Mortgage Rates are at their Lowest, Arguably
When talking about the "Lowest Rate Possible" a strong, two sided debate always takes place. We have heard this argument take place, many times both sides make equal and valid points to their case. Either way, Valley West Mortgage is here to tell you some of the details involved with the phrase "Lowest Rates Ever!".
Earlier this fall, the beginning of October and even the end of September, rates were on average lower then they are today. That being said, in terms of the actual interest rate that's most likely to be quoted to an ideal-scenario borrower, it was 3.875% then and after a long time stuck at 4%, the most prevalent best-execution rate is once again 3.875%.
There are a couple things to keep in mind when thinking about a 3.875% Best-Execution rate.. 3.875% Best-Execution rates mean that this the most prevalent RATE for the best of qualified scenarios, while it considers the costs involved to obtain that rate. Those costs can vary quite a bit before a move up to 4.0% or move down to 3.75% would be justified. We're only just entering the very outer limits of 3.875%'s range of closing costs (on average, some lenders are already close to 3.75, some are still at 4.0 or higher). The point I am trying to make here with this article on Lowest Mortgage Rates is that with all this hype and exposure of the term "LOWEST RATES POSSIBLE" in the market today, it is a good idea to step back and take a look around. It is very important to know all the details. You might have a better scenario then you imagine, leaving you with more options to help choose a company that can move down to 3.75%. It is not that the rates have not been here before, or that you have not been warned numerous times about subject similar to this one. The fact is that many first time home buyers have no idea what they are jumping into - (Not Factual).
Many first time home buyers read a Mortgage Blog, maybe even a book or watch a video and then make a few calls hoping to get some kind of valid information, possibly hearing some of the same terminology they just read about. Valley West Mortgage is dedicated to helping all of our potential home buyers find all of the information needed to make a smart decision with their future. See our past blog about Loan Officers Should Always Provide Valid Contact Information. Our staff at Valley West Mortgage can prove their Authenticity, as well as our companies, before talking number.
30 Year Fixed Mortgage Falls to 3.94 Percent for the first time ever!
BASED off of Average Rates
For all those who qualify and in the market for a Home Mortgage Loan, there is an amazing chance to buy a home or refinance with Valley West Mortgage. It has even been said that Mortgage Rates could fall even lower then 3.94 (The AVERAGE RATE) since "the Federal Reserve plans to reshuffle its portfolio of securitues to try and lower long-term rates", according to a recent article written by & posted by MSNBC.com.
Freddie Mac released a statement that said " The Average Rate on a 30-year fixed mortgage dropped from 4.01 percent last week, which was the previous low. The Average rate on a 15-year fixed loan, one of the most popular refinancing options, fell to 3.26 percent, making that a record low as well. Rates would have to drop a full point more for Americans who have already refinanced in the last could years, to do so again.
What does this all mean?
A drop in mortgage rates will provide a a boost in the economic stuggles this country is currently facing, if more Americans could refinance . When People refinance at a lower rate, they pay less interest on their loans and have more money in their accounts. That is what everyone wants right?
NewFed Programs Help Mortgage Rates
This week, the Fed announced new measures to boost the economy. This sounds amazing, and like everything else we have heard in the last two years. So expectations are pretty low for much economic growth to result from the measures taken by the fed. but they did help push mortgage rates to historic lows. The lowest rates we have scene in the last 3 years, not to mention that the rates are bordering on lowest rates we have seen in the last 45 years. You heard it here. We are almost at the lowest rates in history.
The Fed released its statement Wednesday afternoon. The MBS markets then staged a very strong rally for several reasons. The Fed confirmed that there are "significant downside risks" to the US economic outlook. Slower economic growth reduces inflationary pressures, which is favorable for mortgage rates. The Fed then announced the widely expected "Operation Twist program." A program that will extend the average maturity of the Fed's portfolio by purchasing $400+ billion of longer-term Treasury Securities and selling an equal amount of shorter-term Treasuries. The third major element from the statement helping mortgage rates was a surprise to most investors. The Fed will begin to reinvest principal payments from its mortgage-backed securities (MBS) holdings in additional agency MBS. Until now, the Fed has been reinvesting the MBS principal payments in Treasury securities.
With roughly $885 billion in MBS holdings in the Fed's portfolio, these principal payments, along with Operation Twist, will create a significant source of additional demand for MBS. The impact of the announcement was priced in very quickly. Although the Fed has not yet begun to purchase securities under the new programs, investors have already factored in the expected impact of the added demand on MBS prices. Following prior Fed announcements about purchasing MBS, nearly all of the benefit took place right away.
Mortgage Rates Are on the Rise!
We said it would happen and soon. Average rates have just passed 5%
What we don't know is how far or how fast this Mortgage Rate rise will be. Recent positive indicators for the economy have caused rates to rise. Mortgage Rates parallel Long-Terms Bond Rates and those always rise on positive economic news. It is more important than ever to have your Refinance or Purchase file in the hands of a competent Mortgage Professional! At Valley West Mortgage, we keep a very close watch on rates for our clients. While rates are clearly on the rise, they still have their ups and downs. We watch all of the rate change indicators for potential changes so we can lock rates at the best possible advantage for our clients.
The key to being ready to lock is having a complete file which is ready in every respect. With our clients help, and help from our Realtors on Puchase files, we do everything within our control to make sure that your file is complete, as quickly as possible. In this way, we won't miss any opportunity to secure the best terms possible! Give us a call today so we can help you to succeed even in this unstable market. Remember, Las Vegas is still one of the best buying opportunities in the entire country regardless of current rate fluctuations.
Call (702) 696-9900 or (888) 931-0007 and let Valley West Mortgage get you ready to close!
This is the best time I have ever seen to purchase or refinance. I am here to help. Please call me with any questions 702-696-9900.
I have prepared a brief summary of mortgage rates for the most common loan programs. As you know, rates can vary greatly based on credit scores and loan to value but, for this weekend, the rates below are realistic.
|
Conv 30 Year Fixed
|
| Rate |
Disc. Points |
APR |
Payment |
Closing Cost |
|
| 3.875% |
0.750% |
3.982% |
$1,176 |
$3,640 |
Details |
| 4.000% |
0.250% |
4.063% |
$1,194 |
$2,390 |
Details |
| 4.125% |
0.000% |
4.168% |
$1,212 |
$1,768 |
Details |
But wait, there's more
Weekly Rate Update: September 13th-17th Mortgage Rates
Welcome back, I have prepared a brief summary of mortgage rates for the most common loan programs. As you know, rates can vary greatly based on credit scores and loan to value but, for this weekend, the rates below are realistic.
|
Conv 30 Year Fixed
|
| Rate |
Disc. Points |
APR |
Payment |
Closing Cost |
|
| 4.125% |
0.750% |
4.232% |
$1,212 |
$3,640 |
Details |
| 4.375% |
0.125% |
4.304% |
$1,230 |
$2,078 |
Details |
| 4.500% |
0.000% |
4.418% |
$1,248 |
$1,765 |
Details |
But wait, there's more
Low Inflation is Making Mortgage Rates Better
After rising for two weeks, mortgage rates moved a little lower this week. Slower than average economic growth and low inflation persuaded investors to purchase bonds, including mortgage-backed securities. Following three months of declines, mortgage rates appear to be settling into a range so far in September.
The most significant economic data released during the week was the monthly inflation reports. Rising inflation erodes the value of bonds and pushes mortgage rates higher. In the current economic environment, higher inflation is not a concern, and some investors are more worried about the risk of inflation falling too low. The Fed is generally most comfortable when core inflation is rising at an annual rate between 1.0% and 2.0%. In August, the core Consumer Price Index (CPI) increased at a low 0.9% annual rate. While this level is probably not low enough to prompt new action from the Fed, investors will be closely watching what the Fed has to say about inflation rates at next Tuesday's meeting.
Hearings began this week on the role of government in the housing market, including the future of Fannie Mae and Freddie Mac. The debate is expected to be lengthy, and the Obama administration has stated that it will produce a proposal in January. There is general agreement that government involvement has created a more liquid market for mortgages, which has resulted in lower mortgage rates. The early consensus is that there is an appropriate role for government in the housing market, but that proper safeguards must be established to reduce the future risk to taxpayers. In any case, changes are expected to be phased in gradually over a period of years.
