Mortgage rate update for the week of October 29, 2012

October 29, 2012 by 1 Comment

This week is packed with economic indicators that may move mortgage rates with the grand finale being the Jobs Report on Friday.

Hurricane Sandy is also impacting the industry with the bond markets closing this afternoon and Tuesday. This is the first time in 19 years that the NYSE has closed due to a storm. Some lenders are closing their lock desk due to Hurricane Sandy. My thoughts and prayers to those who are in the path of this storm.

Here are some of the economic indicators scheduled to be released this week:

Monday, October 29: Personal Spending; Personal Consumption Expenditures and Core PCE; Personal Income

Tuesday, October 30: Auto Sales and Consumer Confidence

Wednesday, October 31: ADP National Employment Report; Employment Cost Index and Chicago PMI – Happy Halloween!

Thursday, November 1: Initial Jobless Claims; Productivity and ISM Index

Friday, November 2: The Jobs Report. NOTE: it’s expected that around 125,000 non-farm payroll jobs were added in September.

Remember mortgage rates are based on mortgage backed securities (bonds). Mortgage rates tend to improve when the stock market is doing poorly as investors will trade the potentially higher returns from stocks for the safety of bonds. The reverse is also true. Mortgage rates may change several times throughout the day.

Next week we have our elections. Please be sure to vote!

If you’re interested in refinancing or buying a home in Seattle, Redmond, Renton or anywhere in Washington State, where I’m licensed, I’m happy to help you.

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Mortgage rate update for the week of October 15, 2012

October 15, 2012 by Leave a Comment

mortgageporter-economyHere are a some of the economic indicators scheduled to be releases this week which may impact the direction of mortgage rates.

Monday, October 15: Retail Sales and Empire State Index

Tuesday, October 16: Consumer Price Index (CPI); Industrial Production and Capacity Utilization

Wednesday, October 17: Building Permits and Housing Starts

Thursday, October 18: Initial Jobless Claims and Philadelphia Fed Index

Friday, October 19: Existing Home Sales

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Give yourself a raise: Refinance!

October 12, 2012 by Leave a Comment

About three years ago, I helped a couple buy their first home. They were my first clients to lock in at 4.500%. I remember sitting across the table from them at a coffee shop in West Seattle and telling them that they would probably never need my services again since their rate was so low. I was wrong.

We are refinancing their mortgage of $359,000 into another 30 year fixed rate at 3.375% (apr 3.544) with net closing cost of $1145.  They are reducing their monthly mortgage payment by $418! That’s a significant amount of savings to put back into their household to pay off revolving debt, build savings or retirement or help fund a college account.

They could even take that $418 and apply it towards additional principal, making the same payment they have been for the past three years while whittling seven years off of their new mortgage. This would save them $67,000 over the life of the loan.

My point is that mortgage rates are extremely low. Even if your current rate is 4.5%, it may very well make sense to refinance.

If your home is located in Washington state and you would like me to provide you with a written rate quote, click here.

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Mortgage rate update for the week of October 1, 2012

October 1, 2012 by Leave a Comment

mortgageporter-economyI cannot believe it’s October, can  you? Perhaps it’s our extended summery weather we are experiencing in Seattle. This being the first week of a month means that we have the Jobs Report being released this Friday. The Jobs Report tends to impact mortgage rates as it indicates how the economy is doing and the potential for wage inflation. It is anticipated that 120k jobs were added last month – we’ll see how the numbers pencil out on Friday when September’s Jobs Report is released. Wednesday is loaded with both the ADP National Employment Report and the release of the FOMC minutes.

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Vacations over…I’m back to work!

August 6, 2012 by 1 Comment

I’m back to work after my vacation in Hawaii with my son. We had a great time exploring Oahu’s beautiful beaches. The last time I was in Hawaii was probably about 12 years ago when my husband was a county manager for a title insurance company. And we brought home beautiful weather to Seattle – wasn’t this weekend gorgeous?

Okay… back to work. This week we don’t have a lot on deck as far as scheduled economic indicators. 

Wednesday, August 8: Productivity

Thursday, August 9: Initial Jobless Claims

Watch for the results of the bond auctions starting Tuesday and ending Thursday when the Treasury will be selling $72B in notes and bonds.

Last Friday’s Jobs Report came in stronger than expected which has caused mortgage rates to trend higher.  With that said, mortgage rates are still extremely low.

As of 7:40 am this morning (8/6/2012), I’m quoting 3.500% (apr 3.579) for a 30 year fixed rate based on a sales price of $500,000 with a $400,000 loan amount (20% down) and low-mid credit scores of 740 closing in 30 days for a purchase in greater Seattle.

If you’re interested in a mortgage rate quote or getting preapproved for a purchase or refinance for a home located anywhere in Washington state, please contact me.

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FHA Streamlined Refinance: Credit vs Non-Credit Qualifying

July 25, 2012 by 10 Comments

With an FHA streamlined refi, most folks have the misconception due to the program name “streamlined” that the refinances are close very quickly and are a slam dunk with little to no paperwork. While they do close quicker than a typical refinance since more often than not, you’re not waiting on an appraisal, if you’re going for a lower cost or better rate, you’re probably opting for a “credit qualifying” FHA streamlined refi. What’s the difference?

FHA streamlined credit qualifying basically means that the borrower is providing income and asset documents, just like a regular refinance. By providing documentation that shows they actually qualify for the new mortgage, lenders provide preferred pricing. Since it is a “manual” underwrite (a real human is underwriting the loan and not a computer program) the debt to income ratio is limited to 45%.

FHA streamlined non-credit qualifying is when income documentation is not provided and not stated on the loan application. The borrower’s income is not a consideration. Because of the higher risk, the rate or pricing is often slightly higher.

EDITORS NOTE: Rates quoted below are expired (years old!!)…for a current mortgage rate quote for your home in Washington state, click here.

Right now (July 25, 2012 at 11:00 am) I’m working on a quote for an FHA streamlined refinance for a home located in Seattle. The rates quoted below are based on mid credit scores of 680 –  720 with no appraisal and the base loan amount is $289,000.

FHA credit qualifying 30 year fixed: 3.375% (apr 4.548) priced with just over 1 point in rebate credit which will cover closing cost and some of the prepaids/reserves. Principal and interest payment is $1300.01.

FHA non-credit qualifying 30 year fixed: 3.750% (apr 4.934) priced just under 1 point (about 0.25% difference in fee) which covers closing cost and some of the prepaids/reserves. Principal and interest payment is $1361.82.

NOTE: for a current rate quote on a home located anywhere in Washington state, based on today’s pricing and your scenario, click here.

What type of supporting documentation is required?  This is in additional to a complete loan application and credit report.

Non-credit qualifying:

  • Copy of your existing mortgage Note
  • Copy of your mortgage statement (we need to document a “Net Tangible Benefit”)
  • Bank statement (all pages) if funds are due at closing. Large deposits may be required to be documented.
  • Drivers license
  • Social security card
  • Payoff obtained from escrow company documenting that the current month’s mortgage payment has been made

Credit qualifying: all the above, plus…

  • last two years W2s
  • last two years tax returns (if self employed)
  • most recent paystubs documenting 30 days of income
  • most recent bank statements (all pages) documenting at least funds for closing. Large deposits may be required to be documented.

Additional documentation may be required depending on your personal scenario.

Whether you opt for non-credit qualifying or credit qualifying is your choice and depends on your financial scenario. When rates and pricing are the same for both scenarios, most would opt for “non-credit” qualifying. Since recent changes with how HUD prices FHA mortgage insurance for some loans, there has been major changes with which banks are offering FHA streamlines and how they’re pricing them.

If I can help you refinance your FHA loan on your home located anywhere in Washington state, please contact me.

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Do I have the best rate possible?

February 6, 2012 by 1 Comment

One of my preapproved first-time home buyers asked me if they have the “best rate possible”.  The phrase “best rate” can mean different things to different people, in my opinion, the most common definitions to a borrower would be:

  • best rate possible based on qualifying; or
  • lowest rate possible based on current market pricing.

Best rate based on qualifying means that your credit scores are as high as they can possibly be and you’re putting enough money down (or have enough equity) to where there are as few price adjustments to your scenario.

With FHA loans, there are no price improvements after a credit score of 720 or higher. There is a slight improvement to mortgage insurance premiums with FHA at 5% down. With FHA a 720 score with 5% down will provide you the “best payment”.

With conventional financing, you can see by Fannie Mae’s chart below that there are different price adjustments based on credit score and loan to value. The best pricing on this chart is with 40% down (or equity) with credit scores of 700 or higher. There are additional charts for conventional depending on program features, such as an adjustable rate or the Home Affordable Refinance.

FannieLLPA

Below is a chart from a lender showing various adjustments based on program, credit score and loan to value.

LenderPricing

If you’re interested in obtaining the best rate possible based on qualifying, consider starting the preapproval process very early so that you have time to work on your credit, debts and/or down payment. I enjoy helping my clients develop a plan to put them in best possible situation based on their scenario. Sometimes this may take a month or two and sometimes it may be a year or more, depending on what my clients situation is.

Best rate based on pricing may be the very lowest rate available at that moment, which would take paying additional discount points and would increase your closing cost. Some might think “best rate” is lowest rate at the least amount of cost (par pricing or using rebate pricing).  Whether you want your rate priced with discount (higher fees/lower rate) or rebate credit to pay for closing cost (lower fees/higher rate) is up to the borrower. 

Keep in mind that mortgage rates are a moving target, much like buying stocks. Rates often change several times a day. A mortgage interest rate is only secure once it is locked. Once you pull the trigger to lock in a rate, rates may improve or deteriorate. You can lock in a rate once you have a signed around contract with a specific closing date if you’re buying a home. If you’re refinancing a home, you can lock in whenever you know what your approximate closing date should be.

Mortgage originators are restricted from advertising that they have the “best rate” since this is something a lender cannot guarantee. It’s impossible to know what all our competitors are currently offering in pricing and therefore, no lender can truly say they have the “best” or “lowest” rates.

As a correspondent lender, we work with several banks and lenders and utilize a pricing engine which compares their mortgage rates based on a borrower’s specific scenario so that we can select who has the most competitive pricing at that time available to our company for that borrower.

If you’re considering buying a refinancing a home anywhere in Washington, from Redmond to Walla Walla (and everywhere in between), I’m happy to help you with your mortgage needs. Click here for your personal rate quote.

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Using Rebate Pricing to Reduce Closing Cost on your Refi or Home Purchase

August 21, 2011 by 6 Comments

Mortgage rates are priced with rebate, a credit towards closing cost, or discount points, an additional cost paid to reduce the interest rate (Note rate).  The amount of the rebate or discount is based on a percentage of the loan amount. The difference in pricing (rebate or credit) varies throughout the day, just as mortgage interest rates change. In fact, it’s not so much that the mortgage rates change throughout the day, it’s actually the cost or credit associated with that rate.

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