A Look at Rates

As many of you know, on December 16 Janet Yellen raised Fed Funds Rate from 0% to .25%. This is the first time its changed since Ben Bernanke lowered it in 2008 to aid economic recovery after the financial crisis. Now that inflation is down, jobs are up, and we have had a gradual, positive economic trend, it was decided that a reinstatement of the rate was appropriate.

Home Loan Specialist - Walnut Creek

Many thought that the change would have a large impact on mortgage rates, but due to 30-Year Fixed loan rates being tied to the 10-year Treasury — not the Fed Funds Rate — the change will have minimal effect (see the image above for rate changes over the last week). However, HELOCs are tied to the Fed Funds Rate and will experience a hit due to the .25% increase. See my video or call me (925.586.3174) for more information!

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What to Expect: Fed Funds Rate Change

The two-day Federal Open Market Committee meeting kicks off on Tuesday and will culminate on Wednesday with the 2:00 p.m. ET release of the monetary policy statement. It is widely expected that the central bank will raise its benchmark Fed Funds Rates by a 1/4 point for the first time in nine years. The Fed has kept the fed Funds Rate near zero percent since 2008 in an effort to promote economic stability and job growth.


The Fed Funds Rate is the rate in which financial institutions lend balances held at the Federal Reserve to one another on an overnight basis. The increase could raise interest rates on bank fees, car loans and credit cards.

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Fed Funds Rate Changes

Important news for anyone who currently has a HELOC or is thinking about getting one. The Fed Funds Rate is projected to raise over the next few months. If raised, HELOC’s will experience a rate hike due to the Fed Funds’ effect on the Prime Rate and your total interest rate.

The Prime Rate is made up of the Fed Funds Rate, plus 3%. Right now (11/17/2015) the Fed Funds Rate is 0.25%; therefore 3.25% is the current the Prime Rate. When that Prime Rate of 3.25% is added to the Margin, the sum equals the total interest rate on your adjustable rate HELOC. Federal-Funds-Rate2

What this means for individuals with HELOC’s, is that as the Fed Funds Rate increases, so will your interest rate. It might be a good time to refinance out of any HELOC’s in order to dodge the projected increase in rates. Call me so I can evaluate your situation personally. Kristine Marr – (925) 586-3174

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Skipping the Bagel

Research firm CoreLogic reported that there were 55,000 completed foreclosures nationally, down from 67,000 in September 2014, a 17.6% decrease. The report went on to say that there has been a 52.8% decline since the peak of the foreclosure problems when there were 117,438 foreclosures in September 2010. In addition, completed foreclosures jumped 49.5% from August 2015 to September 2015, which was due in part to the result of an annual public auctioning of thousands of tax-foreclosed properties in Wayne County, Michigan.

On the lighter side, with Thanksgiving right around the corner, here are a few facts: Approximately 46 million turkeys are eaten on Thanksgiving every year. The Macy’s Thanksgiving parade began in 1924 with only 400 employees. More alcohol is consumed on Thanksgiving than any other holiday of the year. One last fact, while Turkey does contain tryptophan, which could make us feel drowsy, sleepiness is more likely caused by the over-consumption of alcohol and food, especially desserts. So maybe skip the desserts if you want to stay awake for more family time.

Speaking of skipping things, take a look at this infographic displaying the huge positive outcome that ‘skipping the bagel’ or daily designer coffee run can have. It’s always interesting to see how small changes can add up long-term, especially when it is as substantial as this!


Getting back on track; the Federal Reserve almost set to raise interest rates (the Fed Funds Rate) next month, consumers could be impacted. If you are buying a home and using an adjustable rate mortgage (ARM) to finance the purchase, those rates will move higher, as ARMs closely follow the Fed Funds Rate. If you are shopping for a home equity loan, those rates will also increase, as will home equity lines of credit. Interest rates on most credit cards and rates on certificates of deposits, money markets, and savings accounts will increase as well.

The Labor Department reported on Friday that U.S. employers added 271,000 new workers in October, well above the 181,000 expected and up from the lower numbers seen in August and September. The report showed hiring across many sectors of the economy. The Unemployment Rate fell to 5 percent, the lowest level since April 2008, just before the Great Recession.

The strong number could push the Fed to raise interest Rates next month at the FOMC meeting.

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Housing news continues to stream in with mixed results as the sector deals with tightening inventories and rising prices. The Federal Housing Finance Agency reported on Tuesday that home prices were up 0.6% in July from June. In the year ended in July, prices were up nearly 6%. The survey is based on home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. The data comes after lower than expected results from Existing and New Home Sales in the past week. The index is 1.1% below its March 2007 peak and is roughly the same as the November 2006 index level.

A recent Harvard University study revealed that renters will continue to struggle for the next decade as an estimated 11% more households will fork over at least half of their incomes in rent in 2025. The study said that renters who pay more than half of their earnings in rent often need federal subsidies to find affordable places to live. One big factor for the recent uptick in renting was that many lost their homes during the Great Recession along with incomes declining. The report went on to say that if rents continue to grow faster than incomes, the number of households in hardship could rise as much as 25%.


U.S. Stock markets continue their roller coaster ride due to uncertainty surrounding the Federal Reserve’s future interest rate hikes. Last week, the Federal Reserve held off from raising its benchmark Fed Funds Rate, which is currently at 0.00% – 0.25%. Markets hate uncertainty, and today’s action sees the Dow Jones Industrial Average down well over 200 points. Yesterday, Atlanta Fed President Dennis Lockhart fueled the uncertainty flames when he said a rate hike later this year was still possible and that the Fed, in recent months, has added to the market instability and needs to refine its communication approach.

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Tax Benefit of Renting vs Buying

Purchasing a new home is one of the biggest financial decisions we can make in life, would you agree? Yet most consumers and most loan officers treat a mortgage like a commodity… the only consideration they make are rates and fees. While rates and fees are certainly important, they are just a component of the loan and what you should consider when choosing a mortgage.

mortgage coach

I invite you to look at me not as a loan officer, but a mortgage planner, and rather than provide you with just a quote, I take a consultative approach, and after learning what your personal and financial goals are, I will provide you several potential solutions and strategies that will help you achieve your short and long-term financial goals.


Click here or on the Mortgage Coach images to view a presentation I’ve put together for a First Time Home Buyer interested in monthly payment savings as well as the tax benefit of purchasing. I put individual presentations together for EVERY one of our clients in order to ensure that they can make an educated and informed decision when making the biggest financial decisions of their lives.

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2014 Five Star Award

I wanted to thank everyone for making this possible! The award is based on realtor and client recognition and means the world to me!

I promise to continue to provide the best possible service; it is my pleasure and my goal to exceed your expectations. Please fee free to contact me anytime with questions or concerns regarding any loan related questions. My cell number is (925) 586-3174 and my email is Kristine.Marr@SummitFunding.net

I cannot thank you all enough for this honor. I promise to return the favor with continued hard work and dedication to all of you.


Market Update 6/24/14

Housing data continued today with the Case Shiller 20-city Home Price Index for April being released showing that prices rose by 10.8% in the year ended in April, which was below the 11.6% that was expected. Home price appreciation has been slipping after the 13.7% year-over-year gain that was recorded in November of last year. A spokesman for Case Shiller said that prices are still on the rise, but at a much slower rate.

The National Association of REALTORS® reported that May Existing Home Sales were up 4.9% from April to an annual rate of 4.89 million units. The 4.9% was the highest monthly rate since the 5.5% recorded in August 2011.


May New Home Sales surged by 18.6% to their fastest pace in six years, as reported by the Census Bureau today. Sales hit a seasonally adjusted annual rate of 504,000, which was well above the 440,000 that was expected. At the end of May, sales were up 0.8% from May 2013. Within the report it revealed that the median price of new homes sold in May was $282,000, up 7% from a year ago.

The Conference Board released its June Consumer Confidence Survey showing that after improving in June, the index also increased in June. The index now stands at 85.2, the highest level since January 2008 when expectations called for 84. Within the report it showed that the employment component increased, while business condition expectations also improved. The Conference Board said that momentum going forward is quite positive.

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Market Update 6/16/14

The manufacturing sector of the economy got a boost in June as the sector expanded more than expected. The New York Manufacturing Index rose to 19.3 and was up significantly for the second consecutive month. Labor markets conditions continued to improve, with indexes pointing to a modest increase in employment levels and hours worked. The forecast for the next six months conveyed a strong degree of optimism about future conditions.

The International Monetary Fund (IMF) reported today that is has lowered U.S. growth for 2014 to 2% from the 2.8% that was previously announced. The IMF cited the harsh winter weather, a still-struggling housing market and weak international demand for U.S. products. The IMF went on to say that job growth has been healthy, but markets are weaker than is implied by the headline unemployment number – long-term unemployment is high, labor force participation is well below what can be explained by demographic factors and wages are stagnant.

Home builders across the country showed some confidence in June for the first time this year, though the sector is still finding its feet after the harsh winter weather slowed construction and sales. The National Association of Home Builders Housing Market Index rose to 49 in June, above the 46 expected and higher than the 45 recorded in May. A reading below 50 means more builders view market conditions as poor than favorable.

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