Tag Archives: Ron Ricchio

At press time, recently appoints Fed Chairwoman Janet Yellen is being presented with a challenge right out of the gate. Do we taper the taper? The Federal Reserve is currently buying $65 billion in bonds per month (down from the high of $85 billion) in an effort to keep mortgage and treasury rates down. The Fed seems to be on course to reduce their bond purchases by $10 billion per Fed meeting, which occurs approximately every six weeks. The Fed has already decided to taper for a second time since the tapering started in December. The Fed has stated that …

If anyone is thinking of buying property this year, they should consider doing it sooner rather than later. The Fed is beginning to take the foot off the bond pedal by buying fewer and fewer mortgage bonds, allowing for mortgage rates to rise. They started in December when they reduced their purchases from $85 billion to $75 billion in mortgage and treasury bonds per month,” he writes, “and they’re telling us that they are going to continue to ‘taper’ their purchases every six weeks until they are buying $0 in bonds. What does this mean to a consumer? You will …

At the time of this article was written, the unemployment rate had just dropped to 7 percent and the economy’s three-month average of job creation was approximately 180,000 per month. While this number was far from being great, at least it was moving in the right direction. On Feb. 1, Janet Yellen will become the first female Federal Reverse board chairperson. While she is known for being less concerned about inflation and willing to keep rates down longer, other economists are convinced that the Fed will have to start reducing its bond purchases, which will undoubtedly increase interest and mortgage …

Starting this year, there will be two new rules in effect for “qualified mortgages” or QMs, one that affects the amount that lenders can charge and one that affects the amount the buyer can borrow. The change mandates that lenders cannot charge fees of more than 3 percent of the loan amount. This limit such mortgage charges as underwriting fees and origination fees, but excludes title and attorney fees. This has most of the mortgage industry in an uproar because it limits what a mortgage company or bank can charge a consumer. Personally, I believe that this is a good …

On Oct. 17, lawmakers finally passed an amendment to increase the debt ceiling and reopen the government, which had been closed since Oct. 1. Reports were telling us that if the U.S. had defaulted, we would have seen mortgage rates spike. Since the lawmakers came together and raised the debt ceiling, one would think that everything is fine and that we should be carrying on just like we did before, but that’s not the case. The government shutdown came at a time when the Fed was still very worried about the economy’s weak state. This costly game of chicken between …

On Sept. 18, the Federal Reserve ended their two-day meeting and shocked the financial markets by deciding not to begin tapering their asset purchases. The Federal Reserve has been buying mortgage and treasury bonds off and on since 2009 as part of a strategy known as Quantitative Easing (QE), which was designed to push rates down and spur the economy. In the most recent QE move, which took place in September 2012, called QEIII, the Fed announced that it was going to be buying a total of $85 billion in bonds per month ($40 billion in mortgage bonds, $45 billion …

With rates rising since early May of this year, homeowners should take a long hard look before committing to an adjustable rate mortgage, or ARM, as we like to call them in the mortgage business. An ARM can be a great tool that can save you money, but it can also be a dangerous product that can put you in financial distress. ARMs come is various sizes, and usually a 3/1, 5/1, 7/1 or 10/1 ARM are the most common. What this means is the mortgage is spread over 30 years (like a 30-year fixed rate), but the rate is …

On April 30, bond fund king Bill Gross of Pimco Co. said he believed that the bull run in bonds had come to an end along with the low interest rates that have propelled it. Judging by how high rates have come up since those comments you would think that the market was listening to his every word. During the last two weeks of May and into the first week of June, mortgage rates moved up from 3.375 percent on a 30 year fixed to 4.25 percent. That is a pretty dramatic increase in such a short period of time. …

Today’s mortgage interest rate environment is without question the lowest it has been in decades. So why would anyone want to take an ARM (adjustable rate mortgage) instead of a fixed rate? First off, let’s talk about how adjustable rate mortgages work. Most ARMs are spread over 30 years, just like a 30-year fixed-rate mortgage (a mortage where the interest rate never changes, by the way). The most common ARMs are the 3/1, 5/1, and 7/1 Treasury or Libor ARM. What this means is that the rate will stay fixed for 3, 5 or 7 years respectively and then will …

Your credit is by far the most important ingredient of a mortgage. You receive three credit scores (Trans Union, Experian and Equifax) when you apply for a mortgage. If you do not receive at least a 640 on two of the three scores, you cannot apply for an FHA mortgage. A conventional mortgage usually requires an average credit score of 700, and 740 is the minimum required to get the best rate for a conventional loan. There has been a lot of negative noise lately about credit repair companies, both nationally and locally, and with good reason. Complaints abound about …