Rate Watch update – 5/14/10

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Happy Friday May 14, 2010

The problems in Europe continue to dominate headlines.  Skepticism over the European bailout plan is again helping mortgage rates in U.S.

Here is a crude map from 30,000 feet:  lack of confidence in Europe in recent weeks has pushed the Euro lower compared to US Dollar (i.e. the US Dollar is strengthening),  a stronger Dollar can hurt U.S multi-national corporations because it makes our exports more expensive, and thus can hurt sales, and weaken the stock market if the Dollar strengthens too quickly, which we’ve seen recently.   As stocks weaken, and foreign debt instruments look less attractive, money flows into mortgage bonds as a safer investment and helps our interest rates.

Bottom line is we may be in this very beneficial interest rate environment a little longer than expected.  Don’t look for rates to stretch any lower, but we may see these current levels for another 30 to 60 days.

Also, don’t forget we can finance FNMA Homepath properties (Fannie Mae owned homes).  There are currently over 1000 listings in the greater Bay Area, over 8000 in CA.  97% financing for investors, no MI and no appraisal.

www.homepath.com to check current listings.

Have an awesome weekend, let me know if I can help you or someone you know with any real estate financing.

Mike