Monthly Archives: October 2014

Mortgage Rates Remain Steady Important Fed Announcement

Mortgage rates were almost universally sideways today with very few lenders changing rate sheets noticeably from yesterday.  As such, the most prevalent conforming 30yr fixed rate quote remains 4.0% for top tier borrowers.  It continues to be the case that paying points upfront in exchange for a lower rate may make sense to some borrowers at these levels.  There’s nothing inherently bad or good about that strategy.  It’s simply a trade-off between upfront costs and monthly payment.

The bond markets that underlie mortgage rate movement have arguably been hunkering down for a bigger dose of volatility with tomorrow’s big Fed Announcement.  Even though there is broad consensus that the Fed will announce the end of QE3 asset purchases, there is plenty of uncertainty and anxiety regarding the other potential verbiage changes in the official policy statement.  In other words, markets are now ready to make a bigger move regardless of what the Fed says.

The statement is released at 2pm Eastern.  While this does mean that lenders will already have rate sheets out for the day, it doesn’t mean you’d necessarily have time to interpret the market reaction and make a lock decision with enough time to before a potential negative reprice.  If you have a loan in process that isn’t locked, make sure you’re on the same page with your mortgage professional regarding the strategy surrounding tomorrow’s announcement.

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Mortgage Rates Holding Near 4 Percent

Mortgage rates were almost perfectly unchanged over the weekend.  Most lenders are still right in line with Friday’s most prevalently-quoted conforming 30yr fixed rate of 4.0% for top tier borrowers.  That said, most of those rate sheets also still have reasonable costs for borrowers interested in paying more upfront for a lower rate.  For instance, the time required to break even on additional upfront costs is roughly 5 years when moving down from 4.0 to 3.875% or 3.75%, depending on the lender.

Today was uneventful in terms of movement in the markets that underlie mortgage rate changes.  The rest of the week, however, stands a good chance to be increasingly volatile.  Wednesday afternoon’s Fed Announcement is the main event in that regard.  The Fed is widely expected to confirm the end of the asset purchases associated with its 3rd round of quantitative easing (QE3).  While that won’t be a surprise if it happens, it will require additional verbiage changes in a statement that hasn’t been forced to undergo any meaningful changes in months.

Second Opinion on Your Mortgage

Second Opinion on Your Mortgage

Even If You Have Already Been Pre-Approved For Your Mortgage!

You or your clients are making what may be one of the largest investments of their life. Why not have me and my team take a second look at that mortgage application or preapproval and see if they are being treated correctly. If we can’t point out or substantially help “NO PROBLEM”. This is called checks and balances and I’m tired of the horror stories after the files close. It’s very simple people; We are all in business to earn money. Conceptually it should be an even playing field but it isn’t. if a doctor tells you need massive surgery, what do you do? You get a second opinion.

That’s the way it should be with your mortgage too! If you have already been pre-approved, pre-qualified or are in process for a mortgage, are you absolutely sure you are getting the best service and the best deal?

If they did not talk to you about any of these issues then you definitely need a Second Opinion.

DID YOU KNOW YOUR CREDIT SCORE HAS A DIRECT CORRELATION TO YOUR INTEREST RATE:

Simply put “Your Rate” on a Conventional loan is heavily weighted in determining your interest rate. Banks and brokers don’t care about helping you understand your credit and “Buckets” used. For example: a 620 to 640 credit score is the first bucket, 640 to 660 is the second bucket and so on and so forth. Having a credit specialist will increase your chances of getting either a better rate or a much better rate. We have seen plenty of people with a 639 credit score for example. Believe it or not, it takes us very little work to improve a score by 2 points thus obtaining a lower rate. A monthly savings of 1/4 of a point in interest rate on $300,000.00 loan is $43.00 per month, $516.00 a year and $15,480.00 throughout the life of the loan. This is a small example. Move the score enough and you can double, possible triple that savings.

ARE YOU USING YOUR BANK FOR A MORTGAGE?

Banks offer free checking because they know when it comes time to get a car loan or a mortgage loan, you are already familiar with them. Problem is “THESE BANKS HAVE THE HIGHEST DENIAL RATES” This attitude of familiarity can cost you a lot if you don’t shop somewhere else. Again, they don’t work for free, so when they think you are not looking elsewhere, do you think you are getting the best deal in the market? Could be, but not likely.

I’m not talking about interest rates either!

I’m talking about the structure of the deal itself! Donald Trump, in his book called The Art of the Deal said, The price that you pay is the least of his worries in a transaction. It’s how the deal is structured is what matters most. You could have been quoted a wonderful interest rate, but if your financial house is not in order, the best interest rate could be absolutely the worst loan for you.

I’m not saying that interest rates are NOT important, they are! But, here are some of the things you need to consider and why you need a second opinion from me

:

  • Should you decrease your down payment and use your cash to pay off your high credit card debts?
  • Should you pay points or loan origination fees?
  • Does a no closing cost mortgage make more sense for you?
  • and did your lender show you how to save thousands of dollars and take 5 years off the mortgage term?

Mortgage Rates Moved Higher Today

Mortgage rates did as expected and departed their recently more stable range today.  Unfortunately, we got the less enjoyable of the two potential departures with rates moving higher at a moderate pace.  At the same time, the world’s most widely-followed weekly check on rates from Freddie Mac indicated a move in the other direction!

The discrepancy is a result of Freddie’s survey methodology.  Here’s what it means when Freddie says rates were lower this week: Human survey respondents chiming in at some point between Sunday and Monday this week reported lower rate quotes to Freddie than they did at some point between Sunday and Wednesday last week.  Given that Freddie tells us they receive more responses earlier on in their survey periods AND that last week’s big move lower in rates didn’t happen until Wednesday, it makes sense that the numbers could come out lower this week.

Rates are unequivocally higher today than on any other day during the past 2 weeks.  Whereas 3.875% has been at least a contender, if not a sure thing on all of those days, 4.0% is now clearly in control as the most prevalently-quoted conforming 30yr fixed rate for top tier borrowers.  Some lenders may already be looking at 4.125%.

All that having been said, rates are STILL lower than at any other time in 2014 with the exception of the past two weeks.

Mortgage Rates Holding Under 4 Percent

Mortgage rates returned to levels best characterized as “under 4 percent” today after drifting higher on Friday.  Last Wednesday was the first foray into the “high 3’s” in more than 16 months.  Not every scenario will be seeing those high 3’s today, but for top tier borrowers, 3.875% is slightly more prevalent today when it comes to conforming 30yr fixed rate quotes.  4.0% is a close runner-up, but 3.75% may be a viable option for borrowers interested in paying higher upfront costs.

Today’s modest recovery suggests that we’re in the midst of a few days of limbo relative to the bigger picture.  Historically, after a big swing down in rate followed by a big snap back (like that seen last week) there has been a time frame of a few days or even a few weeks of comparatively smaller changes before rates embark on their next noticeable move.  That means that long-term optimists can keep hope alive for further gains, but also that there’s a risk they won’t materialize.  In any event, it won’t be long before we know one way or the other.

It also means that both locking and floating can be justified at the moment, and neither is necessarily a bad choice.  It’s worth noting, however, that today’s rates are right in line with the second best day in over 16 months.  If you missed out on last week’s sub 4% rates, here they are again.

Mortgage Rates Slightly Higher; Still Near 16-Month Lows

Mortgage rates were forced to give back some of the tremendous improvements seen yesterday as financial markets corrected after the wild swing.  Apart from the past two days, today’s rates are the best in 16 months, and in many cases remain very close to Tuesday’s offerings.  The most prevalently-quoted conforming 30yr fixed rate for top tier scenarios remains 3.875%.  Whereas 3.75% was merely drifting out of the realm of possibility yesterday afternoon, it’s completely gone today.  4.0% is a far more deserving runner-up.

One thing to be aware of in this environment is the MUCH-wider-than-normal stratification between lenders in terms of pricing.  The volatility wreaks havoc on rate sheet timing and strategies.  Some lenders may be more aggressive in the morning only to raise rates several times during the day.  Others might start out more conservatively and undergo fewer reprices.   More importantly, lenders are simply farther away from each other.  During calmer times, almost all the lenders in the top 20% will have very similar rates and costs.  They’re all over the board right now though.

Even when markets calm down, rate sheets will continue feeling the effects of recent volatility.  Excessive lock volume in recent days, fallout, and renegotiation’s have a major effect on a lender’s balance sheet and pipeline planning.  These are two of the most important considerations when it comes to rate sheet pricing strategy as rate sheets have a direct effect on how many new locks are coming in the door (pipeline planning) and how profitable they need to be (balance sheet).  Needless to say, some lenders navigate this disruption better than others.  The rest may bounce around much more than normal for days to come, regardless of market movements.

Mortgage Rates Dip Below 4 Percent.

Mortgage rates are moving below 4 percent for 30-year fixed conforming loans with balances below $417,000 for the first time since they spiked in June 2013. It’s not a huge move by the numbers, but psychologically it could be a major boost—potentially prompting a leap of faith for home buyers, but more likely a push for those looking to refinance existing loans.

“Rates have been under a bit of pressure so far this morning,” Mortgage News Daily’s Matthew Graham said Tuesday. “The first few rate sheets are right on the edge of 3.875 percent. Four percent would still be significantly more prevalent today, but 3.875 percent is out there for a few lenders.”

“Lower interest rates will impact refinancing for people who bought late in 2013 and early 2014. They can get half a percent off their rate now,” noted Logan Mohtashami, a loan officer with AMC Lending Group in Irvine, California. “Some who are looking to take their private mortgage insurance off their home will take advantage of these rates with their higher home price.”

While the government has provided just over 3 million underwater borrowers the opportunity to refinance to lower rates through its Home Affordable Refinance Program (HARP), rising home prices have brought thousands of other borrowers, who did not qualify for that program, back into the black and therefore eligible to refinance. Then there are those who purchased their homes in just the past year, when rates were in the 4.75 percent range, who could also benefit, although that is a small population.

Mortgage Rates Fall in Line with 2014 Lows

Mortgage rates continued lower today at an exceptionally strong pace.  The most prevalently-quoted conforming 30yr fixed rate for the very best scenarios has moved quickly from being worryingly close to 4.375% to being excitingly close to 4.0%.  Officially, we’re easily near the lower end of 4.125%, meaning that this is the most prevalent rate for the strongest borrowers and that the closing costs associated with that rate today are about as low as they get before 4.0% begins taking over.

The most interesting thing about the movement of the past two days is that there is no big-ticket headline motivating it.  This is simply traders moving money for a variety of reasons.  No one can know what all the motivations for that might be.  Even the market participants themselves can only know about their own individual reasoning, but we can certainly make an educated guess based on the fact that the Minutes from the most recent Federal Reserve meeting are tomorrow at 2:00pm.

Certainly, this isn’t the only market-moving consideration in play, but if some traders are expecting a rate-friendly tone, that could account for some of the extra ‘oomph’ behind the current push lower.  It would also increase the risk of a volatile reaction after the data hits.

Second Opinion on Your Mortgage

Even If You Have Already Been Pre-Approved For Your Mortgage!

You or your clients are making what may be one of the largest investments of their life. Why not have me and my team take a second look at that mortgage application or preapproval and see if they are being treated correctly. If we can’t point out or substantially help “NO PROBLEM”. This is called checks and balances and I’m tired of the horror stories after the files close. It’s very simple people. We are all in business to earn money. Conceptually it should be an even playing field but it isn’t. if a doctor tells you  need massive surgery, what do you do? You get a second opinion.

That’s the way it should be with your mortgage too!  If you have already been pre-approved, pre-qualified or are in process for a mortgage, are you absolutely sure you are getting the best service and the best deal?

If they did not talk to you about any of these issues then you definitely need a Second Opinion.

DID YOU KNOW YOUR CREDIT SCORE HAS A DIRECT CORRELATION TO YOUR INTEREST RATE:

Simply put “Your Rate” on a Conventional loan is heavily weighted in determining your interest rate. Banks and brokers don’t care about helping you understand your credit and “Buckets” used. For example: a 620 to 640 credit score is the first bucket, 640 to 660 is the second bucket and so on and so forth. Having a credit specialist will increase your chances of getting either a better rate or a much better rate. We have seen plenty of people with a 639 credit score for example. Believe it or not, it takes us very little work to improve a score by 2 points thus obtaining a lower rate. A monthly savings of 1/4 of a point in interest rate on $300,000.00 loan is $43.00 per month, $516.00 a year and $15,480.00 throughout the life of the loan. This is a small example. Move the score enough and you can double, possible triple that savings.

Are you using your Bank for a mortgage loan?

Banks offer free checking because they know when it comes time to get a car loan or a mortgage loan, you are already familiar with them. Problem is “THESE BANKS HAVE THE HIGHEST DENIAL RATES” This attitude of familiarity can cost you a lot if you don’t shop somewhere else.  Again, they don’t work for free, so when they think you are not looking elsewhere, do you think you are getting the best deal in the market?  Could be, but not likely.

I’m not talking about interest rates either!

I’m talking about the structure of the deal itself!  Donald Trump, in his book called The Art of the Deal said, The price that you pay is the least of his worries in a transaction.  It’s how the deal is structured is what matters most.  You could have been quoted a wonderful interest rate, but if your financial house is not in order, the best interest rate could be absolutely the worst loan for you.

I’m not saying that interest rates are NOT important, they are!  But, here are some of the things you need to consider and why you need a second opinion from me:

  • Should you decrease your down payment and use your cash to pay off your high credit card debts?
  • Should you pay points or loan origination fees?
  • Does a no closing cost mortgage make more sense for you?
  • and did your lender show you how to save thousands of dollars and take 5 years off the mortgage term?

Mortgage Rates Little Changed After Yesterday’s Big Drop

Mortgage rates were mixed today, depending on the lender.  Some rate sheets were slightly better or worse than yesterday’s latest, but the broader average was unchanged.  This happened in spite of weakness in bond markets.  This includes mortgage-backed-securities (MBS), the bonds that most directly affect mortgage rates.

Losses in MBS almost always correspond with rates moving higher, but in yesterday’s case, the gains were so precipitous that the benefits hadn’t fully translated to rate sheets by the end of the day.  That left lenders some wiggle room this morning.

The most prevalently quoted conforming 30yr fixed rate for top tier borrowers remains 4.125% for a second day.  Until yesterday, September’s weakness had kept that rate at 4.25% for several weeks.  Differences from yesterday would be seen in the form of closing costs.

Tomorrow brings the most important piece of economic data of any given month.  The Employment Situation Report, which includes ‘nonfarm payrolls’ and the unemployment rate will start the day off at 8:30am–well before lenders’ generate the first rate sheets of the day.  Even though financial markets have shown some disregard for economic data in general, this report is still likely to generate an initial response.  If the previous month’s somewhat weaker numbers are revised higher in addition to stronger numbers in this month’s headline, rates would likely be higher right out of the gate.