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January 2004
Dear “Mortgage Family Member”,
The stock market keeps going higher and higher and higher and higher. GREAT, Right. Portfolio’s are growing, 401k’s are going up again. It feels so good. Me, I’m in CASH. I smell irrational exuberance, again. Yahoo Inc. went from $15 per share to $50 per share. WHY? People want to believe. George Bush wants you to believe. The government wants you to spend money. The government wants you to invest your extra money in the stock markets. Your government is so desperate to keep this economy rocking it is spending, spending, spending (no concern for a balanced budget) and lowering taxes all at the same time. It feels so good. The result, the government hopes, will be more jobs so in the future the government will collect more in taxes. Makes sense. Problem ¼The money has been spent, but no jobs. Without jobs no recovery. On Friday, 1/9, the employment report was projected to show the creation of 150,000 new jobs. Actual number was 1,000. Not Good. Be careful with your investments. The upside to all of this is the cost of money. Interest rates will stay low and hopefully go lower.
30 year fixed- 5.625% 15 year fixed- 5.00% 5 year fixed- 4.375% 7 year fixed- 4.875%
I’m getting married in June. Beth from Tampa is the lucky girl. Beth hails from Michigan but has lived in Tampa for 8 years. Beth has 2 children, Jamie, 10 years old and Nathan, 6 years old. Who is this mystery woman and why marry again¼I’m in love and it keeps getting better and better, deeper and deeper. I can only wish all of you the happiness I found since Beth and I started dating.
New Program
Most of you know, that I offer a No Closing Cost Mortgage option. Now, in addition, I am offering a mortgage with a $995 Closing Cost option. The billboard going up in January on U.S. 19 near Tampa Road will make this announcement. Instead of spending 3 to 5 thousand dollars to obtain your new mortgage, we will offer one where the total cost will be $995 (Loan must be over $100,00). The trade off for the lower costs will be an interest rate that is about .375% higher than it would be if you paid the higher costs.
For example: Loan amount $150,000, closing costs around $3,200, interest rate is 5.75%. Instead interest rate will be 6.125%. Therefore you will be paying $46.88 more per month than you would be if you paid the full closing costs. The $46.88 difference is tax deductible. If you are in the 28% tax bracket, the higher rate will cost you net $33.75 more than the lower rate loan would. If you divide the saving of $2205 ($3,200 -$995) by $33.75, you get a break even of 65.33 months. If you only own your house for 2-3 years you certainly wouldn’t want to pay the extra $2,205 to save $33.75 per month. Also, if you think you might be refinancing in 1-2 years why not save the $2,205? Fixed Mortgage Package pricing is coming soon anyway, so we decided to introduce the $995 option now.
Business is slow right now, so please refer anyone you know to us for a mortgage. I would appreciate that very much. Also remember, I am beginning to act as a Realtor more and more, so call me with your Real Estate needs as well.
Stay warm. Keep your investments diversified.
Respectfully submitted,
Stan “The Mortgage Man”
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Mortgage Co., Inc.