Mortgage Rates Newsletter - Market Analysis

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

Mortgage Rates Continue Defying Bond Market Weakness
Wed, 02 Dec 2020 21:33:19 GMT - Although it was the focus of yesterday's discussion , the ability of the mortgage market to hold steady in the face of bond market weakness continues to impress . This is interesting because mortgage rates take direct cues from the bond market. That's still the case, but at the moment, the mortgage side of the bond market is playing with a stacked deck . If Treasuries are only a little bit weaker on any given day (like today), mortgage bonds and mortgage rates have been consistently holding their ground or actually improving. Today was more of a "ground-holding" sort of day, but it depends on how any given lender responded to yesterday's bond market weakness. Those who adjusted rates higher yesterday were generally in slightly better shape today . Those who abstained yesterday were offering
Mortgage Rates Surprisingly Steady Despite Market Drama
Tue, 01 Dec 2020 21:39:03 GMT - Like many industries, housing finance has a superficial layer that's fairly easy to understand for the average consumer. A person wants a home. They don't want to pay cash. They get a loan. Lower rates = lower payments. The end. Shortly below that superficial layer of understanding, where a surprisingly high percentage of mortgage professionals operate, it's popular to discuss 10yr Treasury yields as a basis for mortgage rates. The only problem with viewing 10yr yields as the basis for mortgage rates is that they're not. Anyone can observe this objective fact by jumping just a bit deeper into the rabbit hole and acquainting themselves with MBS (mortgage-backed securities). These are the true raw ingredients for mortgage rates even though they frequently mimic 10yr Treasury yield movement. By
Mortgage Rates Hold Steady Over Holiday Weekend
Mon, 30 Nov 2020 22:09:53 GMT - Although many mortgage lenders were technically open for business last Friday, it's a well-known unofficial holiday. Mortgage rate movement requires bond market movement, and the post-Thanksgiving Friday invariably sees fewer traders trading fewer bonds. Even when bonds do manage to move, the people in charge of setting mortgage rates at various lending institutions tend to play it safe. In fact, many lenders simply leave rates wherever they were on Wednesday and then simply plan on getting back to work on Monday. This particular Monday, however, the average lender is still in line with Friday's and Wednesday's rates. Some of them offered lower rates in response to strength in the bond market today. Those who abstained are expected to offer token improvements tomorrow, assuming the bond market
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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