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Economic/Market Commentary (7/2008):

Housing Bill Helps Mortgage Market

A comprehensive Housing Bill was agreed upon by the House, Senate and President. The announcement was successful in increasing confidence in Fannie Mae and Freddie Mac which resulted in modestly lower mortgage rates.

Highlights of the Housing Bill include:

Providing support for Fannie and Freddie Mac
Allows the FHA to insure up to $300 Billion loans targeted to troubled homeowners
Adds tax credits for First Time Home Buyers which are basically 15 year interest free loans up to $7500
Provides funds for more low income housing

Industry News

According to publications, Fannie Mae, Freddie Mach and FHA accounted for 90% of all US home mortgages in the second quarter of 2008.

June existing home sales fell slightly along with an increase in the inventory levels of unsold homes. In contrast, new home sales increased in June.

The chief economist of the National Association of Realtors believes the passing of the Housing Bill will play a major role in helping the housing market to rebound.

Oil prices dropped below $124/barrel down from a record high of $147/barrel earlier this month. Thus easing inflation pressures a modest amount

THE HIGHEST COMPLIMENT WE RECEIVE IS A REFERRAL OF YOUR FRIENDS AND FAMILY

THANK YOU FOR YOUR BUSINESS!

1.	Why should I choose Main Street Mortgage Company? Answer
2.	Should I borrow as much as I qualify for? Answer
3.	*When can I lock an interest rate?* Answer
4.	*How long does it take to process and close a mortgage?* Answer
5.	*How much does it cost to close a mortgage loan?* Answer
6.	*What are points?* Answer
7.	*How are interest rates determined?* Answer

Q :	Why should I choose Main Street Mortgage Company?
A :	Personal Service, Customer Satisfaction and Results - Here is what some of our customers say: "Excellent service & follow through and top notch results" and "Paul - You exceeded my expectations, Thanks" - Kyle V. "Paul - I will let other friends know about you and your services. You did a great job" - Nidya S. "Paul - I was extremely pleased with the service you provided - how easy you make it and especially pleased with the results. Thanks for your help" - Bob R.

Q :	Should I borrow as much as I qualify for?
A :	Only borrow as much as your are comfortable with after looking at your monthly disposable income (income after expenses) and considering unforeseen expenses and savings strategies

Q :	*When can I lock an interest rate?*
A :	After completing a loan application and choosing a loan program. On a purchase, you will need to have executed a purchase contract and have an estimate of the closing date

Q :	*How long does it take to process and close a mortgage?*
A :	Generally between 10 and 30 calendar days but every situation is unique. Your Main Street Mortgage loan officer will give you an estimate based on your circumstances

Q :	*How much does it cost to close a mortgage loan?*
A :	Most loans require a down payment of least 5% of the sales price but some loans can finance 100% of the sales price for a higher interest rate. Closing costs are items such as loan origination, discount points, appraisal fees, credit report fees, attorney fees and title charges will be paid in addition to the down payment. Generally speaking the closing costs will run approx $2000 not including the loan origination fee or any discount points. You can obtain a Good Faith Estimate (GFE) for your loan request to get a better estimate and itemization of these amounts.

Q :	*What are points?*
A :	A percentage of loan amount you can pay to lower your interest rate. One point equals 1% of the loan amount. Example: $100,000 loan amount, 1 point = $1000 ($100,000 x 1%)

Q :	*How are interest rates determined?*
A :	Interest rates are determined by the bond market and other financial indicators. Rates can change daily and even more than once in the same day. Mortgage rates are primarily driven by the trading of mortgage backed securities. Typically, mortgage loans are packaged together into a mortgage backed security instrument which is then sold to investors. That investor earns a return on their investment by collecting the principal and interest payments that all the individual mortgage borrowers make on a monthly basis. In order to get investors to buy those mortgage backed securities, they must pay rates of interest that are competitive with alternative interest paying investments such as Treasury bonds. Of course, since mortgage borrowers are not as good a credit risk as the US Government, rates on mortgages are somewhat higher than those on US Treasury bonds. In summary, US Treasury bond rates often are a good indicator for the direction of mortgage rates. Another crucial element that helps determine interest rates and mortgage rates is the outlook for inflation. If investors believe that inflation is on the rise then interest and mortgage rates will rise as well.

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RESIDENTIAL LOT LOAN PROGRAM

Purchase or Refinance of lot for future Primary Residence and Vacation Home

If you are seeking a Lot Loan in Texas, You need to contact our office to explore your options. We work with several different underwriters with several different financing options.

MSMC offers a variety of residential lot loan programs to meet your specific needs. Lot Loan Rates vary by the amount of down payment, length of term and the individual's credit and income qualifications.

CONSTRUCTION and PERMANENT MORTGAGE LOANS

When you are ready to build on your lot, MSMC can arrange either a Construction Loan or a "One Time Close" Loan for the construction of your new home.

The One Time Close loan program gives you an approval for both the construction and permanent financing at one time. It also helps to reduce your transaction costs by having only one closing.

Other benefits of the One Time Close construction - permanent financing program include:

- lower fees

- interest rate cap on the permanent loan

- construction periods of 6, 9, 12 and 18 months available

- many programs offer a float down feature for the permanent rate so when the home is finished if rates are lower you can benefit