Historically Low Rates

Mortgages in Greenville, NC - Last week the US Treasury discussed purchasing mortgage loans from Fannie Mae, Freddie Mac and the Federal Housing Administration in an effort to push mortgage rates to 4.5%. At first, I thought it was just a rumor, but after further investigation, it looks like this is real possiblity.

As a reaction to the hype and open media discussion on the rates hitting 4.5%, rates actually dropped below 5% in the ladder part of last week, almost reaching 4.5%.

I'm not a economist by any stretch of the imagination, but I really believe that we'll see rates hit 4.5% on 30 year fixed and possibly lower. Low mortgage rates won't fix the US economy, but it's a much more tangible benefit to the average US family than a drop in the Fed Funds Rate. For this reason, I believe that the US treasury will follow through with the plans to purchase mortgage debt and effective drive interest rates to their lowest rates is US History!

The BIG "D" - Deflation!!

Mortgages in Greenville, NC - Yesterday, the Federal Reserve indicated that our economy is showing signs of deflation. This means that the average price of goods may be going down instead of up. The market has reacted by moving money from the stock market into the bond market. Generally, this would be a good thing for mortgage rates, causing them to drop. However, if you follow mortgage rates, you've seen that we haven't seen a significant change in rates. The reason is that investors still don't have a high level of confidence in mortgage bonds. The charts below show the 10 year T-Bill rates as well as the FNMA bond prices over the past 3 months. The first chart shows how T-Bill rates have significantly dropped over the past week. The 2nd chart shows the price of the FNMA 6% 30 year bonds. (Bond prices move inversely to the rates) As you can see, the FNMA Bond has stayed fairly flat. Hopefully, as investors gain confidence in mortgage bonds, more people will buy them causing rates to drop.

No change to Conforming Loan Limits

GREENVILLE, NC - On Friday, November 7th, the Federal Housing Finance Agency announced that the Conforming limits will remain unchanged for 2009. Click on the link below for more detailed information:

2009 Conforming Loan Limits

Call me if you have any questions about how this will effect you or your clients!

Mortgages in Greenville, NC

Mortgage Market Guide

GREENVILLE, NC - This week, I'd like to let everyone know about the newest tool that I have as a mortgage loan officer that helps me provide superior service to my clients. It's called Mortgage Market Guide. Everyday, I receive a market update informing me of what's going on in the market and what it's effect will be on the mortgage rates. I get weekly marketing tips and ideas on how to improve my business and the business of those I work with.


Probably the best service that they provide is up to the minute mortgage bond quotes and charts. This allows me to see what is going on with mortgage bonds how those changes are immediately effecting the interest rates. This allows me to give the best and most educated advice to my customers on whether now is a good time to lock their rate or not. It's not a crystal ball, but it's about as close as one can hope to get! Below is a sample chart showing how mortgage bonds have been trading over the past quarter. Obviously, there's been a lot of fluctuation recently.


Feel free to call or email me if you have questions about how these bonds effect the mortgage rates and how this could effect you as a borrower.



(Mortgages in Greenville, NC)

Stability of My Bank

RBC Bank Stability



GREENVILLE, NC - When considering who you want to handle your mortgage financing, please consider the following information!!



Why RBC, Why Now?

RBC is consistently named one of the safest banks in North America.

RBC is currently the 5th largest financial institution in North America.

RBC has been named one of the Global 100 Most Sustainable Corporations for the past 4 years.

RBC has over 70,000 employees serving more than 16 million clients in 47 countries.

RBC Financial Group has generated $3.4 billion in earnings this year.

As a whole, RBC Financial Group is less exposed to the U.S. housing crisis than large U.S. and European banks.

RBC Bank and its parent corporation have among the highest debt ratings in the industry according to ratings agencies Moody’s and S&P.

* Moody’s Investors Service credit rating on RBC’s senior long-term debt.

Choosing a Bank

Sometimes you think you’re ready for a change. Who knows? Maybe you’ll get better interest rates on CDs or home equity lines of credit. Maybe you’ll qualify for the platinum credit card. Maybe you’ll get better service or a friendlier banker than you have today. The key word is “Maybe”.

Lots of banks promise to give you the best service, better rates on both loans and deposits, and a great overall banking experience. But before you decide to leave your bank because the ‘grass is greener’ somewhere else, be sure to consider the following questions:

• Does the bank have a strong and stable financial history?


• Is it consistently profitable?


• Is the bank’s stock price stable or volatile?


• How do impartial rating firms like Standard & Poor's or Moody’s view the bank?


• When you apply for a loan, how quickly does the bank get you an answer?


• Does the bank offer a personal relationship? – Is there someone you can call or visit whenever you need?

RBC Bank offers a full suite of banking solutions designed to help you achieve whatever is giant in your life or business. And because we’re part of RBC – consistently recognized as one of North America’s largest, safest, and most respected financial institutions – we deliver a broad array of services and the peace of mind that comes with knowing your bank is financially sound. And the best part? We do all this with the personal service, local decision making, and practical advice of your hometown bank.

(Clay Brown is a Mortgage Loan Officer in Greenville, NC)

Own vs. Rent

Renters Have Much to Gain by Pursuing Home Ownership
By: Clay Brown, Mortgage Loan Officer @ RBC Bank

Greenville, NC – Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages.

Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage payment.

The numbers are staggering if you look at it this way. If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over the next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when the property value goes up!

However, if you were to purchase your own home or condominium, you would be well on your way toward building equity within that same five-year period. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up. In fact, you would have the option of refinancing to a lower interest rate at some point in the future should interest rates drop, and this would cause your monthly mortgage commitment to go down.

In addition to building equity, there are tax advantages that come into play with home ownership. Depending on your tax bracket, owning a home is often less expensive than renting after taxes. Interest payments on a mortgage below $1 million are tax-deductible, and your mortgage consultant should help you evaluate the tax advantages of various loan scenarios, and share this information with your tax consultant to glean feedback on your behalf.

To find the loan program that is right for you, your mortgage consultant will need to evaluate your monthly household income, current assets and savings, as well as any monthly obligations you may have for credit card payments, car payments, child support, etc. These prequalification factors, along with the report of your credit score, will determine how much house you can afford and what interest rate you will pay for financing. It is also important to let your mortgage consultant know what your future goals are, because this will help narrow down which loan option is the best fit for your long-term needs.

There are many different types of loan programs available, including “low” and “no” down payment mortgage programs. These types of programs require the borrower to provide less than 3 percent of the loan amount as down payment. FHA lenders rule that the mortgage payment, including principal, interest, taxes and insurance (PITI) should not exceed 31 percent of your gross income, and the PITI plus other long-term debt (car payments, etc.) should not exceed 43 percent of your gross income.

Housing is an expense that takes a big bite out of the monthly budget. If you are a renter and feel that “home” is more than just someplace to hang your hat, think about the advantages of purchasing real estate. It may be time to take the step into building your personal net worth as a home owner.

SUBMITTED BY: Clay Brown
PHONE: 252-551-7828
FAX: 252-551-7827
EMAIL: clay.brown@RBC.com