What's Affecting The Mortgage Rates Today
Conventional rates today fell considerably today but, do you know what does effect the rates to rise and fall as they do?
The most crucial clues offset each other — Return of investment (Treasury Yield) on the government's debt obligation rose while oil prices fell. Shown below are some factors you might want to consider:
- Major stock indexes opened slightly low and flat (neutral for mortgage rates)
- Gold prices fell $8 to $1,232 an ounce. (That is not-good for rates because the change is so small. In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower)
- Oil prices fell another $1 to $67 a barrel (that’s good for mortgage rates today, and nice to have dropped through the $70 threshold — an improvement long-term because energy prices play a large role in creating inflation)
- The yield on ten-year Treasuries fell 1 basis point (1/100th of 1 percent) to 2.86 percent. That is good for mortgage borrowers because mortgage rates tend to follow Treasuries
- CNNMoney’s Fear & Greed Index (Tool that is comprised of 7 key market indicators) remains at 46 (out of a possible 100). That is still in the “neutral” range. Normally, “fearful” investors push bond prices up (and interest rates down) as they leave the stock market and move into bonds, while “greedy” investors do the opposite
Predictions indicate for the year 2018 we should only see less than four rate hikes in 2018. So if your looking to purchase soon contact us today! And keep an eye on the markets!
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Shopping for a Mortgage Loan
How Do You Shop for Rates?
The top tools for mortgage shopping
Over the years, shopping for a mortgage has become better than ever. Purchasing a home is more accessible online and mobile, which makes the process more fitting for those of us looking for our dream home. Valley West Mortgage is here to make that happen, with our online pre-approval form, loan application, and secure loan docs upload capabilities to ease the stress of buying a home.
Buyers have been using a combination of resources when looking for mortgage information that include, real estate agents, online, family, friends, and lenders. Out of which, most buyers found that the industry professionals, family, and friends were more trustworthy over online resources.
Lenders were the top preference for recent buyers, with 77 percent saying they used a lender for information when shopping for a mortgage. Two-thirds also said they looked for information directly from an agent, while 69 percent said they used online resources, including Realtor.com, credit management sites and social media. Valley West Mortgage is your Mortgage Banker offering the lowest mortgage rates in the Las Vegas Valley.
Online mortgage resource users are buyers between 18 to 34 and 45 to 64. Nearly half of all buyers said they used online resources out of convenience. 22 percent said because of their “practicality,” and another 12 percent said they were “easy to understand.”
If you’re wondering, it’s not going away anytime soon. Mobile usage during the mortgage shopping process has jumped to 65 percent and 73 percent hope to do so in the future.
Tools That Help Your Mortgage Buying Needs
Specifically, online tools and mobile resources are available to you 24/7 which is why it makes it more convenient to start your search there. You can compare mortgage quotes, obtain a mortgage quote, fill out a mortgage application, submit documents to your lender and look for advice about getting mortgage via your mobile device without the hassle of leaving your home.
Get Today’s Mortgage Rates
If you’re looking to buy a home and need a quick quote, pre-approval, or want to speak to a mortgage loan originator you’re in luck, we have everything you need.
What Goes Up...Must Come Down
If you watch the news or are current in the mortgage world (as we all should be), you know that the mortgage rates are dropping significantly. Mortgage rates are important because they regulate the amount of interest that home buyers pay on their mortgages every month. Houses, especially nice ones, aren’t exactly cheap. So borrowers need to obtain a loan from a bank in order to pay for their house. Well upon paying back that loan, borrowers must also pay interest, so if the interest rates are low, then of course the payments (in most circumstances) are low as well. What does that mean for you? It means that NOW is the time to look into buying a new home, or refinancing your current home for a lower interest rate.
According to Freddie Mac, the average mortgage rate as of October 16, 2014 is at 3.97% for a 30 Year Fixed Rate Mortgage. That’s a major change from the 4.28 percentage rate that was reported last year by Freddie Mac. One of the safest bonds to invest in are US Treasury Bonds. Because of this, US Banks model their interest rates on mortgages based on the US Treasury’s rates. As a result, if the Treasury’s rates drop, then the mortgage rates are likely to follow.
Is There an Explanation for Low Mortgage Rates?
Wise investors want to make safe investments that will provide a steady income of money. One investment that is considered “safe” is an investment in Mortgage-Backed Securities (or MBS). Those who invest in mortgage-backed securities are essentially lending their money to a homebuyer or a business. These MBSs are backed by government supported entities like Freddie Mac and Fannie Mae, and since they are supported by the full faith and credit of the government, investors feel comfortable with investing. Investors are investing while the mortgage rates are low. If they go up too high, there is no guarantee that they will continue to put money towards MBSs. Banks need people to continue to invest in MBSs so that they can continue to gather their loans and sell them to the GSEs, or Government-Sponsored Enterprise . If no one is investing then the banks can’t sell their loans, and if smaller banks can’t sell their loans and their borrowers default then the bank loses thousands of dollars. According to Jed Kolko, a Trulia Chief Economist, “[When] investors think US mortgage-backed securities are relatively safe, mortgage rates [will] stay low.”
Granted, what I have provided is only one explanation. Other bloggers, mortgage experts, and financial institutions I’m sure have their opinions on why the rates have fallen. Will the rates stay low? Doubt it. The economy is constantly changing as well as the demand to borrow money. So be sure to take advantage of this rare financial opportunity while it’s beneficial to you. Just a bit of food for your mortgage thoughts.
The Basics Of Buying A Home
Anyone who may be looking to purchase a new home or refinance their current home should have a thorough education on certain aspects of the mortgage industry. No one wants to make an uninformed decision, especially when it comes to making such an important financial investment.
First thing’s first, let’s talk about the money. Remember back when you were a kid and you wanted that special brand of sugared cereal, the newest toy or game? If your mom was a savvy shopper she’d say “Wait until it goes on sale”. Because we’ve all heard of this phrase on so many occasions, we have all learned to live by it. We are attracted to the words sale, rebate and bargain. We’re also attracted by discounted prices. We love the idea of obtaining something that is valued at a higher price, but not having to give up an arm and a leg to get it.
So when you’re in the market for buying a home, as a buyer, you want to make the best financial decision possible. That would be buying a great house but not necessarily having to spend your life savings on it.
When you’re looking to purchase a home, you have to first seek out a loan (in most cases from a mortgage broker or bank). Once approved, the broker or bank will give you the loan amount to purchase the house. You then pay money back to the bank until your house is paid off.
The best time to purchase a home is when interest rates on mortgages are low. This is because, you are paying less money back on what you initially borrowed in order to purchase the home.
What do interest rates have to do with purchasing a home?
Interest rates affect your monthly payment, by determining how high or how low these payments will be. For example: The house you have your eyes on is $220,000.
- You make a down payment of $20,000 (10%).
- The remaining principal (the amount of the loan you will need for the house) is $200,000
- Remember, upon paying back the loan, you must pay on the principal amount of the loan, as well as the interest on the loan every month
- If your interest rate is 5.5%, you’d be paying about $1000 in interest every month, plus your house note and all of the other fees that come with owning a home
- If your interest rate is at 4%, you’d be looking at paying a bit over $700 a month in interest
As you can see, a small increase or decrease in your interest rate can have a serious impact on your monthly payments. The lower the interest rate, the more affordable your monthly payments have the potential to be.
When is the right time to finance a home?
The time to finance a home for the best rate could be now, as mortgage rates across the country have reached a low over the last 16 months at 4.12 percent, according to Freddie Mac.
This number is quoted for a 30-year fixed rate conventional mortgage, and since Jan. 1, people have been finding themselves able to afford about 8 percent more of a home in terms of quality. Las Vegas, in particular, may be experiencing their home rates flattening out as the median home price reached $200,000 in August, which is an almost 10 percent increase from the same time last year, according to a recent report from the Greater Las Vegas Association of Realtors (GLVAR). This is good news for home owners and buyers as the economy continues to recover from the recession that severely impacted the value of property nationwide.
Although property values increase as pricing begins to level, low mortgage rates are not necessarily available to everyone. Those who will see the lowest rates would be considered prime lenders, defined by Freddie Mac as a lender with a credit score over 740 and who can offer a 20 percent down payment. This, however, should not discourage those from financing a home.
If you’re interested in mortgage rates in the greater Las Vegas area, please contact Valley West Mortgage at 702-696-9900 or firstname.lastname@example.org