The Dow Jones posted another strong week, closing on Friday over 11,730 which is up nearly 150 points for the week. Mortgage backed securities inched higher for the week, but could have been much worse as inflation reports came in at a tame number. December’s Consumer Price Index (CPI) increased .5%, but .4% of the increase was due to increased food and energy costs. With food and energy costs backed out, the rate only increased .1%. This loosely translates into an annual inflation rate of 1 to 1.5%. The Federal Reserve’s ideal inflation rate would be probably somewhere around 3%.
This upcoming week could be volatile for mortgage rates because many companies will be releasing their earnings for the 4th quarter of 2010. If earnings meet what was projected, we could see mortgage rates increase, as more investors look to move their money from the safe harbor bonds to the higher yielding stock market. If earnings miss, the exact opposite will occur.
Local Economy and Real Estate Market
The Center for Business and Economic Research released its Southern Nevada index of Leading Economic Indicators report for the month of December, and it saw an increase of nearly ½%. This index is considered to be a predictor of job growth 4-6 months down the road. Below is the link to the actual site and the report itself.
Tip of the Week:
Tax Returns
If you have a client that is considering purchasing a home, you may want to have them speak with your trusted loan officer before they file their tax returns. Often minor tax write-offs such as: meals and entertainment, mileage, uniforms, tools for their trade etc result in a slightly higher tax rebate for your client, but could also be the difference in qualifying for a home loan. There are many other examples in which a client’s filing will affect how an underwriter will review their income, so have them meet with your lender, before they meet with their accountant.
Program Change
Primary Residential Mortgage is now able to offer 95% financing on conventional loans with a FICO score of 660! PRMI recently re-engaged with a mortgage insurance company that has agreed to insure these loans in Clark County, and are now able to offer the product to your clients.
