Use These Mortgage Charts to Easily Compare Rates

Last updated on December 14th, 2020

One of the things prospective home buyers and existing homeowners seem to care most about is mortgage rates.

And for good reason – the interest rate you receive on your home loan dictates what you’ll pay each month, sometimes for as long as the next 30 years. That’s 360 months!

The rate you receive can also completely make or break your home purchase, or sway the decision to refinance a mortgage.

As such, I decided it would be prudent (and helpful) to create a “mortgage rate chart” that displays the difference in monthly mortgage payment across a variety of interest rates and loan amounts.

My New Expanded Mortgage Rate Chart

mortgage rate chart

  • I created a fresh mortgage rate chart that factors in the new record low rates
  • And the possibility of them drifting even lower over coming months and years
  • The chart is also more granular because rates are broken down by eighths as opposed to quarters
  • Also available in 50k increments if your loan amount is closer to that

mortgage rate chart 150k

These charts can make it quick and easy to compare rate quotes from mortgage lenders, or to see the impact of a daily rate change in no time at all.

After all, mortgage rate updates can happen frequently, both daily and intraday. And rates are especially erratic at the moment.

So if you were quoted a rate of 3.5% on your 30-year fixed mortgage two weeks ago, but have now been told your home loan rate is closer to 4%, you can see what the difference in monthly payment might be, depending on your loan amount.

Today, that scenario might be the opposite. A quote of 3.5% a month ago might now be 3%, or even below 3%.

That has forced me to create a new expanded mortgage rate chart that contains 30-year fixed interest rates all the way down to 2%. Whether they get anywhere close to that remains to be seen, but never say never.

I just hope I don’t have to make another chart…

Anyway, this is all pretty important when purchasing real estate or seeking out a mortgage refinance, as a significant jump in monthly mortgage payment could mean the difference between a loan approval and a flat out denial.

Or you might be stuck buying less house. Or perhaps driving until you qualify!

30-Year Mortgage Rates Chart

Mortgage Payment Chart

Click to enlarge

  • Use the 30-year mortgage rates chart above
  • To quickly ballpark monthly principal and interest payments
  • At varying interest rates and loan amounts
  • While handy for estimates, don’t forget the taxes and insurance!

My first mortgage rate chart highlights monthly payments at different rates for 30-year mortgages, with loan amounts ranging from $100,000 to $1 million.

I went with a bottom of 3.5%, seeing that mortgage interest rates were around that level recently, and generally don’t seem to go any lower than that. Well, maybe they will…one can hope.

There is certainly the possibility that fixed rates could drift back in that direction with all the trade war uncertainty and the election year on the horizon.

Regardless, one might be able to buy their rate down to around that price, assuming they want an even lower rate on their home mortgage.

For the high-end, I set interest rates at 6%, which is where 30-year fixed mortgage rates were for many years leading up to the mortgage crisis.

With any luck, they won’t return there anytime soon…though in time they could potentially surpass those levels. Eek!

Yep, they could rise even higher over time depending on what transpires in the mortgage market, but hopefully home loan rates won’t climb back to the double-digits last seen in February 1990.

That fear aside, this mortgage payment chart should give you a quick idea of the difference in monthly payments across a range of mortgage rates and loan amounts, which should save some time fooling around with a mortgage calculator.

It should also make your job easier when you compare rates from different lenders. Or when you compare your current mortgage rate to what’s being offered today.

For the record, you can use the 30-year chart above for adjustable-rate mortgages too because they’re based on the same 30-year loan term. They just don’t offer fixed rates beyond the initial teaser rate offered.

So if you’re looking at a 5/1 ARM, you can still use this chart, just know that your interest rate will adjust after those first five years are up, and the chart will no longer do you any good.

That is, unless you’re looking to refinance your mortgage to a new low rate to avoid the interest rate adjustment.

Tip: Use the charts to quickly determine the impact of a higher or lower credit score on rates. If you’re told you can get a rate of 4% with a 760 credit score or a rate of 4.5% with a 660 score, you’ll know how much marginal or bad credit can really cost.

15-Year Mortgage Rates Chart

15 Year Fixed Mortgage Payment Chart

Click to enlarge

  • The 15-year mortgage rates chart helps illustrate the massive cost difference of a shorter-term mortgage relative to a 30-year mortgage
  • Use it to determine the capability of making larger monthly payments at various loan amounts
  • And also to see if refinancing makes sense at certain interest rates
  • While payments are significantly higher, you can save a ton of money on interest while paying off your home loan in half the time

Now let’s take a look at my mortgage rates chart for 15-year fixed mortgages, which are also fairly popular, but a lot less affordable.

I used a floor of 3% and a max rate of 5.50%.  Again, rates can and probably will climb higher, just hopefully not anytime soon. Spoiler alert: They drifted lower, but not much lower than 3%.

For the record, you can obtain mortgage rates at every eighth of a percent, so it’s also possible to get a rate of 3.625%, 3.875%, 4.125%, 4.375%, and so on.

But for the sake of simplicity, I spaced it every quarter of a percent except for the jump from 5% to 5.5%.

These charts are really just a quick reference guide to get ballpark monthly mortgage payment amounts if you’re just beginning to dip your toes in the real estate pool.

If you’re getting serious about home buying or looking to refinance an existing mortgage, whip out a loan calculator to get the exact PITI payment.

Some Interesting Takeaways from the Mortgage Rate Charts

  • Monthly payment differences are larger when interest rates are higher
  • Higher mortgage rates may be worse than larger loan amounts
  • Small loan amounts are less affected by interest rate movement
  • Those with smaller loan amounts have a higher likelihood of affording 15-year payments

The lower the interest rate, the smaller the difference in monthly payment. As rates move higher, the difference in payment becomes more substantial. Something to consider if you’re looking to pay mortgage discount points.

If you look at the 30-year mortgage rate chart, the monthly payment difference on a $500,000 loan amount between a rate of 3.5% and 3.75% is $70.36, compared to a difference of $77.93 for a rate of 5.25% vs. 5.5%.

Additionally, higher mortgage rates can be more damaging than larger loan amounts. Again using the 30-year mortgage rates chart, the payment on a $400,000 loan amount at 3.50% is actually cheaper than the payment on a $300,000 loan at 6%.

So you can see where an individual who purchases a home while mortgage rates are super low can actually enjoy a lower mortgage payment than someone who buys when home prices are lower.

However, for someone purchasing a really expensive home, upward interest rate movement will hurt them more than someone purchasing a cheaper home.

Sure, it’s somewhat relative, but it can be a one-two punch for the individual already stretched buying the luxury home.

To illustrate, the difference between a rate of 5% and 5.25% for loan amounts of $300,000 and $900,000 is about $46 vs. $138, respectively.

Be Sure to Look at the Big (Payment) Picture

  • Most advertised mortgage payments only include principal and interest
  • There is a lot more that goes into a monthly housing payment
  • Including property taxes, homeowners insurance, HOA dues, PMI, and so on
  • Don’t buy more than you can afford without considering all of these items

Lastly, note that my mortgage payment graphs only list the principal and interest portion of the loan payment.

You may also be subject to paying mortgage insurance and/or impounds each month. Property taxes and homeowner’s insurance are also NOT included.

You’ll probably look at this chart and say, “Hey, I can get a much bigger mortgage than I thought.”  But beware, once all the other costs are factored in, your DTI ratio will probably come under attack, so tread cautiously.

And don’t forget all the maintenance and utilities that go into homeownership. Once you hire a gardener, pool guy, and run your A/C and/or heater nonstop, the costs might spiral out of control.

I referenced this problem in another post that focused on if mortgage calculators were accurate, in which I found that housing payments are often greatly underestimated.

So you might want to drop your loan amount by $100,000 if you think you can just get by, as those other costs will certainly play a role.

Oh, and if you want to nerd out a little bit (a lot), learn how mortgages are calculated using real math, not some fancy calculator that does it all for you.

Or just use my mortgage payment calculator and enjoy the simplicity of it all. The choice is yours.

Source: thetruthaboutmortgage.com

Veterans Can Now Get Rates as Low as 2.25% on a 30-Year Fixed Mortgage

Posted on June 24th, 2020

It seems mortgage rates keep moving lower and lower, and now some veterans and active duty military might be able to snag a 30-year fixed as low as 2.25%! That’s pretty unheard of.

While it sounds too good to be true, it appears to be a reality thanks to United Wholesale Mortgage’s push to dominate the mortgage market.

The rapidly growing wholesale lender based out of Pontiac, Michigan announced the new offering today via their website, calling it “Conquest for VA.”

Who Is Eligible for Conquest for VA?

  • Active duty military and veterans who otherwise qualify for VA loans
  • Those looking for a VA purchase loan or VA IRRRL (streamline refinance)
  • Primary residence only for purchases
  • Primary and second homes for VA IRRRLs
  • Minimum FICO score of 640
  • Must obtain financing via a mortgage broker approved to work with UWM
  • Homeowner must not have closed a refinance through UWM in past 18 months
  • Mortgage rates start from 2.25% to 2.375% on the 30-year fixed

Now let’s talk about who’s eligible for this seemingly fantastic loan program, which UWM says is being offered to honor our nation’s veterans.

As the name suggests, Conquest for VA is reserved for veterans and active duty military, and anyone else generally eligible for a VA home loan.

So if you don’t qualify for a VA loan, you’ll have to look into their general Conquest loan program instead.

Additionally, these low rates are only applicable to new home purchase loans and streamline refinances (IRRRLs). In other words, no cash out refinances here.

Take note of the occupancy type as well – primary residence only for purchases, primary and second homes for IRRRLs.

You must have a minimum FICO score of 640 and like the conventional Conquest program announced a couple weeks ago, these rates are only available to borrowers who haven’t worked with UWM in the past 18 months.

In terms of interest rates, they start as low as 2.25% on the 30-year fixed, which is surreal, though they could be an eighth higher at 2.375%. Either way, pretty hard to beat.

Another cool feature to this program is you can choose your own loan term, ranging from as little as eight to a full 30 years.

For example, if you’re already several years into a 30-year fixed, you could choose a shorter term to avoid resetting the clock while refinancing.

Lastly, UWM is a wholesale mortgage lender, meaning you can’t contact them directly as a homeowner.

Instead, you have to work with a mortgage broker who is approved with UWM.

So if you’re weighing the mortgage broker vs. bank argument, these super low rates could be a tipping point for some.

As always, be sure to shop mortgage rates with mortgage brokers and banks to ensure you don’t miss an even better deal.

Also, pay attention to the closing costs associated with these mortgage rates since interest rate is just one piece of the pie, and mortgage APR is a more accurate representation of total loan cost.

Like I mentioned with their conventional Conquest program, UWM seems to be the trailblazer here, but my guess is other mortgage lenders will jump on board and offer similarly low rates now or in the very near future.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

Mortgages in Forbearance Fell in January 2021

The COVID-19 pandemic has shaken up all areas of the U.S. economy in a number of ways, and the mortgage industry has been no exception. Since the start of the pandemic, the number of mortgages in forbearance have increased significantly — due, in major part, to the high unemployment numbers as well as the federal relief programs meant to help protect homeowners who are struggling financially.

 While the forbearance and delinquency numbers in January 2021 look more optimistic than they did at other points in the past, experts still predict it will be a while before the rates return to pre-pandemic numbers. Here’s what you should know about this issue.

In this article

Current state of forbearance as of January 2021

According to data from the Mortgage Bankers Association, about 5.46% of all mortgages — or roughly 2.7 million homeowners — were in forbearance during the second week of January, down slightly from 5.53% the week prior.

Forbearance numbers have ebbed and flowed over the past 10 months, in major part because of the economic changes caused by the pandemic. The latest decrease in forbearances came after a three-week increase caused by the economic slowdown in December.

There are still tons of people still struggling to make their mortgage payments, however, and two important federal relief programs are set to end soon — which could cause big issues for homeowners who are struggling to pay their mortgages.

The foreclosure moratoriums for Fannie Mae are set to end January 31, while the foreclosure protections for Freddie Mac loans are set to end on Febuary 28. Further compounding the issue is the fact that the deadline to request forbearance on a government-backed loan is currently February 28.

If your mortgage is backed by Fannie Mae, Freddie Mac or another government agency and you’re still facing financial hardship due to COVID-19, be sure to request mortgage relief before the deadline. You can request up to 180 days of forbearance if you need it.

2020 forbearance trends and the COVID-19 pandemic

When the pandemic hit and unemployment numbers increased, many homeowners struggled to make their mortgage payments. In response, the federal government provided mortgage relief as part of the CARES Act, a $2.2 trillion stimulus bill to provide relief during the COVID-19 pandemic.

Included in the bill was a provision to protect homeowners with mortgages that are backed by a government agency or government-sponsored enterprises (GSE) such as Fannie Mae or Freddie Mac. Under the CARES Act, borrowers who fit the criteria couldn’t have their home foreclosed on. Those experiencing a financial hardship could also request forbearance in 180-day increments for a total period of 12 months.

During the first couple of months of the pandemic, the number of homeowners with forbearances grew rapidly. At the start of the pandemic in early March, only 0.25% of loans were in forbearance. By the first week of April, that number had risen to 3.74%.

The percentage of mortgage loans in forbearance peaked at 8.6% in June, representing about 4.2 million mortgages. While the numbers ebbed and flowed throughout the rest of 2020, the rate of mortgages in forbearance generally declined.

As unemployment and forbearance rates remained high throughout the year, government agencies extended deadlines on forbearance requests and extended foreclosure moratoriums. As of Jan. 2021, borrowers have until Feb. 28 to request forbearance on their government-backed loan, and their mortgage cannot be foreclosed on until the same date. For Fannie Mae and Freddie Mac loans, there is no deadline to request forbearance, but the foreclosure moratorium ends Jan. 31, 2021.

Despite the relief provided by the federal government, mortgage delinquencies still remain high. Part of the problem is that the federal protections only apply to those with a government or GSE-backed mortgage. As a result, many homeowners aren’t eligible, and some may not realize there are programs available to help.

[ Read: Best Refinance Rates ]

Before COVID-19, the number of mortgages that were delinquent was fairly steady at about 3.6%. By mid-2020, that number had risen to more than 8%. Mortgage experts expect that delinquency rates won’t return to pre-pandemic levels until early 2022.

How the housing market was affected by COVID and government forbearance programs

Despite the increase in unemployment and mortgage delinquencies throughout 2020, the past year has still been booming for the housing market.

First, the Federal Reserve slashed interest rates in 2020 to help keep the economy moving during the pandemic. As a result, mortgage rates have reached all-time lows over the past year, significantly increasing the demand for homes and refinances.

The public health crisis also caused many families to flee urban areas in favor of suburban neighborhoods or smaller towns. This pattern has caused housing demand and prices to spike in those areas due to an influx of new residents.

The government relief programs have also kept the housing supply low, despite the high demand. Thanks to the foreclosure moratorium and forbearance program, many homeowners have been able to stay in their homes when they otherwise may have had to sell. As a result, the housing market supply hasn’t increased like it generally does during an economic crisis.

What to expect for the rest of 2021

There’s no way to know exactly what is to come for the remainder of 2021. The past 12 months have been a tumultuous time for the economy as a whole, including the housing market.

The first thing worth noting is that many of the federal protections for homeowners are set to end soon. The foreclosure moratorium will end Jan. 31 for mortgages backed by Fannie Mae and Freddie Mac and Feb. 28 for mortgages backed by a government agency. Additionally, the deadline for homeowners to request forbearance from a government agency is Feb. 28.

Despite the protections currently in place, the delinquency rate for federally-backed loans has remained significantly higher than the rate for mortgages overall. Once the current relief programs end, it’s possible that many of the loans currently in forbearance will become delinquent, ultimately causing them to go into foreclosure.

[ Read: Best Investment Property Mortgage Rates ]

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

Bodnar of MMG: Long End of Bond Market Having a Tough Time

Bill Bodnar of The Mortgage Market Guide (MMG) explains that long-term interest rates moved up to their highest levels in a year despite significant bond buying from the Fed. What’s next?

Watch the video to find out what it means for you and your clients.

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Source: themortgageleader.com

Mortgage and refinance rates today, February 26, 2021

Today’s mortgage and refinance rates 

Average mortgage rates soared yesterday, rising by a greater amount than we’ve seen in a long time. Of course, they’re still very low in a historical context.

Markets often correct themselves after sharp movements such as yesterday’s. And I’m expecting that mortgage rates may fall today but probably modestly. However, during such volatile times, markets can shift direction quickly and they certainly read as jittery at the moment.

Find and lock a low rate (Feb 26th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed 3.058% 3.061% +0.08%
Conventional 15 year fixed 2.488% 2.497% Unchanged
Conventional 20 year fixed 2.983% 2.99% +0.09%
Conventional 10 year fixed 2.567% 2.587% +0.01%
30 year fixed FHA 2.816% 3.495% +0.06%
15 year fixed FHA 2.517% 3.1% Unchanged
5 year ARM FHA 2.5% 3.213% +0.01%
30 year fixed VA 2.375% 2.547% Unchanged
15 year fixed VA 2.25% 2.571% Unchanged
5 year ARM VA 2.5% 2.392% +0.01%
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Find and lock a low rate (Feb 26th, 2021)


COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

Overnight, CNBC summed up what happened yesterday:

The yield on the U.S. 10-year Treasury note [which mortgage rates often shadow] briefly surpassed 1.6% on Thursday, its highest in over a year, fueled by expectations for higher economic growth and inflation.

We’ve been highlighting the same two factors for some time now. And they haven’t gone away.

So my personal rate lock recommendations remain:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • LOCK if closing in 30 days
  • LOCK if closing in 45 days
  • LOCK if closing in 60 days

But, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

Compare top lenders

Market data affecting today’s mortgage rates 

Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time yesterday, were:

  • The yield on 10-year Treasurys edged up to 1.48% from 1.45%. (Normally, bad for mortgage rates. But yesterday’s rise was reflected in yesterday’s rates and yields are now falling.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
  • Major stock indexes were mixed on opening. (Neutral for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite happens when indexes are lower
  • Oil prices fell to $62.54 from $63.02 a barrel. (Good for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices fell to $1,756 from $1,785 an ounce. (Bad for mortgage rates*.) In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower
  • CNN Business Fear & Greed index — Fell to 59 from 69 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones

*A change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.

Caveats about markets and rates

Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. The Fed is now a huge player and some days can overwhelm investor sentiment.

So use markets only as a rough guide. Because they have to be exceptionally strong (rates are likely to rise) or weak (they could fall) to rely on them. But, with that caveat, so far mortgage rates today look likely to dip a little or hold steady.

Find and lock a low rate (Feb 26th, 2021)

Important notes on today’s mortgage rates

Here are some things you need to know:

  1. The Fed’s ongoing interventions in the mortgage market (way over $1 trillion) should put continuing downward pressure on these rates. But it can’t work miracles all the time. And read “For once, the Fed DOES affect mortgage rates. Here’s why” if you want to understand this aspect of what’s happening
  2. Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read How mortgage rates are determined and why you should care
  3. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
  4. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the wider trend over time
  5. When rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
  6. Refinance rates are typically close to those for purchases. But some types of refinances are higher following a regulatory change

So there’s a lot going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Today and soon

I’m expecting mortgage rates today to edge lower or remain unchanged. But, as always, that could change as the day progresses. Indeed, such intraday swings have become an irritating feature of markets. And they’re especially likely at times like this when investors are so skittish.

Nothing’s changed. And, if there is a fall in mortgage rates today, it will likely be markets correcting themselves after too sharp a rise yesterday. This is a common phenomenon after exceptional volatility.

So don’t think such a fall means the pressures that have recently been pushing those rates higher have suddenly evaporated. It seems to me highly improbable that we’ll see those falling back to record-low levels anytime soon.

Indeed, more rises seem more likely for the time being, absent some sudden and very bad economic news.

For more background on my wider thinking, read our latest weekend edition, which is published every Saturday soon after 10 a.m. (ET).

Recently

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But rates then rose. And Freddie’s Feb. 25 report puts that weekly average at 2.97%, up from the previous week’s 2.81%, and the highest it’s been since mid-2020.

Expert mortgage rate forecasts

Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.

And here are their current rates forecasts for each quarter of 2021 (Q1/21, Q2/21, Q3/21 and Q4/21).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s and the MBA’s were updated on Feb. 18 and 19 respectively. But Freddie now publishes forecasts quarterly and its figures are from mid-January:

Forecaster Q1/21 Q2/21 Q3/21 Q4/21
Fannie Mae 2.8% 2.8% 2.9% 2.9%
Freddie Mac 2.9% 2.9% 3.0% 3.0%
MBA 2.8% 3.1% 3.3% 3.4%

However, given so many unknowables, the current crop of forecasts may be even more speculative than usual. And there’s certainly a widening spread as the year progresses.

Find your lowest rate today

Some lenders have been spooked by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.

But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.

But, of course, you should be comparison shopping widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:

Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan.

Verify your new rate (Feb 26th, 2021)

Compare top lenders

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.

Source: themortgagereports.com

Brutal Week For Rates But There’s Hope (Hopefully)

Rising rates have been on the menu for months, but the drama kicked into a higher gear this week.

Maybe you heard about this?  We’ve certainly been discussing it in recent newsletters (especially last week’s).  The rising rate narrative hit the mainstream this week as it was widely credited for doing damage to the stock market.

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Perhaps you even caught one of Thursday’s many mortgage rate headlines citing the spike in Freddie Mac’s weekly mortgage rate survey.  Freddie reported a jump in 30yr fixed rates from 2.81 to 2.97, their biggest in nearly a year.

Unfortunately, Freddie was low last week and they’re WAY low this week.  This is a common problem when things are this volatile.  Although their survey is published on Thursdays, most of the responses are in by Monday.  As such, their numbers didn’t capture the brutal spikes that came later in the week.

How brutal can a spike really be if we’re still talking about rates in the low 3’s?  That’s entirely a matter of perspective.  If you’d decided to float your rate back at 2.75%, figuring that rates only ever go lower, February hasn’t been great for you.  

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So why is all this happening?  And more importantly, is it going to KEEP happening?

First off, two separate things are happening.  On the one hand, we have the well-known, well-understood, and well-explained rising rate trend that’s been intact for months.  If you’re a regular reader of the newsletter, you might be tired of that one by now.  You can revisit one of any number of past newsletters for a refresher (here’s a good one from late January).  

In a nutshell, if covid caused a rapid surge to persistent all-time low rates, the improving outlook had the opposite effect–albeit a gradual one at first. 

The other thing that’s happening is a recent acceleration in the longstanding trend–first in 2021, but then to an even greater degree over the past 2 weeks. 

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Plummeting case counts played a big, logical role here as well as the Georgia senate election and progress on fiscal stimulus.  Stimulus hurts rates by increasing the supply of Treasuries, and higher supply means higher rates, all other things being equal.

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There was a fresh reminder about Treasury market supply at center stage for this week’s rout.  The 7yr Treasury auction on Thursday was the worst of its kind since its debut in 2009 (a bad auction speaks to an absence of demand, which has a similar effect on rates as an abundance of supply).  Bonds hit their weakest levels of the week/month/year immediately after that, but thankfully appear to have stabilized since then.

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The Treasury auction definitely wasn’t the only consideration this week.  After all, the volatility had already kicked into higher gear last week.  There aren’t any satisfying specifics though.  It’s a combo deal that all speaks to the improved outlook for covid and the post-covid economy. 

There are also some highly technical trading motivations for bond investors that have to do with the changes in the rate landscape.  These can force money managers to make big adjustments to their holdings, and those adjustments often play out in these sorts of “snowball selling” episodes when traders have the same collective realizations.

As for the mortgage market specifically, everything is happening exactly as we said it would more than 2 months ago.  Mortgage rates have increasingly been forced to pay attention to broader bond market volatility.  This week was the best (worst) example yet.  The cushion is deflated, and the mortgage market is no longer invincible.  

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Reasons aside, the big question is whether the drama continues, or the bounce back is just the beginning of a deeper recovery.  While there’s never any way to know for sure, what we CAN know is that our odds (of a recovery) improve as rates move higher.  In that sense, the brutality of the past 2 weeks is one of the best indications of potential support.  While that doesn’t necessarily make a friendly bounce likely, it’s more likely than it was after last week’s big rate spike.

Optimism aside, keep in mind that this is a rising rate environment in general, and we don’t currently have a reason to believe that trend is at risk of dying.  What we’d be hoping for here is a return to a more stable uptrend in rates.  That “return” could help rates move a bit lower in the short term before resuming their gradual uptrend.  Ultimately, it will be up to the course of the pandemic, the economy, fiscal spending, Fed policy, inflation, and other macroeconomic factors to determine the rate range through the end of the year.

Next week brings important updates as far as economic data is concerned.  There will be several reasonably important reports throughout the week culminating in Friday’s all-important jobs report.  

Source: mortgagenewsdaily.com

Women pay higher mortgage rates in 49 states

In Mississippi, single women on average paid 3.47% on a 30-year, conventional fixed-rate mortgage in 2019. But single men on average paid 3.37%, according to the latest HMDA data available. Over the lifespan of the mortgage, the single woman in this instance will have roughly $7,000 more in mortgage payments than the single man.

Patrick Boyaggi, CEO and founder of Massachusetts-based lending startup OwnUp, says this issue hasn’t drawn enough attention in the mortgage space. His analysis of HMDA data found that women paid higher mortgage rates than men in 49 out of 50 states, the lone exception being Alaska (the analysis assumes that the loan size averaged $345,000 and the prime rate was 3.00%).

“The latest HMDA data makes it startlingly clear – women are largely being left out of the conversation,” Boyaggi said. “Recent HMDA data confirms that discrimination in the home-financing process is very real.
The main reason? Many female borrowers simply fail to shop around for the best possible rate, which translates into losing thousands of dollars over the total life of their loan.”

Boyaggi admits his analysis is not exactly revelatory – it’s been well documented that women pay higher mortgage rates, and the reasons for it are many and complex.

He said he didn’t intend to undertake a sociological study to determine all of the reasons women pay more. It’s more important to acknowledge there’s a problem and take action, he said.


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“I am not certain everybody is aware of it or believes it’s a real issue,” Boyaggi said. “We believe it is a systemic-wide problem…women are not being treated fairly…For us, it’s really about it not being 50-50. And therefore, it’s a systemic problem. Let’s bring that to light first and let’s start worrying about the solutions versus trying to nitpick as to why it is an issue. It is an issue. We know it’s an issue. How do we make it better, versus trying to justify it or come up with some kind of rationale for it.”

According to Boyaggi’s analysis of HMDA data, the five states where women overpay most on a mortgage were Mississippi (delta of $7,077 over the course of the mortgage), Alabama (delta of $6,006), Ohio (delta of $5,856), Florida (delta of $5,591) and New Jersey (delta of $5,515).

Single women typically paid between 8 and 10 basis points higher on a mortgage. In Alaska, single women paid an average of 3.21% while single men paid 3.23%, Boyaggi found. The four other best states for women applying for mortgages were Maine, Wyoming, Montana and Oregon. Single women paid between 1 and 3 basis points more on mortgage rates in those states than single men.

An Urban Institute study from 2016 found that single women were better at paying their mortgages than single men, even though they paid higher rates. The study also found that single borrowers, particularly women, are more likely to be minorities, from lower-income areas, and they are more likely to have a mortgage that eats up a higher percentage of their income.

“One possible explanation is that women, particularly minority women, experience higher rates of subprime lending than their male peers,” the UI study said. “Another explanation is that women tend to have weaker credit profiles. We find that both these explanations are true and largely account for the higher rates.”

Though subprime lending has declined since the study’s publication, mortgage underwriting standards in general are much tougher since the financial crisis, and aren’t particularly flexible.

“There is somewhat of a plain vanilla, one-size-fits-all mortgage underwriting standard, and that’s not very good at accommodating minority borrowers in general, or anybody with any sort of a non-typical, non-generic credit profile,” Guy Cecala, CEO of Inside Mortgage Finance, told Wharton Business Radio in 2016. “Minority buyers in general are getting fewer mortgages than they did before. The good news is that they’re not getting subprime loans, because the subprime market has dried up completely, but they’re not getting mortgages at all in many cases.”

Asked if there could be a potential level of bias against women borrowers, Cecala said in the same interview, “I think there can be. The mortgage market prides itself on being color blind, and essentially using a black box, but any sort of black box basically discriminates against single borrowers, lower-income borrowers and borrowers with lower credit scores. If those happen to be predominantly women, you have to assume that they are getting that kind of treatment from the mortgage market.”

Boyaggi, whose firm Own Up helps consumers shop for mortgages and negotiates prices on their behalf, said more awareness simply needs to be raised.

“There’s a lot of things that happen in this industry where if you just looked at it you’d be like, ‘Oh 10 basis points, .010%. What are we talking about?’” he said. “But if you were to say, ‘Hey, this gas station charges women 10 cents more than men,’ we would be in an uproar. There would be stories about it everywhere, right? People would vilify that gas station, and rightly so.”

Source: housingwire.com