Mortgage Rates Hit Another Record Low

According to the Primary Mortgage Market Survey the national average for the 30 year fixed interest rate has dipped below 4%.

The average 30 year rate is 3.94% with .8% in fees and points.

This rate sets a new record low for interest rates. The first week of October in 2010 the average 30 year rate was 4.27%.

What does this mean for borrowers?

Now is an excellent time to be able to purchase a house, or if you have equity to refinance. There are reports that some borrowers are still on the fence, wondering if rates are going to bottom out anymore.

Last year there were the same concerns. A common question we got was, “Are Mortgage Rates Going to Go Up in 2011?

At the end of 2010 mortgage rates started to rise. It looked like rates in 2011 would go up and stay up. In February rates hit 5%, but sense then have again declined to the current record low.

Investors are still extremely cautions, the economy remains in shambles, there is a threat of a second recession, unemployment is still very high, the housing market has not turned around. All of these factors are contributing to the low interest rates.

Are the low rates going to stick around?

Yes and no. In there short term there is no economic forecast that would suggest rates will increase “over night”. Once mortgage rates increase for good it will most likely be a slow process following the recovery of our economy and the housing market.

Should I buy or refinance?

Yes. Record low housing prices and record low rates is a recipe for a great home with a low payment. Even if house prices stay low for a few more years it is still an incredible opportunity to purchase a home. In fact never in the last 50 plus years have Americans had the opportunity to get locked into such an incredibly low 30 year interest rate.


Long Term Rate Locks? & Sept 24th Mortgage Update

The Freddie Mac Primary Mortgage Market Survey is showing average mortgage rates are unchanged from last week.

This weeks rates are…

  • 30-Yr Fixed – 4.37 %
  • 15-Yr Fixed – 3.82 %
  • 5/1-Yr ARM – 3.54 %

There was one slight decrease for the 5/1 ARM.  Last week it sat at 3.55%

Old Article? See todays Mortgage Rates.

If you are still on the fence about locking today or waiting just a little longer consider this.

Mortgage Rates have not been this low for over 50 years.  Plus mortgage rates are subject to change any minute.  They could shoot drastically up at any point leaving you in the dust.

If I was in a place to refinance or if I was purchasing a home I’d definitely be calling my broker and locking today.

Is it worth Locking Long Term for Purchases?

Rates are so low right now many people are locking in rates for 90, 120 and even 150 days in the event they find their home in the next few months.  Depending on how seriously you are currently looking for a house this may be an option suitable for you.

Be careful to not lock too far out because the length of your lock will affect your rate.  The longer the lock period the higher the rate will be.

The benefit of doing this is because of the volatility of the market right now.  Yes, we could see rates drop more, but it is just as likely, if not more likely, to see them increase over the next few months.

Locking in your rate now would insure you get that rate for the term you indicate in your loan.

Call your Loan Officer today to get some of the options for long term locking.  And checkout our mortgage help article if you are thinking about purchasing or refinancing.


How to Choose the Right Loan Officer

Are you planning on purchasing a home or refinancing your home soon?  If so then you will need an educated, hard working, competent loan officer.  But how do you find a loan officer with the right qualifications?

Getting the Wrong Loan Officer

First off let me explain to you the headache it can cause if you get a poor loan officer.  You are putting all your eggs into one basket when you pick a loan officer.  If you are using a broker the LO will select a bank, issue the paper work, follow up on conditions and pretty much has a hand in every aspect of the loan.  Not to mention they will have access to all your personal information.  If you use a bank the LO may or may not be as involved, but will have access and most the responsibilities as a broker.

If the LO is slow, a poor communicator, unorganized, doesn’t enjoy what they do, these things will make your experience terrible and frustrating.

I have worked along side some Loan Officers that I wouldn’t even trust to make me a sandwich, so choose wisely.

Where to start?

The absolute best place to start looking for a loan officer is with trusted friends and family.  Referrals are the safest way to go.  If you know someone that has had a bad or good experience talk to them.  If you think you don’t know of anyone that can refer you to someone ask around, you may be surprised.

If referrals from friends and family don’t pan out check with a real estate agent.  A real estate agent does a lot of work with loan officers and typically want to work with the best.  Now you need to be sure the real estate agent isn’t a dud themselves, but otherwise they could be a great source.

Interview

It is okay to ask your prospective loan officer some questions before working with them.  Here are a few questions you could ask…

  • How long have you been a loan officer? – Experience can be a big factor.
  • How many loans are currently in your pipe? – You want to ask this because you want someone who is moderately busy working on your loan.  If you get someone who has 0 or 1 loan in their pipe the danger is that they don’t have enough to keep them busy and may have distractions elsewhere.  Too many loans may mean they are too busy and won’t have time for you.  A good loan officer typically has about 2 -12 loans going.  Within that range is doable.
  • How will you disclose Yield Spread Premium to me? – This is a question that will separate the best from the average.  If you don’t know what yield spread premium is jump over and read our mortgage help post.  Look for a loan officer that will fully disclose the details of the loan and give you a straight answer.
  • What is your origination? – A good loan officer deserves 2% – 2.5% on the loan.  Typically that is divided between 1% on the front (origination) and 1% – 1.5% on the back (yield spread premium).
  • What has been the average amount of days to close your last 10 loans? – Now this could vary greatly because of the many different scenarios and condition of banks which are lending the money.  30 days used to be pretty standard, but 45 days has become more normal.  This is due to more guidelines and regulations that the lenders are requiring.   On normal purchases and refinance it should be in the 25 – 45 day range.  Short sales and other types of loans may take longer.
  • How often will you contact me? – The best answer you could hear is, “How often do you want me to contact you?”
    • Now the big test is asking them to follow up with you once or twice by email and once by phone after the meeting is over.  You have not agreed to anything yet, you just want to see if they will indeed follow up.  Give them precise times to contact you.  Something like, “Can you follow up and email me Tomorrow Morning around 10am, and can you give me a call in 2 days at 3:30pm?”
    • This will test their organization and ability to contact you when you ask.

It is completely okay for you to interview prospective loan officers.  If you had $100,000 to invest you would want someone who knew what they were doing.  Well getting a good loan officer who can get you the best deal can save you thousands and thousands of dollars over the life of your loan.

If you have any tips, stories, or great loan officers in your area please leave us a comment. And if you are from Washington State we recommend Clark Davis from Mortgage Master.