Conforming Mortgage Rates Continue To Fall In Corona

May 11th, 2012 |  corona home loans, Economic Outlook, Mortgage Rates, Conforming Mortgage Rates Continue To Fall In Corona

Conforming mortgage rates continue to fall in Corona and throughout the nation!

For the second straight week, the 30-year fixed rate mortgage fell to a new, all-time low nationwide. According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage rate dropped one basis point to 3.83% this week for borrowers willing to pay 0.7 discount points plus a full set of closing costs.

The 15-year fixed rate mortgage also set a mortgage rate record, registering 3.05% with an accompanying 0.7 discount point plus closing costs.

Discount points are a one-time, up-front closing cost, based on the loan size. 0.7 discount points is equal to 0.7% of the borrowed amount. A home buyer in Corona opening a $200,000 mortgage and paying 0.7 discount points, therefore, would be subject to a one-time $1,400 fee paid at closing.

Borrowers wanting to avoid paying discount points can expect higher mortgage rates than Freddie Mac’s reported national average.

Falling mortgage rates are nothing new throughout Southern California. Since peaking in February 2011, mortgage rates of all types have been in steady decline. The 30-year fixed rate mortgage has shed 122 basis points since that date, falling from 5.05%; the 15-year fixed rate mortgage has shed 124 basis points, falling from 4.29%.

Low mortgage rates give today’s home buyers additional purchasing power, stretching home affordability to new heights.

Low rates also help existing homeowners to lower monthly mortgage payments. For example, as compared to mortgage rates just 15 months ago, homeowners refinancing into today’s 30-year fixed rate mortgage stand to save 13.4 percent on their respective mortgage payments.

A comparison :

• February 2011 : $539.88 principal + interest per $100,000 borrowed
• May 2012 : $467.67 principal + interest per $100,000 borrowed

A homeowner with a $300,000 mortgage in February 2011, with a 30-year fixed rate mortgage rate, would save $2,600 annually with a refinance to this week’s low rates. Even accounting for discount points and closing costs, the “break-even point” on savings like that comes relatively quickly.

Mortgage rates can’t be predicted so there’s no guarantee of low rates forever. If today’s rates meet your budget, consider locking something in. Contact me to discuss refinancing option!

Until next time SoCal…

Getting A Proper Rate Quote Is Important!

May 1st, 2012 |  Mortgage Rates, Home Loan Information, corona home loans, Getting A Proper Rate Quote Is Important!

Getting A Proper Rate Quote Is Important!

Mortgage rates can be very complex.  It doesn't matter if you're looking for a home loan in Corona, Newport Beach or anywhere between!  They can change several times a day. Yes – mortgage rates can increase and decrease multiple times on any given day.  Rates can, at times, be difficult to predict and just as difficult to properly quote.

Ensure All Things Are Equal

Here are some questions to consider asking:

• What type of loan are you offering? (30 yr., 15 yr., etc.)
• Is this a fixed rate or an adjustible rate loan?
• Can you show me a list of closing costs associated with this loan?
• Will you be paying for any closing costs?
• If you will be paying for closing costs, how much do I need to bring in to close the loan?
• Will any costs or fees be placed on top of the home loan?
• How much are you making on my home loan?
• Is there a Yield Spread Premium and if so, what is it?

Here's Why

You can’t compare a 15 year fixed rate loan with a 7 year interest only loan.  They are completely different home loans with completely different rates and pricing.  Where did you hear about the rate – from an ad?  Rates you may have heard about on the radio, seen on television or read in the paper are often several weeks old (at least) and many are teaser rates (an introductory rate which is extremely low and will adjust) offered to gain interest.  I’ve seen the same television ads offering the same rates run for weeks!

As I’ve said before, rates change.  A three week old mortgage rate advertisement will most likely be useless.  Again, make sure all things are equal.  Ask questions – if a loan officer is hesitant to answer any question in a straight forward manner, consider walking away!  You do not want to be in the middle of escrow when everything starts falling apart!

How Do I Stay Current With Mortgage Rates?

First off, it’s my job to stay current on rates.  That’s one of the very basic requirements associated with my job.  If I didn’t stay current on rates I’d run out of business real quick! Here’s how I stay current:

• I receive wholesale mortgage rate sheets from numerous lenders daily (first thing in the morning)
• I receive updates throughout the day anytime a rate changes
• All rate changes are updated directly to my smart phone
• I use a software program that allows me to see mortgage rates from each lender we utilize in a “real time” fashion
• I subscribe to a mortgage rate alert program that keeps me updated on the latest mortgage market trends which allows me to see when mortgage rates are heading up or down.

These tools have proven to be very effective.  I will continue to say – It’s my job to stay current on the mortgage market!  Contact me anytime for a free, no-obligation rate quote! 

Mortgage Rates - How They Work

April 29th, 2012 |  Mortgage Rates, Home Loan Information, Mortgage Rates - How They Work

Mortgage rates can be very complex and very easy, all in the same day!  The reality is this – Not too many home buyers understand how mortgage rates really work. Who can blame them?  Look at the large number of mortgage rate advertisements out today.  Television, radio and newspaper ads; all claiming the same thing.  Do any of these sound familiar?

Rock-bottom pricing - Lowest rates around - We beat any rate, guaranteed - We pay closing costs - Best mortgage rates around - No cost to you - And the list goes on and on……..

How are they sure they can get you the best rate?  What exactly is “the best rate”?  Do they know your credit score?  Do they know if you’ve been late on any payments?  Do they have any idea what your debt to income is?  The simple fact is – they don’t know!  They have one goal in mind – To get you to call….That’s it…just call!  Once you’re on the phone they can “wing it” the rest of the way.  In other words, they’ll worry about the “other stuff” later.  How can they do this?  One word….Assumption (at the bottom of every ad in small print).

Simply put - A company will ”assume” that you will meet a certain loan criteria in order for you to receive the advertised rate.  Most consumers, however, do not meet the stringent loan criteria, but hey, they got you to call!  Here’s an example of an assumption:

30-Year Fixed-Rate Mortgage: This rate is based on a $300,000 30-year Fixed Rate Loan at 3.99% and 70% loan-to-value (LTV) with 1.375 points due at closing.  The Annual Percentage Rate (APR) is 4.154%.  Payment does not include taxes and insurance premiums.  The actual payment amount will be greater.  Some state and county maximum loan amount restrictions may apply.  Minimum 740 FICO.

If there is anything different than what’s assumed above, the rate advertised is no longer an option!  It’s no wonder why many get confused and frustrated.  Look at the assumption, how many homebuyers can put 30% down on a new home?  How many buyers have a 740 FICO score?  I could go on and on asking questions…..It’s ridiculous!

Let Me Simplify This!

I’ll start with the very basics on how mortgage rates work.  Mortgage interest rates are based primarily on Mortgage Backed Securities (MBS). Short version - MBS are fixed-income investments that generate interest revenue through pools of home loan mortgages.  Mortgage loans are grouped together and sold to Fannie Mae, Freddie Mac, or other investors in the secondary mortgage market, who in turn securitize the loans.  They are used as collateral for the bonds they issue.  Investors buy and sell these bonds.

Generally speaking, if bonds sell low, mortgage interest rates rise.  If bonds sell high, mortgage interest rates fall.  Mortgage rates are often based on a reflection of the markets.  They can change several times a day.  Just like stocks and bonds go up and down, so goes the mortgage rates.  There is a little more involved when it comes to interest rates, but we can visit that another day!  What this means:

Banks, mortgage brokers and mortgage bankers do not set mortgage rates. They set pricing on the rates.

Now that we’ve got that out of the way let’s move on.  I would like to show you a few other things that can affect your mortgage rate and hopefully help you out along the way.

Although mortgage rates are based on MBS, there is room for individual difference.  In other words, will you qualify for a 4.5% or 4.75% rate?  This is where you can help yourself.  Your individual mortgage rate will be primarily determined by your income, job history and credit history.  Here are a few things that may help you obtain a better individual mortgage rate:

• Job stability (How long have you been employed? Any gaps of unemployment?)
• Credit history (Have you displayed a responsible pattern of paying off debt?)
• Credit score (Do you have a solid credit score?)
• Monthly income (This will help determine your debt to income ratio)
• Cash reserves (How much cash do you have available for this transaction?)
• Current debt (Do you have a $700.00 car payment?)
• Bankruptcies (Are there any bankruptcies, liens, short sales or foreclosures in your past?)
• Closing costs and fees (Can you afford the costs associated with this transaction?)

As you can see, there are many factors that are involved with mortgage rates.  Some things you have no control over (unemployment rate, secondary mortgage market, inflation, etc.) and other things you may be able to help yourself with.  I can’t stress enough the importance of working with a licensed professional.  I realize it may seen overwhelming, but this is what I do everyday.  I’m here to walk you through the entire process; from loan application to loan funding!  I put alot of work into understanding how mortgage rates work.  I understand how important it is to you.  It’s not something I take lightly and neither should you!

If you have any home loan questions, or would like a mortgage rate quote please contact me!  I can be reached by email at Rich@RichConley.com or by phone at 951.588.LOAN.  I will respond in a timely manner! 

Projected Mortgage Rates & Home Sales

January 18th, 2012 |  Mortgage Rates, Economic Outlook, Projected Mortgage Rates & Home Sales

Happy Wednesday all.....

Today Freddie Mac released its U.S. Economic and Housing Market Outlook for January showing that while the economy is undoubtedly in a better place than the same time a year ago, a speedy recovery still seems unlikely this year. 

Highlights Noted:                                                                       

• Economic growth will likely strengthen to about 2.1 percent in the first quarter.
• The current U.S. unemployment rate of 8.5 percent is likely to increase after seasonal gains are reversed.
• Mortgage rates are projected to remain very low, at least in the beginning of 2012.
• For 2012, expect home sales to grow between 2 and 5 percent year-over-year.
• The housing-market recovery will be delayed as long as there remains a large gap between buyer and seller sentiment.

Click here to view the complete January 2012 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.

According to Frank Nothaft, Freddie Mac vice president and chief economist, "With the new year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery. But the economy still is giving some mixed messages."

According to the Bureau of Labor Statistics, California has a seasonally adjusted 11.3% unemployment rate. 

Bottom line: Mortgage rates are projected to remain low and home sales are expected to grow for the time being!

Contact me for a custom rate quote!

Make it a great day!

Mortgage Rate Update

January 17th, 2012 |  Mortgage Rates, Mortgage Rate Update

**Mortgage Rate Update***

- 30 Year Fixed-Rate Mortgage (FRM) averaged 3.89 percent with an average 0.7 point for the week ending January 12, 2012, down from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.71 percent.

- 15 Year FRM this week averaged 3.16 percent with an average 0.8 point, down from last week when it averaged 3.23 percent. A year ago... at this time, the 15-year FRM averaged 4.08 percent.

- 5 Year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent this week, with an average 0.7 point, down from last week when it averaged 2.86 percent. A year ago, the 5-year ARM averaged 3.72 percent.

- 1 Year Treasury-indexed ARM averaged 2.76 percent this week with an average 0.6 point, down from last week when it averaged 2.80 percent. At this time last year, the 1-year ARM averaged 3.23 percent.

Contact me directly for an individualized rate quote!