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Well, it has finally started happening! Mortgage rates in Denver have been climbing steadily for the last month. That would make the mortgage rates in Denver and in Colorado the highest we have seen in a year and almost the highest we have seen in two years.

So you ask what has caused this to happen?? The Bond market is trading lower on news that Japan reported better than expected economic data. Like we saw last week with New Zealand and Australia, global economic growth and inflation risk is causing foreign countries to hike interest rates. And as countries hike interest rates, more attractive yields abroad is causing money to be siphoned out of the US Bond market.

Here's an important story to pay close attention to - in the past we discussed the Yen carry-trade, where traders borrow money tied to the Japanese Yen and reinvest that money in higher yielding investments in countries like the US or Australia. So why is this important? The higher rates offered in the US are attractive to Japanese investors because rates in Japan are far lower. So many Japanese investors are big buyers of US Treasuries and Mortgage Bonds. And while it may seem like getting 5% in the US instead of 1% in Japan is a good and simple strategy there is another moving part that needs to be considered, which is the currency exchange rate between the US and Japan. Lately, the US Dollar is losing ground in value versus the Japanese Yen because the percentage loss of the Dollar vs the Yen has been greater than the additional yields offered in US Bonds, many Japanese have decided to unwind their holdings in the US. This is putting additional selling pressure on our Bond market. Japan is presently the largest holder of US Mortgage Bonds.

If you have any questions regarding your mortgage or potentially want to refinance your home, shoot me an email ray.williams@meridiascapital.com~ Until next time! ~Ray

"Working with honesty and integrity every step of the way"

Many times over the past three months I have gotten that all too familiar call from previous clients. It goes something like this "Hey Ray, It's ______ and my (friend, brother, neighbor, colleague) has a loan that is going to go up in rate in ___ days/months. Can you help?" I have seen many good people who got into bad loans because of the lack of licensing that recently changed in Denver's Mortgage Industry. Many unscrupulous or uneducated mortgage brokers in Colorado and the U.S. have taken the common homeowner and misguided them about the mortgage they were offering to them as the "best option". What this does to people is portrayed to them that A.R.M's and "flex pay / option A.R.M mortgages" as the solution that was best for them.

What ends up happening is that people aren't explained what the effect of that A.R.M or flex pay loan will do to them. There is a misconception that you can pay off your home in 7 years and not change your payment. How can that be? If you were to take your mortgage balance and divide it by 84 that would give you the payment you would have to make WITH 0% interest! Now, you tell me where do you get a 0% interest loan? You don't so that is why there needs to be a better understanding of the loan program you select for your mortgage.

We educate these potential clients and better assess their needs before selecting a recommendation for their home loan needs. After all, it is better for you to get the right loan the first time around with me and a great competitive rate. Versus being that person who becomes my referral from a satisfied client and has to refinance to get out of that ugly mortgage or worse, save your home from foreclosure.

Call me today to discuss your situation and get honest answers from an experienced mortgage consultant and homeowner and real estate investor.

Take Care~

Ray

(303) 779-0591