Tucson AZ Home Loan Info

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Interest Rates: What's Around The Bend?

What's around the bend for interest rates?

Mortgages repriced for the worse this morning, and that's not a surprise in light of tomorrow's midterm elections.  What you may not know is that this week has more than a little in the way of news that will affect interest rates.  Here's what's happening this week in addition to the Midterm Elections:

1.  The Federal Open Market Committee meets on Wednesday, the day after the midterm elections.  The Committee is expected to announce a second round of Quantitative Easing.

In plain english, that means that the Fed is going to print more money with the hope that the banks who get it will lend it to you and me to buy stuff.  It didn't work in 2008, but 10 out of the 12 members of the committee think that it might work this time, and that's the way the vote is likely to go.

'Why didn't it work,' you ask?  When the banks get money for free (0-2%) there is nothing that requires them to re-lend the money.  Instead, they've been using it to make other investments for their own accounts.

2.  The Jobs Report will come out on Friday.  Regardless of your political outlook on life, having 10% of the people in your town unemployed is not good for your local economy.

Initial Jobless Claims last week were 434,000. 

If you're a REALTOR, I have a 3-point plan to help you sell houses between now and the end of the year:

1.  Don't focus on interest rates.  Time spent talking about something you can't control is time stolen from talking about what you CAN control: __________________________________ (you fill in the blank.)

2.  Advise your clients not to focus on interest rates.  Negotiating price on a purchase is much more powerful than worrying about whether rates will be lower or higher after the first of the year.

3.  Get out your prospect list and call 10 more people today than you called yesterday!

 

____________________

I'm Mike in Tucson, your preferred Tucson Mortgage Lender.

NMLS #223495

SUNSTREET MORTGAGE llc ~ Correspondent Mortgage Bank
Offices (AZ) Mesa, Tucson, Nogales, and Albuquerque, NM.

Comment balloon 55 commentsMike Jones • November 01 2010 01:40PM

Comments

Excellent three point plan!    Focus, focus, focus on the job at hand/the things in our control.

Posted by Li Read, Caring expertise...knowledge for you! (Sea to Sky Premier Properties (Salt Spring)) over 7 years ago

A big week indeed and it just irks me that the banks get any money. WF has reported billions in earnings while Americans are loosing their homes. What's wrong with this picture? BTW, I voted last Friday already :) and your blog is right on.

Posted by Teral McDowell (Referral Patners LLC) over 7 years ago

Thanks for calling me today.  Made me go on AR and check some things out.  I really have to start blogging but it is one of those things I put off.  So are you predicting that the rates that are at an all time low now will creep back up after the election tomorrow? 

Posted by Donna Grady, Bringing Home Results (Keller Williams Realty) over 7 years ago

I like your 3-point plan! Thanks for sharing.

Posted by K.C. McLaughlin, Realtor, e-PRO, Homes for Sale - Cary, Raleigh NC (RE/MAX United) over 7 years ago

Nice post Mike. You're right -- spend time on the things you can change not worrying about what we cannot do anything about. Good advice for any topic.

Posted by Erica Ramus, MRE, Schuylkill County PA Real Estate (Erica Ramus - Ramus Realty Group - Pottsville, PA ) over 7 years ago

Erica,

Thanks!  I still can't get over you being a herpetologist...  :)

KC,

You're welcome!  Thanks for stopping by.

Donna,

Rates repriced for the worse today.  I don't think that they will rocket skyward any time soon, but the bias is definitely toward higher rates moving forward.

Teral,

Lets see...  The banks are being bailed out with OUR money, and they don't want to loan it back to us?  What's wrong here?!

Li,

Thanks for being the first to comment!  See you on your blog.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 7 years ago

Mike,

Turning on the press devalues our savings! Our Assets! Our paychecks! God help us it destroys our retirement! Only those with COLAS even break even.

Thank you Mr Precedent! Deight W Eisenhower disgraced us with limited war and * taking us off the Gold standard, but we did get some nice highways and bomb shelters.

One of the big food companies announced food prices were going up 14%, but why not when we're converting it to food instead of drilling for oil.

Bill

PS: Your 3-point plan is good advice. Interest and value go together never buy more house than you can afford at today's rates.

* OPS!  Steven Cook very politely corrected me! It seems Nixon took us off the Gold standard! I knew that, once apron a time.

All I can say is 1971 was the best and busiest year of my life. When I think about it, Nixon never comes to mind.

Thanks Steven!

Bill 

Posted by William J. Archambault, Jr. (The Real Estate Investment Institute ) over 7 years ago

Mike, look out for hyper inflatation when a goverment starts buying its own debt. NOT GOOD

Posted by Betty Knowles, TeamKnowles REALTORS® - Springfield MO Real Estate (Coldwell Banker Vanguard - www.teamknowles.com) over 7 years ago

hi mike -- i have no ideal what will happen...but i sure hope interest rates don't go up.  i know the party can't last forever.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) over 7 years ago

Love your 3-point plan!  I will definitely call as many prospects as possible (and email) every working day this month.  Thanks for the boost (and your nice message ;)

Posted by Kate McQueen, Tailored service for your real estate needs! (Realty ONE Group-Lone Star) over 7 years ago

Agreed.  Don't focus on something you can't control.  Rates are still great. 

Posted by Kyle Jan, Phoenix AZ Homes for Sale over 7 years ago

Mike, 

We don't know what's around the corner or how many more curves are ahead.  Your idea of focusing on what we do know and can do makes a ton of sense.  

All the best, Michelle

Posted by Michelle Francis, Realtor, Buckhead Atlanta Homes for Sale & Lease (Tim Francis Realty LLC) over 7 years ago

there are no bad rates just

good, better, and best

Posted by Jay Beckingham, "I love first time homebuyers" (Fairway Independent Mortgage Company) over 7 years ago

Mike: Thanks for the update and advice. I appreciate it. I agree with you. People shouldn't focus on rates and base their decision solely on that. As you and I know there are a number of variables. A great loan officer will offer choices to their clients. Thanks again!

Posted by Paul McFadden, Pest Control, Seattle, WA. (Paratex) over 7 years ago

Paul,

I hope things are going well for you up there in God's Country!

Jay,

Amen to that!

Michelle,

Momma taught me that it's good to spend your "worry energy" on things you can do something about!

Kyle,

Yes they are!

Kate,

You're so welcome!

Chris,

Get ready for when they do, and you'll still prosper!

Betty & John,

Love your comment!

Bill,

The "limited war" thing has sort of turned into "permanent war," hasn't it?  Think we will ever go back on the gold standard?

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 7 years ago

"2.  Advise your clients not to focus on interest rates.  Negotiating price on a purchase is much more powerful than worrying about whether rates will be lower or higher after the first of the year."

Thank you, thank you. When will people understand that the amount you borrow and length of loan has far more impact than the interest rate on monthly payment and total interest repaid.

Posted by Consumer over 7 years ago

Thank you Mike Jones for sharing your crystal ball with us.  I've learned over time that it's one of the more reliable crystal balls out there in the 'Rain.  Great message - don't worry about the things you can't control - and control the things you can!

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) over 7 years ago

All good points -- keep on keeping on ---- that is all that any of us can do -- thanks much

Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) over 7 years ago

Thanks Mike... Your always there to share those golden mine thoughts so that we can bring our business to the next level. We raise some great points.. I have to make sure use them with my buyers in the end.

Posted by Donna Paul, Long Island Home Specialist,All About Real Estate (Keller Williams Realty Gold Coast) over 7 years ago

Mike that is excellent advice.  It is not about the interest rate, and it is time that those of us in the business stop treating interest rates as if it is all about interest rates.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 7 years ago

Mike, great post!   If buyers are waiting for the rates to go down even more --- they probably will wait forever to buy, and STILL make excuses!

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) over 7 years ago

Hey Mike, excellent feature and very worthy! I will never understand why our gov't hands over the goods to banks "hoping" and expecting these gigantic pricks to actually do the right thing! Small business lending is down BILLIONS. Small town America is starving to death! Money needs to be lent! The fat cats of Congress are destroying our country day by day. It sickens me to know that they are trying this a second time.

 

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) over 7 years ago

Good points.  Wouldn't it be nice if we could control interest rates?

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) over 7 years ago

Mike, I've always said to just get what you think is a good rate and STOP.  Another .25 "sounds" good, but equates to far less in monthly payments than your stress about it.  With rates still at the lowest in 1/2 a century and housing priced at 2002/2003 levels, I don't understand what people are waiting for. 

Posted by Juli Vosmik, Scottsdale/Cave Creek, AZ real estate 480-710-0739 (Dominion Fine Properties) over 7 years ago

Great post Mike.  I hear from the street the rumblings of inflation, and then also the process to try to keep it down through government intervention.  We'll see what happens.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 7 years ago

Mike: Thanks for reinforcing the fact that the consumer should't be focusing on what we can't control. Too many people worry about rates and overlook other very and more important aspects of home buying. Awesome post.

Posted by Maria Marriott, Realtor - DBRealEstateTeam.com (Executive Properties) over 7 years ago

Thanks for the crystal ball Mike. I like the way you put it in plain english. 

Posted by Ann Cordes, Home Ownership is Not a Distant Dream (Century 21 Randall Morris and Associates, Waco) over 7 years ago

The fact that interest rates at at an all time low is the very reason I encourage buyers to buy now. Additionally, buying down the rate to lower it if capable is another reason to buy now.

Using the low interest rates is a closing benefit and is easily illustrated; simply do the math and let your buyer determine why it makes sense to buy now.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) over 7 years ago

Most people forget that only TWO YEARS ago this month, clients were thrilled to get a rate in the 5's. 

Need to put things in perspective and keep moving forward.

Good job, and I agree that any Fed move won't have desired effect and will make things worse in the long-run, as traditional investors move to investments with higher yields.

Posted by Eric Newman, Loan Officer with 25yrs in Housing, NMLS-97776 (Directors Mortgage, NMLS-3240) over 7 years ago

Thanks for the good information and good advice too.

Posted by Kathleen Sheridan over 7 years ago

The fact that interest rates at at an all time low is the very reason I encourage buyers to buy now. 

I'm with Kimo, but I definitely agree with your bigger point. In my opinion, a slight move upward in interest rates is what we need to get buyers to stop waiting for a better rate, so I'm happy to see rates going up a little.

Posted by Julia Odom, Chattanooga Homes for Sale (Select Realty Professionals) over 7 years ago

Mike: Great points--I think focusing on the selling price and informing the buyer of the "discount" from the height of the market is what makes them feel like they are getting a bargain--and I agree that to focus on the interest rate is a waste of time! Gotta go make 10 more phone calls...see ya! :)

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 7 years ago

Hi Mike,  Excellent explanation of the factors impacting the current interest rates.  I like the idea of not wasting time on things beyond our control.

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) over 7 years ago

Bill,

Amen to that!  Thanks for stopping by.

Paula,

Love your idea of a "discount!"  I'm using that.

Julia,

They're up a little again today, I see.

Kathleen,

Thanks for stopping by to comment!

Eric,

They forget that, though.  We need to remind them.

Kimo,

It will be interesting to see what the outcome of today's Midterm Elections bring.  Thanks for your comment.

Ann,

You're welcome!

Maria,

I sure appreciate your encouragement!

Gabe,

Yes we will!  See you on your blog.

Juli,

I think that mostly, they're scared of making a mistake.  Now is the time to encourage them to move forward.

Christine,

Low rates have a downside.  Your parents investments don't give them a good return in their retirement when rates are so low.  There's a flip side to everything.

Greg,

I appreciate your comment.  You could make your point with more strength if you edited out the vulgarity, though.

Joan,

Thanks!

George,

Right you are!

Donna,

It's good to see you; thanks for commenting.

Bob & Carolin,

I'm home (finally) and look forward to working with you.

Tony & Suzanne,

Thanks for the reblog of this post!  You two are an encouragement to me.

Consumer,

You're welcome!  I really appreciate your comment.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 7 years ago

Your points are one of the reasons we do not advertise, nor push rates.  We are busy helping our clients get the best deal, that provides them with the best solution for their individual situation.

Posted by Steven Cook (No Longer Processing Mortgages.) over 7 years ago

Thanks for explaining Quantitative Easing.  I've seen that referenced recently and didn't understand it.

Posted by Carol Fox, Helping You Discover Charlotte's Best Small Towns (Allen Tate Company 704-905-3935) over 7 years ago

Makes sense, thanks for the mini-plan.

Posted by Lyn Sims, Schaumburg IL Area Real Estate (RE/MAX Suburban) over 7 years ago

Love the 3 point plan.  Good info!

Posted by Debi Prosek (Coldwell Banker The Real Estate Group) over 7 years ago

Hi Mike,

Very scary to think that our government is going to give MORE money to the banks AGAIN! Did they learn nothing the last time they wrote huge checks to these banks, with no strings attached? Sadly, we all know the answer to that.

Great post & plan! Thx!

Gina

Posted by Momentum Realty, Orange County CA Real Estate Agent (North Orange County CA Real Estate Specialists) over 7 years ago

Great advice Mike......we have spent too much time "talking" about the interest rate......and it didn't work.

Posted by Woody Edwards, A Realtor® Who Answers His Phone! (First Choice Realty, Inc) over 7 years ago

Dear Mike,

A friend of the family was happy to get an interest rate of 16% back in the 1980s. When I relate this, our current rates seem pretty amazing. You always need to make decisions based on today and not what might be in a year from now. Rates could go down more or shoot to the moon. People will still buy & sell real estate, they will just do so differently.

Posted by Dörte Engel, ABC - Annapolis, Bowie, Crofton & rest of Maryland (RE/MAX Leading Edge) over 7 years ago

I remember being thrilled to get 10% with no points in the late 80's. Now my son has a loan for twice as much money as we did then - but approximately the same payment we had then.

We can't predict what interest rates will do, but if you want a home of your own, it does seem like a good idea to buy right now, before they shoot up.

Posted by Marte Cliff, your real estate writer (Marte Cliff Copywriting) over 7 years ago

Mike: The best advice I have heard from a financial person in years! Yes, get proactive, do something!

Ty

Posted by Ty Lacroix (Envelope Real Estate Brokerage Inc) over 7 years ago

This is great advice for Realtors. Too many people are focused on the interest rate. Why? Homes are at historical lows. You cannot build a home for the price homes are selling at in today's marketplace. Let's sell these homes and move on to new business.

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) over 7 years ago

I think its human nature to try and squeeze the last nickel out of any deal.  And in my experience when I find someone obssessed with that - then they are very unlikely to get unstuck.

Most people respond well when we discuss that its better to buy "in the low range" with interest rates "in the low range" and make the move that best fits your families needs.

Posted by Jeanne Dufort, Madison and Lake Oconee GA (Coldwell Banker Lake Country) over 7 years ago

Jeanne,

You're right about that; we all want a great deal, and when we focus on that, we lose the bigger picture.

Harry,

It's going to be interesting to see what comes of yesterday's election results in the real estate industry.

Ty,

Thanks for commenting; I'll see you on your blog.

Marte,

Right you are!

Dorte,

How did you get that umlaut over your "O"?

Woody,

Much success to you today!

Gina,

Today, we have a new face on the congress.  Call your congressional representative and tell her!

Debi,

Thanks!

Lyn,

You're welcome!

Carol,

Google makes us all smarter!  LOL

Steven,

That's a good philosophy!  Thanks for commenting.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 7 years ago

It should be made mandatory for banks that receive the stimulus funding to re-lend to the general public at a reasonable margin.

Thanks

Sleepless in Seatle.

Posted by Sam Kader, Real Estate and Mortgage Broker (Pacific Coast Financial LLC) over 7 years ago

Generally good advise. I do use low interest rates to encourage people to buy now.  However, a higher rate should not stop people.  If they drop a lot more you can refinance down to the lower rate, if they don't drop you should be happy to get them where you can.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) over 7 years ago

Properties were being sold in the early 80's when interest rate where over 16%.  We spend too much time worry about interest rates and not enough on the affordability of homes.  K.I.S.S. - Buy what you can afford.

Posted by Simon Mills (Mills Realty) over 7 years ago

Interest rates do make a difference in the monthly mortgage payment so at some point they have to be considered but even if they were to go up two percent they would still be low!  Margaret C.

Posted by Margaret C. Taylor, St Marys/Calvert/Charles MD Real Estate Agent (Century 21 New Millennium MD) over 7 years ago

Mike,

I love your 3-point plan! Lead generation is VERY important, its time well spent!  Hopefully the people who are soooo "concerned" about hitting the bottom, start waking up and seeing that they have VERY limited time left. They need to seize the moment now! Rates aren't going to be low forever, things change!

Posted by Kwesi Childress, Kwesi Childress R.E. and Investment Specialist (Childress Investment Group/Keller Williams Beverly Hills) over 7 years ago

Mike - It only makes sense that our current low interest rates won't last forever! Those that wait won't get any sympathy from me later on.

Posted by Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional, Palm Harbor, Dunedin, Clearwater, Safety Harbor (Charles Rutenberg Realty) over 7 years ago

This is good stuff Mike and a pretty cool picture to boot!

Posted by Wayne B. Pruner, Tigard Oregon Homes for Sale, Realtor, GRI (Oregon First) over 7 years ago

Wayne,

thanks for saying so!

Barbara-Jo,

You know what they say about sympathy...  It's in the dictionary between stink and syphillis. :)

Kwesi,

Leads are EVERYTHING!

Margaret,

You've got a point there!

Simon,

I remember those days.  I was a homebuilder.

Gene,

Yup!

Sleepless,

Where is Seatle?  :)

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 7 years ago

Your statement rings true, it is timeless advice: "Get out your prospect list and call 10 more people today than you called yesterday!"

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) 9 months ago

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