Happy Monday! We have a lot of economic indicators to be released this week which may impact the direction of mortgage interest rates. Here are just a few of them:
Tuesday, December 13: FOMC Meeting and Retail Sales
Thursday, December 15: Producer Price Index (PPI), Empire State Index, Initial Jobless Claims and Philadelphia Fed Index
Friday, December 16: Consumer Price Index (CPI)
It doesn't take a scheduled event to influence mortgage rates. The woes of Europe continue to impact the stock markets, which in turn helps to keep mortgage rates low. Remember, bad news for stocks tends to mean lower mortgage rates as investors will seek the safety of bonds (like mortgage backed securities) over stocks.
I'm going to attempt to post live mortgage rates from quotes that I'm doing for homes located in Washington. If you would like a quote for your home located in Bellevue, Seattle or even Walla Walla, I'm happy to help!
8:24 am: DOW down 174.
Quoting 4.250% 30 year fixed Fannie Mae Home Affordable Refi (HARP) with NO APPRAISAL (apr 4.335%) with closing cost of $2830. Seattle home owner has existing small home equity loan which the bank will need to subordinate. Borrower has excellent credit and will reduce his monthly mortgage payment by $400.
9:30 am: DOW down 226
Quoting 4.000% 30 year fixed Home Affordable Refi – HARP (apr 4.144%) with closing cost of $5740. $313,000 loan amount with a principal and interest payment of $1,494.31. We won't know if the appraisal is waived on this Maple Valley home until we submit this loan through Fannie Mae's automated underwriting system. If so, the closing cost will be reduced by $425.
10:00 am: DOW down 228
Explaining how the refinance process works when there is an existing second mortgage that is not going to be paid off as part of the refi. Even if the first mortgage is approved without an appraisal, the second lien holder may require one before they consider if they will subordinate (keep their lien position subordinate to the new first mortgage). At least with a home affordable refi, if there is no appraisal required with the new HARP mortgage and the second lien holder elects not to subordiate, the home owner isn't out the $500 appraisal fee.
11:15 am: quoting 4.500% 30 year fixed rate-term Home Affordable refinance in Kitsap County $405,000 loan amount subordinating a second mortgage (apr 4.566) with $2786 in closing cost.
NOTE: Most of the rates I'm posting here are as close to "par pricing" as possible, meaning that I'm pricing with as little discount or rebate credit as possible. If my clients want to reduce their rates, they can have the quotes repriced with discount points or if they want to reduce their closing cost, we can increase the rate to create a rebate credit.
DOW closes down 162.
1:15 pm: quoting 3.375% for 15 yr fixed rate-term refi with combined loan to value of 70% and excellent credit (apr 3.505) closing cost of $3000 in King County. Second mortgage will need to be subordinated or possibly paid off, if the borrower elects.
NOTE: Paying off a second mortgage that was not obtained at the time the home was purchased constitues a "cash out" refinance – even if you're not taking any cash out with the transaction. Cash-out refinances have different pricing than rate-term refinances and underwriting guidelines.
Update… I've not forgotten this post… I've been locking in rates and preparing the required documentation. It will be interesting to see how rates perform tomorrow with the results from the FOMC meeting.