Mark Tiernan

Friday, 28 March 2008

Numbers Don't Lie: LoanBiz.com Analyzes Correlation Between Federal Funds Rates and Home Mortgage Rates

Reno, NV (PRWEB) March 19, 2008 -- Opinions concerning the impact of the Federal Reserve's most recent rate cut of 0.75% vary widely, even on the Reserve Board itself. LoanBiz.com (http://www.loanbiz.com/), a site focused on providing mortgage industry news, information and consumer education, has analyzed historical interest rate data and offers a comprehensive view of the impact of this rate change on consumers with different mortgage products.

The effect of this recent rate cut (http://www.loanbiz.com/fed-rate-cut.htm), if it follows historical patterns, should impact the following mortgage products differently (http://www.loanbiz.com/fed-rate-cut.htm):

? Fixed-rate mortgages (http://www.loanbiz.com/fixed-rate-loans.htm) -- Fixed-rate mortgage pricing is driven by bond markets, and bond markets are influenced by future expectations of inflation. Cuts in the Federal Funds rate mean an increase in the money supply, meaning more money competing for the same resources can drive up prices. Cuts in the federal funds rate may therefore result in increases to 30-year-fixed mortgage rates.

? Home Equity Loans (http://www.loanbiz.com/home-equity-loans/home-equity-loan-financing.htm) -- Home Equity Loan rates are generally based on the prime rate, and the prime rate almost exactly parallels the Federal Funds rate. Therefore, a decrease in the Federal Funds rate will almost certainly lower the prime rate and thus home equity loan rates.

? Adjustable Rate Mortgages (http://www.loanbiz.com/home-loans/arm-loan-mortgage-primer.htm) (ARMs) -- There is a much higher correlation between the Federal Funds rate and ARM rates. Homeowners facing impending rate resets may find that the cut results in a lower rate than expected; homeowners whose loans have reset in recent years may see a rate reduction at their next adjustment.

Analysis of past mortgage and monetary market data has shown to be a fair predictor of the influence Fed rate changes have on home loan rates. Knowing how changes can affect personal situations may help borrowers and investors in making financing decisions.

Loanbiz.com is the number one source for loan business news, information and consumer education. We provide a wealth of loan information, including loan tutorials, how-to guides, calculators and up-to-date news. LoanBiz.com leverages industry experts, government data and our own industry analysts to bring you the necessary data, articles and calculators to help you make the right decision during your loan product search

Posted by marktiernan at 5:46 AM EDT

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Thursday, 29 November 2007

Mark Tiernan, Real Estate Investment ? Three Ways To Success
If you ever wondered about the most profitable investment avenue, real estate investment comes out tops. Did you know why? As population rises, demand for services and quality living space is bound to grow. Families would look for residences and business would want more offices. Naturally then, owning a piece of real estate would bring higher returns in the form of rental income and capital appreciation over time to beat inflation.

Before you jump at the friendly next-door real estate agent with dreams of cornering a property in the most glamorous district in the city, do your groundwork well. Here are three simple ways to success with real estate investment.

? Determine your time span and budgetary constraints. ? Do a thorough research on the investment. ? Stay motivated to make real estate investment an ongoing habit.

The first step in your attempt to invest in property consists of making a realistic estimate about your finances. You need not save up for the entire value of the property. Even if you decide to purchase a mortgage, the lender would first ask for your financial position. So, calculate your present and potential future earnings, deduct living expenses, payment for other debts and outflows for savings. You can find out the sum you would be ready to pay monthly towards home purchase.

You should calculate the probable number of years for which you could invest in real estate. This puts a dollar value on your capacity to invest and removes ambiguity.

The second step is the most crucial and time-consuming. You must perform a detailed study of the trends in the real estate market. A few rules of thumb are:

? Concentrate your search closer to your area or at least within your state. ? Look for growth potential in upcoming areas. ? Personally inspect the property and the area a couple of times before making the decision. ? Consider areas with good infrastructure as these bring higher rentals.

Investing in real estate should not be a one-off affair. You must imagine property as a component of your investment portfolio. Hence, you must remain an active investor. Keep watching the trend and move out of unprofitable areas to more lucrative ones. Do not be disheartened by the occasional losses. With time and experience, you would make better choices.

Real estate investment calls for careful planning and methodical execution. It is the best way to make your hard-earned money multiply faster and easier. If you did your preparation well, it would be impossible to go wrong.

Joel Teo writes on various financial topics relating to arizona estate goodyear investment real. Signup for his free online Real Estate Investing newsletter today and gain access to the ?Six Day Real Estate Investment Profits Course?

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