Tag Archive: rates

Nov 19

Mortgage Rate Watch November 19, 2012

A little late posting this tonight, very busy day!

After the post last Friday the market improved towards the end of the day.  This morning it opened off a little then bounced back in the afternoon.  Not enough change in either direction to impact interest rates.  One reason they are not moving is because the yield spread between the 1/8 increments rates are quoted in is so large it will take a pretty big movement to bounce either direction.

It will be a short week for trading in the mortgage backed securities market as well as the stock market.  Both are closed all day Thursday and half a day Friday.

Nov 16

Mortgage Rate Watch November 16, 2012

No change in mortgage interest rates over Wednesday’s pricing.  The Industrial Production Report was released this morning and the index declined very slightly when the experts were expecting a slight improvement. 

I believe the storm has been more of an influence on the markets than the recent financial reports.

The last quote I received this morning for the bond market showed a little improvement which is a good sign on a Friday.  Over the years it seems to me Friday’s are usually off days, investors taking money out of the market over the weekend in case we attack Canada or something silly like that.

 

Next week is going to be a light one for financial reports, home sales will be released on Monday, and housing starts are due Tuesday, sounds backwards to me.  Ironic but Jobless Claims and Consumer Sentiment are both due out Wednesday, as are the Leading Indicators. 

 

2:00 update, Mortgage Backed Securities are up 8/32 which is good for interest rates, when bonds go up interest rates go down.  That is not enough change to impact rates yet, but at least they are headed in the right direction.

 

There will be fewer hours of trading next week, the market is closed Thursday and half a day Friday in observance of Turkey Day.

 

Nov 14

Rate Watch November 14, 2012

 

Bonds Down a Little Rates Up Slightly

 

Not a big movement, but Mortgage Backed Securities are trading a little lower this morning, down about another 5/32’s. Interest rates are up very slightly, not enough to change the rate.  Lenders look at yield and borrowers look at rate, the yield is only slightly less than yesterday so not enough change to bump the rate an 1/8 of a point. 

 

In fact, considering how small the change is in yield supports something I have thought for the last couple of weeks, interest rates are not as low as they should be.  Yes, I know they are at an all-time low!  But considering how much the price of bonds have increased recently I would have expected the rates would have improved more than they have.

 

So this little movement today and yesterday didn’t change anything, there was already a little fat imbedded in the rate or so it appears to me.   

 

Jun 01

Rate Watch – June 2012

Mortgage Rates improved again this week hitting record lows.  Bad economic news domestic and abroad continued to push mortgage rates down.  The unemployment figures were also bad, jobs added were less than half of what was expected and the unemployment rate increased slightly. Something interesting about the new jobs report, they lowered the numbers for previous months by almost 50,000 and that is a lot of nonexistent jobs that were counted, opps!

I have been hearing for at least a month that home sale are picking up dramatically.  Locally that may be true, I know the mortgage company I work for had a record month for May.  We closed an all-time high for a month, breaking the old monthly record by 4.6 million.  Our previous record was set in September 2010.  By the way, the 4.6 million INCREASE is more than most of our competitors do totally for a month.  We were on the plus side of a 100 million for the month, by far the largest volume of any mortgage company based in Kentucky.

Okay, let’s be honest, we do a lot of things right, but there is a lot less competition too.  I have not had a call from a recruiter since 2008, I have had 3 calls in the last week looking for loan officers.  Volume must be picking up in my area.

I just posted the lowest rate on my application site, be sure to check them out.

How much lower can they go?  Not much, there are cost to bring money to the closing table, the current rates are getting painfully close to the hard dollar cost of raising the money.  How much higher can they go? No limit. 

Remember my first rule on interest rates, Rule #1, What goes up must come down, what goes down must come up.

Every day you do not lock in a low rate is one day closer to a higher rate.

 

 

May 05

CreditXpert™ – New Page Added

There is a new page added to the Buyer’s Section – CreditXpert™ .  It explains how the service helps our clients save thousands of dollars by fine-tuning the structure of the debts listed in a credit report.

This service is provided by CBCInnovis, the company that assembles our credit reports. 

Traditional credit repair companies advise borrowers to dispute accurate information that is negative in nature and that is illegal.  CreditXpert™ does not make suggestions that are dishonest. There is a big difference between lying about what is contained in a report and structuring the content in a positive manner.

This is a major innovation. It will only make suggestions that are 100% legal, and it is provided by the same company that compiled the original credit report, straight from the horse’s mouth. 

Sorry about the horse reference, it is Derby Day after all.

CreditXpert™ will help most home buyers achieve the next best credit position above their existing credit score. This can save a fortune in closing cost and or interest.  Both of these are related to the credit score. 

It can also be the difference between a loan application being approved or declined. All automated underwriting software weighs the entire contents of an application including the credit report.  The more the contents of the credit report matches the approval matrix of the AUS the more likely the application will be approved and the better the terms of the loan will be.  

Check out the New Page.

 

Apr 10

Interest Rates Bouncing Around

Mortgage backed securities are being choppy today, they are the driving force behind mortgage interest rates.  The market opened strongly this morning gaining up to 12/32 before I left for lunch.  Interest rates do the opposite of the price of the bonds, if bond prices go up interest rates go down.  When I returned they had pulled back to 4/32 and I received an alert recommending lock.  

Clients frequently ask me if I think rates are going lower.  Anyone asking this question may want to calculate how small the difference of another 1/8 of a point interest makes.  When you see how small that difference is it may seem like a good idea to follow the advice of the alert I just received and lock that rate!

May 09

LIBOR Adjustable Rate Mortgages (ARM) Return

May 9,2011, adjustable rate mortgages returned to our rate sheet today.  Could this be a sign that things are settling down in the mortgage industry?  I see it as a good sign.  We have not offered ARM’s for a couple of years now.  For awhile they were still listed but with interest rates higher than fixed rate mortgages, then they were removed from our product list entirely.  Historically adjustable rates started much lower than fixed rates.

Today the difference is not as large as in the past but still enough to make them useful in some instances.  Our 5/1 ARM for example has a start rate about 1% lower than the 30 year fixed rate.  If the intended holding period is less than five years the difference could be substantial.  

If the holding period exceeds five years then the current low fixed rates are hard to beat.  

The current ARM indexes are currently the lowest I remember them.  The 1 year LIBOR index was .746 today, that is the lowest it has been since 1989 which was the oldest published rate on the chart at Mortgage-X.  

I am pleasantly surprised that rates have remained as low as they have and they are so incredibly low it is perplexing.  There doesn’t seem to be any problems in terms of availability of funds and yet demand remains low as well.  Strange times.

Apr 28

Mortgage Applications Fall

This is interesting; the number of loan applications fell last week by 5.6% according to the Mortgage Bankers Association. The number of applications declined at the same time interest rates improved!!! HAHAHAHA 

Can you hear The Oink Factor? 

I talk about this phenomenon in my book Selling the Invisible House in the chapter about mistakes to avoid.  Loan applications initially slow down as interest rates decrease. Then they speed up as rates start to rise.  How crazy is that? 

You economist types will state this is a matter of supply and demand.  That could explain it except for the fact that interest rates do not react that quickly to demand.  Demand on the other hand turns on and off like a faucet when ever there is a change in the direction of rates.

 Watch, when the rates start to increase there will be a spike in the number of loan applications.

Apr 27

Rate Watch

Looks like the Fed has not hurt interest rates today.  The bond market opened off a little but rebounded by lunchtime.  I had sushi, maybe that helped.  Bernanke’s speech should be over by now, he must have been a good boy.  Just got an email that the bond market improved a little more.

 Looks like they intend to keep the rates low for awhile.