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Archive | January, 2017

Jan 13

A Short History of “Underwriting”

A Short History of “Underwriting”

If you’ve ever applied for a mortgage, an insurance policy or a car loan, your application went through an “underwriting process.” Ever wonder why the underwriting process was so intense and detailed? Well, here’s a short history that puts it all in context: The word “underwriter” dates back to the story of Lloyd’s of London, which is the world’s oldest continuously operating insurance company. Lloyd’s of London started as London coffee house in the shipping district of the city. “Underwriters” were individuals who signed underneath the line on

Jan 11

Why Do I Have to Pay for a Rate Lock Extension?

Why Do I Have to Pay for a Rate Lock Extension?

Here’s the scoop: mortgage rates are determined by mortgage bond prices.  Mortgage bonds trade in what’s known as a “To Be Announced” (TBA) market.  When you commit to a rate lock, the lender is agreeing to deliver your mortgage to the bond investor within 30 days, 45 days, etc.  That’s where rate lock timeframes come from.  So in essence, bond investors are trading empty buckets of mortgages that are scheduled to be filled within certain timeframes.  (For a current look at the mortgage bond market, see our Live Market

Jan 9

How Remodeling Impacts Your Home Value

How Remodeling Impacts Your Home Value

Thinking of home renovation projects this spring/summer?  Click here to view an interesting report that compares the economic impact of various remodeling projects.  As a hint, the highest impact remodeling projects that add value to your home are a new kitchen or kitchen upgrade, or a new bathroom, or bathroom upgrade.  The lowest value items include an insulation upgrade, closet renovation or converting an attic to a living area. As for a remodeling project’s impact on your happiness, a whopping 82% of homeowners said they have a greater

Jan 6

Search Yuma Homes for Sale

Search Yuma Homes for Sale

If you are searching for homes for sale in Yuma, AZ, you will probably want to start your home search online.  Many people end up on Zillow or Trulia, but if you want a truly local search with access to the most updated information, and all the homes currently on the market, the best place to go is http://www.searchyumahomesforsale.com/   You will find it extremely easy to customize your home search, sort your favorites, and zero in on the right home for you. Search for Homes Customize Your Search Almost

Jan 6

How the Fed Impacts Mortgage Rates

How the Fed Impacts Mortgage Rates

The Federal Reserve Open Market Committe (FOMC) meets at least eight times per year to discuss and vote on US monetary policy.  The Fed controls the Fed Funds rate, which is essentially a bank’s cost of money.  When the Fed increases the Fed Funds rate, short-term interest rates such as the Prime rate and LIBOR go up.  These are often used to determine interest rates on adjustable rate mortgages, home equity lines of credit, credit card balances, and business loans. However, interest rates on fixed-rate mortgages are not tied to changes in the Fed Funds rate.

Jan 5

What Causes 1-Year LIBOR to Change?

What Causes 1-Year LIBOR to Change?

The London Interbank Offered Rate (LIBOR) is the primary index used on adjustable rate mortgages in the United States.  It’s the interest rate that banks pay to borrow money in the London money markets.  LIBOR is published by the International Continental Exchange (ICE).  It’s calculated through a survey that the ICE Benchmark Association (IBA) sends to banks who trade and do business in the London money markets.  The US Dollar 1-month LIBOR is what a bank would pay to borrow US dollars for 1 month. The 6-month LIBOR