Mortgage Interest Rates are HIGHER!

December 8, 2010 by Leave a Comment

Mortgage Interest Rates have gotten higher, not lower as the Fed said it was hoping would happen with this latest round of activity.

So, when you look at the Mortgage Banker’s of America’s (MBA) refinance index (looks at refinance activity on a month over month basis) and the the 30 year fixed rate mortgage interest rate that’s printed each week from the Freddie Mac Primary Mortgage Market Survey®… the following release of information from the MBA is not surprising.

The Refinance Index decreased 1.4 percent from the previous week. This is the fourth weekly decrease for the Refinance Index which reached its lowest level since June 2010.

December mortgage rates are currently hovering for a 30 year fixed mortgage at above 4.75% APR. Although mortgage rates haven’t risen very far – and are still below 5% – it takes lower and lower rates to get people to refi (at least lower than recent purchase rates).

With 30 year mortgage rates now about 0.75% above the lows in October, this is the end of the recent surge in refinance activity – unless rates drop sharply again.  It also seems unlikey to “excite” any buyers out there looking for a bargain.

The Fed Stated Policy is for mortgage Interest rates to be LOW with the QEII policy… we’re waiting… and waiting… for that to happen.  When and IF rates head lower – I’m hoping buyers realize this could be the last opportunity they get!

If you have questions about mortgage interest rates, and qualifying for a mortgage in NC, please call Steve and Eleanor Thorne, NC Mortgage Loan Experts 919-649-5058.  We have the best mortgage rates available.

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Mortgage Update 10-05-2010 (L-O-W)

October 5, 2010 by Leave a Comment

As you might know, I work with my husband, Steve.  Occasionally, I sit in his office waiting to talk to him – while he’s on the phone with a customer.  Today, I listened as he explained where mortgage interest rates are, and what the best interest rate was for the customer on the other end.

Have you ever bought tires?  Well, you know how when you are looking for tires there’s all these ads that say that tires are $25 each?  When you get in the tire shop, and the guy starts adding for valve stems, alignment, balancing… rebuilding tire pressure sensors and pretty soon the tires for YOUR car are $45 a piece.

Well, that’s kinda’ how I look at mortgage rates today. In general, rates are around 4.25%. You can get lower with a little more cost – or you can get a little higher rate with fewer costs.”

I thought that was pretty clever! It made me wonder though, how low COULD I really get a mortgage loan? Let’s say the seller is willing to pay closing costs, and I can pay a 1% origination fee and .25% in a discount fee.  If that was the case – what could I do??

On a conventional loan you could get a 30 year fixed rate today at 3.875% (with great credit and a 20% equity gap an APR of 4.064 refinance or purchase)

A 15 year mortgage interest rate is even lower!

On a Government loan (FHA or VA) you could get a 4.0% mortgage loan (4.562 APR) 30 year fixed rate!

If you get that 3.875% rate – does that mean you are getting the lowest possible rate? Someone said, getting the best mortgage rate takes research and LUCK.  I believe that’s true.  Mortgage interest rates don’t just change daily – they change by the HOUR, sometimes 2 or 3 times within 30 minutes!  You could research rates right now, and call back in the morning – and find a difference of an 1/8th or more!

The real purpose in researching all of this is (especially if you are shopping for a refinance) finding a loan officer that has YOUR best interest at heart.  You want to work with someone who is going to ask you important questions, like:

  • How long do you expect to live in your home?
  • Do you have a second mortgage or an equity line on the home?
  • What are the financial changes your family is going to experience in the next 3 – 5 years? (do you have children going to college, someone getting married, expect to have new children in your family/)
  • What is your debt and spending situation?  Have you been saving for retirement?

Besides the best mortgage interest rate, you are looking for a realistic idea of what it will cost to refinance your mortgage loan. If one person quotes you title insurance of $300 and another quotes title insurance of $378… well ask the $378 guy why his is higher.  Chances are, he’s given you an EXACT number, and the $300 guy gave you a “guestimate” on the cost to refinance your mortgage loan.  If one person quoted you $700 for hazard insurance and you know yours is $633 a year, tell them!

The insurance, title, recording, attorney, taxes appraisal, credit fees are generally NOT fees a loan officer has ANY control over.

The bottom line here is this… work with the loan officer that has your best interest in mind. If one person charges you $700 in fees and saves you $115 a month in your mortgage payment when you are refinancing your mortgage loan, I’d be happy!

BUT… if the loan officer asks the RIGHT QUESTIONS, and saves you $280,000 with a refinance on your mortgage loan by giving you a shorter term, or pays off consumer debt… THAT’s something to stand up and dance for, do a Whoot! Whoot! and tell your friends about!

If you are considering a REFINANCE, or the purchase of a home - call Steve and Eleanor Thorne, 919-649-5058 we have the best mortgage interest rates and the lowest fees available! If rates were at ZERO, would that make you want to buy?

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What if Mortgage Rates Went to Zero? Would You Buy Then?

September 28, 2010 by Leave a Comment

I am a self proclaimed economics junkie, nerd, enthusiast. I got really excited looking at some recent information about the Economy and Interest rates!

A survey done by CNBC of  leading market participants indicates that THEY believe the Federal Reserve will boost it’s balance sheet by about a half a TRILLION dollars in the next six months.

If you are like one of my friends, you are scratching your head going, “and I care about this because….?” Well you care about this because if the Fed does this – a likely benefactor would be LOWER Mortgage Rates.

The Fed stopped buying mortgages in March, and rates didn’t skyrocket… but they just are not going below certain thresholds. The idea is that the Federal Reserve will have to come back into the market in some fashion, and when they do, mortgage rates will likely go lower.

But HOW low will they go?  And would a rate at, or near zero, have first time home buyers running to buy like the next $8000 Tax Credit?

“The difference between a 4.5% and a 3.5% mortgage isn’t that great. If we were at 10% and rates fell to 5%,” that drop would attract much more borrower interest. “When you’re talking about incremental declines in interest rates, it does add some [demand] but not as much as you’d think.”

Mr. Bernanke is scheduled to speak this Thursday and there will be even more people listening to his “tone” to see if there’s any hint about deflation and the Federal Reserve”s Balance Sheet. If the CNBC poll is correct, we could get below the current stale mate.  Either way, though, mortgage rates are at the historical low point and that’s only ONE of the reasons people are buying in the Raleigh / Cary real estate market!

To find out what you can qualify to purchase in NC, call Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.  We have the best rates and the lowest fees for mortgage loans in NC Do you think we need a new tax credit?  Read this

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Mortgage Interest Rates September 17, 2010 Update

September 17, 2010 by Leave a Comment

If you are considering a home purchase or a refinance, you are probably doing your best to follow the direction of mortgage interest rates. Well, rates on 30-year mortgages climbed for the second straight week, even though they are pretty close to the lowest level in decades.

The average rate for 30-year fixed loans this week was 4.37 percent, mortgage buyer Freddie Mac said Thursday. That’s up from 4.35 percent a week earlier and 4.32 percent the previous week, which was the lowest level on records dating back to 1971.

The average rate on 15-year fixed loans dropped to 3.82 percent. That was the lowest on records dating back to 1991 and was down from 3.83 percent last week.

For mortgage rates to move lower – we need more bad news in regards to the Economy… Rates have been at or near the lowest level in decades since spring as investors worried about the state of the economy and then moved money into safe Treasury bonds.  That lowered the bond yields, which mortgage rates tend to track.

But recent economic data have given investors less reason to worry. First-time claims for jobless benefits have fallen in three of the past four weeks. And in August retail sales rose modestly and factory output grew for the 12th time in 14 months. The CPI numbers out today indicate that we have little to any chance of Inflation, generally seen as good news.  The “Zero” inflation status allows some room for the Fed to make some slight moves at it’s meeting next week, allowing the Fed Balance Sheet to grow.

Even thought the improving economic outlook may have prompted some investors to pull their money out of the bond market and put it back into stocks.

But it hasn’t helped the housing market, nor have low mortgage rates. Home sales plummeted this summer and economists don’t expect that to change until the unemployment rate falls significantly and credit becomes more accessible to potential buyers. Applications for new home loans fell by nearly 9 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday.

Meanwhile, foreclosures are surging. Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis, foreclosure listing firm RealtyTrac Inc. said Thursday.  In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said.

In all, it’s going to take a Congress and the “new” bank regulators deciding on a course of action that is consistent to – coupled with JOBS to fix the housing problem.  One of my competitors said this week in a Rotary Meeting their Economist expect rates to go to 2% by the end of the year.  Really?  I’m not seeing it.  If this is true… we are in a WORLD of trouble!

To calculate average mortgage rates, Freddie Mac collects rates from lenders around the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.55 percent, down from 3.56 percent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.4 percent from 3.46 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for 30-year and 1-year mortgages. The average fee was 0.6 of a point for 15-year and 5-year mortgages.

If you are considering a purchase or a refinance in NC – call Steve and Eleanor Thorne.  We have the best rates and the lowest fees available, and we are WATCHING the economic conditions… not just repeating what someone else is saying!

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Have We Hit The Bottom On Mortgage Rates in NC?

August 4, 2010 by 2 Comments

I read a ton of Economic commentary and as such, I can sometimes come across as a “Debbie Downer.” The reason for this is simple.

I like low mortgage rates – I’m constantly looking to see if they are going lower… and in general, as mortgage interest rates move lower, it’s BECAUSE of BAD NEWS in the Economy.

Most people don’t want to read commentary from someone who is delivering more bad news, because they get enough of that from the media. So instead of pointing out that home sales are down, and consumer confidence is off, and the Economist that Obama most listens to (Mark Zandi) thinks we need more jobs to make markets move higher…

Let’s look at the Bright Side of Life!

  • Mortgage Rates are at an ALL TIME low.  I’m talking lower than World War II when our grandparents all bought houses.
  • Housing Prices are at an ALL TIME low. You’ve never been able to get a better deal on Real Estate.  That’s a fact I don’t think ANYONE can disagree on!

The question then becomes… are we at the Bottom?

I am a syndicated writer.  I write for Zillow and Lender 411, and I’ve been saying lately that”this is not my first rodeo” – meaning, I’ve seen at least 7 other Refinance Booms in my mortgage career.  They all follow a pretty predictable path (If you want to know if you should refinance now, click here).  Rates get low, they pop back up, they get a bit lower over a gradual period of time, and then one day – they don’t get any lower.

At some point, the banks are just not interested in buying mortgage loans, over a 30 year period, that have rates below a certain percent of profit.

It looks to me like we are there. (Can I Get A Refinance Under 4.25%, click here)  I think we are at the bottom of this cycle, and that means if you are waiting for a lower rate, you are wasting valuable time! In a few hours, the ADP jobs numbers will be released, and Friday, August 6th the NonFarm Payroll Numbers will be released.

These reports, if AT ALL positive will likely move mortgage rates higher.

If you want to PURCHASE, and, and, and the moon is right, and you have money to cover your closing costs, and your down payment - you might be able to work out a temporary buy down so that you would have payments starting at 2.5% the first year, 3.5% the next year and 4.5% (4.8 APR) for there on out.  But that will be the exception, not the rule. (click here for more info on a 2-1 Buy Down)

So, if you are considering a Home purchase in Raleigh or Cary, or you want to refinance a mortgage in NC – please don’t wait, call Steve and Eleanor Thorne 919-649-5058.  We’ve seen these situations before, and you need to act while rates are where you want them to be!

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Mortgage Rates for NC 6-25-2010

June 25, 2010 by Leave a Comment

“There was a 7-year Treasury Note auction yesterday that was a little bit stronger than expected. Despite that encouraging news, Mortgage backed securities fell…”  So, what the heck does that mean??  Looking at this chart of the 10 Year Treasury Bond (which is really our Government Bonds that people and Institutions purchase… you can see that we are at or near as low as we were a couple of weeks ago.  Mortgages trade on the Bond Market – and are called MBS (Mortgage Backed Securites).  Currently – 30 year mortgages follow the 10 yr TBill “pattern.”  When the TBills go up… rates go up – when they go down GENERALLY rates will go down.

When the Mortgage Backed Securities are “off” or “down” – you’d think rates would be DOWN… but NO!  That’s trader talk for rates are moving HIGHER!  Are you confused yet?

The News and Observer (our local paper) ran a huge story today that rates are at their lowest point and you should refinance… well, they are “almost” at their lowest point.  We actually were lower for a couple of days at the end of May… but it’s still a good time to consider a refinance if your rate is adjustable, or you’re at 6% or higher.

So which direction are mortgage loan rates in North Carolina headed?  Data today started off with the GDP report.  Real GDP was reported at 2.7%, just below expectations of 3.0% and the GDP Price Index was reported at 1.1%, just above the 1.0% expected.  Overall, a fairly benign report.

Consumer Sentiment was released as well this morning and was reported at 76.0, slightly above expectations of 75.5 and up from the 75.5 in the last report.  Some Economist believe that this rise in Consumer Sentiment means that the high levels of Jobless Claims may be a result of some “special factor” (like the Gulf Oil)  and not due to actual deterioration in the labor market.  That kind of thinking aims at a continued economic recovery and a better jobs picture than has been presented with its respective data.

What does this mean for North Carolina Mortgage Rates? Mortgage rates have been trading in a “range.”  Although the day to day movement is very volatile… the long-term outlook is not perfect for even lower mortgage rates, so you really need to watch the 10 year TBill (look at the chart – every time we hit this low mark we pop back up!).  We hit a mark below 4.5% for just about 48 hours.  If that’s the mortgage interest rate you are looking for – call us, and get on our Rate Watch List.  We’ll call you when (if) we hit “your” rate!

Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058 North Carolina Mortgage Lenders.

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We Are Pulling Credit Report Right Before Closing

June 2, 2010 by Leave a Comment

Fannie Mae made some changes in the last 30 days that could delay closings… as a lender, we are now required to verify that any credit inquiries you have in those last few days prior to closing are not really an extension of credit!  So don’t buy a sofa, or a refrigerator… or ANYTHING ELSE between the time of loan approval and closing… or you could be jeopardizing your closing date!

Effective with loans closing 6.1.2010 Lenders are now required to run a second credit check right before the loan funds… just to make sure you haven’t run up your credit cards, bought a new car, or added any sort of debt DURING THE MORTGAGE PROCESS.  (for more details click here) [Read more...]

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Refinancing FHA Loans and Cash Back

April 6, 2010 by Leave a Comment

Head ScratchingWe’ve been in the mortgage business for a couple of decades, and with all of the changes that have happened, month after month… we sometimes get asked a question that you would think was a SIMPLE question… and we scratch our head and ask for time to research it.

When you are refinancing a FHA loan, you can get a CASH OUT loan, meaning you take cash out to pay for Education, or to Consolidate loans – or you might opt for a Streamline FHA loan.  With the Streamline FHA loan – you are limited to a small amount of cash back at closing, usually less than $500.

You still have to pay your closing costs, although some of those costs can sometimes be rolled into the loan, paid out of the escrow refund you get from the original mortgage holder, or covered in part by the Mortgage Loan Officer (that would be us!).  Having a “No Cost” refinance mortgage loan, however, is VERY DIFFICULT to coordinate with today’s lending requirements!

If you are considering a Refinance in Raleigh or Cary – please call us Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.  We have the experience and the best mortgage rates!

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Why Look At FHA Versus Conventional Loan

September 7, 2009 by Leave a Comment

FHA Mortgage loans have a TON of great things going for them, and if you qualifiy for one, it’s often a better program than a Conventional Loan.

  1. Easier to Qualify: Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify (i.e. lower rates, longer repayment terms, lower down payments, etc…)
  2. Less than Perfect Credit: You don’t have to have a perfect credit score to get an FHA mortgage. In fact, even if you have had credit problems, such as a bankruptcy, it’s easier for you to qualify for an FHA loan than a conventional loan.
  3. Low Down Payment: FHA loans have a low 3% down payment.  Best of all, the down payment for your new FHA loan can come from a family member, employer or charitable organization as a gift. Other conventional loan programs don’t allow gift money to be used as a down payment.
  4. Costs Less: FHA loans have competitive interest rates because the Federal Government insures the loans.  It’s always best to compare an FHA loan with other loan types.  For many buyers, and FHA loan is their gateway to the American Dream of homeownership.
  5. Helps You Keep Your Home: The FHA was formed in 1934 and is a division of the US Government.  You can rest assured that FHA and HUD will be around for many years to come and will continue to work to protect you, the homeowner. Should you encounter hard times after buying your home, FHA has many options to help you keep you in your home and avoid foreclosure.  FHA refinance and FHA streamline refinance products are available if needed in the future. 
  6. If you are refinancing from a Conventional loan (with a first and second) FHA will often allow you the MOST flexability!

If you are considering a purchase or Refinance in NC, please call Steve and Eleanor Thorne, 919-649-5058 for more information.  We have the LOWEST FHA RATES available!

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FHA – June is Biggest Month Ever! WOW!

July 31, 2009 by Leave a Comment

FHA announced that in June, of 2009 they had a RECORD month!

Nearly 89,000 of insured mortgages in June were for new purchases. In addition, approximately 97,000 were for refinanced mortgages. The remaining more than 8,600 endorsements were for reverse mortgages.

If you are considering a purchase in NC, click here to learn more about getting a FHA mortgage!  It’s easier than you think!  WOW!  89,000 People in ONE MONTH!  Wonder how many were First Time HomeBuyers??! 

We expect October and November to busy with First Time Homebuyers who wait until the LAST MINUTE to apply for their $8000 First Time HomeBuyer Tax Credit!  Don’t Wait!  Call Steve and Eleanor Thorne to get the CHEAPEST FHA mortgage!

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