Mortgage Rates Newsletter - Market Analysis

Provided courtesy of: http://www.mortgagenewsdaily.com/reports/mortgage_rates/archive

Mortgage Rates Move Modestly Lower Ahead of Holiday
Wed, 22 Nov 2017 21:12:23 GMT - Mortgage rates fell modestly today, with bond market strength both before and after the release of the Fed Minutes (a more detailed account of the Fed meeting that took place 3 weeks ago). Stronger bond markets correlate with lower rates. Bonds tend to benefit from weak economic data, low inflation expectations, and an accommodative monetary policy stance from the Fed. Today's economic data was generally weaker, but of particular importance at the moment were the inflation expectations in the consumer sentiment data, which came in near the lowest levels since the financial crisis. The Fed Minutes also mentioned some concern over intractably low inflation, though they continue to expect a rebound based on a strong labor market. Bond markets are already well aware the Fed is planning on hiking
Mortgage Rates Holding Steady in Recent Range
Tue, 21 Nov 2017 22:18:20 GMT - Mortgage rates were unchanged today, on average, although a few lenders made small adjustments to rates sheets in response to bond market volatility. Bond markets began the day heading into stronger territory (which implies lower rates), but gave up much of the gains by early afternoon. That prompted a few lenders to raise the costs associated with prevailing rates. In other words, markets didn't move enough for published interest rates to change. Those tend to move in .125% increments and it takes an uncommonly big day in bond markets to push mortgage rates higher or lower by that much. The "upfront costs" associated with a mortgage (origination and discount, typically) give lenders a way to fine-tune the overall cost of financing. It's those costs that moved higher, but again, only for a
Mortgage Rates Higher to Begin Holiday-Shortened Week
Mon, 20 Nov 2017 21:59:11 GMT - Mortgage rates moved slightly higher today against the backdrop of the unique bond market conditions seen on Thanksgiving week. Bond markets underlie mortgage rates, and there's generally a certain level of participation that traders and mortgage lenders can count on. That participation wanes on major holiday weeks and the remaining players tend to behave a bit more conservatively. This is seen in the form of interest rates staying inside recent boundaries and mortgage lenders not getting too aggressive with pricing. Inside those boundaries, however, movement is far less predictable . After all, with fewer players in the game, each trader has a bigger say in the direction rates will move. If there are more bonds being sold than bought, regardless of the motivation, rates will move higher. This
Why Use a Mortgage Broker?

Why Use a Mortgage Broker?

When shopping for the best mortgage or the best mortgage rate, many home buyers enlist the services of a mortgage broker to find them the best terms and rates. Since the real estate market crash in 2008, however, the business practices of brokers have come under scrutiny and the question of whether they are acting in the customers' best interests has been raised. Working with an experienced, competent mortgage broker can help you find the right mortgage, but there are both advantages and disadvantages that you should consider before committing to one. 


Advantages:


Saves You the Legwork
Mortgage brokers have regular contact with a wide variety of lenders, some of whom you may not even know about. The alternative to working with a broker is to call up dozens of lenders and compare their mortgage terms and rates on your own. A broker saves you the time and headache of having to do that. A broker also can steer you away from certain lenders with onerous payment terms buried in their mortgage contracts to help you find a better mortgage. 

Brokers May Have More Access 
Some lenders work exclusively with mortgage brokers and rely on them to be the gatekeepers to bring them suitable clients. You may not be able to call some lenders up directly to get a retail mortgage. Brokers may also be able to get special rates from lenders due to the volume of business generated that might be lower than you can get on your own. 

You May Save Some Fees 
There are several different types of fees that can be involved in taking on a new mortgage or working with a new lender, including origination fees, application fees, and appraisal fees. In some cases, mortgage brokers may be able to get lenders to waive some or all of these fees which can save you hundreds to thousands of dollars. 

Disadvantages:


Brokers' Interests May Not Align with Your Own
Your ultimate goal in shopping for a mortgage is to find one with an affordable interest rate and low fees. You are in it for the long haul. A mortgage broker, on the other hand, often gets paid a fee from the lender for bringing in the business. This fee can be based on the amount of the mortgage, and will vary amongst lenders. A broker's goal, therefore, is to get you into a mortgage that maximizes their compensation. The 2008 market crash revealed that many brokers were getting their clients into mortgages that they could not afford over time.

You May Not Be Getting the Best Deal
Many homebuyers simply assume that a broker can deliver a better mortgage than they could get on their own, but this is not always the case. Some lenders may offer homebuyers the exact same terms and rates that they offer mortgage brokers (sometimes, even better). It never hurts to shop around on your own to see if your broker is really offering you a great deal.

Brokers Often Do Not Guarantee Estimates 
When a mortgage broker first presents you with offers from lenders, they often use the term "good faith estimate." This means that the broker believes that the offer will embody the final terms of the deal, but this is not always the case. In some cases, the lender may change the terms based on your actual application and you may end up paying a higher rate or additional fees.

Some Lenders Do Not Work with Mortgage Brokers at All 
This is an increasing trend since 2008, as some lenders are finding that broker-originated mortgages were more likely to go into default than direct lending. By working through a broker, you may not have access to these lenders, some of whom may be able to offer you better mortgage terms than you can get through the broker. 

The Bottom Line
Mortgage brokers may be able to find you the loan of your dreams, but you should weigh the potential downsides before hiring one. We always suggest that you begin your search at I Want a Better Mortgage (iWantaBetterMortgage.Com).  Spend some time contacting lenders directly to obtain an understanding of what mortgages may be available to you. Work with a reliable mortgage broker with solid references and ask them to guarantee their loan estimates.

 

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