And the winner is…Stephan Metzger! Congratulations on winning our “Make Your Own Pizza Kit”!

Our next newsletter will hit your inboxes in April with informative articles and another chance to win a great prize. If you are not currently on our quarterly e-newsletter list and would like to be added, please email your Mortgage Advisor or info@perlmortgage.com to be added.

Here’s the 2009 winter news brainteaser and answer:

Question: At the end of a banquet, 10 people shake hands. Every person shakes hands with each other once. How many total handshakes are exchanged?

Answer: 45

It’s that time again! Email your answer to the brainteaser below, and you’ll be entered in our drawing to win a Make Your Own Pizza Gift Set! The winner will be drawn on February 2nd!

At the end of a banquet, 10 people shake hands. Every person shakes hands with each other once. How many total handshakes are exchanged?

A. 100
B. 20
C. 45
D. 50
E. 90

Email your response to: contests@perlmortgage.com

In today’s financial climate, everyone’s becoming more informed about our nation’s markets and economic indicators. The following information will help you understand a few key factors that affect the movement of certain elements in the mortgage market.

The Federal Funds Rate is the primary tool used by the Federal Open Market Committee to influence interest rates and the economy.  Changes in the Fed Funds Rate influence the borrowing costs of banks in the overnight lending market, and subsequently the returns offered on bank deposit products such as Certificates of Deposit, Savings Accounts, and Money Market Accounts.

Changes in the Fed Funds Rate and the discount rate also dictate changes in the Wall Street Journal Prime rate.

The Prime rate is the underlying index for most credit cards, home equity loans & lines of credit, auto loans, and personal loans.  Many small business loans are also tied to the Prime rate.

Mortgage Backed Securities (MBS) are used by lenders to price rates on mortgages.  Historically, the 10-year Treasury Bonds moved in the same direction as MBS — but mortgage rates are not tied directly to the 10-Year Treasury or the Prime rate.  They’re tied directly to the FNMA benchmark coupon.

The “Market Data” section of Bloomberg.com provides a great daily indicator of real time market movement — and your PERL advisor is always available to give you up-to-the-minute financial data.

For more information on mortgage-related topics, tune-in to the new PERL Mortgage Podcast at perlmortgage.com.

Click here to download a printable version of the Winter 2009 Newsletter.

© Copyright 2008 PERL Mortgage, Inc.

What can we expect to see in the new year? Will home values rise? Will foreclosure rates drop? Will the cloud over the declining market finally lift?

Looking into the future is complicated, and even the best predictions can be flawed. But by analyzing the past and identifying future challenges, we can take a stab at forecasting what 2009 may bring.

Home Prices
Analysts don’t expect a rise in home prices until the later part of 2009, when buyers will benefit from rock bottom pricing and low interest rates.

Lending Guidelines
Banks will maintain strict lending practices. While putting 20% down for a home purchase used to be the gold standard, it’s now moving to the silver or bronze category. Lenders will continue to offer better rates for loans carrying less than 60% of the value of the property. Good credit used to be definied as “620 and above.” Now it’s closer to 720, with incentives beginning above 740.

Advice for Sellers
Wait it out. The 2010 real estate market should be stronger, with fewer homes clogging the market.

Highlight your home. Sellers face tough competition from fellow homeowners, but even more from banks and builders, who are slashing prices to sell new and foreclosed homes. Make sure your home is move-in ready by showcasing unique features, especially those uncommon in new constructions.

Price below market. Talk to your realtor about the value of your home and recent sales in your area, and then price your house 5% below that amount. In a study completed by a New Jersey appraiser (c/o Money Magazine), lower-priced homes had greater exposure and sold for more than those priced above market.

Advice for Buyers
Look for homes that have been sitting around. Beautiful homes linger in the market for over six months, especially in areas with an abundance of new developments. Check-out properties that have been on the market for over 90 days. Chances are, sellers are willing to negotiate.

Bargain. Offer less money right out of the gate. Offering 13% below the seller’s price may be good place to start.

Improve your credit. Lenders charge fees for clients outside of the 720+ credit tier. A boost of 40 points on your FICO score can reduce your mortgage interest rate by as much as a quarter of a point.

The best way to forecast your own financial future is with the help of your mortgage expert. I can review your individual scenario and help you plan for the new year and I look forward to helping you exceed your 2009 goals!

Click here for a printable version of the Winter 2009 Newsletter.

© Copyright 2008 PERL Mortgage, Inc.