Fixed rate mortgage Archives - Page 2 of 26

Apache is functioning normally

February 3, 2024 by Brett Tams

Mortgage interest rates were mostly down compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 5/1 ARMs and jumbo loans decreased, while rates for 15-year fixed mortgages increased.

Mortgage rates could gradually come down this year, according to Greg McBride, CFA, Bankrate chief financial analyst. Mortgage rates cooled at the tail end of 2023 with the Federal Reserve pausing its campaign of rate hikes to tame inflation. The central bank now expects to cut rates in 2024 — a direction that would affect many areas of the economy, including on the 10-year Treasury, a key benchmark for fixed-rate mortgages.

“The 10-year Treasury yield that serves as a baseline for fixed mortgage rates will have a bouncy journey lower, moving back above 4 percent early in 2024 but trending lower as inflation cools and the Fed gets closer to cutting rates,” says McBride. “For mortgage rates, that portends a general downtrend — albeit with fits and starts — in 2024.”

Rates accurate as of January 31, 2024.

The rates listed here are averages based on the assumptions here. Actual rates displayed on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Wednesday, January 31st, 2024 at 7:30 a.m.

30-year fixed-rate mortgage moves down, -0.07%

The average rate you’ll pay for a 30-year fixed mortgage today is 6.96 percent, down 7 basis points from a week ago. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 7.06 percent.

At the current average rate, you’ll pay $662.62 per month in principal and interest for every $100,000 you borrow. That’s down $4.70 from what it would have been last week.

Use Bankrate’s mortgage rate calculator to estimate your monthly payments and see how much you’ll save by adding extra payments. The tool will also help you calculate how much interest you’ll pay over the life of your loan.

15-year mortgage rate advances, +0.01%

The average rate for a 15-year fixed mortgage is 6.49 percent, up 1 basis point since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $871 per $100,000 borrowed. The bigger payment may be a little tougher to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more quickly.

5/1 ARM moves down, -0.01%

The average rate on a 5/1 adjustable rate mortgage is 6.12 percent, ticking down 1 basis point from a week ago.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.12 percent would cost about $607 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.

Jumbo mortgage rate falls, -0.06%

The average rate for the benchmark jumbo mortgage is 7.00 percent, down 6 basis points over the last week. A month ago, the average rate for jumbo mortgages was greater than 7.00, at 7.13 percent.

At the average rate today for a jumbo loan, you’ll pay a combined $665.30 per month in principal and interest for every $100,000 you borrow. That’s $4.04 lower, compared with last week.

Refinance rates

Current 30 year mortgage refinance rate slides, -0.02%

The average 30-year fixed-refinance rate is 7.16 percent, down 2 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was higher, at 7.21 percent.

At the current average rate, you’ll pay $676.08 per month in principal and interest for every $100,000 you borrow. That’s $1.35 lower, compared with last week.

Where are mortgage rates going?

The Federal Reserve has signaled that it intends to cut rates in 2024, depending on inflation and employment data and other factors. The Fed meets again on Jan. 31.

As of mid-January, the average 30-year fixed rate mortgage sits at just under 7 percent. As the year progresses, expect rates to slowly trend downward, says McBride.

“Mortgage rates will spend the bulk of the year in the 6s, with movement below 6 percent confined to the back half of the year,” says McBride.

The rates on 30-year mortgages mostly follow the 10-year treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves. These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.

What today’s rates mean for you and your mortgage

While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent any time soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.

Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.

“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

Source: bankrate.com

Apache is functioning normally

January 21, 2024 by Brett Tams

Broker, Credit Report Fee, Flip and Bridge Products; TPO News

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Broker, Credit Report Fee, Flip and Bridge Products; TPO News

By:
Rob Chrisman

Fri, Jan 19 2024, 11:02 AM

If you’re in Chicago, the newest attraction is “the rat hole.” Here in Denver, besides the cat I saw in the airport yesterday being walked on a leash, one attraction is the National Ice Core Lab, where, you guessed it, ice sample cores from all over the world are kept for research purposes at temperatures even colder than those outside. It is around this time of year when plenty of people think about vacations or moving to warmer places… Like Phuket in Thailand. In 2023 it saw 6.24 million airport arrivals, up 88 percent from 2022, and the real estate market is booming. The island has 26 beaches and a population of 420,000. Phuket is trying to move away from over-reliance on tourism by simply selling to wealthy outsiders, often Russians: 27,000 Russians have moved to Phuket in the past 12 to 18 months, fueling a development boom. Follow the money, right? Today’s podcast can be found here, and this week’s is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products (nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics) unite the people, systems, and stages of the mortgage process. Today’s features an interview with Polunsky Beitel Green’s Marty Green on mortgage spreads, why 2024 is a year of transition in the mortgage industry, and potential ramifications of NAR lawsuits.

Lender and Broker Services, Products, and Software

Anchor Loans Launches TPO Broker Channel for Flip, Bridge, New Construction and Rental Investment Financing! With so many banks and private lenders scaling back on fix and flip and construction lending, house flippers and builders are turning to mortgage brokers and other intermediaries to help identify reliable sources of capital. National private lending leader Anchor Loans has stepped up to launch a new Third-Party Originator (TPO) Broker Channel to serve loan brokers and other third-party originators whose clients are the real estate investors and developers building and refurbishing homes for America’s buyers and renters. With 25+ years in business, $14B+ in loans funded to date and expert teams lending in 48 U.S. states, Anchor offers flexible loan programs, experience-based pricing, $100k to $10MM loan amounts, fast funding, and a speedy draw process. Mortgage brokers and loan originators can learn more here.

Lenders across the country are still looking for ways to cut costs without sacrificing revenue. Start off easy with collecting credit report fees upfront. Fee Chaser by LenderLogix makes it as easy as clicking a button… literally.

Rocket Pro TPO’s recent IGNITE Live showcased a powerful line up of new product & technology solutions designed to help broker partners exceed expectations with clients and outpace its competition. If you missed it, check it out here. Mike Fawaz, Rocket Pro TPO’s EVP reminded the audience of the benefits of the lender’s free credit report offer. He also featured Product Compare, an innovative new tool available from Pathfinder by Rocket. This platform enables partners to quickly and easily identify the ideal mortgage products for every client scenario. Also, the lender introduced a special discount for partners using Mobility Market Intelligence (MMI): a leading real estate and transaction database that will immediately impact broker’s business strategies. Be sure to review the IGNITE Live video for many other updates and special offerings. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.

Wholesale and Correspondent News

A&D Mortgage launched its innovative ITIN Mortgage Program, designed to extend homeownership opportunities to a broader community. This groundbreaking initiative offers mortgage solutions to individuals who possess an Individual Taxpayer Identification Number (ITIN) but do not have a Social Security number, thereby catering to a previously underserved market. Tailored to meet the diverse needs of borrowers, ranging from first-time homebuyers to those seeking to invest in property, there are several attractive features such as eligibility for borrowers with minimum FICO score of 660 for Super Prime loans. A DSCR (Debt Service Coverage Ratio) option is available for applicants with a minimum FICO score of 700.

Discover more information about the ITIN Mortgage Program and other services offered by A&D Mortgage.

United Wholesale Mortgage (UWM) announced that it will sunset the name of its consumer-facing website, FindAMortgageBroker.com, and replace it with Mortgage Matchup. “Mortgage Matchup will continue to be a consumer-facing website geared toward homebuyers and real estate agents and will offer both educational material around the homebuying and refinancing processes, along with a searchable database of independent mortgage brokers near them. The goal is to connect this audience with a local mortgage broker in their area and they understand the vast array of loan options available to them based on their specific financial situation.”

According to IHDA, nearly 10 percent of all first-time homebuyers use IHDA Mortgage products to help receive the additional leverage needed to bridge the gap of homeownership. An IHDAccess Forgivable loan is for both first-time and repeat homebuyers and offers a very competitive interest rate to help keep costs down over the length of the mortgage. IHDAccess Forgivable highlights include 4 percent of the purchase price up to $6,000 in assistance for down payment and closing costs, forgiven monthly over 10 years and does not have to be repaid. 30-year, fixed rate mortgage with an affordable interest rate. Available to first-time and repeat homebuyers statewide. Interested homeowners can learn more about IHDAccess Forgivable and eligibility requirements by contacting any INB mortgage lender.

Rocket Pro TPO, the wholesale arm of Rocket Mortgage, has just announced updates to its ONE+ program aimed at making it easier for prospective homeowners to obtain a low-down-payment conventional mortgage. ONE+ allows buyers to make a down payment of as little as 1 percent of the home’s purchase price. The program now includes Freddie Mac’s Loan Product Advisor. Use of the automated underwriting system could increase buyer eligibility by 16 percent, Rocket Pro TPO executive vice president Mike Fawaz said in a recorded statement.

Angel Oak Mortgage Solutions DSCR Loan (Investor Cash Flow) program has been enhanced to accommodate an impressive 85 percent Loan-to-Value (LTV). Loan highlights include Purchase Only, Minimum DSCR 1.00. SFR, PUD, Condo, Multifamily 2 – 4 units. Minimum loan amount $150,000, Maximum loan amount $1 million, and minimum FICO 720.

Plaza Home Mortgage® is kicking off the New Year with improved updates to its Solutions Non-QM, DSCR, Jumbo AUS 1 and Jumbo Champion loan programs. Details are available in the updated Solutions Non-QM Program Guidelines, DSCR Investor Solutions Program Guidelines, Jumbo AUS 1 Program Guidelines, and Jumbo Champion Program Guidelines.

Citizens Correspondent National Bulletin 2024-01 includes information on Conventional Conforming Products- FNMA- Income Calculator, FNMA- Restricted Stock Income Units, Non-Taxable Income-DU, LPA Cash-Out Occupancy and Condo Eligibility, VVOE Alternatives – DU and LPA, FHA and VA Loan Limits- AUS update, USDA Product Update, Secondary Marketing Contact Info and Disaster Tax Filing Relief. See the bulletin for additional information and all lock, delivery, and purchase by dates, if required.

The average annual number of business applications rose to 4.9 million between 2020-2022. This is an 89 percent increase compared to 2005-2016. This strong and steady market of non-traditional, high-quality borrowers presents a clear opportunity for Non-QM program options. How to capitalize on this growing segment of borrowers? Angel Oak Mortgage Solutions range of products for self-employed borrowers can help you unlock this market. Bank Statement Mortgage, 12- or 24-months business or personal bank statements, Profit and Loss (P&L) statements are a valid form of income verification, non-permanent residents allowed, Closed End Second Mortgage, Borrowers receive a lump-sum payment, no restrictions on how borrowers can use the funds. Owner-occupied, second homes, and non-owner occupied.

Capital Markets

Economic data yesterday held some good news for U.S. consumers, with signs of improvement in the job market and some relief on mortgage rates. Initial jobless claims (187k) fell to the lowest level in over a year, a bigger drop than any forecaster expected. After two weeks of increases, mortgage rates fell to the lowest level in eight months, per the latest Freddie Mac Primary Mortgage Market Survey. For the week ending January 18, the 30-year and 15-year mortgage rates fell 6 basis points and 11 basis points to 6.60 percent and 5.76 percent, respectively. Both rates have fallen more than 100 basis points from the October highs. (Unfortunately, the more timely data already shows rates moving quickly higher – MND)

LOs looking for an increase in inventory in homes for sale aren’t seeing much help from builders. The overall direction of economic data recently has given Fed officials some cover to maintain their “hawkish” rhetoric. That is of little comfort to homebuilders, evidenced by housing starts falling in December for the first time since August. Housing starts showed a smaller than expected decrease in December (actual 1.460 million, expected 1.417 million).

There’s historically been theory that “an enemy of my enemy is my friend.” We’ll see. Something to keep an eye on is an expanding conflict in the Middle East. Pakistan’s military carried out targeted strikes against militant hideouts in Iran on Thursday, responding to an attack by Tehran a day earlier. Historically strife around the world leads to a flight to quality and the buying of U.S. fixed income securities. Now, not so much.

Today’s economic calendar sees some key data later this morning with existing home sales for December, a preliminary January look at Michigan sentiment, November TIC data from the U.S. Treasury, and remarks from Fed Vice Chair of Supervision Barr and San Francisco Fed President Daly. We begin the day with Agency MBS prices roughly unchanged from Thursday’s close and the 10-year yielding 4.12 after closing yesterday at 4.14 percent on little financial news.

Employment

Logan Finance Welcomes Paul Jones as SVP, Business Development! Logan Finance is happy to announce that Paul Jones has joined the organization as SVP, Business Development. “Paul is an industry giant with an uncanny ability to identify and develop winning strategies and educate the industry on the benefits and opportunities within Non-QM. We’re thrilled to have Paul join the team”, said Logan’s Chief Revenue Officer, Aaron Samples. Paul Jones has spent 30 years in Operations and Sales and he’s developed a methodology for parlaying the many aspects of Non-QM into a cohesive strategy for Account Executives and Originators. This strategy is instrumental in scaling Non-QM production, expanding referral sources, and refining customer outreach. “The spotlight is on the world of Non-QM right now, and I’m ready to help focus that spotlight on Logan,” Paul said. “We have a lot of things in play for 2024, and I’m looking forward to contributing to Logan’s exciting future.”

“Primis Mortgage was born out of a belief that we, as an industry, can do better. We decided that to do this, we needed to act like an Independent Mortgage Bank, but leverage the stability and resources of a traditional bank. And the results speak for themselves. We saw a 107 percent increase in funded loans from 2022 to 2023, and while most companies were cutting back, we decided to step up: increasing our sales staff by 160 percent in that same time period. Primis Mortgage is a place where proven all-stars come to win. Our in-house support staff averages just 22 days from ITP to Docs Out, and leadership constantly motivates and educates our loan officers to strive for continued growth. If you’re a highly-successful loan officer ready to take your career to the next level, reach out to Chris Blevins, National Sales Director.”

Last week, Sales and Operations leadership from both the Lower and Thrive Mortgage teams got together in Columbus, OH to collaborate and discuss the way forward. Not just for the merger between the two entities, but what they see for the industry. After two days together, the response was clear… this is a powerful move for both companies. The game-planning, engagement with new colleagues, and enthusiasm continues to grow as each side returned to share what they’d learned. Above all else, the most commonly referenced statement was, “It felt like we’ve known each other for years.” Ready to find out what the insiders already know? Let’s talk about how you can Thrive with Lower.

A well-capitalized IMB, based in the NJ/PA tri- state market, is seeking Loan Officers, Sales Teams, or possible acquisition opportunities of small to midsize IMBs in NJ, NY, CT, FL, PA, while expanding in MD, DC, VA, NC and SC. The IMB’s focus is a highly personable and high touch experience for LOs and Realtors. Organizationally lean, very competitive pricing, a wide array of products, and much higher LO Comp than what is offered by other larger IMBs. The focus is to attract serious loan officers who want an unparalleled service, where your voice matters and you have a seat at the table in growth. If interested, message Chrisman LLC’s Anjelica Nixt for a confidential discussion.

Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

January 21, 2024 by Brett Tams

Fannie Mae has a rosy outlook for mortgage rates. The government sponsored enterprise is projecting that rates will drop below 6% by the end of 2024, which in turn will boost refi volumes and help thaw the existing home sales market.

Following years of volatility in mortgage rates, the housing market will begin its gradual return to a more normal balance in 2024.

Courtesy: Fannie Mae

Fannie Mae’s economic and strategic research (ESR) group expects home sales and mortgage origination activity to begin a gradual recovery in the presence of a slow-growing economy.

“Inflation’s decline and the resultant Fed pivot to signaling future rate cuts rates lead us to believe that home sales and mortgage originations likely bottomed out in the second half of 2023 and that a gradual improvement is now underway. We expect mortgage rates to dip below 6% by year-end 2024 and for homebuilders to continue to add new supply, both of which should aid affordability,” said Doug Duncan, Fannie Mae’s senior vice president and chief economist.

The ESR group expects the annualized pace of existing home sales to move up to 4.5 million units by the fourth quarter of 2024, up from 3.8 million in Q4 2023.

Courtesy of Fannie Mae

Overall, Fannie Mae expects that the slowly normalizing existing homes market, as well as additional housing supply from the construction of new homes, will help keep further home price growth in check in 2024.

Home prices are now expected to rise 3.2% over the year, compared to 7.1% in 2023.

Origination volume forecast for 2024

Fannie Mae forecasts the total single-family mortgage originations volume to be $1.98 trillion in 2024 and $2.44 trillion in 2025, up from $1.50 trillion in 2023.

Of the total $1.98 trillion origination volume in 2024, $1.5 trillion is projected to come from purchase origination volume, a 19% increase from $1.3 trillion in 2023.

Courtesy of Fannie Mae

Refinance mortgage origination volume will remain subdued as about 90% of outstanding Fannie Mae single-family conventional 30-year fixed rate mortgage loans currently have a note rate below 6%.

“So, while many recent borrowers from 2023 will begin to face meaningful benefits by refinancing, a strong refinance wave driven by rate-term borrowers is not expected in 2024. Even as rates moderate, we expect continued interest in cash-out refinancing relative to past periods, especially given heightened levels of aggregate homeowner equity available following the home price gains of the last few years,” the ESR group said.

Economic backdrop looks more positive

Another good news is that Fannie Mae removed its explicit call for a recession in 2024 and replaced it with an expectation of “below-trend growth.”

While Fannie Mae had forecast a modest downturn in 2024 up until last year, the ESR Group noted the rapid recent easing in financial conditions following the Federal Reserve’s December meeting and the solid, upward trend in real personal income growth in October and November as positive impulses for growth over the coming quarters.

As a result, Fannie Mae upgraded its 2024 economic outlook to a modest expansion of 1.1% from a 0.3% Q4/Q4 contraction of real gross domestic product (GDP).

Still, the ESR group believes the economy remains at a higher-than-normal risk for a recession in 2024.

Mixed labor market signals, recent rise in shipping rates due to attacks on container vessels in the Red Sea and easing of monetary policy opening doors for inflation to possibly reanimate are among the factors that Fannie Mae listed as risks for a recession.

“Our baseline forecast continues to show inflation trending toward the Fed’s 2% target over the course of the year, but risks to the outlook remain,” said the ESR group.

Source: housingwire.com

Apache is functioning normally

January 11, 2024 by Brett Tams

In 2023, mortgage rates were up year over year—a trend that continued from 2021. Rising rates from 2021 through 2023 were due to rate hikes introduced by the Federal Reserve as part of economic strategies to try to combat inflation.

Since current mortgage rates can be a huge factor in your ability to get a mortgage and the total cost of owning a home over time, prospective home buyers should educate themselves on this topic. Learn more about mortgage rates, how rates impact your home loan, and how to improve your chances of getting a good rate below.

What Is a Mortgage Rate?

Your mortgage rate is a reflection of the amount of interest you agree to pay a lender on your home loan. There are many mortgage rate structures, including fixed and variable rates. It’s critical to learn more about rate types and discuss the fine print with your mortgage broker or lender so you understand exactly how much your loan might cost.

To demonstrate how mortgage rates work to impact the total cost of your home, consider some hypothetical situations below.

For a fixed-rate, 30-year loan on a $300,000 home with a down payment of $60,000:

Interest Rate	Monthly Payment	Total Loan Cost
5%	$1,552	$463,990
6%	$1,702	$518,605
7%	$1,806	$585,446
8%	$2,025	$635,012

Note that this hypothetical situation takes into account property tax and homeowner’s insurance, which is typically added into the monthly payment. It’s also calculated based on a randomly selected zip code in Virginia. Your location and other factors can change how your monthly payment is calculated.

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Will Mortgage Rates Go Up or Down in 2024?

Mortgage rates rise and fall with the market, changes made by the Federal Reserve and other factors. Here’s a look at some mortgage rate trends to help you understand how the figures have changed historically:

Date for rate reported by Freddie Mac	U.S. 30-year fixed rate	U.S. 15-year fixed rate	U.S. 5/1 adjusted rate
1/10/13	3.40	2.66	2.67
1/9/14	4.51	3.56	3.15
1/8/15	3.73	3.05	2.98
1/7/16	3.97	3.26	3.09
1/12/17	4.12	3.37	3.23
1/11/18	3.99	3.44	3.46
1/10/19	4.45	3.89	3.83
1/9/20	3.64	3.07	3.30
1/7/21	2.65	2.16	2.75
1/13/22	3.45	2.62	2.57
1/12/23	6.33	5.52	not included on report

By mid-2023, rates for a U.S. 30-year fixed rate mortgage averaged over 7%. Most economic experts indicate that rates are expected to go down, at least slightly, through 2024. That’s according to predictions from organizations such as Fannie Mae and the National Association of Realtors.

How Can You Find Out About Current Mortgage Rates?

As you can see, the current mortgage rates at the time this article was written are unlikely to be relevant when you’re ready to get a home loan. You may want to research mortgage rates before you buy a home to understand the market, and you can find current rates by searching for them online. Sources such as Freddie Mac and Fannie Mae are reliable, and major news outlets tend to provide ongoing reporting on interest rates as well.

How to Improve Your Chances of Getting a Good Mortgage Rate

Of course, average mortgage interest rates at any given time only provide a baseline from which you can start your financial research. You may end up paying a rate that’s more or less than the average depending on factors such as your creditworthiness and the type of mortgage loan you decide to go with. Here are some tips for improving your chances of getting a good rate.

Improve Your Credit

No matter what the average is, the best mortgage rates tend to be reserved for those with excellent credit. Before you begin the hunt for a new home, order your free credit reports and get a look at your credit score. This reduces the chance of being surprised during the mortgage application process.

Once you have your credit reports, go through them and look for any potential errors. If you see anything that could impact your credit health negatively, such as a misreported balance or a late payment you actually made on time, you can dispute the information. The credit bureaus must investigate disputes, and if the information turns out to be incorrect, they must make edits to your report. That can help improve your credit.

Save for a Bigger Down Payment

When you make a bigger down payment, you reduce how much of the home price a lender has to fund. That creates a lower loan amount, which might help you get a lower rate. In part, this is because the lender has less risk. If you don’t pay the loan as agreed and the lender forecloses on your home, it’s more likely to be able to sell the house and cover its losses.

Choose the Right Mortgage Type

As you can see from the historical rate information in the table above, interest rates are different, given different types of loans and terms. Rates are typically lower on 15-year fixed rate mortgages, for example. However, paying your entire mortgage back over 15 years rather than 30 does mean you’ll pay a much larger monthly payment, so make sure you consider all the financial factors before you make a decision.

Buy Down Your Rate

You may be able to buy down your mortgage rate by paying for discounts up front. This can temporarily or permanently reduce the amount of interest you pay, which could reduce the total cost of your home.

Start Your Mortgage Rate Research Now

Take time to compare your options before you apply for a mortgage loan. You may also want to do the work to get preapproved before you start house shopping, as preapproved buyers tend to be more attractive to sellers during the bidding process.

Source: credit.com

Apache is functioning normally

January 9, 2024 by Brett Tams

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Barclays and Santander have announced cuts to their mortgage rates, adding to momentum for cheaper UK home loan deals after HSBC and Halifax reduced rates last week.

Santander led its announcement with a sub-4 per cent deal available to new and existing customers with a deposit of at least 40 per cent on a five-year fixed rate mortgage. It said its residential fixed rates would fall by up to 0.82 percentage points from Wednesday.

Barclays will from Wednesday offer a two-year fix at 4.17 per cent, down from 4.62 per cent, for borrowers with a 40 per cent deposit. Its rates will fall by up to 0.5 percentage points across its residential range, and it will offer those with a smaller 25 per cent deposit a two-year rate of 4.2 per cent, down from 4.7 per cent.

The Co-operative Bank slashed rates on Tuesday by more than one percentage point for some deals. Existing customers looking to remortgage can now access a two-year fix starting from 3.85 per cent, while five-year deals start at 3.74 per cent. For new customers the equivalent rates are 4.22 per cent and 3.84 per cent respectively.

The changes follow rate cuts announced last week by HSBC, Halifax and Leeds Building Society across their residential ranges.

Mortgage rates have been falling for several weeks as competition between lenders intensifies. The latest cuts follow a drop in market swap rates in December, after investors predicted a quickening pace of falls in inflation and Bank of England interest rates over the coming year. Lenders use swap rates to guide their pricing of fixed-rate mortgages.

Adrian Anderson, director at broker Anderson Harris, said: “The market is predicting that the base rate might come down quicker than the Bank of England is suggesting . . . Over the short term, I think we’re going to continue to see a reduction in fixed-term pricing from lenders.”

Two clients called him last week to discuss remortgaging temporarily to a variable rate deal in the expectation they could lock in to a lower fixed rate later. But on seeing the higher rates on variable deals, they demurred.

“A lot of people last year took variable trackers in the hope that fixed rates will start to come down and now they have,” Anderson said. “So I do think we’re at that point where it could be the time to switch from tracker margin to a fixed rate. The fix is so much cheaper than variables.”

Mortgage rates may have fallen in recent weeks, but they remain well above the levels on offer before the “mini” Budget of September 2022. Average two-year fixed rates are currently 5.81 per cent, down from a high of 6.86 per cent last summer, according to finance site Moneyfacts, but were at 4.7 per cent on the eve of the “mini” Budget.

Aaron Strutt, a director at broker Trinity Finance, said one factor behind the rate cuts was the falling cost of funding mortgages for banks and building societies, as indicated by swap rates. “The lenders know the only way to get the markets moving again and to boost some of the low lending figures they had last year is to issue cheaper rates,” he said.

The fall in swap rates since December — with two-year rates running at about 4.2 per cent — has opened up an unusual gap with the Bank of England base rate of 5.25 per cent. This is a sign of the extent to which investors expect base rates to fall over the coming years.

With swap rates so far out of kilter with the base rate, though, some brokers questioned how long swaps would continue to decline — and alongside them, mortgage interest rates. Anderson said: “The Bank of England is potentially not going to start reducing base rates until the spring.”

Chris Sykes, technical director at mortgage broker Private Finance, said a number of lenders had yet to reduce rates, so there were likely to be further cuts, though these were unlikely to be “dramatic”. He added that some rates offered in the latest round of cuts were below the relevant swap rate, a highly unusual position for lenders to be in. “This is very rare, so we don’t expect these rates to be around for long.”

Source: ft.com

Apache is functioning normally

January 9, 2024 by Brett Tams

Mortgage rate forecast for next week (Jan. 8-12)

Mortgage interest rates inched up this week, following nine straight declines totaling a decrease of 118 basis points (1.18%).

The average 30-year fixed rate mortgage (FRM) rose from 6.61% on Dec. 28 to 6.62% on Jan. 4, according to Freddie Mac.

“Given the expectation of rate cuts this year from the Federal Reserve, as well as receding inflationary pressures, we expect mortgage rates will continue to drift downward as the year unfolds,” said Sam Khater, Freddie Mac’s Chief Economist.

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Will mortgage rates go down in January?

Mortgage rates fluctuated significantly in 2023, with the average 30-year fixed rate going as low as 6.09% on Feb. 2 and as high as 7.79% on Oct. 26, according to Freddie Mac.

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The range can be largely attributed to the Federal Reserve’s ongoing fight against inflation, juxtaposed with uncertainty in the banking sector sparked by Silicon Valley Bank’s collapse. However, with duress permeating the financial market and the fallout from U.S. debt ceiling talks, the Fed may continue making hikes to bring interest rates down.

With the economy likely heading into a recession, it’s possible we’ve already seen the peak of this rate cycle. Of course, interest rates are notoriously volatile and could tick back up on any given week.

Experts from CoreLogic, Home Qualified, Realtor.com and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in January.

Expert mortgage rate predictions for January

Craig Berry, branch manager at Acopia Home Loans

Prediction: Rates will moderate

“As inflation is the no. 1 item on the Federal Reserve’s radar right now, the Feds may choose not to lower the federal funds rate until inflation comes down. And, while Fed rate cuts aren’t a must-have in order for mortgage rates to come down, interest rates are affected by the federal funds rate.

The Feds continue to seek a balance between inflation and maximum employment so as not to cause significant damage to the economy which could trigger a recession. Recent momentum has been positive, and as long inflation cooperates, mortgage rates may see a slight decline in January. However, it isn’t likely that we’ll see significant drops to longer-term rates until we get further into 2024.”

Ralph DiBugnara, president at Home Qualified