Mortgage Rates Newsletter - Market Analysis

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Mortgage Rates Just Barely Higher, But Lower This Week
Fri, 16 Mar 2018 21:36:49 GMT - Mortgage rates rose modestly today, but many lenders were essentially unchanged compared to yesterday's latest offerings. Moreover, rates ended the week slightly lower compared to last Friday's latest levels. That's no small victory in 2018, despite the fact that it is a small victory in general. Part of the motivation toward slightly higher rates over the past 2 days could be the looming Fed announcement next week. Oftentimes, bond markets (which underlie rates) don't want to move too far outside recent ranges when there's a risk the Fed may say or do something to redefine that range. In the current case, Wednesday's improvement brought average rates to their best levels in roughly 3 weeks. Traders aren't eager to explore anything lower without the Fed's blessing. But at the same time, they
Mortgage Rates Hold Steady at Lowest Levels in March
Thu, 15 Mar 2018 20:42:23 GMT - Mortgage rates held steady today as political headlines helped to offset some initial weakness in bond markets. When bonds weaken, rates tend to move higher. That said, this morning's weakness was quite modest. The helpful headlines (regarding Robert Mueller's subpoena of members of the Trump Organization) had a similarly modest effect, thus leaving bonds and rates in relatively unchanged territory. That's perfectly acceptable in this case because it means rates are holding in line with their lowest levels since March 1st. The risk is that March 1st served as a floor for rates after they began falling from mid-February highs. It could be the case that rates will have a tough time moving any lower than today's levels without more meaningful motivation and that they're waiting to decide on such
Reverse Mortgage

Reverse Mortgage

A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage (principal or interest) is required until the borrower dies or the home is sold. After accounting for the initial mortgage amount, the rate at which interest accrues, the length of the loan and rate of home price appreciation, the transaction is structured so that the loan amount will not exceed the value of the home over the life of the loan.

Often, the lender will require that there can be no other liens against the home. Any existing liens must be paid off with the proceeds of the reverse mortgage.

BREAKING DOWN 'Reverse Mortgage'

A reverse mortgage provides income that people can tap into for their retirement. The advantage of a reverse mortgage is that the borrower's credit is not relevant, and is often unchecked, because the borrower does not need to make any payments. Because the home serves as collateral, it must be sold in order to repay the mortgage when the borrower dies (in some cases, the heirs have the option of repaying the mortgage without selling the home). These types of mortgages have large origination costs relative to other types of mortgages. These costs become part of the initial loan balance and accrue interest. Senior citizen borrowers with good credit should carefully analyze the options of a more traditional mortgage, such as a home equity loan, against a reverse mortgage.


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