax cut for 160 million workers that otherwise would have expired on December 31. The resolution, if only temporary, removes a market force that investors said could have hit growth next year.

The 10-year Treasury closed at a yield above 2% this week, settling at 2.03%. Last week it closed at 1.85% yield. When the 10-year has dipped below 2%, it has not stayed there for long.

Three times this week I got a question or heard something on TV about mortgage rates hitting all-time lows. While that may or may not have been true by one abstract metric, mortgage rates have been in a narrow channel of historically low rates since September. The all-time low by my measure was the end of September and early October when my 30-year rates dipped below 4%. The lowest rate that I locked personally then was 3.75% on a 30-year FHA.

When you see information attributed to Freddie Mac, what you may not hear is the "pricing" of a certain rate; that is, the rate is such and such with a point discount. Freddie puts out a weekly survey tracking rates, and it may be viewed at this link: http://www.freddiemac.com/pmms/

Freddie put out Dec. 22 a 30-year rate of 3.91% with 0.7% discount ($700 on a $100,000 loan) to achieve that rate. TAR Digest put out 3.94% this week and called it an all-time low rate. It was not an all-time low rate in the real world, although I have no doubt that Pug Scoville, who does an excellent job of putting out Realtor-related news in TAR Digest, read that somewhere. The TAR Digest, however, failed to note that the rate quoted of 3.94% was tied to a certain discount charge.

In other words, on a $100,000 loan, you get that rate by paying that discount. At a lower rate, the discount paid is higher; at a higher rate the discount is less to non-existent. Every one of us is unique, and do not go overboard paying attention to what you see on TV or frankly information you get from any source who has not actually pre-underwritten your loan.

APR is another thing. APR (annual percentage rate) is a somewhat confusing measure that informs the borrower that closing costs are involved with her new loan, and it displays the staggering figure of how much you would pay over the life of the loan if you paid it out to full term. I do not quote APR on rates here because I am not making reference to a particular borrower. Any rates I talk about in a general way are to be taken only in the context of discovering market trends. Any rates actually disclosed to a live, breathing borrower must be accompanied by APR.

It is a good time to refinance if you have a mortgage that escrows for taxes and insurance. Your servicing lender has just paid your 2011 property taxes, and they will not have to be collected at the closing---or thus rolled into the loan amount, which increases the need for a higher loan amount---of a refinance mortgage.

Call me to get pre-approved for a purchase or to run a refinance analysis to weigh your options. Amid a lot of negative economic news, now is the time for you to act in your best interests by taking advantage of mortgage rates at historical lows. Now is a good time to buy investment property, and we have low-interest loans for that. Call me with any questions. Nothing ventured, nothing gained. Gary Moore 615-579-8658

30-Year Conventional Fixed

4.125% $100,000-$417,000


5/1 ARM

3.25% $100,000-$417,000

15-Year Conventional Fixed

3.75% $100,000-$417,000


30-Year FHA-100% VA

4.0% $100,000-$393,300


30-Year Jumbo Fixed

4.875% $417,001-$1,500,000

(Interest-only available-Call me)

Rural Development 100%

4.0% $100,000-$417,000

THDA Great Start 100% with Gift

4.55% $100,000-$393,300

4% of loan amount Gift

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

Cell: 615-579-8658 Toll-free fax: 866-321-6513

Quote of the Day

"We cannot direct the wind, but we can adjust the sails." –Dolly Parton

Visit my mortgage website:
http://www.BrentwoodHomeLoan.com

National Mortgage Licensing System #186007