Archives for March 2017

Longer term mortgage rate loan program

Before 2008 longer term mortgage rate loan programs were starting to make their way into mainstream loan production. 40 year fixed rate mortgage loan programs became popular and wide spread in California and in other parts of the country. Homeowner’s were looking for the opportunity to buy a larger house so the mortgage industry created this new loan product. The mortgage rate was fixed however instead of a 15, 20 or 30 year term; it Mortgage Interest Ratewas now 40 years. At first the rate was not much higher than a 30 year fixed rate mortgage; so the borrower received the benefit of both a fixed rate and a lower payment when compared to other mortgage rate products. After the market collapsed; the 40 year mortgage loan product went away and California refinance and purchase loans went back to the previous normal of 15, 20 and 30 year terms.

Recently we’ve heard talk of bringing back the 40 or possible a 50 year fixed rate mortgage. Longer term mortgage rate loan programs might offer some benefits in terms of allowing the buyer to purchase at a higher price point however there are some serious downsides. Moving to a 40 or even 50 year mortgage essentially means you have no plans to pay off the loan; and paying off a mortgage is a great way to build wealth.

Also longer term mortgages carry a much higher long term cost for homeowners.  The interest rate may not be much lower than a 30 year fixed and you’ll be paying very little towards the principal the first 10-15 years of the loan. Do we need to create loan program so that people can spend more money or are the current suite of mortgage rate loan programs adequate? I think the industry should be conservative and stick with the normal mortgage rate loan programs of 15, 20 and 30 year fixed rates.  If you would like a quote for a new home loan; please contact us directly at 1-800-550-5538.

Final GDP Q4 2016 and Mortgage Rates

The Final GDP for Q4 2016 came in at 2.1%; just above the estimate of 2.00%.  Also final sales came in a bit stronger at 1.1% and estimates were 1.1%.  Mortgage rates for the morning probably will be similar to yesterdays as fixed rate mortgages  (flat) and adjustable rate mortgages usually don’t move much when data points are only a tad bit stronger; or weaker, than estimates.

If you would like a no obligation and no cost quote for your next California refinance or purchase please contact us directly at 1-800-550-5538.

RTRS – US FINAL Q4 GDP DEFLATOR +2.1 PCT (CONS +2.0 PCT), PREV +2.0 PCT

RTRS – US FINAL Q4 GDP +2.1 PCT (CONSENSUS +2.0 PCT), PREV +1.9 PCT; FINAL SALES +1.1 PCT (CONS +1.0 PCT), PREV +0.9 PCT

In other news; jobless claims fell to 258,000 for the week of March 25th down from the previous week of 261,000

RTRS – US JOBLESS CLAIMS FELL TO 258,000 MAR 25 WEEK (CONSENSUS 248,000) FROM 261,000 PRIOR WEEK (PREVIOUS 261,000)

California mortgage rate reset

Is your California mortgage rate about to reset after a 5, 7 or 10 year fixed rate period?  If so don’t worry; thousands of Californians are in the same situation every year.  Adjustable rate mortgages are a mortgage product in which the rate adjusts or “resets” after a fixed period time.  That’s different from a fixed rate mortgage which has a fixed rate during the entire life of the loan.  As you know you obtained a break on the rate for going with an adjustable California mortgage rate when you purchased or refinanced your home.  But now you’re facing a mortgage rate reset; so here are some options.

When you obtained your current mortgage, California mortgage rates were probably super attractive considering the 30 year low we’ve seen since 2008.  But now you might be looking at a reset so does that mean you need to refinance?  Nope; you actually might not see a bump in rate at all.  The key thing with a California mortgage rateCalifornia reset it to know your margin and your index.  Add those two together and that will be your reset rate for the next year (if you’re rate adjusts every year).  Many homeowners chose to stick with the mortgage they have for many reasons especially if the new mortgage rate is attractive.

Next option is to do a California refinance with a new fixed rate mortgage or a new adjustable rate mortgage.  Make sure you obtain 2-4 quotes and don’t forget to contact JB Mortgage Capital, Inc. at 1-800-550-5538 for a no obligation and no cost quote.  Another option is to sell the property if you are looking to upgrade to a new home or downsize to something smaller.

California refinance rates influenced by Evans

California refinance rates influenced by Evans earlier today; per Reuters see the feed information below.  Since his comments from earlier today; California refinance rates have shown a willingness to improve before the end of the day/by tomorrow.  California refinance rates have been a bit stagnant this week; and late yesterday came under pressure.  To keep loan volume just above abysmal mortgage lenders are trying to keep California refinance rates very competitive.  If we see further gridlock in Washington and if data points come in lower than expected we could see further improvements to California refinance rates over the next 4-8 weeks.

Charles Evans
President and Chief Executive Officer Federal Reserve Bank of Chicago.  Federal Reserve Bank of Chicago is one of twelve regional Reserve banks across the United States.

RTRS – FED’S EVANS SAYS 2 RATE HIKES THIS YEAR VERY SAFE, 3 COULD ALSO HAPPEN BUT 4 WOULD NEED EVEN BETTER FUNDAMENTALS

RTRS – FED’S EVANS SAYS BIG FISCAL STIMULUS NOT NEEDED BUT INFRASTRUCTURE SPENDING WOULD BE GOOD

RTRS – FED’S EVANS SAYS NOT MORE PESSIMISTIC THAN OTHERS BUT THINKS U.S. COULD BUILD MORE OF AN INFLATION “BUFFER”

If you would like a quote for a California refinance please contact JB Mortgage Capital, Inc. at 1-800-550-5538.  We’ll provide a no cost and no obligation quote and answer any questions you may have.

Mortgage rates and Pending home sales February 2017

Mortgage rates and Pending home sales in February 2017 were a mixed bag.  Mortgage rates were high but pending home sales were fantastic.  As previously posted we’ve seen mortgage rates move higher since November 2016; post election due to the fear that a Trump Presidency will bring inflation and higher mortgage rates.  So far that has not happened as inflation has not jumped although some data points have shown improvements over recent months.  Mortgage rates seem to be range bound between 4.00% – 4.375% (30 year fixed mortgage rate).  The interest in buyers at this level of mortgage rates seems to have been negative although the pending home sale data for February 2017 was strong.  Keep in mind this “pending” home sale data and not closed sales so we’ll have to wait and see if these contracts close.  It will be interesting to see if the higher California mortgage rates cause some buyers to back out of certain contracts; this can happen when a buyer is gambling a bit on mortgage rates moving down prior to close.

Per Lawrence Yun, National Association of Realtors chief economist, said “Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country,” he said. “The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year.”

He added; “Last month being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt.”