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Mortgage Rate Analysis-Monday October 19th, 2009

Well you never like to start an article with “an I told you so” but I feel that this week it is important to do just that.  People that were “floating” their loan last week saw the rates rise about .25% from the five months lows we had the previous week.  It is always tempting to try and get something better but in this market you need to analyze what you can get and if it is good you need to take it!  We had several “good news” economic reports last week that drove the price of Mortgage Back Securities lower, thus forcing the banks to raise the rates a bit to compensate.  Remember a stronger economy means that we are able to handle higher rates so those two entities tend to work against each other.

Today will not really have any major news in it that will shift the rates one way or the other, but our fearless Fed Chairman Ben Bernanke will be giving a speech later in CA that will get several peoples attention.  It is amazing how much power there is in this mans words.  We will wait to hear any indication that the Fed will either begin to raise the Federal Rate or hold steady.

Rates are holding steady today!

Rates are holding steady today!

Third, I have been reminding readers of the expiration date of the First Time Home Buyer Tax Credit.  The American Recovery and Reinvestment Act of 2009 authorizes an up to $8000 tax credit to any first time home buyer that closes a loan on or before November 30th  on a primary residence.   To qualify you must not have owned a home in the prior 3 years and must make less than $75,000 if filing single or $150,000 for a married couple filing jointly.  The amount of the credit is reduced if your income is higher and completely goes away if your income exceeds $95,000 if single and $170,000 if married filing jointly.   Currently the credit is being extended for veterans of our armed forces who have served overseas for at least 90 days during 2009.  Check out the IRS website for more information and the appropriate forms that must be completed to get the credit.  To receive the tax credit you can either amend your 2008 returns or wait until you file your returns next year.

My review of several other mortgage professionals indicates that the par 30 year conventional mortgage rate remains in the 4.875% to 5.125% range for well-qualified consumers.  I like this rates being published cause as you can see my rates at the bottom of the range!  To get a par interest rate you must have a credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination fee.  You can elect to pay less in fees and secure a higher interest rate, as every lender has a creative way of packaging your closing costs.  It is important to know that there are always closing costs in a loan it only differs how you pay them which is why a trusted mortgage professional is worth their weight in gold!

lock_iconThis week projects to be a pretty steady week as far as rates go, but as I have been saying for a several days now, I don’t see much improvement in the future so lock today and have peace of mind going forward with your mortgage process.

Mortgage Rate Analysis-Friday October 16th, 2009

Sorry for missing posting an update yesterday, I just found out I am going to be a dad for the first time and my day was crazy from there as you can imagine!  The good news is there was not really anything happening with rates yesterday so we didn’t miss much!

Mortgage rates moved slightly higher yesterday but managed to hang in there a lot better than expected considering all the economic data and earnings reports we got this week.  Today, mortgage-backed security prices are mostly unchanged and mortgage rates trended just a little bit lower.   But in the big picture however, compared to last week mortgage rates are about 0.25% higher.

Rates are holding steady today!

Rates are holding steady today!

Although there is talk of an extension, the first time home buyer tax credit is currently scheduled to expire on November 30th.  If you want to take advantage of this great money opportunity, get your loan application submitted.  One thing you should know is, you will be unable to lock your interest rate until you have secured a home contract.  Additionally, if you lock and change your mind on the original home for a different home, you will be required to do a new lock at the current market rate since the lock goes with the specific address.

Lock Today!

As for the question as to lock or float your rate today, we are somewhat neutral based on your risk tolerance level.  If you want to try to get a lower rate, it could happen, but it could increase just as easy.  If I am making that choice I would lock and secure the piece of mind.

Mortgage Rate Analysis-Wednesday October 14th, 2009

Today is a great day if you are trader on Wall Street or anyone that is following the overall economy as we have received several reports in the past 24 hours that indicates that we are pulling out of the recession!  JP Morgan posted profits that simply blew the projections out of the water, because a mini sell off of Mortgage Back Securities.  Simply put, as the stock market looks more attractive to investors they will sell their safer bonds for higher reward stocks.

Rates are up across the board today

Rates are up across the board today

To entice those investors back to MBSs we will see the bank raise their rates so the return for the investors is more attractive.

There was also a report release from the Mortgage Bankers Association that indicate that bases on the economy and where we are heading that they believe that rates are going to hold around 5% for the rest of the year, and then in 2010 we could see a slow climb up to around 5.5%.  Now if you are looking at the low point we hit a while back of 4.5% you might say that those are really high, but as my father likes to remind me, “when your mother and I bought our first house we had an 18% rate, and were so happy when we refinanced it down to 16%!”.  Great mortgage rates are very relative to where you are in life!

We are now pretty much at the end of qualifying for the First Time Home Buyers Tax Credit, as you will need 30-45 days to close a loan and the deadline is November 30th.  That means you need to have your deal closed on the 30th, not a “cute house” picked out by then.  We will post any updates that we hear concerning an extension or modification to the tax credit, similar to the one we talked about yesterday for active military personal.

lock_iconWe are defiantly of the opinion that today is a day to lock and not float!

Mortgage Rate Analysis-Tuesday October 13th, 2009

With the bond markets being closed yesterday we really came off the weekend today, even though several lenders did issue rate sheets.  Today we saw little to no movement in rates as we get ready for a couple different reports that will be coming

Rates are holding steady today

Rates are holding steady today

out to help us to determine how the overall economy is fairing.  There are lots of different companies out there that offer all sorts of different rates, so make sure you are taking the time to check for the best mortgage rates in Seattle.  Right now is a very good time to consider locking in a low fixed rate.

One big piece of news is that congress voted to extend the First Time Home Buyer Tax Credit…but before you get to excited it is important to know that the extension is only for active duty military personal.  To qualify you must have been deployed for over 90 days in 2009.  For the rest of us you have until November 30th to qualify for your $8000 tax credit.  We are still waiting to hear if that also will be extended, although it is very unlikely that anything will be announced until we are right on the deadline.

Today's suggestion is to lock your rate

Today's suggestion is to lock your rate

I have received several emails and calls asking if you should lock today to “float” and wait for a better rate.  As with anything in our industry I don’t pretend to know the future, but I am going to do the best I can in these reports to suggest if locking is suggested or not.  My only disclaimer is this is going to be my “best guess” and you have to make the decision that is best for you.

Mortgage Rate Analysis – Monday October 12th, 2009

Rates are Rising

Rates are slowing on the rise.

Today the bond market is closed in observance of Columbus Day, so there is not going to be a lot of activity on the mortgage rate front.  Several lenders have published rates sheets, and several loan officers are working today so don’t hesitate to contact your mortgage professional.

What we are seeing in the rates that have been posted so far today is that the lenders are taking a more conservative approach to the day and have slightly raise all rates across the board.  Check out the best mortgage interest rates for Washington State right here.

Last week we saw a slight spike in rates right at the end of the day on Friday due to the precipitous drop in prices of mortgage back securities.

  • This week we are expecting several economic reports that potentially have the ability to slow the rise down and maybe lets us hold steady for a while.  Wednesday we will get Retail Sales and the meeting minutes from the Sept 23rd Fed Meetings.  Those meeting minutes will get analyzed to see of any hint of the feds future actions might be hiding in them.   There are several other reports due this week that if they hit their expectations, the markets should respond favorably!

This would be a good week to keep a close eye on rates are they could be a bit volatile over the course of the next week.  If you see a rate you like you should really considering locking, and not floating on the hope that they will go down.