Mortgage rates improved last week, marking the first time since mid-May that has happened. The rate drop is the result of how mortgage markets interpreted the Federal Reserve's Wednesday press release. In it, the Fed said: Inflation pressures should lessen soon Growth should remain steady this year The credit market is currently fragile Separately, none of this was news to the markets. But considering all three statements together, investors grew nervous of leaving money in the stock market -- specifically in financials. Post-Fed announcement, there was a wave of selling ...

A Home Equity Line of Credit is bank product that grants homeowners access to the equity in their home at anytime, usually using checks. Often called a HELOC, these equity-based credit lines function very much like credit cards: The rate is adjustable, tied to Prime Rate There is a minimum monthly payment There is a pre-set spending/credit limit But different from credit cards is that a HELOC is "guaranteed" by real estate and with real estate values in question nationwide, many banks are exercising a little-known clause in the HELOC contract. With alarming frequently, banks ...

The Federal Open Market Committee left the Fed Funds Rate unchanged at 2.000 percent this afternoon, as expected. In its press release, the Federal Reserve noted the co-existence of inflation and recession. On inflation, the Fed said that energy and food prices are contributing to an "elevated state" of inflation, but that it expects price pressures to ease "later this year and next year". On the topic of recession, the Fed seemed a bit more concerned. Overall, markets reacted favorably to the press release; both stocks and mortgage rates showed signs of improvement in the ...

The Federal Open Market Committee adjourns from its 2-day meeting at 2:15 P.M. ET today.  It's widely expected that the group will leave the Fed Funds Rate unchanged at 2.000 percent. However, it's not what the Fed does today that has markets so interested.  It's what the Fed will say. One of the Federal Reserve's roles is to promote stability in the U.S. economy by protecting it from two major threats: Inflation Recession The Federal Reserve's primary weapon against both of these hazards, though, is the same -- the Fed Funds Rate.  To combat inflation, the Fed raises the Fed ...

Most homeowners make four housing-related payments each month: Principal on a mortgage Interest on a mortgage Taxes on the real estate owned Insurance for the real estate owned Collectively, these payments are known by the acronym PITI but don't let it fool you -- a homeowner's monthly expenses are still called PITI even if one or more of the elements doesn't apply. For example, a homeowner with an interest only mortgage does not pay principal each month. Additionally, condo owners typically don't pay homeowners insurance -- they pay a monthly assessment and/or maintenance ...

Mortgage rates edged higher for the fifth straight week and the benchmark 30-year fixed-rate mortgage is now at a 10-month high. One reason why rates are spiking is because the temporary jolt from higher energy and food costs is starting to look like a longer-term trend. For example, high energy prices get a lot of press, but its 19.4 percent increase since last year is dwarfed by the 64.8 percent increase in the price of grains over the same period of time. Eventually, as businesses spend more because of these rising costs, they have no choice but to pass those costs on to ...

Flooding in the Midwest has displaced thousands of families and caused billions of dollars in damages. It may also cause mortgage rates to rise. As the extent of the damage becomes more clear, prices for grain and livestock are soaring.  For example, a host of dietary staples are suddenly more expensive at the supermarket, including: Meat Pork Chicken Dairy Eggs Rising food prices are considered inflationary and inflation tends to make mortgage rates rise. But of all the foods that are increasing in price, it's corn whose price is rising the most -- up 70 percent so ...

Home buyers are often surprised when a "rate quote" from the morning won't be honored in the afternoon.  Sometimes, the assumption is that the loan officer is just being sneaky. This couldn't be less true. Rate quotes change in the middle of the day because mortgage markets are in constant flux.  All day, every day -- just like stocks. And like stocks, a mortgage bond's morning price will likely "expire" before the day ends. One way to visualize this is to look at today's Microsoft's stock price: At 9:30 A.M. ET, the price was $28.46 At 9:38 A.M. ET, the price was ...