The Insider Secret of a No Closing Cost Mortgage

Mortgage quotes come with options that you may not be aware exist, but definitely need to understand if you want the best mortgage for your unique situation. The terminology used by mortgage lenders to describe these options is probably foreign to most borrowers - par, above par and below par pricing. These mortgage terms also come with more consumer friendly names - especially above par pricing and below par pricing. Consider par pricing in golfing terms - if you make a par you are even. You neither pay more or less for the…continue reading →

What Brexit Means to the Mortgage Market

The United Kingdom - surprisingly and foolishly in my opinion - voted to exit the European Union yesterday. Brexit - dutifully dubbed by the acronym loving media - will have wide-ranging effects on multiple continents and countries - including right here in the USA. One of the biggest, and most immediate, effects for Americans is how it will change mortgage interest rates. In fact, the positive change in rates can already be felt - for now. In the typical “flight to safety” reaction by international investors, they moved assets from flailing equity markets…continue reading →

What to Expect from Mortgage Rates in the Second Half of 2016

Mortgage rates are a fickle beast affected by many factors. They can change on the drop of hat and fluctuate constantly. Your ultimate mortgage rate is determined by your overall risk as a borrower through a mechanism called loan level pricing (LLPA) which adds adjustments to your rate based on risk. Combine “base” rates - driven by actively traded pools of mortgages known as Mortgage-backed securities (MBS) - with your loan level pricing adjustments and you get your mortgage rate. Get a Customized Live Rate Quote If you have ever played the stock…continue reading →

The Reason You Are Getting Higher Mortgage Rate Than Your Friend

You checked out Freddie Mac’s average mortgage rate report. You looked at Bankrate too. You called your mortgage lender - or multiple lenders - but your mortgage rate quote is higher than the rates you see online. Why? If you are consistently being quoted a higher rate than what you see listed online you likely pose more risk to the lender and the bump to your mortgage rate is the result something called "risk-based pricing". More formally, it's known as the loan-level pricing adjustments (LLPA). They apply to Fannie and Freddie - aka…continue reading →

2016 Mortgage Rate Outlook

2015 was an easier year than most, for mortgage rate shoppers. Consistency was the standard,  with rates generally hovering  below 4% for most of the year. That consistency was a mortgage market anomaly though. In fact, it’s been nearly 20 years since we’ve had such a consistent mortgage rate environment. You have to go all the way back to 1998 according to Freddie Mac’s mortgage rate benchmark survey - the Primary Mortgage Market Survey® (PMMS®) - to find such a small amount of rate movement. Get PreApproved for a MortgageGet PreApproved for a Mortgage The “Primary Mortgage…continue reading →

How the Fed Rate Increase Affects Mortgage Rates

The Federal Open Market Committee - also known as the Federal Reserve or just the “FED” -  makes big decisions that impact the future of the American (and even the world) economy. The Federal Open Market Committee (FOMC) is a rotating, 12-person sub-committee within the Federal Reserve, headed by Federal Reserve Chairwoman Janet Yellen. The FOMC meets eight times annually on a pre-determined schedule, and on an emergency basis, when needed (like in 2008). What they say matters. They move markets of all kinds with their actions and also their words. This time…continue reading →

Mortgage Rates Jump 0.25% on Fed Comments and Employment News

In last 2 weeks, mortgage rates have jumped sharply. They are up 0.25% for most loan programs and the outlook is for something worse for the rest of 2015. Day to day mortgage rates are decided by the movement of mortgage backed securities (MBS) as traded on the Wall Street.  The lower the price of MBS, the higher the mortgage rates to consumers. Get a Live Rate Quote MBS lost 74 basis points (bps) last week. See the image below. It had gone down in pricing the week before and this week has…continue reading →

How Greece and China Woes Will Affect Your Mortgage Rates?

Have you ever wondered how the number is derived that makes up your mortgage rate? Why is your mortgage rate 4.5%? 5.25%? 3%? Mortgage rates are born from bonds and the mortgage-backed securities (MBS) markets. Similar to corporate bonds and the stock market, mortgage-backed bonds trade actively every day. Pricing changes constantly. Rates change constantly. Your mortgage rate is a moving target until you lock it. Feeling lucky? Get A Live Mortgage Rate Quote Mortgage Backed Securities Market Movers So, if the mortgage backed securities market is actively traded, what moves the market?…continue reading →

Mortgage Rates Continue To Climb – Now At Highest Level Since Oct, 2014

Mortgage backed securities (MBS) suffered one of the worst weeks in recent times. As a result, mortgage rates continued to climb higher. After the recent MBS sell off, rates are now at the highest level since October, 2014. However, they are still ~.0.25% lower than at the same time last year. MBS is a type of bond traded on Wall Street. It's daily yield impacts the mortgage rates. Just this past week, MBS lost a whopping 160 bps pushing the 30 Year Fixed rates over 4% for most borrowers. A quick look at…continue reading →

Mortgage Rates Jump Sharply – Reach Highest Level In 6 Weeks

Mortgage Rates climbed swiftly this week, reaching the highest point since March 17th, 2015. Mortgage rates are directly impacted by the trading of mortgage bonds on Wall Street. This week there has been rapid and deep movement to Bond Markets both in the US and Europe - like shaking a bottle of Coke before opening it. See the chart below for how mortgage bonds (Called Mortgage Backed Securities or MBS in short) have been doing for last week or so. A Red stick means MBS declined in price that day and a green…continue reading →