BIG POINTS WERE SCORED FOR THE ECONOMY last week, as Friday morning’s Jobs Report came in far stronger than expected. This news, along with the slate of other positive economic reports of last week, caused mortgage bonds to drop by about 50 basis points over the course of the week, loosely translating into a .125% increase in mortgage interest rates. Friday’s Jobs Report not only included a strong upside surprise for October’s job creations; it also included a surprisingly stronger upward revision of September’s numbers. Critics skeptical of the economic recovery had pointed to the lack of new job creations as a reason for their disbelief. But the strong jobs data and revisions appear to have silenced the sideline chatter, confirming that the US economy is strong enough to produce jobs, and the economic recovery is well on its way!

724 or 619, maybe somewhere in between? So…what’s your score, and what does it mean to you? Maybe nothing yet, but be sure to check out this week’s Mortgage Market View to learn the real deal about credit scoring and the surprising ways that it can impact your financial game plan. PLUS – Learn how to find out your own credit scores, how to boost your numbers, and get a copy of the report that drives it all...

The bond market will be closed on Tuesday, so Monday’s bond market action may be light due to traders heading out early on Monday afternoon or helping themselves to a 4 day weekend. Light trading can often cause volatility in the markets, but no real “meat and potato” economic reports will be coming into play until Thursday.

Let’s take a look at what’s on the boards for this week. First, remember that what is good for the economy and stock market tends to be bad for the bond market and mortgage interest rates. Thursday brings the Initial Jobless Claims Report, which could be under special scrutiny because of the tremendous Jobs Report numbers of last week. Tech bellwether Dell is also due to report earnings on Thursday morning, so this day could have some interesting action. Friday brings a few heavyweights onto the field, including Retail Sales numbers and several key manufacturing reports.

Both stocks and bonds exhibited uncertainty towards the close of last week; however there is momentum for continued positive economic reports. So it is expected that mortgage interest rates should be stable to slightly higher for the coming week.

Do you know the score? More importantly, do you know your own score and how to improve it? You have probably heard of credit scores, and that they bear an impact on most of your financial world, including interest rates and limits on credit cards, auto loans and home loans, even affecting the cost of your car insurance premiums. What you may not know is that very simple, seemingly innocent actions may impact your credit score in surprising ways. Taking out a car loan could cause your credit card interest rate to double! Missing a student loan payment could cause your auto insurer to deny your policy renewal! What can you do to protect your score, and even ramp it up? A few quick tips:

• Keep your credit card balances under 50% of the limit on the card. Many people believe that a low limit will translate into improved credit, but not generally so. It is better to have a $5000 balance on a card with a $10,000 limit, than a $3900 balance on a card with a $4000 limit. Therefore, increasing limits on your cards without increasing your balance will actually improve your credit score.
• Think twice about closing out credit card accounts, even if they are inactive or infrequently used. Many will think that closing out accounts will have a positive impact on their credit score…this is not true! Even long-dormant accounts will figure positively toward your history, and the extra available credit won’t hurt your score either.
• Be cautious of certain types of inquiries to your credit. Most consumers are aware that extra checks into your credit history may cause your score to drop. This is due to the appearance of a consumer looking to take on extra debt. But did you know that even multiple inquiries for a mortgage will not hurt your score any more than just one inquiry, so long as they are within the same 30 day period?

Get a copy of your score from each of the three credit bureaus (Equifax, Experian and TransUnion) along with a copy of your report. You can obtain this information through www.myfico.com for under $40. If you have questions on this report once you receive it, please contact me and I would be happy to review the details with you.

All of the week’s economic news takes place on Thursday and Friday. The most important economic news Thursday will be the Initial Jobless Claims report while the Retail Sales report leads the charge on Friday. Remember that in general, weaker than expected numbers would indicate the economy is not improving as quickly as expected, and could cause mortgage rates to improve. Positive numbers would indicate a strengthening economic climate, and could cause mortgage rates to gradually climb higher.

For the week of November 10th - November 14th, 2003