Monthly Archives: September 2014
Mortgage rates were lower for a 3rd straight day, effectively confirming that markets hadn’t merely paused for reflection on a determined move to new 2014 highs. For a few days, that was a risk to be weighed as markets perceived last week’s Fed Announcement as a turning point toward a more aggressive rate hike policy. The Fed Funds Rate doesn’t dictate mortgage rates directly, but an accelerated rate hike outlook could create a change in momentum for the entire bond market, which includes the bonds that DO dictate mortgage rates.
Today’s improvement brings rates back to levels not seen for 2 weeks. For some lenders this means that an actual drop in the quoted rate as opposed to a drop in closing costs. On average, the most prevalently-quoted conforming 30yr fixed rate remains 4.25%, but we’re now much closer to 4.125%. Some lenders are there already. Keep in mind though, even in cases where lenders CAN offer that rate, 4.25% may be a better deal in terms of closing costs vs monthly payment.
Mortgage rates moved slightly lower today after hitting the highest levels in more than 4 months yesterday. There were no significant economic events providing guidance today. This actually makes the strength more meaningful as the absence of big-ticket events left bond markets to their own devices. In that sense, the rally was more of a conscious choice.
Rate quotes fell back in line with those seen on Monday. Most borrowers will see the changes in the form of closing costs as the move wasn’t big enough to affect rates themselves. 4.25% remains to most prevalently quoted conforming 30yr fixed rate for top tier scenarios.
This week ends on a bittersweet note. On one hand, Friday’s loan costs improved at the best pace of the entire month. On the other hand, not only was it a small improvement by historical standards, it also leaves us in line with recent highs. The bigger question is whether this is a turning point that marks the end of an abrupt September market movement, or merely the eye of the storm. We’ve seen some events in markets over the past two days that allow for a bit of cautious optimism, but in the current environment, it’s important to reevaluate that optimism every day. Anyone who holds off on locking a rate should have a limit set overhead as to how much rates would have to rise before they’d cut their losses and lock.
Mortgage rates only moved slightly higher today for most lenders. Some lenders were unchanged from yesterday, but on average, rates inched up to match their highest levels since May 1st. There was no significant underlying market movement, which is interesting considering yesterday’s Fed Announcement was expected to do more to stir up the action. Instead, the mortgage-backed-securities (MBS) that underlie mortgage rates simply held flat today after losing only a moderate amount of ground yesterday.
While we technically moved from “1.5 month highs” to “4.5 month highs,” it’s important to note the two were separated by a mere 0.01% in terms of effective interest rate. The actual rate quotes going out today would be the same as yesterday in most cases, but with marginally higher closing costs. 4.25% remains the most prevalent conforming 30yr fixed rate for top tier borrowers.
Mortgage rates managed to hold steady today, which matches the very best performance of any other day in September. In other words, rates have either been flat or higher every day for the past 11 days. As we discussed last week, this quick move to higher rates is based, to some unknown extent, on anxiety over the upcoming Fed Announcement. Market participants are concerned the Fed will change the verbiage of their official policy statement to indicate a potential rate hike earlier than expected. Bond markets respond to that concern with weakness and when bond markets are weaker, rates move higher.
Interestingly enough, bond markets were actually somewhat stronger today, but it wasn’t enough to make for a widespread improvement in lender rate sheets. Some lenders were, in fact, slightly better, but plenty were slightly weaker. The net effect is ‘unchanged’ rates compared to Friday’s latest offerings. 4.25% remains the most prevalently-quoted conforming 30yr fixed rate for top tier scenarios. 4.125% had that distinction until Friday.
The Fed Announcement isn’t necessarily the only motivation out there for bond markets. But because that idea has become so ingrained in market psyche and media coverage, the reaction to Wednesday’s Announcement can’t help but cause volatility for rates. Even though today was flat, there’s plenty of risk that rates could continue higher.
A home is likely one of the biggest financial purchases you will make, and you may be overwhelmed by all the people involved with the process: real estate agents, mortgage brokers, appraisers, inspectors. There’s also the option of a real estate attorney. Hiring a real estate attorney may seem like just another person and an added cost, but this cost could save you hundreds or even thousands of dollars in the long run.
How do you know if you actually need to hire a real estate attorney? Knowing what a real estate attorney does is the first step to ensuring that you and your family are in the best position to make a decision before buying a home.
What is a Real Estate Attorney’s Purpose?
While most basic transactions in most states don’t require a real estate attorney, there are still many situations in which an attorney is not only helpful, but necessary.
A real estate attorney can serve multiple purposes. He advises the prospective homeowner’s search for the best property, assists in dealing with brokers, oversees the negotiation and execution of a contract of sale, implements the procurement of a mortgage and attends the closing of the mortgage where the deed is transferred, to name a few.
When buying a new home, you’ll want to hire an attorney if:
- You’re from out of town
- The property has potential physical damages
- The land is owned by the bank
- The area is subject to adverse weather (floods, tornados, hurricanes, etc.)
A real estate attorney can be just as useful when selling a house as when buying. Examples of this include:
- If you’re selling land of a deceased relative
- If the property has structural problems
- If you have a history of property liens (due to debt)
Does a Real Estate Attorney Differ By State?
The main factor in determining whether or not you need a real estate attorney is your location. Since some states require the assistance of an attorney and others don’t, it’s best to ask your real estate agent what the policies are in the state and region in which you’re purchasing your property.
What Should I Ask a Real Estate Attorney?
It’s always in your best interest to come prepared with a list of questions when choosing your real estate attorney. You want to select someone with whom you are comfortable and someone who is experienced with your specific type of transaction.
There are many questions that you could consider asking a real estate attorney, but a few specifics you should be sure to inquire about are:
- How long have you been a real estate attorney?
- How many similar transactions have you dealt with before?
- How would you handle my case?
- Can you tell me your overall strategy?
- Will you specifically work on my case and attend my closing or will your paralegal or someone else in your office handle it?
- Does your fee include due diligence?
Mortgage rates were higher OR lower today, depending on the lender. Some of the differences in pricing strategies have to do with Friday afternoon’s volatility which saw some lenders raise rates more aggressively than others. There was a similar breakdown in financial markets this afternoon which, once again, prompted lenders to recall rate sheets for a mid-day ‘reprice’ to higher rates. Thankfully, these changes are so small that they don’t even affect the rate itself. That means only closing costs are moving higher.
Even after the reprices, the average rate quote remains in similar territory to Friday, on average. For the most part, the most prevalent conforming 30yr fixed rate for top tier borrowers has been incessantly glued to 4.125%. Slightly-less-than-flawless scenarios are still very well priced at 4.25%.
While mortgage rates have been glued to their 2014 floor, broader bond markets have weakened in such a way that there’s some concern for further losses in the short term. In other words, the longer-term trend remains intact, but we’re currently in the middle of a correction which is taking place inside that trend. Think of this like bumper bowling where one bumper equates to lower rates and the other to higher rates. We’re just hitting that “higher rate bumper,” but haven’t yet broken through to the next lane. Bottom line, weakness could continue in the short term, but the jury is still out on the longer term outlook. As such, locking is the safer bet for those with loans currently in process.