Mortgage Rate Watch

Provided courtesy of: http://www.mortgagenewsdaily.com/consumer_rates/

Mortgage Rates Nominally Higher Despite Bond Market Warning
Fri, 18 Jan 2019 20:47:00 GMT -

Mortgage rates rose gently today.  Most mortgage borrowers (and many mortgage professionals, for that matter) wouldn't be aware of slightly more alarming risks lurking underneath the surface.  Those risks involve the broader bond market from which mortgage-related bonds take their directional cues. 

More simply put, if US Treasuries are improving, mortgage-backed bonds tend to improve as well.  The level of correlation varies though.  For nearly all of 2018, mortgages weren't improving as quickly as the most widely-used rate benchmark: 10yr Treasury yields.  That began to change recently--especially when 10yr yields began moving higher 3 weeks ago.  During that time, we've seen moderate moves higher in 10yr yields met with modest moves higher in mortgage rates.  Today was another one of those days.

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Mortgage Rates Holding Ground But Volatility Could Increase
Thu, 17 Jan 2019 20:28:00 GMT -

Mortgage rates were technically steady today.  In fact, as of this writing, most lenders are offering slightly better terms compared to yesterday, but only by barely-detectable amounts.  The afternoon brought volatility in financial markets owing to trade-related headline.   That volatility isn't moving in a good direction for mortgage rates at the moment.  The takeaway is that, all other things being equal, lenders will be offering slightly weaker terms tomorrow morning, assuming they don't see quite enough weakness to adjust today's offerings with only a few hours left in the day.

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Mortgage Rates Up Slightly, But Still in Great Shape
Wed, 16 Jan 2019 21:13:00 GMT -

Mortgage rates rose modestly today after spending the past 2 days moving sideways.  It was really yesterday's market weakness that caused today's move.  Mortgage rates are most directly affected by the trading of mortgage-backed securities (MBS).  When MBS are weaker, rates rise.  MBS were weaker throughout the day yesterday, but not by quite enough for lenders to go to the trouble of revising their rate sheets for the worse.  Instead, lenders simply waited until this morning to make the changes implied by the market.  This delayed reaction is common when the market movement on any given day isn't quite enough to justify lender reprices.

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Home Refinance Loan

Home Refinance Loan

What is 'Refinance'

A refinance occurs when a business or person revises a payment schedule for repaying debt. Mechanically, the old loan is paid off and replaced with a new loan offering different terms. When a company refinances, it typically extends the maturity date.  Companies or individuals refinancing loans may have to pay a penalty or fee.

BREAKING DOWN 'Refinance'

The most common forms of consumer debt are mortgages, car loans and student loans. The borrower agrees to make certain payments based on a rate of interest. Companies operate the same way. The most common types of corporate loans are term loans, bonds and lines of credit. The company agrees to the terms of each loan type, and the bank lends it money. Terms provide the details of the loan and specify the interest rate, payment amount and payment date(s).

When the terms of the loan are revised in a way that changes the payments associated with the loan, the loan has been refinanced. In a refinanced loan, the old loan is paid off with the new loan, and the old terms are replaced with new terms. Some loan terms come with fees associated with prepaying, which makes refinancing less rewarding. The most common changes in loan terms are maturity date and interest rate.

Why Refinance

Borrowers refinance for a myriad of reasons. A common goal is to pay less interest over the life of the loan. Borrowers may also want to change the duration of the loan or switch from a fixed-rate to an adjustable-rate mortgage, or vice versa. The reasons and motivations behind refinancing a loan are as varied as the loan types offered.

Refinance Loan Types

There are several different types of refinancing options. The type of loan a borrower decides on is dependent on the needs of the borrower. The most common type of refinancing is called the rate-and-term. This occurs when the original loan is paid and replaced with a new loan. Another type of refinancing is the cash-out. Cash-outs are common when the underlying asset collateralizing the loan increases in value. The transaction involves withdrawing the value or equity in the asset in exchange for a higher amount. In other words, when an asset increases in value on paper, you can gain access to that value with a loan rather than selling it. This option increases the total loan amount but gives the borrower access to cash immediately while still maintaining ownership of the asset. Another refinancing option is referred to as the cash-in. The cash-in refinance allows the borrower to pay down the loan for a lower loan-to-value ratio or smaller loan payments.

Like many other Americans, you may be considering using the equity you've built in your home to re-invest in your dreams or consolidate debt. A mortgage refinance allows you to borrow additional money on your mortgage, so you can afford the things you've always wanted. It will also help save you money and help consolidate your debt into one convenient payment.

Mortgage refinance can prove beneficial in several ways:

  • Helps Obtain a Lower Fixed Rate
    The interest on a fixed rate mortgage that you took several years ago may have dropped drastically. Refinancing the existing mortgage will entitle you to avail of the reduced interest rate.
  • Do the things you always wanted
    A Mortgage refinance could provide you with peace of mind in doing things you always wanted such as help with kids' education costs, take that dream vacation, buy the perfect vehicle, get a home renovation and so much more. You could purchase a residential property, including rental properties of up to four units.
  • Consolidating Multiple Mortgages into One
    Paying the installments of two or more mortgages at the same time can be quite a burden for most individuals. The best solution in this case is to consolidate the multiple mortgages into one, with a fixed monthly interest rate and a longer repayment duration.
  • Pay Off Other Debts
    The proceeds from your refinanced mortgage can be used to pay off credit card bills and other similar expenses. Since mortgage interest is 100% tax deductible, you end up saving a considerable amount.
  • Make Cash Provisions for Emergency Situations
    You can refinance your existing mortgage to free a larger amount of cash, depending on your home equity. Since a mortgage is a secured loan, the interest applied is considerably lower than that of an unsecured loan.

We help you decide whether it is the right time for you to refinance. The decision to refinance should be carefully evaluated to avoid any complications at a later stage. By carefully studying the status of your current mortgage and comparing it to your income and other debts, we help you pick the refinance solution that best suits your current financial status.

We offer some of the lowest and most competitive mortgage refinance rates in the market. Regardless of your requirement, whether it is to consolidate existing mortgages or obtain a better rate, we get you the best deal possible. Our experienced mortgage professionals, who have extensive knowledge of the mortgage industry, will provide the necessary guidance that you need in making the right refinance decision.

 

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