Current & Future Interest Rates Trends October 18′

Now that the traditional spring/summer buying and selling season is over, let’s take a look at how interest rates have been trending—and what may be in store in the coming months.

Generally, the interest rates on a 30-year fixed-rate mortgage and on a 15-year fixed-rate mortgage have been stable throughout the spring and summer real estate season. In the chart below from Freddie Mac’s Primary Mortgage Market Survey, the interest rates have fluctuated only 0.12 percentage points on the 30-year fixed-rate and only 0.14 percentage points on the 15-year fixed-rate from April through August.

This stability in the rates is something we’ve seen the last two years during the same April-August timeframe, with a variance of 0.17 percentage points in the 30-year fixed and 0.14 percentage points in the 15-year fixed in 2017 and 0.17 in the 30-year fixed and 0.12 in the 15-year fixed in 2016.

 

Month 30-Year Fixed 15-Year Fixed
April 4.47% 3.93%
May 4.59% 4.07%
June 4.57% 4.04%
July 4.53% 4.01%
August 4.55% 4.02%

 

The weekly figures for the last six weeks also show fairly steady rates. Since August 16, the 30-year fixed has varied only 0.14 percentage points and the 15-year fixed has varied only 0.14 percentage points.

 

Weekly 30-Year Fixed 15-Year Fixed
August 16 4.53% 4.01%
August 23 4.51% 3.98%
August 30 4.52% 3.97%
September 6 4.54% 3.99%
September 13 4.60% 4.06%
September 20 4.65% 4.11%

 

 

The steady interest rates are a result of a variety of factors that have been applying pressure—both upwards and downwards—on the rates. The balanced economy, strong corporate earnings and worries over rising inflation have applied upward pressure while slowing home sales, concerns about the global economy, and other international “drama”—such as the recent currency problem in Turkey—have applied downward pressure on the rates.

Going forward, two opposing factors that may influence interest rates in the near future are the Federal Reserve’s pronouncement that we’ll see one or two more hikes to the key short-term interest rate this year and the possible economic ramifications of the current tension surrounding tariffs and trade.

As always, to get the best information on interest rate trends, talk to your mortgage professional. ∆

 

© Left Field Media


Do You Qualify for a Jumbo Loan?

In most areas, conventional loans are limited to just over $400.000. Of course in certain, more expensive, residential areas, those amounts may be higher, sometimes even up to around $700,000. But what if the home of your dreams is currently selling for well over what a conventional loan in your area will offer?

The answer is that you need a jumbo loan. Of course the next question is do you qualify for one? According to bankrate.com, there are three main qualification areas that will answer that question.

Qualification #1: Can you afford at least 20% down payment on the home? Just a few years ago this requirement was only 5% in some cases, but things have changed. A credit squeeze that started in late 2007 frightened some lenders away from jumbo loans entirely. Now they are back, but they are looking for clients that can put a substantial amount down to lessen their risk.

Qualification #2: You must be able to fully document your income. They want cold, hard proof that your annual income is exactly what you say it is.

Qualification #3: If you get the loan, will the monthly mortgage payments be less than 38% of your monthly income before taxes? If yes, then you should be in good standing. Of course the smaller percentage of your income that will be needed for the mortgage the better.

If you think about it, all of these qualifications make sense. No lender wants to lend money that they don’t fully expect to get back–with interest. Meeting these three requirements goes a long way in helping a lender feel comfortable with agreeing to your jumbo loan.

One note, though, is that you shouldn’t expect to get a fixed rate loan for these higher-end amounts. Adjustable-rate loans are common for this market. The good news is that the interest rate can be relatively low for these loans.

Need more information? Please contact us and we will answer any questions you may have about your loan options.


Three Reasons Not to Ignore The Holiday Season

There’s no doubt that mortgage refinancing is very stressful. After all, who has fun crunching numbers and dealing with lenders? However, the upcoming season is something to look forward to. It’s not something to ignore, and will give you a break from the hassles of your finances. Here are a few reasons why you shouldn’t ignore the Holiday season.

#1. Your Family is Essential

Though mortgages and finances are very important, family is just as essential. Not only do the Holidays come around only once a year, but it’s also a time where many people put aside their usual tasks, to spend time with those they care about. Of course that’s not to say the Holidays are the only time we see our family members, but between debts, jobs, and loans, the interactions we have with our loved ones are sometimes very limited.

#2. It Will Be Over Before You Know It

The Holidays are a time to relax, enjoy yourself, and spend time with the family. However, the bright lights and Christmas trees come and go as quickly as they’re put up. If you spend all your time and energy focusing on financial tasks (instead of focusing on your family and the true meaning of the season), you’ll realize what a missed opportunity you had. That’s not to say you should neglect what you need to do, but it’s the best moments in life that tend to pass us by in the blink of an eye. Make every moment during the season last.

#3. You Will Have A Fresh Start 

Once the Holidays are over and you’ve had your break, you’ll be rejuvenated and ready to accomplish your tasks. It’s not just for your direct benefit, but for our benefit as well. Generally speaking, if sufficient breaks aren’t taken, it may affect one’s determination to complete what’s required of them. After all, mortgage refinancing isn’t easy to deal with when experiencing a burnout.

After you’ve enjoyed the Holidays, contact us regarding home loans and mortgages. Thanks, and have a happy new year.


The benefits of using mortgage brokers!

You may be wondering if there are any benefits that are inherent in working with mortgage brokers, and we’re here to assure you that there are, indeed, benefits of working with brokers. Here, then, is the list of benefits you will receive when you work with a mortgage broker:

  • It will save you time and effort. You don’t have the time in the day to go searching for the best deal on your mortgage — and it definitely takes a long time to find the perfect deal. But that’s all the mortgage broker does, and will ever do: find the perfect deal on your mortgage. By hiring a mortgage broker to handle this important part of the home-buying process, you will be saving time and effort.
  • Mortgage brokers already have contacts and relationships in the banking industry that put them at a distinct advantage over non-professionals. These relationships will be suited to your needs — for instance, if you have poor credit, you will need one kind of mortgage broker; if this is your first time buying a home, you will need another kind of mortgage broker.
  • Finally, your mortgage broker will be able to streamline your application materials into one package. If you were to fill out a new application for each mortgage you were looking to apply for, you would waste time and energy and money in the process.

We are a committed team, here to help you find the right mortgage rate for your needs. We understand that every borrower is different, and we offer a variety of services to meet your individual requirements. For more information about us and our services, contact us today to see what we can do for you.

What does a mortgage broker do?

The Benefits of an Adjustable Rate Mortgage

Over the past several years, many people have developed some strong opinions against an adjustable rate mortgage. However, there are actually several reasons that this type of mortgage is still relevant in today’s society. Is this the right decision for you? Learn more about this mortgage below in order to find out.

Low Interest Rates

One of the best things about this type of loan is that it allows you to save a great deal of money when it comes to the interest that you begin paying on your home. Typically, your ARM rate will be significantly lower than a fixed rate, which allows you to save money. To help increase the value, consider adding the savings to the principle of your home in order to pay it off faster.

Short-term Loans

Adjustable rate mortgages are especially attractive to those who do not plan to stay in their home for an extended period of time. This could be those who are only at a location temporarily or who are simply looking to upgrade their home not long after purchasing it. Regardless, this type of loan will help them to save money in the short run so that they can move on quickly.

Most people believe that ARM rates will only increase as time progresses. However, the opposite is actually true as well. When the rates are down, your loan payment will also decrease. This allows you to pay more towards the principle of your home and less to the interest.

If you are considering an adjustable rate mortgage, be sure to contact us today.