Washington State Mortgages, Made Clear. Buying or Refinancing? Let's find the right loan together.
Mortgage rates are influenced by economic data, inflation trends, Federal Reserve policy, and global markets — not just headlines.
In this section, I break down what’s happening in the mortgage-backed securities market and how economic reports may impact rates. You’ll find:
My goal is to translate complex economic movement into practical guidance for buyers and homeowners.
If you want context — not speculation — this is where you’ll find it.
Woooo whoooo SEAHAWKS!! Okay, I know that winning the NFC Championship against the 49er’s has nothing to do with mortgage interest rates… I just couldn’t help myself 🙂
This week’s economic calendar is very light. Markets, as well as our office, were closed yesterday to observe Martin Luther King Day.
In this year’s final episode of Seattle Real Estate Chat (we’re coming back in 2014!), Jim Reppond and I review 2013 and make a few prediction for 2014 regarding the real estate market and mortgages in the greater Seattle area.
We will resume our regular scheduling of Tuesday mornings at 10:00 am PST for Seattle Real Estate Chat on Tuesday, January 7, 2014.
Thank you for watching our show – I hope you’ll tune in next year. 🙂
Mortgage rates are not just influenced by scheduled economic indicators. Sometimes uncertainty in the world, such as what’s going on in Syria, will cause a flight to safety with investors seeking bonds, like mortgage backed securities. This is causing mortgage rates, which are based on mortgage backed securities, to be improved this morning.
Here are a few of the economic indicators scheduled to be released this week:
In his speech at Operation HOPE Financial Dignity Summit yesterday on the challenges of the housing market and mortgage lending, FOMC Chairman Bernanke expressed concerns that mortgage underwriting has become “overly tight”.
“…Some tightening of credit standards was an appropriate response to the lax lending conditions that prevailed in the years leading up to the peak in house prices. Mortgage loans that were poorly underwritten or inappropriate for the borrower’s circumstances ultimately had devastating consequences for many families and communities, as well as for the financial institutions themselves and the broader economy.
However, it seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery.’ [Read more…]
UPDATE: Since publishing this post this morning, another major bank announced a significant increase in their extension fees as noted below.
If you obtain a new mortgage next year for a refinance or purchase (for any purpose) and it is securitized by Fannie Mae or Freddie Mac or insured by FHA, you're helping to pay for the recently passed payroll tax cut bill.
From the FHFA:
“On Dec. 23, 2011, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011. Among its provisions, this new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae and Freddie Mac( the Enterprises) by no less than 10 basis points from the average guarantee fees charged by these companies in 2011 on single-family mortgage-backed securities. This requirement is effective immediately, meaning that the average guarantee fees charged in 2012 need be at least 10 basis points greater than the average guarantee fees charged in 2011 and that this increase be remitted to the U.S. Treasury, rather than retained as reserves by the Enterprises…. FHFA will announce plans for further guarantee fee increases or other fee adjustments that will then be implemented gradually over the two-year implementation window, taking into consideration risk levels and conditions in financial markets…"
What I'm seeing from some of the various banks and lenders we work with ranges from announcements they're increasing their extension fees 0.25% 0.40% across the board and other lenders announcing fee increases to up to 0.5% to take effect in the next couple weeks.
On a $400,000 loan, a 0.5% fee to interest rate increase means you'll be paying $2000 more for the same rate once the fee increases go into place!
With a rate lock extension, currently the charge from one bank who has announced the price increase, 7 days cost 0.125% and now with the 0.4% add, the 7 day extension cost 0.525%. Where an extension before would have cost $500 on a $400,000 loan, now it will cost $2,100 for the same seven days! This will force many borrowers to consider longer rate locks in order to avoid such a hefty penalty.
What can you do?
If you are considering refinancing your mortgage, contact your local mortgage professional to discuss current rates and securing your lower (pre-fee) rate today. If your home is located anywhere in Washington state, I can help you.
If you are buying a home and are in contract, but not yet locked, you may want to investigate locking.
Whether you are buying or refinancing your home, make sure that the lock is for a long enough period to avoid possibly higher extension fees.
Different lenders have different guidelines and ways they're implementing their fee structures. One of the benefits of working with a correspondent lender, like Mortgage Master Service Corporation, is that I work with several different banks and lenders and can filter out who is offering the most competitive price for your program at the moment you are ready to lock.
If you would like a rate quote for your home located in Washington, click here or contact me.
