Rate Volatility for First Time Buyer Mortgages

The downgrade of U.S. debt to AA+ by S&P has caused an enormous amount of volatility in the financial markets dating back to about the third week of July. Clearly, we’ve seen stocks fluctuate wildly. A great example was the Fed’s release yesterday that floored the market and then sent it rocketing higher at close. At the end of the day, both stocks and mortgage bonds increased in price. Stocks going higher will typically mean interest rates are heading higher and mortgage bonds going higher will typically mean that interest rates are heading lower. That conflict will sort itself out and it’ll likely be a volatile run for the next few days, weeks and months ahead. This is going to make for an interesting next few months as we evaluate state programs for first time home buyers.

 

Mortgage rates are significantly different if you are talking about a state-sponsored program or any other ‘normal’ program like FHA or conventional. The reason for this is that they derive their interest rates from different factors. So, if you are looking at a FHA or conventional loan, your interest rate is based on what is happening in the financial markets at that moment in time. When we have unprecedented volatility, FHA and conventional have volatile days as well. For state-sponsored mortgage programs, it is a little different. States typically sell bonds to fund these programs and they do so in large blocks periodically. This means that from day to day, that mortgage rate won’t typically change. When that pool runs dry, the state will often sell another amount of bonds and then first time home buyers would see those rates for some period of time. When states happen to raise money when money is cheap, that block is then based on a lower rate for home buyers during that period. As much as the degree of state subsidies varies from state-to-state, so too does just the timing of when the money was raised. So, there are many factors influencing differences between Michigan home buyer programs and Texas home buyer programs

Commodity Sector Rallies

Crude and gold rallied recently as the commodity sector recovered from its recent losses. This came as traders reacted positively to a disappointing set of data on the US jobs market. The reason for the positive reaction was that the downbeat data meant there would be no change to the America’s ultra-low interest rates which is, in fact, up beat.

The Labor Department said that 103,000 jobs were created last month in its non-farm payrolls report for December. This came in against expectations of 175,000. The fact that fewer new jobs were created than expected means that the Fed is likely to keep interest rates near zero.

The poor employment data also suggested that the Federal Reserve would continue with QE2, which fuelled much of 2010’s late rally in the commodity markets.

The price of gold has seen falls recently as disappointing job data failed to revive demand for the safe-haven due to a raft of strong economic data. The yellow metal notched its biggest weekly decline since May 2010.

The decline, of nearly 4%, in the price of the commodity has called into question bullion’s lengthy bull run. Investors will be looking forward to a US economic recovery, which Fed Chairman Ben Bernanke said “may be taking hold”. Continued debt problems in the Eurozone have limited falls however.

If you are trading gold through CFDs or gold spread trading then the big question on many traders’ minds is whether February will see gold will reach the $1500 level.

Looking at the technical charts, according to City Index, “At the moment, the commodity has dropped lower supported by a Parabolic break, as well as breaching the $1400 support level.

“If prices continue to fall then $1330-$1298 will next key support levels. Overall a larger degree consolidation pattern looks like it could be developing, which suggest sideways price action in the weeks to come”.

If you are trading commodities via CFDs and/or spread trading you can lose more than your initial investment. Commodities spread trading and Commodities CFD trading carry a high level of risk, so before trading, ensure that they match your investment objectives. Where necessary, seek independent financial advice.

3 Tips For Buying a Car With Bad Credit That Will Save You Money

Here’s 3 tips for buying cars with bad credit ratings.

Don’t Negotiate on Payments. One of the most popular tactics that salespeople in dealerships will use with people that have bad credit, is to keep customers focused on payments. By doing this, the salesperson is able to keep you in the dark about the real price of the car and the interest rate. It’s not until you see the finance manager to complete the sale that you ever really realize what you’re really paying. So keep the focus on the price, not the payments. You can negotiate that later when you’re talking about interest rates with the finance department.

Don’t Use Buy Here, Pay Here. Dealers that offer “tote-the-note” financing can be hazardous to your wallet. You’ll pay much more in both the purchase price and the interest rate for a car at a dealership of this sort. You’ll do much better if you steer clear of these types of car lots and get your financing pre-approved online or at a local bank.

Get Your Financing Pre-Approved. There are online companies that provide car financing for people that have bad credit and everything can be taken care of online. By having your financing pre-approved through an online lender or loan company, you’re in a better position to get approved. You also can save money on interest rates as there is no middle-man (dealership). Also, you’ll be able to make an offer based on price, because you’ll know what you’re approved for before you go shopping.

Recommended: http://www.BuyingCarswithBadCredit.com helps with buying cars through legitimate auto lenders online regardless of your past credit history.

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