My New Blog

While the macroeconomic data and statistics for the week will have a bearing on the direction of interest rates- it is something entirely different that will likely make the most impact. Late in the day on Friday the price of a barrel of crude oil bypassed and closed above the $ 125 per barrel price for the first time in history. For those not familiar with how this can affect markets- when a previously unprecedented trend line is broken- you set a new "base" line which can have profound market moving ramifications. (This happens for stocks, bonds, commodities in most fluid markets and is what you may have seen referred to as predicting the market from a "technical perspective"- which is another way for saying trend analysis.) Some economists immediately proclaimed the likelihood of $ 150- $ 200 a barrel oil prices after this breakthrough- and mortgage rates immediately jumped 1/4- 3/8 of a % within an hour period late Friday.

The immediate future of interest rates will likely be tied to the price of a barrel of oil even more than the economic data in the short term. Why, you might ask? There is little that gasoline and petrochemical prices do not affect from a pricing perspective as any food, goods, etc. must still be manufactured or processed and transported to market- which means a price of a barrel of oil can very likely impact inflationary pressures even more than any other single core economic factor.  Inflation is not friendly to mortgage interest rates- as fixed income investors will command a higher price to affect a true yield on their investments after factoring in inflation. So, higher oil prices will mean higher mortgage interest rates, as well. What is key is whether the price of a barrel of oil remains above this threshold and whether this new base line shows tolerance or "support"- or whether the price of a barrel of oil will retreat back below the new high established Friday. To put this in perspective- hopefully these economists are not correct in their assessment- as that level of a price of a barrel of oil would mean gasoline prices up to $ 6- $ 6.50 per gallon.

We are in previously unprecedented territory at the moment. It is a time where it would be prudent to move quickly if you want to capture these still excellent interest rates. If you are looking in the near term to do anything (within the next few months)- you would likely be well served to move on a decision sooner rather than later. Why? Inflationary pressures have already been showing up in economic data- even with some mixed signals, admittedly. When you look at the big picture- the middle east instability, the recent artificial increase in the price of a barrel of oil (even when inventory levels remain strong and are increasing) and the resulting increase in prices at the pump for gas and energy for us all- and the resulting inflation all of this creates means potential instability- and the mortgage markets translate instability into higher interest rates the vast majority of the time.

If you are ready to move forward, please click on "Apply Now" on our home page.  We look forward to serving you.

Legacy's "Mortgage Minute" update:

The residential real estate industry has been in the news a great deal lately- mostly with some pretty bleak news about many parts of the country. You should know, however, that the market here in the Greater Dallas Ft Worth area has not suffered to the extent other major markets in the United States have. Essentially- many of those markets were rather dramatically over priced and we are seeing a value correction. The Dallas Ft Worth metropolitan area has the lowest cost of housing of any major metropolitan area in the United States- and most economists believe we are due for some good gains in values in the coming years due to this fact. But perception rules in any economy- and many have bought into the newspaper stories of challenges across other parts of the United States and think it also applies to us. What this has created is a very good buyers market. Rates have leveled off in the high 5% to low 6% interest rate range- a very good level compared to historical norms. But the market has been volatile- so the time to move to capture these low rates is now. So if you are in the market for a home- your timing to act is very well suited to the current market conditions and you would likely be well served in the long term to move while the market favors you buying.

Also- for those of you who own your own home- now is a good time to either move up to your next home or to consider whether a debt consolidation loan might be good for you. As an example- just this past week we closed on a LegacyCare loan for an employee who has been having challenges keeping up with all their credit card debt. We were able to refinance their existing home loan and do a debt consolidation loan and pay off virtually all of their consumer debt - and their new house payment ended up saving them over $ 1700 per month in total debt payments a month compared to their prior situation! Obviously, individual circumstances vary- but you have as one of your benefits to have an annual Mortgage Fitness Check Up to insure your current mortgage and financing situation is the right one for you at no charge! Simply complete the attached forms- they only take a couple of minutes to complete and fax them in to the number on the forms. (Anyone who has an adjustable rate mortgage or rate higher than 6.75% should do this to see if we can help save you money.)

Texas Mortgage companies are allowed to do home equity loans- but only under very strict criteria unlike most other states in the United States. The legislature finally approved with voter consent a few years ago the ability to borrow against your equity in your home- but not without extremely strict criteria. This still leaves homeowners with much less flexibility than most states allow.

The biggest issue with Texas Home Equity guidelines is the restriction put into place whereby a home owner can only borrow up to 80% of their appraised value. Compared to other states, this is extremely restrictive. Most other states in the United States allows you to borrow from 100 to 110% of your appraised value. It is not at all unusual in other states for a homeowner to take out a home equity loan instead of a car loan. The reason this is advantageous is the ability to normally get a lower fixed rate on a home loan- and the fact that the interest is tax deductible on a home loan but not on other consumer debt.

It is rather frustrating for a homeowner in Texas to be bound by such restrictive laws. Special interest groups lobbied the legislature very hard to put these in place. Some special interest groups were concerned about consumer rights- but the largest lobby was in fact the Realtor lobby who really wanted consumers to have to sell their home to access their equity. The Home Equity loans are very good ways to use your equity to lower your overall debt service, and if you have any consumer debt at all you would be well served to look into a Texas Home Equity loan.

Another provision the legislature put into the Home Equity law is a 12 day waiting period from the time you apply for a loan until you are able to actually sign and close the loan. This was intended to allow a period of "contemplation" and for married couples both husband and wife must sign this disclosure.

Use the equity in your home to maximize your financial advantage- a home loan should be looked at as an important part of your overall financial plan- and not just a loan. While more restritive than other states home equity loan guidelines- the legislature at least finally helped Texans to tap into some of the equity in what is most people's largest single asset- their home. You can also use a home equity loan to do improvements to your property and increase the value of your home.

You can complete a preapplication by completing our Mortgage Fitness Check Up at http://www.legacyfinancial.com/

C. Chad Bates

President/CEO

Legacy Financial

Mortgage Lending the way it should be.

an Inc. 500 - 2002 company

Better Business Bureau Golden Torch Award Winner 2004

817-860-3232

Now that the 2008 is here, if you are like most of us, you spent too much at Christmas and ate too much during the holidays.  Both cause Americans to make New Year's resolutions of saving money and losing weight!  To lose weight, you'll have to join that health club on your own but we can help you save money.  We can help you refinance your home and get cash from your equity to pay off those high interest credit card bills or if you don't have enough equity in your home but want to see if we can offer you a lower interest rate, you can do what is called in our industry a "rate and term" refinance.  Both will save you money.  Additionally, you will be able to skip a mortgage payment and who doesn't need to do that right now?

To get started, touch "Mortgage Fitness Checkup" at the top of our home page and complete a secure, online application.  We will be back to you same day if a weekday or on Monday if a weekend day.  Rates have come down some this week.  With the feds reducing the interest rate once again, the rates should be very competitive in the next few weeks but don't delay.  We can never tell when they are going back up!

We at Legacy Financial Group, Inc. wish you and your family a very warm holiday season filled with lots of fun, fellowship and laughter. 

We know you will be busy in the coming month getting ready for Christmas, Hannukah, or other religious holiday.  After the 2008 new year will be the time to get a "Mortgage Fitness Checkup".  We will review your current mortgage program to make sure you are in the right program for your current financial goals.  We will look at the following areas:

1) Can we lower your interest rate?

2) Can refinancing and paying off high interest consumer debt be of benefit to you?

3) Are you gearing up to send a child to college next year and would rather not take out student loans when you can use the equity in your home to finance that college education?

4) Will you be ready to finally start that remodel project you have been putting off?  Let us see if we can help!

When you are ready, please apply online here on our secure website.  We look forward to being of service to you and your family!

Happy Holidays!