Archives for September 2015

Mortgage rates post Fed meeting

At their September meeting the Fed decided not to raise the federal funds rate.  3-6 months ago many believed it was almost a certainty that they would raise the the federal funds rate however the global economy has slowed, China has faltered and it appears the US economy is weakening.  Mortgage rates did not move dramatically lower post meeting however they did retreat back to where they were a few weeks prior to the meeting.  Mortgage rates have been in a sideways trend for several months now.  Overall most mortgage lenders are offering high 3 to low 4 percent 30 year fixed mortgage rates.  As for a 15 year fixed mortgage; most lenders are in the low to mid 3 percent range.  Mortgage rates could continue this stable trend for the next few months as the world awaits what the Fed will do next.  Stable mortgage rates is a welcome trend….earlier this year we saw a period of volatility that caused lenders to raise rates.

How to best understand mortgage loan fees, costs and points

One of the biggest mistakes someone can make when shopping for a new mortgage loan is to just ask: “What’s the rate and are there any points?”  There are other things potential borrowers due that prevents them from getting the best possible mortgage rate however today will focus on this one question.  When working with a mortgage lender; it’s very important to make sure you ask questions-lot’s of them!  Having a better understanding of what your new mortgage is all about could save you thousands and thousands of dollars over the life of the new mortgage loan.

The main reason why it’s bad to just ask: “What’s the rate and are there any points?” is  that mortgage lenders in California (and across the country) can add a lot more fees to loans that have nothing to do with points.  Also some loan officers will quote you zero point loan and not be clear on the upfront origination fees.  Second there are some lenders that only quote discount points as “points” and do not include loan origination fees with discount points. Searching for a mortgage loan and getting a great interest rate can be a hard process, but with a few simple steps you can make the process MUCH easier.  The easiest way to shop for a new mortgage is to ask the following:

“What is the rate, loan amount, payment and TOTAL fees for everything?”

Second question – “Are you rolling the TOTAL fees into the loan amount?”

mortgageEveryone wants the absolute lowest California home loan rates and ff you ask what are the “total fees” (as in everything including points, origination fees, 3rd party fees, lenders fees etc) then you don’t have to worry about if anything is being left out.  And if it’s a purchase ask them to leave out the title and escrow fee estimation.  Reason is the seller sets up the title/escrow services so no matter who you use as a lender your title and escrow fees will remain the same.

Perhaps the worst quote you can get is when a loan officer says something like “Our rate is 4.00% and comes with a $3,000 lender credit!”

Sounds great but the realty is it could be the worse quote ever.  Reason is you don’t know what the total fees are.  If the total fees are $10,000 (which easily can happen with some lenders on their mortgage loan programs) then you’re paying $7,000 in fees.  Never, ever accept a quote with just a rate and credit towards fees.

Also check the lender’s rating with the Better Business Bureau; if they have less than an A rating you might want to ask more questions about the company and the quote.  If you would like a no cost/no obligation quote just call us directly at 1-800-550-5538

Mortgage Applications 9-9-15

The resent rally in mortgage applications came to end as rates inched up ever so slightly in early September.  Refinance application fell 10% and applications to purchase new and existing homes only fell 1%. Per MBA the total volume fell 6.2 percent on a seasonally adjusted basis for the week ending September 4 versus the previous week (Mortgage Bankers Association).

Mortgage rates still remain relatively low compared to last year and the good news is we’ve seen stability return to the Mortgage Backed Securities (MBS) market.  June and July were marked by serious volatility which is never good for mortgage rates.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 4.10 percent from 4.08 percent, with points increasing as well.  This move was very small however it was enough to cause a significant slow down in refinance mortgage applications.