Mortgage Rates Newsletter - Market Analysis

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

One of The Biggest Paradoxes You'll Ever See For Mortgage Rates
Fri, 11 Jun 2021 22:25:27 GMT - No, this isn't one of those click-bait headlines that promise to share "one weird trick" or proclaim "you'll never believe what happened next." Well, actually, some people might have a hard time believing this one. In the interest of respecting the time of those who are already up to speed on this week's economic data and interest rate movements, we're about to talk about the paradoxical drop in rates despite decades-high inflation. Everyone else, read on!
Mortgage Rates Fall As Inflation Fails to Spook The Market
Thu, 10 Jun 2021 21:02:32 GMT - Inflation is one of the mortal enemies of interest rates. If dollars in the future buy less stuff than they do today, investors need to set higher and higher rates on the money they lend in order to realize the same returns. With that in mind, we'd be well within our rights to assume a surprisingly high reading on a key inflation report would push rates higher. In many past instances, that's exactly how things play out, but that's not what happened today. To be fair, markets traded according to conventional wisdom in the first 20 minutes after the inflation report was released. But from that point on, the bond market rallied (i.e. bond prices rose and yields fell, thus implying lower rates for the mortgage market). What's up with the paradoxical reaction? There are a few moving parts. The simplistic
Rates Move Lower Again as Bond Demand Stays Strong
Wed, 09 Jun 2021 19:51:50 GMT - The bond market is the main ingredient that lenders use to determine lending rates. The mortgage market is no exception . In fact, mortgages have specific bonds that dictate the prices of loans that sold between investors on the secondary market. Those prices let lenders know where to set their mortgage rates on any given day. There's a longstanding belief that the 10yr Treasury yield guides mortgage rates as well. While that's not exactly the case, longer-dated Treasuries (think 5, 7, 10yr) tend to move in relative lock-step with the rates implied by mortgage-backed bonds. As such, when "things" happen that help longer-dated Treasuries, mortgages tend to benefit as well, even if the timing and magnitude can vary. That's exactly what happened . A scheduled 10yr Treasury auction showed very
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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