While the essential elements of shopping for a mortgage are the same for a purchase or refinance, the refinancing process usually starts with a decision to either improve your cash flow or change your debt profile, says Russ Anderson, a centralized sales executive with Bank of America in Los Angeles. He says you should determine your goal for refinancing before you meet with a mortgage professional.

Once you’ve decided whether you want to reduce your mortgage payments or pay off your loan faster, you can begin shopping for a lender and a loan.

“The average consumer shops for a refinance like they’re shopping for a flat-screen TV,” says Barry Habib, chief market strategist for Residential Finance Corp. in Columbus, Ohio. Everyone’s price conscious, he says, but not everyone does their homework to determine which product best suits their short and long-term goals.

6 steps to refinance shopping

No. 1: Start online. Deborah Ames Naylor, executive vice president of Pentagon Federal Credit Union in Alexandria, Va., recommends starting with a mortgage payment calculator that estimates your monthly payments at various loan terms.

“A shorter term loan will have a lower interest rate than a 30-year fixed-rate loan, but the payment will be higher because you’re paying it off faster,” says Naylor. “It’s important to decide what payment you’re comfortable making before you see a lender, because that payment could be much less than the payment you qualify for.”

No. 2: Loan term. Habib says the loan term you choose needs to be made in the context of your other financial obligations and plans.

“If you have $30,000 in credit card debt and no savings for college, you may want to go for a 30-year loan to keep the payments as low as possible,” says Habib. “Someone else may want a shorter term to build equity faster while another borrower might want a longer loan so they can keep their tax deduction as long as possible.”

No. 3: Talk to multiple lenders. Research loan products available from a credit union, a regional or community bank, a direct lender and a national bank to find out what special programs they offer, says Naylor.

“Many lenders offer ‘portfolio loans,’ ones they keep in-house instead of selling on the secondary market,” she says. “They can be more flexible with those loans and offer special promotions.”

Instead of choosing a lender solely based on current mortgage rates, Anderson says you need to find a lender you can trust. “People get too wrapped up in the rate rather than finding someone who will communicate with them,” he says. “You need to find someone you trust, who will be engaged in your family’s financial situation.”

No. 4: Loan options. Discuss various loan products when interviewing lenders.

“There’s a broad product mix of conventional financing, government-backed programs like FHA loans and special refinancing programs through the Making Home Affordable program,” says Anderson. “A good lender can present the pros and cons of each of these programs in the context of your individual finances.”

No. 5: Decide how you’ll finance your refinance. Closing costs and lender fees can be paid at closing, wrapped into your loan balance or you can opt for a “no-cost” refinance.

“A no-cost refinance means that your lender will pay the fees and you’ll pay a slightly higher interest rate of one-eighth to one-fourth percent,” says Habib.

HSH.com’s mortgage refinance calculator can help you decide the best way to finance your refinance.

No. 6: Compare mortgage rates and fees. Advertised mortgage rates are sometimes based on paying points, so you need to make sure you compare loans with zero points or the same number of points.

“It’s important to compare all three things that factor into what your loan will actually cost: the interest rate, points and the loan origination fee,” says Naylor.

According HSH.com, average mortgage rates for the week ending May 3, 2013 were:

• 30-year fixed-rate loan: 3.49 percent
• 30-year FHA-backed fixed-rate loan: 3.26 percent
• 15-year fixed-rate loan: 2.74 percent
• 5/1 ARM: 2.55 percent

Mortgage rates vary daily and sometimes hourly, so it’s best to compare rates on the same day.

While shopping for a refinance may take a little longer than refinancing with your current lender, the rewards can last as long as your loan.

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Homeowners who endured years of declining home values will discover that the game has changed in their favor.

With low mortgage rates and home prices gaining momentum, an increasing number of buyers are expected to shop for homes this spring. The good news for sellers: The inventory of homes for sale is shrinking, so they have less competition and more control of the situation.

Loan mods: As more distressed homeowners regain equity in coming months, many with high-interest loans will be able to refinance and perhaps cash out some equity. If you fell behind on your mortgage payments, you might get a second chance to modify your loan.

Homebuyers are losing bargaining power as the market shifts in favor of sellers. But home prices remain attractive for the most part, and low mortgage rates should stay on their side for a little longer.

1. Fewer options, higher prices and bidding wars

If you plan to buy a home this spring, expect competition.

Demand from homebuyers is growing faster than the supply of homes for sale, according to data from the National Association of Realtors.

“It’s creating a little bit of a shortage and a mismatch between supply and demand,” says Jed Smith, managing director of quantitative research for the National Association of Realtors.

Buyers are encountering bidding wars in many parts of the country, Smith says. Competing offers pose a challenge for first-time homebuyers.

Competition: ”Multiple offers seem to be the norm these days,” says Patty Da Silva, owner of Green Realty Properties in Davie, Fla. She says she recently represented a seller who received more than 15 offers in one weekend for a house in Cooper City, Fla.

“Home listed Wednesday evening; first showing on Saturday at 1 p.m.; several offers came in on Saturday and several Sunday; the home was under contract by Monday morning,” she says.

As of February, there were 1.94 million homes for sale nationwide. That represented a supply of 4.7 months at that month’s sales pace. A balanced market requires about six months’ of supply.

During the same period last year, there was a supply of 6.4 months.

“Back in 2010 we had 9.4 months’ of supply,” Smith says.

2. Loan modifications made easy — for some

Homeowners who are behind on their mortgages may get a hassle-free opportunity to reduce their monthly payments.

The Federal Housing Finance Agency will require mortgage servicers to offer a streamlined modification program to borrowers with loans owned or guaranteed by Fannie Mae and Freddie Mac, starting in July. The offers will be sent to homeowners who are at least 90 days behind on their loans but no more than two years behind. To qualify, borrowers must owe at least 80 percent of the home’s value.

The modification reduces the loan’s interest rate and extends the loan term to 40 years.

Minimal paperwork: Borrowers won’t be required to submit any financial documentation to the lender to get approval. The loan modification becomes permanent after three payments are made during the three-month trial period.

“Streamlined modification provides borrowers who face difficulty satisfying the documentation standards of traditional workout programs with a path to stay in their homes with reduced paperwork requirements,” says Meg Burns, senior associate director for housing and regulatory policy for the FHFA. “This option should be especially helpful to those who are self-employed, part of multigenerational households, or simply overwhelmed with the document-collection burden.”

3. Federal Housing Administration loans lose appeal again

Borrowers seeking low-payment mortgages will be charged for mortgage insurance for the life of their loans if they don’t get their Federal Housing Administration mortgages by June 2.

The FHA currently requires borrowers to pay for mortgage insurance on FHA loans until the balance reaches 78 percent of the original value of the home.

Pay forever: Once the change goes into effect, all new FHA loans with less than a 10 percent down payment will carry mortgage insurance until the loan is refinanced or paid off. Loans with a 10 percent down payment or greater will have to pay for mortgage insurance for at least 11 years.

For borrowers who plan to stay in their homes for less than 10 years, the new rules won’t make that much of a difference, says Cameron Findlay, chief economist at Discover Home Loans. That’s because normally, it takes borrowers about 10 years to reach the required loan level for the insurance to cancel anyway.

“But for those who are planning (to) keep their houses for an extended period, this is a big deal,” Findlay says. “They can always refinance later — but who knows where rates are going to be 10 years from now?”

4. Equity loans and cash-out refinances are back — sort of

About 1.7 million homeowners regained equity in their homes last year, and an additional 1.8 million are close to it, according to a recent study by CoreLogic. All they need is home values to go up by another 5 percent, CoreLogic says.

As home prices rise, millions of homeowners might consider turning to their homes as a potential source for a loan. Cash-out refinances and home equity loans, which were popular during the housing boom, are slowly returning, along with the temptation to tap into equity.

“I’m starting to see some of that,” says Michael Becker, a mortgage banker at WCS Funding in Baltimore. He says he has recently received a couple of inquiries from parents who are thinking of using some of their equity to pay for college expenses. Another client is considering a cash-out refinance to pay off credit card debt.

Home as ATM: Lenders remain somewhat reluctant because these types of loans contributed to the mortgage meltdown as homeowners turned their homes into ATMs. But borrowers who have good credit scores and sufficient equity should be able to find lenders willing to do cash-out refis and home equity loans this spring.

5. Mortgage rates rise at a snail’s pace

Mortgage rates are expected to creep up this spring but should remain low.

Up just a little: The Mortgage Bankers Association estimates the 30-year fixed rate will reach 3.9 percent by the end of the first quarter this year. That’s not as good as the superlow rates that borrowers got in December 2012, when the 30-year fixed hit a record low of 3.5 percent in Bankrate‘s weekly survey. But it’s still a good deal for most buyers and refinancers, housing experts say.

“Rates are climbing slowly, but even by the end of year, they are not going to be astronomical,” Smith says. “They are still a bargain.”

This story was originally published by Bankrate.

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Mortgage rates are dropping as the Federal Open Market Committee (FOMC) adjourns from its third meeting of the 2013.

In its post-meeting press release, the Fed described the U.S. economy as expanding “at a moderate pace” over the past six weeks, buoyed by strengthening housing and labor markets.

Mortgage markets are gaining on the news. Conforming and FHA mortgage rates have dropped to lifetime-low levels.

Near-Unanimous Vote : No Change In Rates

Wednesday, the Federal Open Market Committee (FOMC) voted 9-1 to leave its benchmark Fed Funds Rate unchanged at its current range near 0.000%.

It marks the 35th consecutive FOMC meeting at which the Fed Funds Rate was held near-zero. When the Fed Funds Rate is low, it reduces borrowing costs for businesses and consumers.

Low borrowing costs stimulate spending and, by extension, the U.S. economy.

The Federal Reserve statement contained few changes from the Fed’s last meeting, in March 2013.

• On housing : The sector has “strengthened further”
• On household spending : Spending has advanced
• On employment : There is “improvement”, but the unemployment rate “remains elevated”

Furthermore, the Fed again noted that inflation rates are running below the group’s 2% target rate, and that inflation pressures are expected to remain low in the medium-term.

Low inflation rates are a bonus for today’s home buyers and refinancing households. Inflation is linked to rising mortgage rates.

The Fed’s QE3 Program May (Or May Not) Continue

Also for the second straight time, the FOMC statement featured language describing how, and when, the FOMC may start to raise the Fed Funds Rate.

So long as the U.S. jobless rate remains above 6.5%, the statement reads, the Fed Funds Rate is likely to remain near zero percent. According to economists, this range won’t likely be reached until 2015 or later.

The Fed Funds Rate is linked to Prime Rate, which is the basis for credit card rates and home equity lines of credits. Consumer rates, then, will be low for at least another two years.

However, the Fed retains the right to raise the Fed Funds Rate sooner. Should labor markets exhibit unexpected strength; or, should inflation pressures mount, the Fed may act sooner.

It may also end its third round of quantitative easing (QE3).

The Fed launched QE3 in September 2012. Via the program, the Fed purchases $40 billion of mortgage-backed bonds monthly in the open market. The excess demand keeps a lid on MBS pricing, which helps to suppress mortgage rates.

It’s no coincidence, in other words, that the start of QE3 last September coincided with the Fall 2012 mortgage rate plunge. Now, however, the Fed has said that it will monitor “economic and financial developments” and may “increase or reduce the pace of its purchases”.

A weakening economy will likely increase the Fed’s ongoing purchases, which would be good for mortgage rates. For a strengthening economy, the result would be the reverse.

Get A Personalized Mortgage Rate Quote

Mortgage rates are roughly -0.125% lower as compared to the start of April and there are few reasons for rates to be headed higher. The early-year pressure on rates subsided in late-March when banking and economic issues surfaced in the Eurozone. In addition, aside from the housing market, U.S. economic conditions have proved slightly weaker-than-projected.

If you’re floating a mortgage rate, though, or wondering if today is a good day to lock a loan, consider asking for a lender commitment. Rates may drop through May but, then again, maybe they won’t. And rates look great today.

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Your credit score is a number meant to score your history of “borrowing money”.

However, a February 2013 study from the Federal Trade Commission (FTC) found that 20% of U.S. consumers have at least one documented error in their active credit history, with a quarter of those errors negatively affecting the consumer’s credit score.

High credit scores are linked to favorable mortgage rates and access to mortgage programs such as the three-percent-down Conventional 97 program and the 5-10 Properties program for real estate investors.

What Is A Credit Report?

A credit report is a person’s documented debtor history. It includes every credit card, student loan, charge card, mortgage or auto loan or lease for which you’ve ever been named as a signer or co-signer. Details includes starting amounts owed and current balances; monthly payment history for individual accounts; plus, any record of delinquency.

Credit reports also include information regarding known places of residence and employment; judgments and tax liens assessed by courts; and any public record of bankruptcy.

Credit reports are different from credit scores.

Credit scores are a numerical representation of the information within a credit report, meant to determine the likelihood of a person repaying future debts. There are many credit scoring “systems” — hundreds — and many scoring systems are available for purchase.

For purposes of a mortgage application, the three credit scores used by mortgage lenders are the Equifax Beacon; the TransUnion Empirca; and, the Experian FICO.

“FICO” is a brand name, but it often used to refer to credit scores generically in the same manner as Q-Tip, or Band-Aid.

Obtain A Copy Of Your Credit Report

Federal law makes it possible to review your credit report’s contents annually. Via the Fair Credit Reporting Act (FCRA), the three major credit bureaus will provide you with a no-cost copy of your credit report, with no scores attached.

Reviewing your report can be a valuable step toward identifying errors and omissions; and potential cases of fraud.

There are also consumers for whom the credit bureaus will provide additional free reports. These cases are categorized as extenuating circumstances and include instances whereby your application for credit, insurance or employment was denied as a result of “poor credit”.

Affected consumers may request their additional free report within 60 days of their denial.

Additionally, certain persons may request a free credit report anytime, with no limit. This includes unemployed persons; persons looking for work within the next 60 days; and, individuals receiving government welfare assistance.

Lastly, victims of fraud or identity theft are entitled to a free copy of their credit report in order to make sure the information contained within is accurate.

Copies can be obtained by making requests online, by phone or by mail.

How To Dispute A Credit Report Error

For consumers with credit report errors, there is a defined process by which to dispute and attempt repair. The key is to act quickly.

First, highlight the portion of your credit report which you believe to be inaccurate. Include all lines, all account numbers and any relevant information. Consider writing notes in the margin, if that will help you to remember the specific error or omission.

Next, in writing, contact the credit reporting agency and include the highlighted section from your credit report along with annotations, notes and whatever documentation you can provide to dispute the error.

Be clear and thorough about the facts of the error, remembering that the credit bureaus process many requests daily. The more clear and to-the-point you can be, the more likely you’ll get a quick review, and favorable result.

Next, as you prepare your letter for the credit bureau, make two copies of everything. Keep one copy for yourself, and send the second copy to the creditor. The creditor’s address will be listed on your credit report for you.

Also, consider sending your request via USPS or by some other means through which you can request a delivery confirmation. Email may not be the best means of conducting a credit report review.

Upon receipt of your request, the credit bureau(s) will contact the creditor regarding the account in-question. If the creditor cannot prove that their files are correct, the item will be removed from your credit report.

Obtaining A Mortgage While Your Credit Score Improves

Unfortunately, not all poor credit reports can be attributed to errors. That doesn’t mean that a mortgage approval is out-of reach. Consumers with low FICOs can still find financing, despite fewer overall options.

As one example, the Federal Housing Administration (FHA) insures mortgages with FICO scores below 600 and, in some cases, will insure a home loan for which the borrower has no credit score whatsoever. Buyers which fall into this latter class are often non-U.S. citizen making their first home purchase, or other buyer groups who have remained off the credit grid to-date.

FHA mortgages feature low mortgage rates and requires just a 3.5% downpayment in most U.S. markets.

VA loans are also available for homeowners with lower-than-average credit scores, too. VA loans are available to members of the military and veterans of war. VA mortgages allow for 100% financing and require no mortgage insurance.

Poor Credit? Get Your Mortgage Options.

For today’s home buyers and would-be refinancing households, a low credit score may, in fact, be lender-acceptable. For example, the FHA Streamline Refinance program specifically ignores an applicant’s FICO score (although some lenders enforce a minimum). Certain portfolio loans ignore credit scores, too.

If you’re shopping for a home loan and have concerns about your credit score, consider talking with a lender. You may be able to get financed for that purchase or refinance. Get started with a rate quote today.

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Conforming mortgage rates slipped this week as the Refinance Boom continues.

According to Freddie Mac’s weekly Primary Mortgage Market Survey (PMMS), a poll of more than 100 banks nationwide, the average 30-year fixed rate mortgage rate fell 3 basis point to 3.54% this week. The rate is available to borrowers willing to pay 0.8 discount points plus a complete set of closing costs.

30-Year Fixed Rate Mortgage Rate To 3.52%

Nationwide, the average 30-year fixed rate mortgage rate slipped 0.03 percentage points to 3.54% last week. It’s not the lowest 30-year fixed mortgage rate of all-time, but today’s mortgage rates remain far below historical norms.

For example, two years ago, the average 30-year fixed rate mortgage rate was 4.87 percent and five years ago it was 5.92 percent. Over the last 41 years, rates have averaged near 8.75%.

Today’s rates in the 3s are downright cheap.

The 3.54% does come at a cost, however. For the right lock Freddie Mac’s weekly published rate, mortgage applicants are paying an average of 0.8 discount points at the time of closing, in addition to whatever typical closing may accompany their home loan.

Paying 0.8 discount points on a $100,000 loan adds an $800 closing cost. On a $200,000 loan, it adds $1,600.

For loans at the jumbo loan limit of $625,500 in places like Fairfax, Virginia; Bethesda and Potomac, Maryland; and Huntington Beach, California, 0.8 discount points adds $5,004 in closing costs.

Conforming 15-Year Mortgage Rate Falls To 2.74%

Freddie Mac’s weekly mortgage rate survey showed the following average mortgage rates nationwide :

• 30-year fixed rate mortgage : 3.54% with 0.8 discount points
• 15-year fixed rate mortgage : 2.74% with 0.7 discount points
• 5-year adjustable rate mortgage : 2.65% with 0.5 discount points

Note that these mortgage rates may not be available to everyone. For example, Freddie Mac backs conventional mortgages which means that FHA mortgages, VA home loans, jumbo mortgages, and other non-conventional loans are exempted from the survey.

In addition, mortgage rates can vary based on your loan’s unique characteristics.

Applicants with a credit score of 740 or better can expect slightly better mortgage rates as compared to applicants with credit scores below 740. Condo buyers may also find higher mortgage rates, unless a 25% downpayment is made; as may homeowners using the HARP 2.0 mortgage program.

The Freddie Mac survey is a guide, not the gospel.

Search For Mortgage Rates Quickly

For home buyers and today’s refinancing households, mortgage rates remain near all-time lows. The Refinance Boom is ongoing with many households dropping payments by 33 percent or more.

See how much home you can afford, and how much cash you can save. Get started with a quick, no-obligation, mortgage rate quote online.

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Ultra-low mortgage rates have sped up the housing market’s recovery during the last year, with home sales and home prices both on the rise.

During the third quarter of 2012 alone, $521 billion in new mortgages appeared on consumer credit reports, marking the fourth consecutive increase in mortgage originations on a quarter-over-quarter basis.

Activity in the housing market shows no signs of slowing down, with the Mortgage Bankers Association forecasting $1.3 trillion in mortgage originations this year.

Purchase originations are projected to reach $585 billion during 2013, marking a 16 percent increase over 2012. Meanwhile, refinances are expected to reach $785 billion in the coming year.

Between low interest rates and affordable mortgage programs like FHA loans and the three-percent down Conventional 97 program, savvy home buyers should be looking to lock their mortgages before mortgage rates rise and home prices rise more.

Before you begin the process of obtaining a mortgage, though, get your financial affairs in order. The first step deals with your credit report.

What Is A Credit Report?

A credit report is a record of your financial history, detailing everything from auto loans and credit card balances to liens and bankruptcies. Generally, the information found in your credit report lasts for seven years. And, while not an official part of your credit report, credit scores are “grades” based on the report’s information.

For today’s home buyers and refinancing households, having a good credit score can mean access to lower mortgage rates and mortgage programs with smaller downpayment requirements.

However, your credit scores are used in other aspect of life, too :

• Insurers can use your credit score to determine your premium schedules
• Employers can use your credit score to determine whether to hire you, promote you or reassign you
• Landlords can use your credit score to determine whether to rent you a home or apartment
• Government and judicial agencies can use your credit score for program eligibilities and legal matters

Your credit report is your first impression in the financial world. It will often be used to estimate your level of monetary responsibility. This is one of the many reasons why keeping your credit score high is paramount.

Mortgage Lenders Use FICO Scoring Model

There are tens of credit reporting companies and you’ve likely seen their ads on TV or online. However, in the mortgage world, there are three companies which matter most — Equifax, Experian and TransUnion. Collectively, these three firms are called the “major credit bureaus” and each sells a multitude of credit scoring products.

For mortgage purposes, each sells one credit score of consequence to mortgage applicants :

• Equifax : Equifax Beacon 5.0
• Experian : Experian/Fair Isaac Risk Model v2
• TransUnion : FICO Risk Score 04

When a mortgage lender “pulls your credit”, these are the three credit scores which are reviewed. Your lender will then take the middle of the three scores, and this will be your assigned credit score.

For example, if your credit scores are 620,640 and 700, your “score” is 640. As another example, if your credit scores are 700, 719 and 720, your credit score is 719. Credit scores are not rounded up or averaged.

Credit scores are called FICO scores, named after the Fair Isaac Co., a pioneer in the credit scoring space.

How To Boost Your Credit Scores

When you order a credit report, along with your credit scores, the credit bureaus often offer several ways by which you can improve your credit score.

For people whose credit scores are low, this can be a roadmap for FICO improvement. For people whose credit scores are very high, it may be extraneous information; you can’t get “bonus points” for having an extra-high FICO.

Take the credit bureaus’ recommendations under consideration, but remember that there are only a few fool-proof ways to improve your credit score.

1. Pay your bills on time, every time
2. Keep your credit card balances low as compared to your total available credit
3. Apply for store charge cards only when absolutely necessary
4. Pay doctor and utility bills when they’re due
5. Keep old credit cards open, and use them periodically

Ideally, your credit card balances should not exceed 30 percent of the card’s available balance. If you are having trouble meeting this requirement for a high credit score, ask your credit card company to raise your credit limit.

Lastly, if you’ve had a derogatory event on your credit report, avoid credit repair companies until you’ve done your due diligence. Often, time is the best healer of a “bad credit report”.

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Take a look at this post from Curbed University. I’ll be answering your questions next week!

Curious about borrowing to buy that dream home in the Hub? Wondering what it all entails beyond the credit check? Well, clear the confusion and get some answers with our upcoming Asking a Mortgage Banker… feature, part of our ongoing Curbed University. Throughout next week, Brian Cavanaugh, senior mortgage banker at Residential Mortgage Services Inc., will be doing his utmost to answer the questions you email us or submit via the comments button to the top right. Anonymity guaranteed.

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Reposted from boston.curbed.com by Tom Acitelli

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Mortgage rates continue to plumb historically low levels, on the threshold of the industry’s key spring home-sales season. The rate on a 30-year fixed-rate mortgage ticked down to an average of 3.54% in the week ended on March 21 from 3.63% the previous week. That also is down from 4.08% — the average rate for a 30-year fixed-rate mortgage a year ago.

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BOSTON (CBS) – Spring is the busiest season in the real estate market, and this year is shaping up to be red hot.

Homes are going under agreement at lightning speed which is good news for sellers like Kerri Ann Richard of Watertown.

She listed her condo recently and is more confident than ever that the refinished pine floors and the track lighting will seal a deal quickly.

“I thought the spring would bring a little more traffic in, but getting 2-3 showings a day consistently has been a surprise to me,” said Richard.

Mike DelRose of Re/Max Leading Edge in Watertown says the market is “almost back to the days of prior to the peak of the market.”

DelRose believes a lack of inventory is causing the return of bidding wars and sales above asking price. At this point, he’s not concerned about another speculative bubble.

“I don’t think buyers of today are in danger of being priced out of the market overnight, which was the case in 2005, back in 2006, when we were seeing 10%-15% appreciation, and people were priced out of the market within 6 months,” added DelRose.

Low financing costs continue to fuel the real estate fire as well. “You can’t do much better than the interest rates that are out there now,” according to Ed McDonald, president of the Salem FiveMortgage Company.

“Nobody is predicting drastic increases in rates over the short term, maybe even going out a year,” added McDonald.

If buying doesn’t feel like the right move at this time, consumers will be hard pressed to find relief in the rental market.

Tim Schmidt of Re/Max Destiny in Cambridge explained, “There haven’t been too many times in real estate history where both the rental market and the sales market are rising, and both are very hot right now, usually they are diametrically opposed.”

Renters are now forced to think outside the box, and many are giving communities like East Boston or Chelsea a second look.

Construction is going full tilt on the Chelsea Place Apartment Complex, which will include 56 luxury units. It is scheduled to be ready for occupancy this summer.

Schmidt said, “It has all the high finishes the new units downtown do; laundry in the unit, all stainless steel, cherry cabinets, granite countertops, parking and it’s about half the price.”

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Fed Chairman Bernanke’s press conference shortly after the meeting adjourned and projections were posted also didn’t give us too much to be concerned with or excited about. He did say that potential government spending cuts and global economic or financial crises could create a problem that the Fed would not be able to offset with monetary policy. We can consider that as a warning to Washington to get their budget differences resolved quickly. He noted the stronger unemployment numbers of recent, but cautioned that we have seen job growth in past winter seasons to be followed by a “spring slump.”

Overall, there isn’t too much to address here. It appears the Fed is sticking with a 6.5% unemployment rate or 2.5% annual rate of inflation as targets to adjust current short-term interest rates, which many Fed members believe won’t come until late 2015. They voted 11-1 in favor of maintaining the current bond buying program of $85 billion a month in mortgage-related and U.S. Treasury bonds. This news initially boosted stocks but they have since come back down close to their 2:00 PM levels. The Dow is currently up 55 points while the Nasdaq has gained 24 points. The bond market is currently down 15/32, which may be enough of a move for some mortgage lenders to revise rates higher by approximately .125 of a discount point. Many may opt to wait until tomorrow to reflect that change, however, the possibility of an intraday revision does now exist.

Tomorrow morning has three pieces of economic data scheduled for release. The first is the weekly unemployment update from the Labor Department. They are expected to say that 345,000 new claims for unemployment benefits were filed last week, up from the previous week’s 332,000 initial claims. That would be fairly good news for the bond market and mortgage rates because rising claims indicates a softening employment sector and makes a broader economic recovery less likely.

February’s Existing Home Sales will be posted late tomorrow morning by the National Association of Realtors. It will also give us a measurement of housing sector strength and mortgage credit demand. It is expected to reveal an increase in home resales, meaning the housing sector strengthened last month. Ideally, bond traders would prefer to see a decline in sales, pointing towards a still weakening housing sector. However, a small increase is expected, so it shouldn’t cause much alarm in the bond and mortgage markets. Bad news would be a sizable increase in sales, indicating that the housing sector is gaining momentum. That could be troublesome for the bond market and mortgage rates because housing and unemployment were the two biggest hurdles the economy had to overcome. Recent reports have some traders much more optimistic about the employment sector, so overwhelmingly strong housing news could lead to another rise in mortgage rates.

The Conference Board will post its Leading Economic Indicators (LEI) for February late tomorrow morning also. This index attempts to measure economic activity over the next three to six months. It is considered to be moderately important, but likely will not have a significant impact on mortgage rates. Current forecasts are calling for a 0.5% increase, meaning it is predicting that economic activity will likely expand moderately in the coming weeks. A smaller than forecasted rise, or better yet a decline would be considered good news for the bond market and mortgage rates.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now…

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