If you’ve been watching the economic news, you’ve probably noticed that market experts and traders have been keeping a close eye on the Commerce Department’s Personal Spending and Personal Income reports. Obviously, those reports provide insight into the health of our economy, but did you know they also influence home loan rates? That’s right, personal spending can actually influence the interest rates that are available when you purchase or refinance a home.
Here's why. It has to do with something called the velocity of money. Even though the government keeps pumping money into the system, nothing happens until that money is spent or lent – and passes from one hand to another or one business to another. The speed at which this money passes between parties is called the velocity of money.
With the job market still very sluggish, consumers aren't spending much money these days, and businesses are still reluctant to spend money to make investments in their business. With the present velocity at low levels, inflation remains subdued and that's good for home loan rates. That's because rates are tied to Mortgage Bonds and inflation is the archenemy of Bonds, so low inflation is good for Bonds and rates. However, once velocity increases, the excess money in the system will cause inflation – which is bad for rates, since even the slightest scent of inflation can cause home loan rates to worsen.
While we certainly want to see better economic recovery news in the near future, we have to remember that there's an inverse relationship between good economic news and Bonds and home loan rates. Weak economic news normally causes money to flow out of Stocks and into Bonds, which helps Bonds and home loan rates improve. Strong economic news, on the other hand, normally has the opposite result.
Currently, home loan rates are near historically low level, but that situation won’t last forever. That means now is an ideal time to purchase a home or refinance before the velocity of money – and rates – change. If you or anyone you know would like to learn more about the current economic situation and how to take advantage of historically low home loan rates, then please contact me.
Hall Lending group was created with one mission in mind, to provide customers with the best mortgage services,interest rates, and loan programs available. We care more than just about your home mortgage loan. We take pride in being professional, efficient, caring people. Our staff possesses a thorough knowledge of rates, loan products, and lenders programs. We use this information to structure a loan that will give you the mortgage that you deserve.
Thursday, February 3, 2011
Tax Deadline Extended!
There's great news for last minute tax filers! You'll have a few extra days to file your taxes this year...thanks to a little known Washington D.C. holiday called Emancipation Day, which celebrates the freeing of slaves in the district.
Though Emancipation Day actually falls on Saturday, April 16, it will be officially observed on Friday, April 15 this year. And since the tax code says that filing deadlines can't fall on Saturdays, Sundays, or holidays, that means your tax filing isn't due until Monday, April 18, 2011.
As always, the most important thing is to file your tax return on time, even if you can't pay your bill. The IRS charges some pretty hefty penalties for filing late: generally 5% per month or up to 25% of the total tax amount due. And that doesn't even factor in interest charges, which the IRS changes quarterly and range between 4% and 9%.
Albert Einstein once noted that, "The hardest thing in the world to understand is income tax." And with all the changes that happen in the tax code each year, it's easy to see why he said so! If you have any questions about your taxes, your best bet is to talk to a CPA or tax professional. Let me know if I can refer someone to you, or if I can answer any questions at all that you may have about your mortgage. I'm always happy to help you however I can in achieving your short- and long-term financial goals.
Sincerely,
Hope Hall
Hall Lending Group
Phone: 319-899-3820
hope@HallLendingGroup.com
NMLS # 3938
Though Emancipation Day actually falls on Saturday, April 16, it will be officially observed on Friday, April 15 this year. And since the tax code says that filing deadlines can't fall on Saturdays, Sundays, or holidays, that means your tax filing isn't due until Monday, April 18, 2011.
As always, the most important thing is to file your tax return on time, even if you can't pay your bill. The IRS charges some pretty hefty penalties for filing late: generally 5% per month or up to 25% of the total tax amount due. And that doesn't even factor in interest charges, which the IRS changes quarterly and range between 4% and 9%.
Albert Einstein once noted that, "The hardest thing in the world to understand is income tax." And with all the changes that happen in the tax code each year, it's easy to see why he said so! If you have any questions about your taxes, your best bet is to talk to a CPA or tax professional. Let me know if I can refer someone to you, or if I can answer any questions at all that you may have about your mortgage. I'm always happy to help you however I can in achieving your short- and long-term financial goals.
Sincerely,
Hope Hall
Hall Lending Group
Phone: 319-899-3820
hope@HallLendingGroup.com
NMLS # 3938
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