CWC Financial Newsletter

CWC Financial

1505 Bridgeway, Suite 121
Sausalito, CA 94965
Local: 415-331-3744
Toll-free: 888 711-5454

U.S. Treasury Bonds

Maturity

Yield

Last
Week

Last
Month

5 Year	4.11	4.02	3.75
10 Year	4.27	4.21	3.98
30 Year	4.46	4.43	4.25

Treasury Market Summary:

Treasuries Get Their 4's On: The market got clobbered on a "quirky" day, as the huge rally of yesterday was erased, a move ignited by a regional report, the impressive print on the Chicago PMI. The market sucked out all the hard won gains going back to May. The 2-years have seen yields boosted to levels last seen July 2001. The 5- and 10-years blasted out over 10 basis points with the 30-years trailing with but 9 and the 2-years a mere 6.6 bps. Along the way the curve flattening tear was also wiped out. Across the 2- through 30-year curve, far as the eye can see, it's nothing but 4-handles (from 2-year yields at 4.015% and 30-years at 4.479%.

Economic Indicators for this week that could impact the mortgage or real estate markets include...

Construction Spending	Aug 1
Auto Sales	Aug 1
Truck Sales	Aug 2
Personal Income	Aug 2
Factory Orders	Aug 2

Property Types

What are the differences between getting a loan for a home you will occupy vs. getting a loan for an investment property? The type of property you are trying to get a loan for has a significant impact on the terms and availability of that loan. If you are a first time home buyer you may be able to get a better deal on a home mortgage than the average home buyer. The federal government offers a variety of programs and grants to first time home buyers. Lenders look favorably on first time home owners for home mortgages because they know it is the first home and that the occupants will strive to take care of the home.

If you are attempting to get a home mortgage for a second home you may not get as favorable treatment from the lending institute you are dealing with. If the home is not going to be your primary residence, the lender will see this as a bad sign because you do not have as much of an incentive to not default on the loan. If the property is not your primary property, a home mortgage will probably carry a higher rate. You will also miss out on the opportunity to take advantage of the first time home buyer programs offered by the federal government.

Types of Properties

First Home

Federal governments programs and grants are available, generally can get a lower rate.

Second Home

Generally will carry a slightly higher mortgage rate since it is not your primary residence, unless you can prove that you will occupy the home.

Investment Property

To qualify for certain investment property loans, it helps to be in the rental business for 2 years to get a fixed rate. If you have not been in business for 2 years, you may need to do an ARM. Investment property also carries a higher interest rate.

Another type of property that loans are issued for are investment properties. These mortgages generally carry higher interest rates than owner-occupied home mortgages. The main reason for this is that the borrower is not living in the property, and there is not as much of an incentive to maintain the home at its current condition. This makes the lender a little wary when it comes to lending the money. If you have not been in the rental business for more than two years, you may get an even higher rate, or be forced to use an ARM.

Note, commercial loans are not the same as investment property loans. Commercial loans apply to properties with more than 4 units, while investment property loans apply to properties with 4 or less units.

One should consult with a qualified mortgage professional prior to implementing any mortgage strategies.

If you are a tax, insurance, financial or insurance planning professional receiving this newsletter, please call our office and introduce yourself to us. We are always seeking to grow our referral network and expose more service professionals to our client base.