Mortgages Hit By Bernanke Rumor

Markets opened flat but bonds dropped like a rock when it was floated that Ben Bernanke would become the next Fed Chair.  This is how screwed up the markets are.  We have a rumor that Bernanke will be named to replace Greenspan, and since he is a Greenspan disciple, the bond markets take this as a bad sign.

So much for Greenspan’s reputation as an inflation-fighter.

The stock market is behaving healthily, though, so the news is not uniformly bad.

Let’s look at the current market situation in real-estate and mortgages as it affects Joe Sixpack:

If you have a 30-year fixed loan at 7% or higher, you probably ought to look at refinancing.

If you have an ARM with 2 years or less to run, you definitely should look at refinancing.

If you have an option ARM, fully variable loan, depending on your prepay penalty you ought to check into moving to a fixed rate.

If you are thinking of buying a house in the next year, the time to start looking is right now.  House prices tend to fall through the winter and rise in the spring.

If you are an investor looking to realize $20,000 or more profit in the next year, your best bet in Utah at the moment is to build a house in the $250,000 range.

Currently, rates for verified-income, owner-occupied properties are 6.125% on a 30-year fixed, 5.375% on a 15-year fixed, 5.875% on a 5/1 ARM, and we’re not even discussing other options except under duress.  Construction financing, however, is easier than ever to get and requires no payments during the construction phase.  We have a couple of no-down construction investors that can get you digging in around two weeks.  That’s the hottest part of the market right at the moment.

Predictions for the weekend were mixed.  Harriet Miers did not withdraw, which I’m just telling you right now is a mistake, and the Broncos actually lost on the last play of the game.  Texas did beat Texas Tech, but by way more than 14, and they trailed in the first quarter, CSU did win the Border War, but not by a field goal, BYU did lose to Notre Dame, but by 26, not by a special-teams play, and the Colts won big, but only by 18, not 28.

The White Sox won both home games.  That one was right on.

On Saturday night we watched Roberto Benigni’s masterpiece La Vita é Bella, which I wholeheartedly recommend to anyone with a soul.  I’ve been reading a lot recently about Hungary in World War II, which might have been the worst place on earth to be.  The Hungarians started as part of the Axis, then tried to make peace in 1943, had to fight the Germans to keep from being occupied in 1944, lost, then had to fight the Russians to keep from being occupied in 1945, and lost again.  The Swiss Delegation reports that Budapest was hit harder than Stalingrad.

Oh, humanity.  What a rare thing it is.