Mortgage Rates Newsletter - Market Analysis

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

Mortgage Rates Move Up From Long-Term Lows
Wed, 04 Aug 2021 21:10:05 GMT - Mortgage rates hit their best levels in 6 months yesterday, but moved higher today following a strong report on the services sector. The economy is one of the key inputs for interest rates. As such, several of the most relevant economic reports have a longstanding history of causing day-to-day volatility. Today's ISM Non-Manufacturing Index is one of a handful of the most important reports. By coming out much stronger than expected, it suggested the economy was closer to a level that would prompt the Fed to make changes to rate-friendly policies. Bonds reacted with lower prices and higher yields (aka "rates"). Of course we're only talking about only one economic report. A few short hours earlier, another important report, ADP Employment, missed by a longshot. A few days ago, ISM's own manufacturing
Mortgage Rates Drift Down to New 6-Month Lows
Tue, 03 Aug 2021 21:17:56 GMT - Mortgage rates moved slightly lower again today--extending a steady string of improvements that began after last week's Fed announcement. The average lender is now able to quote conventional 30yr fixed rates that are at least as low as those seen in the middle of July. In most cases, today's offerings are slightly better. The details can vary quite a bit depending on the scenario (purchase/refi, credit, downpayment, etc), but best-case scenarios have been back in the "high 2's" for weeks. In almost all cases, today's rates are the lowest since the beginning of February. What's up with the refreshingly strong move back toward all-time lows? At the beginning of the year, if you could only make one bet on rates, "higher" made more sense than "lower." That would actually still be a good bet as
Mortgage Rates Near Long-Term Despite Taper Talk
Thu, 29 Jul 2021 20:00:51 GMT - "Taper talk" refers to comments, speeches, or official policy communications from the Federal Reserve (aka "the Fed") that speak to the timing and nature of a reduction in the Fed's bond buying activities. Wow! What a boring and potentially confusing sentence! Let's try again... The Fed buys bonds --US Treasuries and mortgage backed bonds (which, in turn, serve as the foundation for mortgage rate pricing). This helps rates move or remain low. When markets think the Fed is going to stop buying bonds, rates are at risk of moving higher. The current bond buying efforts began as a response to the pandemic. They helped stabilize the financial system and they provided "accommodation" (a boost to overall economic activity intended to support the Fed's goals on inflation and job growth). As the pandemic
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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