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Market Commentary 2/10/17

Posted on February 10, 2017 by Damon Germanides

Bonds yields are higher in response to continued positive trading in the U.S. stock market with all major indexes at record and or above record levels. Also, the announcement by Trump of “big league” tax reform juiced the equity markets yesterday and resulted in a sell-off in bonds which continued into today. If Wall Street responds positively to Trump’s tax policies when announced in a couple of weeks, then interest rates will rise. We have yet to see how effectively the Trump administration will implement new tax policies. However, the stock market continues to trade positively in response to Trump’s stated economic policies at the expense of bonds.

Given that rates are still very attractive, and banks’ loan origination volumes are slow, which typically results in tighter profit margin on loans, we remain biased to locking in interest rates at these levels.

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These are the opinions of the author. For financial advice, please talk to your CPA or financial professional.

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(1) Disclosures

(1) No Tax Return loans and foreign national loan products require other forms of income documentation and asset verification in lieu of tax returns. Not all applicants will qualify. Some products we oﬀer may have a higher interest rate, more points or more fees than other products requiring more extensive or different documentation. (2) Minimum FICO, reserve, and other requirements apply. Contact your loan officer for additional program guidelines, restrictions, and eligibility requirements. Rates, points, APRs and programs are subject to change without notice. Loan to values (LTV) are based on appraised value. Actual closing times will vary based on borrower qualiﬁcations and loan terms. All loans are subject to credit approval. (3) With an interest-only mortgage payment, you will not pay down the loan's principal balance during the interest-only period. Once the interest-only period ends, your payments will increase to pay back the principal and interest. Rates are subject to increase over the life of the loan. Contact your Insignia Mortgage, Inc. loan officer to determine what your payments might be once the interest-only period ends. (4) With an adjustable rate mortgage (ARM), once the fixed rate period ends, the loan payment will adjust after an initial period and then adjust on a regular basis as set forth in the loan documents. For example, a “3/1” loan will have an interest adjustment 3 years after the loan closes and every 12 months thereafter. Also, the loan will be subject to annual and lifetime adjustment caps. Contact your Insignia Mortgage loan officer to determine what your payments might be once the fixed rate period of the loan ends. (5) Insignia Mortgage, Inc., is a real estate broker licensed by the CA Bureau of Real Estate, DRE #01969620, NMLS #1277691

(2) Disclosures

(1) Minimum FICO, reserve, and other requirements apply. Contact your loan officer for additional program guidelines, restrictions, and eligibility requirements. Rates, points, APRs and programs are subject to change without notice. Actual closing times will vary based on borrower qualiﬁcations and loan terms. All loans are subject to credit approval. (2) “Loan to Cost” (LTC) is defined as the acquisition price of the property plus the cost to build as determined by a bank appraisal. Contact your loan officer for additional program guidelines, restrictions, and eligibility requirements. (3) With an interest-only mortgage payment, you will not pay down the loan's principal balance during the interest-only period. Once the interest-only period ends, your payments will increase to pay back the principal and interest. Rates are subject to increase over the life of the loan. Contact your Insignia Mortgage, Inc. loan officer to determine what your payments might be once the interest-only period ends. (4) With an adjustable rate mortgage (ARM), the loan payment will adjust after an initial period and then adjust on a regular basis as set forth in the loan documents. For example, a “3/1” loan will have an interest adjustment 3 years after the loan closes and every 12 months thereafter. Also, the loan will be subject to annual and lifetime adjustment caps. Contact your Insignia Mortgage loan officer to determine what your payments might be once the fixed rate period of the loan ends. (5) Insignia Mortgage, Inc., is a real estate broker licensed by the CA Bureau of Real Estate, DRE #01969620, NMLS #1277691.