Mortgage Rates Newsletter - Market Analysis

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

Mortgage Rates Catch a Break
Wed, 22 May 2019 21:10:53 GMT - Mortgage rates moved higher at a pace that was probably quicker than the average homebuyer would like yesterday . That was part of a 4 day move leading back up from the lowest levels in more than a year (or close to them, depending on the lender). That 4-day move could have easily been quite a bit longer, and it still could be, as long as we overlook today's market movement. Thankfully, it's taken rates back in a friendlier direction. At issue is the unexpected flare-up in British politics surrounding Theresa May's referendum gambit yesterday. To be fair, the gambit was unexpected, but the flare-up makes perfect sense. Long-story short, if May is ousted (and that seems likely), it creates uncertainty surrounding a major economy and financial center. It also makes a "no-deal" Brexit more likely
Mortgage Rates Bounce Back
Tue, 21 May 2019 21:11:39 GMT - Mortgage rates had a fairly decent day yesterday as far as most lenders are concerned. A few lenders saw fit to bump rates up in the afternoon following a day of weakness in the bond market (which directly affects the rates lenders can offer). Because a majority of lenders did NOT make that mid-day adjustment, they were always likely to do so with today's first rate sheets--especially if bonds didn't improve overnight. Not only did bonds not improve today, but they weakened a bit more. This made lenders' decisions easy. With that, the average conventional 30yr fixed quote moved back up to levels last seen on May 9th and 10th. In outright terms, some loan scenarios will be an eighth of a percentage point higher in rate while others will merely be looking at a reasonably big bump in closing costs
Rates Hold Near Lows, But Things Could Change Tomorrow
Mon, 20 May 2019 22:25:06 GMT - Mortgage rates moved microscopically higher today, depending on the lender. In terms of underlying movement in the bond market, however, rates should have risen a bit more than they did. This has to do with the timing of the bond market weakness and the amount of movement lenders typically want to see before changing their mortgage rate offerings for the day. Simply put, weaker bonds suggest higher rates, but bonds didn't weaken fast enough for most lenders to see their "re-price" threshold. All of the above means that most lenders continued to offer rates that were very close to the lowest levels in more than a year. Only a handful of days have been any better, and all of them have occurred in the past 2 months. Much of the credit for the recent drop in rates goes to the well-publicized trade
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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