Mortgage Rates Newsletter - Market Analysis

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

Mortgage Rates Finally Catching a Break
Tue, 02 Mar 2021 21:57:07 GMT - In the past 2 decades , there have been 6 months where mortgage rates rose at least 50 basis points. February 2021 was one of them. Moreover, it was one of only 2 of those months where rates rose without obvious provocation from a significant new, unexpected motivation (the last time that happened was December 2010. The other months were associated with 2013's taper tantrum, the 2016 presidential election, and the market dislocations in March 2020 as covid panic surged). In other words, it was a really bad month for rates--so bad, in fact, that it has increasingly made sense to look for some relief simply because things don't tend to stay that bad for that long. Of course, if there's an exception to how rapidly rates "usually" spike, it has every right to occur after rates have spent an unusually
Brutal Week For Rates But There's Hope (Hopefully)
Fri, 26 Feb 2021 22:53:42 GMT - 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. 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
Mortgage Rates Are Now Well Over 3 Percent
Thu, 25 Feb 2021 22:46:25 GMT - Mortgage rates WISH they were still at 2.97%--the number conveyed today by Freddie Mac's weekly survey. Freddie's data is accurate when it comes to capturing broad trends over time, but can really fall short when the bond market is experiencing elevated volatility. To say that bond market volatility has been elevated recently is an understatement of extreme proportions. Things are happening that haven't happened in years . Some measures of volatility rival the March 2020 panic surrounding covid, only this time, there's no catalyst other than the market movement itself. Today was by far the worst of the bunch when it comes to this most recent spate of volatility. Most any mortgage lender added another eighth of a percent to their 30yr fixed rate offerings. Over the course of the past week, most
Frequently Asked Questions

Frequently Asked Questions

There are many different solutions available for various client profiles. Depending on what your employment type is, and how your credit looks, you may have different options available to you. For a profile analysis, you should contact I Want a Better Mortgage. From there, we can recommend some great options, tailored to your situation. Generally speaking, there are two types of mortgage terms. Open or closed. If you are unsure whether closed or open, fixed or variable is right for you. Read on, the info below will give you a better understanding. We are still just a phone call away in case you want to talk to a live mortgage professional about any of the options listed below.

Open vs. Closed

An open mortgage is 100% open for prepayment at any time throughout the term of the loan. This means that you have the option to repay any or all of the mortgage balance at any time without penalty. This type of mortgage may be important to you if you can foresee repaying your mortgage loan in the near term. For example, you may be planning to sell your home within the term of the mortgage and paying it out in full, or you may be expecting other money that will allow you to make large prepayments to mortgage loan. A closed mortgage has restrictions on how much of the principal you can repay without penalty within the term of the loan. Most closed mortgages will allow you to repay a certain portion of the principal amount every year without penalty. The amount you can prepay depends on the lending institution but usually ranges from 10% to 25% of the original principal amount per year. There may be restrictions on when these prepayments can occur and how many times per year you can make a prepayment. For example, you may be able to only make prepayments once throughout the year on the anniversary date of the mortgage or the prepayment may need to coincide with a payment date. Your mortgage professional will discuss these policies with you as each institutionšs policies can vary widely and it may be difficult to find a better mortgage.  iWantaBetterMortgage.Com is a great place to start.

Fixed Rate vs. Variable Rate

A fixed rate mortgage is where the interest rate is set at the time you get your mortgage loan and will not change for the entire term of the loan. For example, if you take out a 5-year term, fixed rate mortgage at 5.25%, you know that your rate is fixed at 5.25% for five years and will not change. This type of mortgage offers you security and peace of mind, as you know exactly what the interest rate and payments will be. You will generally pay a little higher interest rate for a fixed rate mortgage and the rate usually increases with the length of the term. A variable rate mortgage is a mortgage where the interest rate is tied to and floats with the bankšs prime rate. If the prime rate goes up, then your rate goes up. If the prime rate goes down, then your rate goes down. Variable rate mortgages usually offer the lowest available rate because you are taking the risk that rates may rise. There are many different options available for variable rate mortgages. Your mortgage professional will help you review all of your options to find the best mortgage available.

Mortgage Term

The term of the mortgage is the contractual life of your mortgage loan. The term represents the length of time that you and the financial institution are obligated to each other with respect to your mortgage. As you choose your mortgage, the term is one of the decisions you will need to make. The term of the mortgage is usually shorter than the actual life, or amortization of your mortgage. Once the term has expired, the mortgage is completely open for renegotiation. At that time, you have the right to find a new lender if you wish and your financial institution has the right to re-qualify you before renewing your mortgage. In practice, as long as your mortgage is current and all payments have been made as agreed, financial institutions will often automatically renew your mortgage, and not require that you re-qualify.

Payment Frequency

Most lenders allow several options for payment frequency (how often you make your mortgage payments). Most will allow you to make payments either weekly, bi-weekly (every two weeks), semi-monthly (twice a month) or monthly. Choosing which type of payment to make will be a matter of convenience, but there may be advantages to paying more frequently than monthly. When you increase the payment frequency, you reduce the principal faster, pay less interest and pay off the mortgage sooner. Contact us to discuss the options that will work best for you.

 

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