Mortgages

Seattle Mortgage Rates For The Week of March 1st

Wow, March 1st is already here and the countdown has begun to the Federal Reserve’s exit from mortgage backed securities purchasing at the end of this month.   We ended last week with some pretty good rates and things have continued to be positive for mortgage rates this week as well.   The data this week has been of light impact although we’ve seen rates improve steadily throughout the week with figures in the reports showing DEFLATION signals (Unit Labor Costs, Factory Orders).   As of today well qualified buyers should have no problem getting  a rate of 4.75% on a 30 Year Fixed Conventional Loan.   Here’s some of the data from the last two days: Date Time (ET) Statistic For Actual Briefing Forecast Market Expects Prior Revised From Mar 3 8:15 AM ADP Employment Change Feb -20K -35K -20K -60K -22K Mar 3 10:00 AM ISM Services Feb 53.0 51.3 51.0 50.5 - Mar 3 10:30 AM Crude Inventories 2/26 4.03M NA NA 3.03M - Mar 3 2:00 PM Fed’s Beige Book Mar - NA NA NA - Mar 4 8:30 AM Initial Claims 02/27 469K 515K 470K 498K 496K Mar 4 8:30 AM Continuing Claims 02/20 4500K 4600K 4600K 4634K 4617K Mar 4 8:30 AM Productivity-Rev. Q4 6.9% 6.4% 6.3% 6.2% - Mar... 

The Effect Of Higher Mortgage Rates On Purchase Price

Mortgage rates have risen over the beginning of 2010 and are expected to climb significantly after the Federal Reserve stops purchasing mortgage backed securities in March.  Additionally any improvement to the overall economy will push rates higher as money moves out of mortgage bonds and into stocks.  A couple years ago when the economy was at full steam 30 Year Fixed loan rates were in the upper 5 and low 6% range.   So the question that all home buyers need to ask is how will a rise in mortgage rates affect their purchasing power.  While the exact numbers vary based upon your intended purchase price, I’d like to give you an idea in the chart below. Purchase Price  $ 450,000  $443,500  $  437,250  $ 431,150  $  425,250  $ 419,450 Down Payment  $     90,000  $   88,700  $      87,450  $     86,230  $      85,050  $    83,890 Amount Borrowed  $  360,000  $ 354,800  $   349,800  $  344,920  $    340,200  $  335,560 Interest Rate 4.875% 5.000% 5.125% 5.250% 5.375% 5.500% Term (Years) 30 30 30 30 30 30 Mortgage Payment  $       1,905  $      1,905  $        1,905  $      ... 

Seattle Mortgage Rates For The Week of February 22nd

Last week saw mortgage rates reach some of the highest levels we’ve seen so far this year.  With the homebuyer’s tax credit still around for the next couple months it’s on most buyers mind whether they’ll be able to get a rate in the upper 4’s or mid 5’s for their purchase.  The real estate market is showing some signs of recovery with housing starts exceeding forecasts, growing 590,000 in January, a 2.8% increase over December’s 560,000.  Building permits were very close to market expectations as they came in at 620,000 in January with a forecast of 630,000.  Those numbers as well as several items detailed in my blog post last week, FOMC Minutes & Producer Price Index, drove rates up and kept them there on Monday.  BUT we started out Tuesday with some mortgage rate positive information in the form of the monthly Consumer Confidence Index which came out at a 10 month low.  The FDIC then announced that the problem bank list grew 27% from 552 banks to 702 banks in Q4 2009. That is the highest number of banks on the list since 1993 and doesn’t bode well for the overall industry despite the large banks being quite profitable. ... 

Seattle Mortgage Rate News For the Week of February 15th

It’s been my goal to keep everyone reading our blog updated each week with what’s happening in the mortgage industry.  This post is a bit later in the week than I’d like, but it will allow me to summarize what’s taken place over the last several days.   Mortgage rates have risen as the week has gone by with “par” rates now hovering between 4.875% and 5% for 30 Year Fixed loans.   So why did they rise? The rate increases really got going on Wednesday, when the FOMC (Federal Open Market Committe) of the Federal Reserve Board January 28th meeting minutes came out.   In those meeting minutes there was NO mention of continuation of the purchasing of Mortgage Backed Securities which is set to end on March 31st.  That was pretty much expected, but if the possibility of continuation was expressed mortgage rates would likely have dropped.   What’s important to note is that those purchases by the Fed have accounted for approximately 80% of the marketplace over the past year.  Once you remove that artifical market from the table, volatility is bound to follow.  The minutes also included a re-affirmation of their previous guidance... 

A Tip To A Lower Mortgage Rate

Interest rates are already on the rise in 2010 and the expectation is that will not only continue but potentially explode after the Federal Reserve stops buying mortgage backed securities in March.   No matter what is happening with rates on a daily or weekly basis it’s always important to know some tips on how to get a lower mortgage rate.  In order for this  to make sense let me first give you a basic idea of how the mortgage industry works and how compensation is earned.  On a daily basis mortgage originators, whether they are direct lenders themselves or brokers who originate loans to a wholesaler, have rate sheets listing loan products, rates for those products and prices or rebates for each rate.   Those prices/rebates are part of how compensation is earned in the mortgage industry, the other being direct fees that are charged (“points, origination, processing, etc.).   Higher rates pay more in rebate while lower rates cost more in discount.  In the middle is what’s called the “par” rate.  For example if the “par rate” for a 30 Year Fixed Loan is 4.875% on a particular day then it’s likely that 5% would have a rebate... 

Seattle Mortgage Rate News For the Week of February 8th

Freddie Mac reported last Thursday that average rates for a 30 Year Fixed loan had rose to 5.1% from 4.9% the week prior.  Although, we finished out the first week in February with rates/pricing Friday morning at the best we’ve seen all year.   By the end of Friday, the stock market rallied and the great rates that we started the day with were being re-priced by many lenders.    Monday followed Friday afternoon’s pricing and we saw higher rates and prices for the “par” rates being offered.  “Par” interest rates are those that neither cost to get nor pay because they are higher than the market average.  For a more detailed explanation please feel free to ask me about how the mortgage business/market works. So what’s on tap for this week?  Monday was a fairly uneventful day but the rest of the week should hold more volatility.  Tuesday has a Treasury Auction of 3 Year Notes and Wednesday has an auction of the important 10 Year Notes.  Both of which could potentially have an impact on mortgage rates.  In the wake of treasury auctions, volatility in the mortgage market can typically be quite high.  That means there’s the... 

Seattle Mortgage Rates Drop

Earlier in the week I mentioned that the Employment Report due out on Friday would have an impact on mortgage rates.  As the week went on we saw gradual improvement in the pricing with 4.75% for a 30 Year Fixed becoming more and more available for less cost.   The stock market tumbled on Thursday and continued to fall on Friday morning despite coming back a bit in late day trading.  Thursday we saw Jobless Claim numbers that were higher than expected and Friday had Non-Farm Payroll employment numbers lower than expected.  Despite the overall unemployment rate improving to 9.7% from 10%, money continued to flow out of stocks and into bonds.   By Friday afternoon we saw many lenders “re-pricing” their mortgage rate offerrings because of this.   Early in the week 4.75% for a 30 Year Fixed Conventional loan was requiring origination fees in most cases, but by Friday that is no longer the case and it’s even possible to get into 4.625% with less than a half point in origination fees.  That’s better rates/pricing than we’ve seen at any point in 2010!    Whether these rates hold next week or not is hard to tell as the mortgage market has... 

Seattle Mortgage News For The Week of February 1st

The end of January saw mortgage rates holding fairly steady within a small range throughout the week.  The average for a 30 Year Fixed Conventional loan as reported by Freddie Mac dropped slightly to 4.98% from 4.99% the previous week.  What is somewhat surprising is that the rates held steady amidst a week that had several economic reports that came out with numbers that were more negative than what the market expected.  Existing Home Sales = Market Expected 5.9M – Actual was 5.45M New Home Sales = Market Expected 366K  – Acutal was 342K Durable Goods Orders = Market Expected 2.0% – Actual was .3% Given those negative reports you’d think the outlook on the economy would be decidely worse and we’d see mortgage rates falling.  Well not so fast as there were some also some positive economic reports that came out. Consumer Confidence was up to 55.9 which exceeded the market expectation of 53.5 Gross Domestic Product was up 5.7% while the market expected 4.7% Those positive numbers were in the categories considered to be more important and helped to keep the overall Mortgage Backed Securities market fairly stable throughout the week.   The upcoming... 

First Time Home Buyers Guide – Part 3

8. GET INSURANCE No one would drive a car without insurance, so it figures that no homeowner should be without insurance. The essential idea behind various forms of property and real estate insurance is to protect owners in the event of catastrophe. If something goes wrong, insurance can be the bargain of a lifetime. What kind and how much? There are various forms of insurance associated with home ownership, including these major types: Title insurance: Purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid. Coverage includes “lenders” policies, which protect buyers up to the mortgage value of the property, and “owners” coverage, which protects owners up to the purchase price. In other words, “owners” coverage protects both the mortgage amount and the value of the down payment.  Title insurance, while often seeming to be costly can prevent title “clouds” from affecting who has true ownership of a property. Homeowners’ Insurance provides fire, theft and liability coverage. Homeowners’ policies are required by lenders and often cover a surprising... 

First Time Home Buyers Guide – Part 2

4. LOOKING AT HOMES Some 6 million new and existing homes are sold each year. There is no shortage of housing options, but with so many choices the challenge becomes finding the property which best meets your needs. The housing market is complicated because the stock of homes for sale is always in flux. If it were possible to have a complete list of every home for sale at this very moment in a given community, such a list would become obsolete within seconds as new homes become available and properties now for sale are put under contract. In effect, buyers are looking at a moving target in a marketplace that is never static. Because of this, it is important to know as much as possible about the choices in your preferred markets, and the way to do that is by working closely with a local Realtor who has a good idea of the options available there.    What are you looking for? A home is more than just a collection of bedrooms and bathrooms. Several properties — each with four bedrooms, three baths, and the same price — may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. Each of us is different... 

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