Mortgage Rates Newsletter - Market Analysis

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

Mortgage Rates Lowest Since Halloween
Wed, 20 Nov 2019 22:09:28 GMT - Mortgage rates are in the midst of a winning streak of moderate size and duration. Specifically, rates have improved by at least an eighth of a percentage point for the average lender since the beginning of last week and have moved lower on all but one of the days between now and then. That brings them to the lowest levels since October 31st. As far as rate rallies go, that qualifies as just a bit longer than average and just a bit better than average. Notably, it comes at the expense of weaker rate momentum for nearly the entire month of October. In the bigger picture, however, rates are staggeringly lower than they were this time last year. Despite having risen from multi-year lows in September, we're still in a very solid ball park. In the coming weeks, we'll be watching closely for signs
Mortgage Rates Hold Steady
Tue, 19 Nov 2019 22:13:06 GMT - Mortgage rates had a great week last week and haven't done anything to jeopardize that so far this week. Today was the first time during these 2 weeks where rates have merely held steady as opposed to move lower. The recent winning streak requires a caveat , however. It was largely made possible by the losing streak that preceded it. But if we're going to play that game, we could just as easily say that the losing streak was largely a reaction to the even bigger winning streak that's characterized most of 2019. The takeaway from the back and forth above is that rate momentum can often adhere to considerations that are almost like the laws of physics (you know... equal and opposite reactions?). Generally speaking, the longer and stronger any given move has been, the more likely it becomes that
Lowest Mortgage Rates in 2 Weeks
Mon, 18 Nov 2019 21:51:26 GMT - Mortgage rates added to last week's improvement with another modest drop today. That brings the average lender to the best levels in exactly 2 weeks--a welcome change after hitting the highest levels in more than 3 months on Friday November 8th. US/China trade relations have been a key source of volatility , but markets are also eager to see how economic data unfolds as 2019 draws to a close. The combination of a phase 1 US/China trade deal and reasonably resilient economic data could push rates much higher and confirm a rising rate trend for the next several months. Conversely, if the trade deal looks shaky and if economic data deteriorates, rates could take another run at the long-term lows seen in early September. This isn't a narrative that will play out today, tomorrow, or even any time
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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