Wishing You A Happy Holidays and A Fantastic New Year !!!!

Ron and Julie Wish You A Happy Thanksgiving !!!

October Financial Updates From Ron Black and Julie Bailey

By Louis S. Barnes                                                      

This week an exercise in perspective, stocks versus bonds and mortgages, and here versus over there.

     In a week with little new US data (apartments hot, single family not), bonds and mortgages stayed the same -- which is remarkable given the performance of stocks. The 10-year T-note could not break below 2.00%, mortgages just under 4.00%, but unchanged all through October while the Dow rocketed 500 points in the last two days.

     These two markets usually trade opposite each other, stocks up on good economic news, bonds down in price and up in yield, and vice-versa on bad news. Good news should help corporate earnings and stocks, but any good news brings fear to bonds that the Fed will do something awful.

     I have worked in or near credit markets for forty years, and like all colleagues regard the stock market as cognitively impaired and bi-polar, heavily overweighted to the manic side. Those people reciprocate, viewing us as depressed and void of imagination. How could these two pathologies join minds this week?

     The first stock up-burst coincided with ECB chief Mario Draghi’s suggestion that he would expand its QE and perhaps drive euro-zone rates more deeply negative. The German 10-year fell in yield from 0.63% to 0.51%, pulling downward on US 10s. Meanwhile stocks interpreted more central bank easing as economic stimulus good for them. Then today, the People’s Bank of China cut by surprise its overnight and reserve rates -- more glee for stocks, but bonds holding.

     Who is right here? My bias declared, of course bonds are right, and stocks don’t get it. In a normal world, big central bank stimulus would be good news for stocks, but this world is not at all normal. Unprecedented, fantastic stimulus by the ECB, PBOC, and BOJ has done nothing more than to hold up the economic floor and to buy time.

     Europe is caught in its own wire and trenches, the euro a proxy for the Western Front in 1917. Germany profiteers and the weak cannot recover while the ECB merely maintains the meat-grinder -- a situation unique to Europe, but real recovery impossible no matter what the ECB does.

     China is different. It has hit its head on the ceiling of investment-led growth, and reforms attempted in the last year have all backfired. On Monday it reported Q3 growth slipping below its imaginary 7%, to 6.9%. Other indicators suggest a far deeper slowdown: as of September, industrial production is down 5.7% year-over-year, and fixed investment is off 6.8%.

     More to the story: unadjusted for inflation, reported China growth was only 6.2%. China is in deflation, an upside-down adjuster. Factory prices have fallen there for 43-straight months. As China in some desperation tries to keep the machine going, it holds its export volume (down only 3.7% YTD) by predatory pricing, exporting its deflation and unemployment to the world while constricting its imports. Double damage.

     Stocks misinterpret China stimulus even more than European. The weaker China becomes internally, the more harm it can do to the rest of us. I do hope that more people will understand that ongoing global economic mire has far more to do with the rise of China and its misbehavior than the financial crisis.

     Okay, if it’s that ugly, why didn’t bonds and mortgages do better instead of just holding? Because of the great disconnect of our time: were it not for the rest of the world’s self-entanglement, the US would be rocking. Fed-haters here include automatically in their screeds: “The Fed’s stimulus has failed to produce economic growth.” Horsefeathers. We have been growing so well that the Fed fears overheating, its leadership dying for an excuse to lift off, and might even be right.

     Take some credit. No, not the Fed -- take credit for US flexibility, and endurance of pain. We have recovered from the Great Recession as nowhere else, our government dysfunctional throughout, because we alone could inflict millions of foreclosures and job losses, adjust and move forward. The rest of the world is politically and culturally stuck.

Mortgage Time From Ron Black and Julie Bailey

Mortgage Time Update For The Week Ending August 28th, 2015

Happy 4th Of July From Julie and Ron !

Happy 4th Of July !!!

Ron Black's Mortgage Time Week Ending July 2nd, 2015

Mortgage Time Week Ending June 26, 2015

Mortgage Time June 2015

Happy Father's Day From Julie and Ron!!

Capital Markets This Week - Get To Know Ron and Julie

Click On Video Above To Get To Know Ron and Julie 

Click the following link to be introduced to Ron and Julie: Introducing the Ron and Julie Team                        By Louis S. Barnes                                                                 Friday, June 12, 2015 Long-term rates have run up again, now to levels of last fall: mortgages are close to 4.25%, the 10-year T-note cresting Wednesday just under 2.50%. Today, 2.36%. Possibly fatal stubbornness, but I think most of this up-lurch is a correction from overreaction last winter, not the threshold of a sustained swoop-up. That may come, but it will require sustained economic data at least as strong as this spring’s revival. Beginning mid-fall last year, Europe appeared headed into deflation. The ECB would embark on QE, but its effectiveness was very much in doubt. Oil crashed, removing all fear of inflation, and a lot of us discounted its stimulus potential. QE in one form or another spread everywhere outside the US, producing a dollar rocket, which at minimum created buyers for US financial markets (stocks-up rates-down), stimulated all of the export-based economies overseas (that would be all of them), and undercut the US. The icing: the weird US winter slowdown. All of that has now either reversed or stabilized. Rates up. Maybe, maybe, maybe at last a genuine turn in the world economy, which will self-reinforce. But the odds are that the great charge of the central bank cavalry has only bought more time, and the deflationary pressures are all still in place, especially overseas -- and above all, hyper-competition compressing wages. In the last two weeks both the IMF and World Bank have downgraded their forecasts for global growth, the latter to just 2.7% for this year. The aspect without precedent is the divergence between the US and the rest. This certainly would not be the first time the US did better than the rest, even the locomotive for the others. But the divergence among central banks is without precedent, all-out printing over there, and tightening beginning here. The US is by far the world’s most adaptable economy. That, our greatest strength, can be cruel to our people, more so than political structures overseas can survive. Europe is having an impossible time calibrating its several labor forces to one currency. China is trying to change its engine without slowing the car, fearful that any downturn will expose the Party as the fraud that it is. The Emergings are all in similar soup. US data has picked up, I think more than just a rebound from another odd winter. The NFIB survey of small business is an especially important indicator, and it has nearly normalized. There are flickers of rising incomes especially at the low end, although compressed incomes for the lower two-thirds of our people are our principal headwind. Defying our fabled flexibility: the runaway cost of health care, acting as an anti-productivity tax, and the same for higher education. Still, the Fed has to come up from zero. Clue: the IMF is so worried about the effect of liftoff on the dollar, and its effects on the weak Emergings, that it asked the Fed to hold off until next year. The huge dollar rise last winter versus all of the others (or their devaluation versus us -- all is relative) was in response to the fact of QE overseas but anticipation of Fed liftoff. QE elsewhere is not going to change much. But nobody knows the moment of Fed liftoff or the slope of increase beyond. Shoot, the Fed doesn’t know. This liftoff process is going to last a long time, and we should expect BIG volatility in things like mortgage rates. Not just up, but up and down and up. Liftoff is a given, but the future slope of increases is not. Since the Fed is data-dependent -- all of its forecasting models worse than useless, misleading -- then so are we. The world is going to stay in a low-rate era so long as competitive pressures cap inflation. In many places, central banks may have to QE-lean against deflation open-ended. However, mortgage rates can ricochet rapidly in the post-bust range, 3.50% to 5.50%. Even a careful, "crawling" Fed pace (Vice-Chair Fischer’s word) of increase in short-term rates will beget wild anticipation in long rates. One month thinking the Fed is coming hard (mortgages up) the next thinking it’s overdone (back down). As we come out of a place we’ve never been before to a new place we’ve never been before, the bond market will have no bearings. Moving, but busted compass. ------------------------------------------------ 10-year T-note in the last year, an obvious bottom in April after an hysterical one in February. Add 1.80% to get 30-fixed no-point mortgages. I do not expect any big retreat from here, not without some very bad news somewhere.

Mortgage Rates Rise Based On Economic Factors

The Basic Concept Of A Mortgage

If you are new to borrowing and are just looking for your first home, then you probably are unsure about how mortgages work, and what the various types of mortgages are. If you are about to get your first mortgage, then you need to know the basics of what mortgages are and their various features. Here is some useful advice on the basics of mortgage lending:

What is a mortgage?

A mortgage is the loan that you take out to pay for a property. The loan is split into the capital and interest. The capital is the amount you have actually borrowed to buy the property, and the interest is the amount the lender charges you for the privilege of borrowing. There are various types of mortgages, but in general the two main types are repayment mortgages and interest only mortgages. Repayment mortgages are ones that require you to pay back the capital and interest each month. Interest only mortgages require you to pay just the interest each month and then the final capital amount at the end of the mortgage term. Whatever type of mortgage you are looking for, there are a number of features you should consider:

Interest rate

The interest rate of the mortgage is very important, because the lower the interest rate, the less you will pay back over the loan term. Mortgage rates are lower than most other types of loans, at around 5 or 6 %.

Exit fees

When you take out a mortgage, you agree a length of time over which you will repay the loan, known as the mortgage term. If you leave during the mortgage term to use another lender, then the current lender will often charge exit fees to allow you to leave. You want a mortgage with low interest rates, but also make sure that you are fairly free to change lenders if required.

Insurance

As with all loans, you will be offered insurance on your mortgage, in case you are ill, out of work or die and can not make the payments on the mortgage. When getting mortgage insurance, make sure that you are not paying too much for it and that your other insurance policies do not already cover you.

How do you get a mortgage?

Mortgages can be obtained from banks, specialist mortgage lenders and online lenders. If you are looking for a mortgage, Cherry Creek Mortgage can help you find the best deals before committing to any particular loan program.

Ron Black Mortgage Time

Get To Know Julie and Ron

Economic News For The Week Of May 4th 2015

By Louis S. Barnes                                                                  Monday, May 4, 2015      The big news of the week: the US economy stalled in the first quarter, GDP rising 0.2%. And long-term rates, which go down on weak economic news instead went up.      There are several keys to this conundrum. The first: the economy did not stall. The most basic forward momentum in our economy (any economy): 321 million Americans need to spend money every day to live, and “personal consumption expenditures” in the first quarter plodded along at a 1.9% annualized rate. Second, there is no new evident weakness in employment, although next Friday’s payroll report could surprise.      Home sales are not rocketing, but not bad either: pending sales in March were 11% higher than one year ago. Today’s release of the manufacturing ISM index arrived unchanged in April at 51.5 despite weakness in the oil patch and the strong dollar hurting exports.      GDP calculations are weird. BTW: nobody should have been surprised by a poor number -- the Atlanta Fed’s real-time GDP tracker (“GDPNOW’) has had a near-zero figure for six weeks. Pulling GDP down: investments fell in Q1, everything from residential to business, some of that due to pullback in drilling. Another big sinker: imports rose, but exports fairly collapsed, down 7.3% in Q1 -- we were still spending, but buying the production of others.      The one aspect of the GDP report which does indicate a stall: businesses built a lot of inventory in Q1 which did not sell, but the production boosted GDP -- it would have been negative without the inventory accumulation. Now we infer that the overstock will mean underproduction in Q2. And the Atlanta Fed tracker shows no rebound in April.      If not a stall, certainly underperformance, then why the jump in mortgage and bond yields? Mortgages are still a hair below 4.00%, but the 10-year T-note is up to 2.11% and looks lousy. If ever you wanted confirmation that the outside world has more and more impact on daily life in the US, follow this bouncing ball.      Last winter the Fed adopted the rhetoric of inevitable rate-hikes ahead. If economic growth merely remained on current track, the Fed was coming. No need for inflation even to rise toward target, we’re coming. Simultaneously the European Central Bank and the Bank of Japan entered end-stage QE money-hosing -- panicked, really.      In the near term, currencies move relative to each other because of changes in local interest rates (longer term: inflation and trade balances). Money will flow to the highest return, and in the era of electronic money on 24/7 screens, moves FAST. So the dollar rocketed up, and the euro and yen crashed, as did nearly all important currencies, those central banks also hosing in order to be trade-competitive with Europe and Japan.      If you’re going to move to dollars you have to buy dollar-denominated bonds and stocks. Thus US bonds went up in price, down in yield, at max panic in early February, the 10-year to 1.65%. The NASDAQ returned to its all-time high. QE by the ECB and BOJ pushed yen and euro bonds almost to zero, adding to buy-pressure here.      Historically, big swings in currency values take a year or years to change the flow of exports and imports. In the modern era, not just money is made of electrons; so is a lot of world trade. The weak euro has suddenly pinked European economies, Spain now the strong man of Europe, second only to Germany. However, ruddy Europe is at the zero-sum cost of a pallid US, our exports tanking.      Hence the spreading global assumption that the Fed will have to hold off, maybe indefinitely. So the whole machine has run in reverse for 10 days: dollar down, euro and yen up. Euro bond yields up (all is relative, German 10s from 0.06% to 0.37%), US Bond yields up.      Hunch: all of this QE-currency hoo-ah has not changed a thing. The world is and has been caught in oversupply of labor, materials, commodities, and manufactures, soggy everywhere, German and Chinese predation making all worse. The Fed may lift off (Bill Gross: “If only to show they can still get out of bed”), but the economy and rates are not going anywhere. ------------------------------------------------------

Mortgage Time Economic Update - Week Ending April 17th

Capital Markets Update 4-13-15

By Louis S. Barnes                                                        Monday, April 13, 2015      The week began with a reverse-bang: last Friday’s payroll report was distinctly weak, and rates fell a lot that day, but on Monday morning markets immediately un-did themselves. Right back to where they were -- mortgages in the high threes, the 10-year T-note just under 2.00%.      That trading is a clear sign that the bond market is gradually awakening from denial. The Fed is coming. Two if by land, one if by sea, but either way, they’re coming.      This week the Fed released minutes of its March 17-18 meeting, which were widely described as “divided.” No, they’re not. The control group -- Chair Yellen and the governors appointed by the president and confirmed by Congress, joined by the capable regional Fed presidents (Dudley, Williams, Rosengren, Evans, Lockhart) -- is in complete agreement: the Fed will lift of from 0% this year unless the economy swoons. Most likely in summer, and at a very low slope. And without further warning. The warmer the economy looks, the sooner; if a tad cool, early fall.      The other chatter out of the Fed comes entirely from the other regional Fed presidents, who seem unaware and uninterested that their hawkish world view is out of touch. Nevertheless, the bond market is a big place, and a lot of it has become convinced that the Fed will stay at 0% forever. Uh-uh.      The part of the economy most vulnerable to liftoff is of course... us. Housing. It is possible that the extraordinary bond-buying QE by foreign central banks will hold down US long term rates even as the Fed raises the overnight cost of money. Very low inflation and oil prices may have the same effect. But we have to address the central question: is housing strong enough to withstand higher mortgage rates?      The question is a big deal -- last year despite all contrary forecasts, mortgage rates fell back into the threes, and housing still did not ignite. Just stumbling forward, underperforming nearly all forecasts.      But now, this spring, there are flickers of improving health. Little up-ticks in purchase mortgage applications. What does real health look like, and why? I live in the hottest housing market in the US, Denver Metro. Why us, and not elsewhere?      1. Our home prices stayed flat from 2001 until ignition in January 2013. We had no bubble. We had a mini-bubble 1998-2000, when the IT Fairy landed here, but when she left... flat. We had our foreclosure episode, plowing through consequences of idiotic subprime lending, but no bust, just flat. Flat is good, and long flat is ideal. During twelve years of flat prices, purchasing power accumulated -- even with wages growing at two, or three, or four percent, that’s a lot of accumulated power.      2. From 2000 to 2015 the state population grew by one million people, a 25% increase, most of them within commuting range of Denver. While prices were flat. And because of accumulated development, and our local mania for open space preservation (in CO outside a municipality, the minimum lot size is 35 acres by state law), as big as CO is we are short of land. Near Denver, very short. Near Boulder we can see the last single-family building sites ever. Our economy is diversified, heavy with stable government payrolls, IT, bio-T, and entrepreneurial.      Purchasing power meets scarcity, and ka-BOOM. Prices in 2013 and 2014 rose in an annual range of 5%-8% depending on the usual things. I had thought that mortgage hyper-regulation and appraisal lids would hold appreciation in the 8% range despite our explosive demand/supply mismatch. Uh-uh.       An attractive new listing this year will be sold in the listing office before it hits the market. Good ones which make it to market may have 40 showings in the first 48 hours. Offers commonly waive appraisal and commit to making up in cash any gap between appraisal and price. A new bubble? Nope -- the economic foundation is sound.      A few other places are like us, but most are not. Most have neither the scarcity, the long-flat, nor the income growth. The Fed knows housing is still fragile, but...      They are coming. ----------------------------------------------------- Five years of 10-year T-note. We are very close to the all-time 2012-2013 bottom, the heart of QE3, but now the Fed is going to lift off. We CAN still go lower, but it will take some really lousy news to do it.

Only 126,000 new jobs in March

By Louis S. Barnes                                                         Friday, April 3, 2015      The last line in last week’s column: “For complete chaos, and canceling all rate worry above: a weak report on jobs.”      And chaos it is! Masked until Monday by today’s holiday, but the ground is moving now. Only 126,000 new jobs in March, the prior two months revised down by 69,000, slightly declining hours in the workweek, overtime flat... this is the growing strength the Fed needs to pre-empt?      Stocks are closed, but bonds are trading: the US 10-year T-note at 1.81%, down from 1.98% on Monday, and all technical forecasting models suggest a re-test of February’s temporary two-year low at 1.65%. The next visit may not be so temporary.      But, be very careful here. Rising wages are much more important to the Fed than payroll numbers. At 5.5% unemployment the economy is already in the historical danger zone. Average hourly earnings in March rose 2.1% year-over-year, but last month climbed 2.8%.      Chair Yellen delivered a magnificent speech on March 27, one of the best-ever by a Fed leader, thinking out loud through all the reasons the Fed should liftoff from 0%. Buried and brief on page 3, reasons not to move:      “I would be uncomfortable raising the federal funds rate if readings on wage growth, core consumer prices, and other indicators of underlying inflation pressures were to weaken, if market-based measures of inflation compensation were to fall appreciably further, or if survey-based measures were to begin to decline noticeably.”      Today’s report does not show weakened wages, nor in other reports any weakening of inflation. We did see a weaker ISM manufacturing survey for March, down to 51.5 from 52.9, obviously hurt by a stronger dollar. Fed Vice Chair Fischer’s statement last fall that “Falling oil prices are an unambiguous benefit” has proven wildly overconfident, the drop not yet stimulating consumer spending but currently shaving jobs.      On the happy side we have a slowly but consistently improving housing market, sales up 12% year-over-year, and prices rising at double the rate of inflation.      On net: presumption that this jobs report has intercepted liftoff in June or in September, or in 2015 is very premature. Specifically to gambling on mortgage rates, these extremely low levels are held down by overseas central banks, which the Fed sees as artificial -- not a signal of US weakness, and possibly requiring Fed interception.      For now, rejoice in low rates. And also in an unusual cluster of other good news.         First, little noticed, the WSJ reported this week that the Fed in 2014 began to lean on bank boards of directors to do their jobs. To supervise management. Not just take fees, get their buddies on other boards, back-scratch executive and their own compensation, take five-star junkets -- and when their ward institutions bring down the global financial system, sniff in indifference. Fed supervisors are leaning hard, one director at a time, especially on previously inert and crony “independent” directors. I have believed ever since 2005 that bank-director indifference to bank conduct was the primary failure leading to the meltdown. The Fed is late, but hooray anyway.      Next, Nigeria replaced its crooked head of state in a non-violent election. Good luck to Muhammadu Buhari in his promised fight against corruption and Boko Haram. Nigeria is 178 million souls today, quadrupled in 50 years, and in another 30 years will be more populous than the US.      Then the Iran deal. In the last two weeks as the negotiation deadline drew near and passed and revived, financial markets traded on the outcome. When the deal looked dead, stocks and rates went down, risk up; alive again, stocks up and rates up. Nobody knows how the deal will turn out, but markets like the fact of six powers talking.      Last, some would argue whether good or bad news, but we can hope in the next two weeks to get a resolution to Greece. If they are out, then quick downward pressure on rates here, fearful of chaos (that word again...). If they stay in, nobody will care. For my own part, an end to the story would be a blessing. ------------------------------------------------------- 10-year T-note in the last week, although NOT including semi-closed trading today. As above, off the bottom of this chart at 1.81%. The sharp drop on Wednesday followed the weak ISM survey, and the rise on Thursday coincided with the good news from Iran talks.

How To Prepare For Getting a Mortgage

Buying a home is an exiting time; at Cherry Creek Mortgage Company, we know the thrill of home ownership has no equal. However, before you can close on your new place, you will need to apply for a mortgage. Here's what you need to know: 

- Save for a down payment

Depending on your exact circumstances, you're likely to need anywhere from a 3% to 20% down payment for your Bellevue mortgage. Once you know you're going to be in the market, it's a good idea to start saving for your down payment. Ideally, you'll start saving at least one year in advance.

- Know your credit score

Bellevue home loans depend heavily on credit score. A year before you're going to apply, it's a good idea to have Cherry Creek Mortgage pull your credit report to see if there are any mistakes. Additionally, please don't apply for any new credit cards in the weeks or months leading up to your application.

- Gather information

At Cherry Creek Mortgage Company, we're going to need quite a bit of information from you for your Bellevue mortgage application. One month before you're going to apply, start gathering up the last few months worth of paychecks, bank statements, tax forms, and employment information. 

- Figure out what you can afford

At least 6 months before you start your application you should contact Cherry Creek Mortgage, start playing around with mortgage calculators to see just how large of a home you can afford, make sure the calculator you use includes taxes and insurance or better yet let Cherry Creek make these calculations for you. Keep this number in mind when you're looking at home listings.

Financial markets - Monday, March 30, 2015

By Louis S. Barnes                                                   Monday, March 30, 2015      Financial markets are in a bit of spring break, common to the last week of every month while waiting for the often-explosive data released in the first days of each new month. Hence here both a review and a look forward -- first domestic, then overseas (never in modern US history have foreign matters been so important to US markets), then bring it together.      Mortgage rates have again bottomed in the same place, twice so far this year near 3.75%. I think we should take seriously the pattern. These bottoms have taken place despite generally soft US data which should have helped rates: orders for durable goods in February were especially poor, down .4% versus forecasts for a similar gain. Several analysts think inflation is showing signs of future increase, toward the Fed’s target, but modeling like that is terribly unreliable in today’s changed world.      Long-term rates also failed to fall during late-week air pockets in the stock market, something to do with overbought technology shares, the loopiest of all. This week’s reports of new “selfie-tools:” a powered selfie-stick (camera holder), and a toaster made in Vermont (buy USA!) which will scorch into bread the image of your favorite selfie. Jam on that. Thus we rely on technology as a key component of growth.      Other supports for bonds and lower rates faltered: the dollar stopped its relentless climb, which had attracted buyers for our securities, and oil stopped its drop, which had provided faith in low inflation ahead. Right there we move overseas.      Reviewing foreign conditions is a lot like each morning for us old folks, making exploratory function and pain checks before getting out of bed. Start with the Middle East: are new upsets pushing up oil prices? Probably not. The US is obviously disengaging, allowing ancient scores to be settled directly by the people who live there, a good thing. In the new battle of Tikrit American advisors are safely inside our wire. We apply limited air power to support our Iraqi Sunni tribal friends, joined by Iraqi Shia militia supported by Iranian forces, our friends and Iran’s together fighting ISIS Sunni bad guys just like the ones who Marines pushed out ten years ago. Yemen: we have pulled our special ops, and the Saudis and other Sunnis have intervened on their own to prop the Sunni Yemen government against Houthi Shias supported by Iran.      Got that? Clear? If locals-on-locals is a threat to financial markets, I don’t see it. Same for Ukraine: presumably Vladimir is readying new nibbles, but Europe won’t fight.             The ECB is proceeding with QE, but European rates are already so low (German 10s pay 0.19%) that the ECB is just buying cash with cash. Europe will begin to show better numbers, but based on currency devaluation -- zero-sum versus damage to the US and China. A Greek exit could happen at any time, and would help rates briefly, but would cause serious upset only if exit were contagious to the rest of Club Med, and it does not seem so. Not now, not yet. Japan is... Japan, implosion at a snail’s pace.      That whole overseas rundown is less scary than any time in a year or more, which is too bad because worry is most helpful to bonds and low mortgage rates.      With foreign help dwindling, stick with simplicity for the cause of bottoming rates: the Fed is coming. The bond market has done a splendid job maintaining denial, but cracks are showing in that resolve. For the Fed to delay liftoff, and to rise on low slope, it will need a steady feed of poor US data. Hence a very big deal immediately ahead.         The ISM survey will arrive Wednesday, and the all-important payroll and wage data on Friday, April 3. Which is also Good Friday and Passover -- markets staffed only by short-straw rookies, which will magnify the effect of any job/wage surprise. Beware long weekends: the worst of my mortgage-market life was Volcker’s Massacre over 1979 Columbus Day weekend. The second-worst: the Fed had just begun a tightening cycle in 1994 (from 3% to 6% in one year, gulp), and we got a positive job-market surprise on Good Friday-Passover. Mortgage rates rose a half-percent over the weekend. Not predicting, just sayin’.      For complete chaos, and canceling all rate worry above: a weak report on jobs.

What Is A Mortgage?

Most people who buy a home borrow money to do so. Such a loan is called a mortgage. Mortgage lending has roots going all the way back to the 1780s, when the first commercial banks were formed in the U.S., but it wasn't until after World War II that the market started to function like it does today.

What kind of loan is a mortgage?
A mortgage is a type of loan called a secured loan, which means it is secured by the property it pays to buy. If you default on your Bellevue mortgage, then the mortgage lender can foreclose on your home and sell it to pay off your debt.

Applying for a mortgage
When you want to buy a home, you can do one of two things: You can go to a bank or mortgage company, such as Cherry Creek Mortgage Company, and get pre-approved or pre-qualified for a loan before you start looking, or you can find a property you want to buy first and then apply for a loan after. Approval for a home loan depends on a number of factors, including your income, credit score and down payment. You definitely want to get a quote from Cherry Creek Mortgage Company.

How does a mortgage work?
Mortgages are long-term loans, usually 15 or 30 years. In addition to principal (the amount) you borrowed and interest, your Bellevue mortgage payment includes monthly installments toward property taxes, homeowners insurance and mortgage insurance if you need it. Home loans are amortized, meaning more of your payment goes toward interest costs in the early years of your loan, and more goes toward your principal in later years. The difference between what you owe on the loan and what your home is worth, meaning an estimate of what you could sell it for, is called your equity.