?Good News? Pushes Rates Up; We Speak Spanish, Korean and ...

30 Year Fixed Rate Loan at a Cost of One Point: 3.25%* (APR=3.47)

Rates increased sharply yesterday because of unexpectedly positive economic news (unemployment down; housing starts up).

As a reminder, positive economic news pushes rates upward largely for two reasons: (1) money moves to stocks from bonds; and (2) good news gives the Fed reason to back off on its low-rate policy.

Stocks are the better investment vehicle to take advantage of positive economic news. So when good news surfaces, money shifts to stocks from bonds, creating less demand for bonds. When demand for bonds decreases, prices for bonds decrease too. This in turn increases yields or interest rates effectively.

Signals that the economy is improving imply that the Fed may be able to back off on its policy of keeping rates extra low to prop up the economy. Even though Fed actions (such as less bond buying, or actually raising the Fed Funds Rate) may be far in the future, just the threat of them on the horizon often pushes rates upward.

Another reminder: We speak fluent Spanish, Korean, and Mandarin.

Spanish: Katrina DeBacco Bio: http://www.jvmlending.com/about-us#katrina

Korean: Heejin Kim Bio: www.jvmlending.com/about-us#heejin

Mandarin: Melody Yang and Chingchi Yu
Bio: http://www.jvmlending.com/about-us#chingchi; http://www.jvmlending.com/about-us#melody

*The above rate quote has the following assumptions: $500,000 purchase; $400,000 loan amount; 20% down payment; credit score above 740; property is SFR; borrower has sufficient income to qualify; Estimated closing costs affecting the APR include $4,000 for Origination Fee; $995 for Lender Fees; $2,300 for Title Insurance (CLTA and ALTA), $800 for Escrow Fee; and $1,000 for Prepaid Interest.

Call Jay Voorhees or Heejin Kim at (925) 855-4491

Real Estate Broker, CA Dept of Real Estate, DRE# 01524255, NMLS# 335646

18
JAN

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