MAKING EXTRA MORTGAGE PAYMENTS CAN “MAKE YOU RICH!!”

Do you want to pay off your mortgage sooner? Whether you've bought a home recently or you've been paying your mortgage for a while, making extra mortgage payments is a smart way to save money over the long term.

Your motivation for making as many payments within your spending limits as possible is knowing you'll be able to pay off your mortgage faster and bask in your return on investment sooner. In addition to taking years of interest off your loan, you'll also end up making fewer payments at lower prices over time.



How to Make Extra Mortgage Payments



Write down your mortgage value, your interest rate and the number of years you have to pay your loan; once you see the savings you'll make in the next few decades with these three tips, you'll want to start making extra mortgage payments today.

Add a Small Dollar Amount Each Month. Commit to adding a small amount of money like $10 or $25 (OR HOPEFULLY MORE!) to your mortgage payment every month. You won't notice the difference, and you'll also decrease the number of months you spend paying your mortgage while saving money in the long run.

Make Lump-sum Payments Sooner Rather Than Later. Carry out larger, extra mortgage payments in the first few years of your mortgage term to pay more now and save a lot in the long term. You'll make an immense dent in the overall amount you contribute to your loan and avoid paying many tens of thousands of dollars in interest.

Because making one or more extra mortgage payments per year can help tremendously, keep these examples and tips in mind as you review your budget, set your goals and start saving.

Cutting back on spending and putting effort into these additional payments will be worth it once you've finished paying off your mortgage and saved thousands of dollars along the way.

I HAVE AN AWESOME (AND VERY SIMPLE) SPREADSHEET I CAN EMAIL YOU THAT WILL ALLOW YOU TO TRACK YOUR PROGRESS. I PROMISE IT WILL BA A REAL EYE-OPENER!!

Hope you have a great weekend and please call me if I can help you with anything at all.

Ken

951-760-3833

KenAHall@gmail.com

BRE 01418440

P.S. Shoot me an email now before you forget and I'll send you the 'Interest Savings Tracking Spreadsheet.'

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Time to Take a Victory Lap!

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My months-long ongoing thesis of falling mortgage interest rates is coming true!  

The yield on the 10-year note has broken through support and now rests at a year-to-date low of 2.26%.  

As the 10-year correlates strongly with mortgage rates, I'm happy to report Mortgage rates are also at their lowest all year!

Give me a call if I can help you with anything at all.

Ken
951-760-3833

KenAHall@gmail.com

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LOWER MORTGAGE INTEREST RATES MAY BE JUST DAYS AWAY!

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This coming Friday, April 7th could quite possibly be 'D-Day' for the next leg down for Mortgage Interest Rates.

I don't want to get all technical but in basic terms ... here's the skinny:

Check out this chart and focus on the straight horizontal green line that shows what is called a 'support level' for the 10-Yr Treasury Bond.

Right now it's at about 2.31 and as you can see, the previous four times it touched that level it bounced right off of it and went back up quickly.

The 'Jobs Report' will be released this Friday. If it disappoints (I think it might), then we could likely see this 'support level' give way ... and if that happens ... we could see mortgage interest rates drop below 4% in a matter of days.

We shall See. Stay tuned!!

Give me a call if I can help you in any way.

Ken
951-760-3833

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Am I Crazy for Staying With My Thesis On Even Lower Interest Rates?

I know it's hard to imagine that interest rates could go down. I talk to clients every day who are – based on the news – getting nervous about interest rates going up before they're able to buy a property.

Every Realtor I know is practically brow-beating their prospective home buyer clients to, “HURRY, HURRY, HURRY! YOU NEED TO BUY NOW! INTEREST RATES ARE GOING UP.”

The problem is: They really don't understand the true relationship between short-term interest rates and longer-term interest rates!

Here are the facts …

The benchmark interest rate has fallen from 2.64% on March 13… to 2.37%, as I write. (The "benchmark" interest rate is the interest rate on the 10-year U.S. government bond.)

A fall from 2.64% to 2.37% is a MASSIVE decline in a little more than two weeks … So what's going on?

Here's what we're seeing right now …

Bets on higher interest rates have hit an all-time extreme, based on one of my favorite sentiment measures – the Commitment of Traders (COT) report… It shows the real-money bets of futures traders in dozens of markets.

Like most sentiment measures, the COT report tends to be "wrong at the extremes and right in between"… but here's the thing:

Futures traders tend to pile into a trade at the worst possible time.

Recently, the bets on the benchmark 10-year Treasury bond in the futures markets hit never-before-seen levels. Take a look:

Futures traders are bullish… more bullish than they've ever been. That tells me this is a 'crowded trade.' And crowded trades oftentimes experience the opposite result of what everyone is betting on!

So what could this mean for interest rates today? To find out, I looked at what happened at previous record highs.

I found that bets neared this extreme level only once before – in March 2005.

Back then, interest rates on the 10-year Treasury bond dropped from 4.6% to 3.9% in less than three months. Here's what happened…

The Fed was in the middle of raising short-term interest rates from 1% in 2004 to 5.25% in 2006. In 2005, futures traders thought it was easy money to bet on long-term rates going up too. They were wrong!

This is not a long-term prediction on interest rates. It is a short-term prediction. In three or four months from now, I'll look at it again to make my next prediction.

Bottom line is, I wanted to share a great example – historical proof, if you will – of what typically happens when investors are "all in" on one side of a trade… In short, you don't want to join them!

We're seeing a lot of parallels to 2005… Back then, the Fed was in the middle of RAISING short-term interest rates. Meanwhile, long-term interest rates shocked everyone and started falling.

That's exactly what we're seeing today…

Nobody believed long-term interest rates could fall while the Fed was raising interest rates… They didn't believe it in 2005. And they don't believe it now.

As for me?  I BELIEVE!

Give me a call if I can help you with anything at all.

Ken

951-760-3833

KenAHall@gmail.com

Temecula's Unemployment Rate Drops to New Low

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More positive economic news for Temecula:  

An uptick in hiring pushed the unemployment rate down in Riverside County last month, state officials report. Locally, Temecula also saw a decrease in its unemployment rate.

The jobless rate in February, based on preliminary estimates, was 5.5 percent, compared to 5.7 percent in January, according to the California Employment Development Department.

State preliminary estimates also show that Temecula's rate dropped, to 3.9 percent, compared to 4.1 percent in January.

Hope you have a great weekend and please call me if I can help you with anything at all.

Ken

951-760-3833

KenAHall@gmail.com

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Why U.S. Interest Rates Can Go Even LOWER

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More thoughts on my hypothesis that U.S. interest rates could still go lower ... 

Interest rates in Germany are -0.94% as I write. 

Read that closely – that's a NEGATIVE number – roughly negative 1%. 

Said another way, you will "earn" -0.94% interest per year over two years in Germany today. 

I put "earn" in quotes because you will actually lose that money each year. It's negative interest. By buying two-year government bonds in Germany, you are guaranteeing that you will lose roughly 1% a year in "interest." 

What's going on? 

Lots of things… But it primarily comes down to the basics: supply and demand. 

There is no supply, and there is lots of demand… 

On the demand side, the French are buying German bonds to get money away from the uncertainty around France's presidential election. And the European Central Bank must buy 80 billion euros' worth of German bonds by year-end. There's plenty of demand. 

Meanwhile, the Germans aren't increasing supply to meet this demand… So we have this extreme negative yield. 

It's not just Germany, though… 

In Japan, the two-year government bond "pays" -0.28% interest. Again, "pays" is in quotes because it's a negative interest rate – you are guaranteed to lose money by putting your money away for two years in Japan. 

In the U.S., the story is different… You still earn a positive return on your money (1.16%) if you put it away for two years. 

Here's what you need to know: Outside of the U.S., Japan and Germany are the world's largest developed economies. 

As an investor, you have to make a choice… Here are your basic choices: 

Your goal is to deliver income… and to keep your job. All things being equal, which of these three investments would you choose? 

Given these (basic) choices, you would choose to invest in the U.S. 

Here's the thing, though: A lot of money managers will make this choice this year. 

Money managers choosing to put money into interest-earning U.S. investments creates demand. Demand for interest-earning products in the U.S. will push U.S. interest rates down. 

I'm not talking about ultra-short-term interest rates, like the interest rates that the Federal Reserve sets. I'm talking about interest rates that are set by market forces… which usually means interest rates for two years or longer (like your mortgage). 

Yes, my friend, interest rates in the U.S. are very low… You will earn just 1.16% per year if you put your money away for two years. 

But when you look at the world's other two developed markets, it's clear that U.S. interest rates have plenty of room to fall, as investors flee those countries and seek the higher rates that the U.S. offers. 

Long-term interest rates here in the U.S. are low… But in my opinion, they could surprise everyone and go even lower.

And that means home owners and home buyers may soon have the opportunity to lock in a 30-year fixed rate mortgage below 3%!!!

We are definitely living in bizarre and incredible times!

Give me a call if I can help you in any way.


On Your Team,

Ken
951-760-3833
KenAHall@gmail.com

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Quote I'm Pondering:

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"There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle."

- Albert Einstein