Mortgage Rate Volatility and the End of the Refinance Boom
Posted On: December 2nd, 2010 by James Posted In: FHA Mortgage • Financial Health • Government Actions • Mortgage Rates • Mortgages • Refinancing
Kind of feels like an epic hangover. The low low rate party that seemed like it would never end, has come to a decidedly abrupt change in direction. The sunlight is streaming into the windows, our clothes are all wrinkled, and there are spilled drinks and confetti everywhere. We’ve seen a handful of days in the bond market this month that have been extremely precipitous in speed and size of the deterioration. Since April of 2010, every time I have locked a loan it has been a bittersweet and slightly regrettable experience. Of course every loan must be locked at some point in the process, but it was a strange new frustration to see rates improve so steadily and relentlessly. We would lock and fund, and then within a day or so rates would just get better. I got in the habit of floating everyone for as long as possible to capture as much of the improvement as we could. Continue Reading – Mortgage Rate Volatility and the End of the Refinance Boom
7 Critical Things to Avoid During the Loan Process
Posted On: September 15th, 2010 by James Posted In: FHA Mortgage • Financial Health • Mortgage Programs • Mortgage Rates • Mortgages • Refinancing
Our new credit environment is fast becoming one of extremely rigid guidelines. Your ability to obtain a mortgage is dependent on the financial scenario presented in the loan application. Think of this application as a snapshot of your existing circumstance. If there are any material changes to this picture, it can mean the difference between having a loan approved, and having it declined.
Certain things are verified and then re-verified at different points in the process, and here is a list of common bugaboo’s that uninformed mortgage borrowers can sometimes find themselves in.
A Special Message to My Friends and Clients
Posted On: August 30th, 2010 by James Posted In: FHA Mortgage • Financial Health • Mortgage Rates • Portland Real Estate • Refinancing
This is my plea to all of my clients past and present: Even if we closed a mortgage earlier this year, even if you think you are upside down on your homes equity, even if you think for some reason that this recent outbreak of mortgage refinance activity will not apply to you… you have to give me a ring, or send an email to james@pdxhomeloan.com. Many of you are invested in 401(k) plans, and mutual funds, and have been taking a beating from the plunge of the stock market since 2008. Well… think of the ridiculously low mortgage rates that are currently available as a way to BENEFIT from that same down market. (Because as stock markets shrink, money goes to bonds, and when bond yields get lower, so do long term mortgage rates!) Continue Reading – A Special Message to My Friends and Clients
Mortgage Rates Below 4%?
Posted On: August 23rd, 2010 by James Posted In: Financial Health • Mortgage Rates • Mortgages • Refinancing
Until recently the holy grail of 30-year fixed-rate mortgages has been the 4.5% rate. I saw that price appear for 90-minute windows a handful of times in 2009, but it was like a unicorn sighting… brief and magical, and ultimately only spoken about in the hushed tones of mortgage legend.
We have recently taken a ride into this pricing territory and we appear to have set up camp here for the foreseeable future. In fact, I have been locking rates on 30-year fixed mortgages well below 4.5% in recent weeks — 4.125%, 4.25%, and 4.375% have all been locked for my clients in varying circumstances.
In these steadily declining mortgage rate environments, the no-cost refinance can start to make a lot of sense for another reason — no cost “recapture period” makes another refinance a possibility, but I digress.
We are squarely in a new trading range on the FNMA 4.0% mortgage bond coupon, and this tells me that we will be in this mid 4% fixed rate range for possibly the rest of the year, but certainly for the next 4-6 weeks. Continue Reading – Mortgage Rates Below 4%?
If your rate is above 4.5%
Posted On: July 20th, 2010 by James Posted In: Mortgage Programs • Mortgage Rates • Mortgages • Refinancing
I’ve been hearing the radio ads just like everyone else, and our favorite breathless loan cheerleader has lately been urging you to call him “if your rate is higher than 4.5%”. I’m sure he would love to refinance you over and over again without any regard to if it makes sense for you.
Lets say you currently have a mortgage for $180k at 5.5% interest. Your principal and interest payment is $1,078. And now you really think that you are being foolishly ripped off for paying more than 4.5% on this loan. Lets also say that your credit score is 685. So now, in order to achieve this magical interest rate, you will need to pay a load of mortgage processing fees, an appraisal fee, title fees, plus 2% in points to cover the premium associated with a 685 credit score. Lender and title fees totaling $7,000. This is what you will pay in order to achieve a monthly savings of $115. The easy math is to divide the monthly savings into the upfront costs and calculate how many months it will take to pay for itself: $7.000 / 115 = Continue Reading – If your rate is above 4.5%
