Rate Update
June 19, 2008
Here is a synopsis of current rates from Home Financial of the Rockies for 6-19-2008 at 1:45 PM:
| 30 Year Fixed: | 6.375% | 6.509% APR |
| 15 Year Fixed: | 5.875% | 6.093% APR |
| 30 Year I/O: | 6.750% | 6.875% APR |
| 30 Year Jumbo: | 7.875% | 7.984% APR |
| 30 Year Investor: | 6.875% | 7.013% APR |
| 5/1 ARM: | 5.875% | 6.039% APR |
Rates eased ever-so-slightly from last week as the stock market took a beating on earnings, oil prices, and economic concerns. Market consensus is moving towards a rate hike in August, so if you are considering purchasing or refinancing please consider taking advantage of rates at their current levels.
Rate Update
May 29, 2008
Here is a synopsis of current rates from Home Financial of the Rockies for 5-29-2008 at 12:15 PM:
| 30 Year Fixed: | 6.125% | 6.253% APR |
| 15 Year Fixed: | 5.750% | 5.960% APR |
| 30 Year I/O: | 6.500% | 6.618% APR |
| 30 Year Jumbo: | 7.375% | 7.486% APR |
| 30 Year Investor: | 6.750% | 6.882% APR |
| 5/1 ARM: | 5.625% | 5.539% APR |
Since last week we have seen a significant jump in rates across the board. Since our last update the Fed has made it clear that it is done cutting rates for the time being and today’s GDP numbers indicated slightly higher growth than anticipated. Moreover, last’s week’s producer price index was higher than anticipated, indicating an uptick in inflation. Healthier than expected growth combined with the high price of oil and increasing inflation means that the likelihood of Fed rate increases goes up, and interest rates may follow. Housing remains week nationwide, with prices falling but sales showing a surprising uptick. I am keeping my eye on the coming wave of Alt-A, prime, and payment-option ARM resets expected over the next two to three years.
Rate Update
May 8, 2008
Here is a synopsis of current rates from Home Financial of the Rockies for 5-8-2008 at 2:45 PM:
| 30 Year Fixed: | 5.750% | 5.875% APR |
| 15 Year Fixed: | 5.375% | 5.583% APR |
| 30 Year I/O: | 6.375% | 6.492% APR |
| 30 Year Jumbo: | 7.375% | 7.486% APR |
| 30 Year Investor: | 6.375% | 6.504% APR |
| 5/1 ARM: | 5.250% | 5.364% APR |
Rates have been fluctuating in a narrow band over the past week, rising slightly before dropping again to the levels above. Some non-standard products have increased slightly in rate (interest only and investor occupancy), ARM rates dipped. The next big items that I expect to affect mortgage rates are the CPI announcement on May 14th and PPI on May 20th. Any increase in inflation may trigger an increase in rates, on the other hand, if inflation is more tame than expected we could catch lower rates following those announcements.
Rate Update
April 24, 2008
Here is a synopsis of current rates from Home Financial of the Rockies for 4-24-2008 at 2:00 PM:
| 30 Year Fixed: | 6.00% | 6.131% APR |
| 15 Year Fixed: | 5.500% | 5.715% APR |
| 30 Year I/O: | 6.500% | 6.622% APR |
| 30 Year Jumbo: | 7.625% | 7.739% APR |
| 30 Year Investor: | 6.625% | 6.761% APR |
| 5/1 ARM: | 5.875% | 5.620% APR |
Overall, mortgage rates are relatively unchanged from a week ago, though we have had some fluctuations day to day. 5-1 ARM rates are up slightly, as the LIBOR rates have jumped over last week.
Despite the general tightening of underwriting guidelines, we do have Stated-Income Stated-Asset (SISA) and Stated-Income Verified-Asset (SIVA) loan products available to individuals with excellent credit. If you are self-employed and have difficulty verifying income, please give us a call to determine if we can underwrite your purchase or refinance.
Rate Update
April 17, 2008
Here is a synopsis of current rates from Home Financial of the Rockies for 4-17-2008 at 4:00 PM:
| 30 Year Fixed: | 6.00% | 6.131% APR |
| 15 Year Fixed: | 5.500% | 5.715% APR |
| 30 Year I/O: | 6.500% | 6.622% APR |
| 30 Year Jumbo: | 7.625% | 7.739% APR |
| 30 Year Investor: | 6.625% | 6.761% APR |
| 5/1 ARM: | 5.750% | 5.287% APR |
Rates have continued to be tremendously volatile, repricing 2-3 times per day. We definitely saw a jump following the high inflation figures earlier this week, but expect possible Fed action towards the end of this month to push rates down somewhat.
In other news, we may be able to provide you with a piggyback loan (80-10-10) for purchase money financing. Also, look for renewed access to Stated Income products as a possibility in the near future. Call for details!
Second Quarter Outlook
April 1, 2008
Since the recent Fed actions, short term interest rates have dropped significantly. Mortgage rates have hesitantly followed suit, dropping to relatively favorable levels. We still have 30 year fixed rates under six percent, but the trend has been slightly higher each day for the past few.
I would venture to say that we are not out of the woods yet with respect to the global credit crisis. Despite the market's exuberance today, I disagree with the overall interpretation that the latest round of massive bank losses and writedowns signals a light at the end of the tunnel. I rather agree with the Goldman report foretelling dramatic losses yet to be realized. If we are only a third of the way through the losses, then I expect further (and possibly extensive) Fed action which may push rates down even further.
Thus far, the Estes Park real estate market has been staying strong. We are seeing a slight increase in foreclosure activity, but overall sales volume is steady and properties are holding value. The recent dips in mortgage rates have revealed some pent-up demand, but financing remains difficult.
Indeed, lending guidelines are becoming more restrictive day by day. While alternative products are still available, investors and mortgage insurers today are shying away from Stated Income Stated Asset (SISA) loans as well as high loan-to-value (LTV) loans. Expect down-payment/equity requirements of at least 10% in the near future.
Home Financial has a unique product available that you will likely not find with another lender in this market. We are still able to originate 80-15-5 piggyback loans for purchase or refinance with a minimum down payment or equity position of 5% in the property. A piggyback allows you to avoid costly mortgage insurance (MI or PMI) premiums when you have only 5% plus closing costs for the purchase of a property. Call us today to see if you would qualify for our 80-15-5 program.
Rates on the Rise
February 21, 2008
We caught a dip in rates today, following three or four days of consistent increases. As you can see from our rate sheet, we're back into the mid 5% range on 15 year fixed and 5-1 ARMs and low 6% range on 30 year loans.
The question on everyone's mind is, where will rates go from here? My crystal ball has been a bit murky lately, but I will lay out the issues as I see them:
The economy is slowing. Inflation is robust. The Fed has hinted at further rate cuts, which the market fully expects. Moreover, ARMs are resetting at record levels and will continue to until 2011.
Mixed signals? Sure. In the absense of inflation concerns, the current economic mess should force the Feds hand in pushing down short-term rates, which in turn would put downward pressure on long-term (mortgage) rates. However, if inflation is a concern, investors may not be willing to buy mortgage-backed paper (already suspect) at 5% or 5.5%...rates would go up.
What I can say for certain, is that rates right now are still far below historical averages. If you are thinking about buying a home or refinancing, you might consider taking advantage of the current rate environment. If rates come back down six months from now or in a year or two, you can usually refinance...but if rates spiral upwards you may miss an opportunity.
Time To Jump In?
February 7, 2008
Everyone has been waiting on the sidelines with fingers crossed for further declines in interest rates. Thirty year fixed rates have been hovering at or slightly over 5.5% for a few weeks now, and fifteen year rates just over 5%. If we see further economic decline and/or Fed action to push rates downwards, it is possible that mortgage rates could fall to new lows.
On the other hand, a bird in the hand is often worth two in the bush. A combination of a weakening dollar and high oil prices may exert significant inflationary pressure on the economy, forcing the Fed to reverse their recent rate cuts and fight inflation rather than recession. If that scenario were to occur, we might see higher mortgage rates in the next several months.
So it you are considering buying a home or refinancing, I heartily recommend that you contact me immediately and discuss the details of your scenario. We'll them take a loan application so that we can lock immediately if rates hit your target...or help you get qualified and close as soon as possible if your current rate is about to adjust.
Amazing Rates
January 17, 2008
Significant trouble for the housing market and economy as a whole have been conspiring to drive down interest rates on full-documentation loans for qualified borrowers. With 30 year fixed rates at or under 5.5% and 15 year fixed rates flirting with the high 4% range, now is an excellent time for anyone with a rate over 6.5% or an adjustable rate mortgage to consider refinancing their loan.
Happy Holidays
December 20, 2007
Happy holidays from Home Financial of the Rockies! It looks like Estes Park will have a white Christmas this year, and the weather has been quite nice...not too cold and not too windy. Rates continue to fluctuate around and under 6% on 30 year fixed loans. The Fed has announced mortgage reforms that are sure to be the subject of much debate over the next 90 days; we will keep you posted. See you in 2008!
All Eyes on the Fed
December 12, 2007
The Federal Reserve voted 9-1 in favor of reducing the Federal Funds target rate by 1/4% to 4 1/4%. The statement from the Fed indicates "that economic growth is slowing" as well as that "recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation." This less-than-optimistic statement shook investor confidence. The stock market reacted very negatively, with the Dow dropping nearly three hundred points in less than two hours. Many traders seem to have interpreted the Fed move as soft on the credit crisis despite their clear recognition of the problem.
However, this morning, the Fed announced a plan that will provide some $40 billion in liquidity to US banks via direct auctions and foreign equity swaps over the next two months. The funds will be lent for approximately 6 months, theoretically helping cash-strapped banks weather the credit crisis rocking international financial markets. The stock market has recovered somewhat since this announcement, but has been slowly losing ground over the course of the day.
Mortgage rates are still lower than they have been in recent months, though they have risen slightly since last week's dip. Click here for our most recent rate update.
Mortgage Update
November 28, 2007
I hope you all had a wonderful Thanksgiving and are ready for the holiday season! Though qualification has become difficult for many borrowers as underwriting guidelines become more restrictive, well-qualified individuals will benefit this winter from still-decreasing mortgage rates. As of this morning, we have 30-year fixed rates at 6% with a 1% origination fee!
The massive trouble facing banks and mortgage companies has the entire industry on edge. Over the weekend, the Wall Street Journal ran an article detailing how adjustable-rate mortgages will likely cause further pain in early 2008. However, Fed commentary this morning has many analysts predicting another Fed rate cut...the Fed will "act as needed" to stave off a financial crisis. While the situation is uncertain, falling rates will certainly benefit some, including second-home buyers in Estes Park.
Happy Thanksgiving
November 15, 2007
Despite the wild ride that the financial markets have taken over the last few weeks, mortgage rates have remained remarkably steady. The most noticeable change in the industry that we have noticed here at Home Financial is increased turntimes; files that used to clear underwriting in as little as 36 hours are now taking seven days or more! So be prepared and talk with your lender early in the process, whether you intend to purchase a new home or refinance your existing loan.
Happy Halloween
October 31, 2007
Trick or treat! Lots of tricks and a few treats in the mortgage industry lately. Rates have been on a gentle downward trend for the past few weeks, though the Fed rate cut perversely resulted in slightly higher mortgage rates today. The Fed announcement implies that their latest action should bring the risk of economic damage from the credit/housing crisis into equilibrium with inflation concerns. In layman’s terms, they hope to leave rates unchanged for a while after today. Regardless, today’s rate cut may spell some relief for home equity borrowers and anyone with a credit card balance.
Also of note: Bank of America decided late last week to back out of the wholesale mortgage business. If your brokerage has used Bank of America exclusively in the past, you may want to inquire as to their stability. Home Financial has a wide array of lender relationships, ensuring our ability to fund loans under even in tremendously difficult credit markets.
Rate Update
October 16, 2007
Rates have been remarkably steady over the last two or three weeks, although we are seeing a slight easing of rates. Tomorrow's inflation numbers as well as the Halloween FOMC meeting should provide strong direction for the interest rate market. All eyes are on Bernanke to respond to the challenges in housing and credit markets.
Is the Credit Crunch Over?
October 2, 2007
Recently, I have heard numerous sources saying that the credit crunch is over, having peaked in August. Even Alan Greenspan has noted that investors mostly consider the slump to have passed. Have the problems really been solved?
The Fed has certainly stepped in to save the day, reducing the Federal Funds target rate by an impressive 0.50% at their last meeting on September 18th, as well as reducing the discount rate and injecting many billions of dollars into the market. The European Central Bank has injected massive liquidity as well. These actions have certainly had an effect on the availability of credit, but have they solved the problem?
Personally, I think that the worst is not over yet. The major catalyst for the subprime meltdown/credit crunch that has been ongoing since February is rising defaults on subprime and alt-A mortgages. We still have nearly 1.2 trillion dollars of subprime debt still outstanding, most of which is parked in adjustable rate products that will continue to adjust upwards into early 2009. It appears that the largest portion of adjustments will not occur until early 2008, meaning that next summer could be just as difficult for borrowers as August of 2007.
What's more, now the Bank of England is scrambling to solve problems with British subprime loans, which may be more pervasive and less secure than US subprimes. So is the credit crunch over? Probably not.
How can you reduce the impact this crisis has on you? If you are selling a house, you may plan on longer-than-expected marketing time. If you are in the market to buy, keep your credit as spotless as possible. Going forward, excellent (720+) credit and verifiable income are going to be very important in qualifying for a mortgage. Most importantly, find a lender you can trust to help you plan your financing.
If you have questions about your mortgage, need help with your credit, or are planning on buying a home, please contact us with your situation. Home Financial is happy to be of service!
Snow on the Mountains
September 25th, 2007
Looking out my window this morning reveals a postcard perfect scene of fresh snow dusting the mountaintops and brilliant yellow aspens dotting the hillsides. Combine that with the herds of elk bugling and battling in town this time of year and it reminds us all that Estes Park is a truly wonderful place to live and work.
The real estate headlines today may be grim, but regardless of the status of the market, people will continue to vacation, live, and work in Estes Park. Mortgage rates are favorable now as well, remaining more or less unchanged from last week. If you have ever dreamed of owning a piece of Estes, I encourage you to contact us to get qualified! Your dream may be more within reach than you ever thought.
Fed Cuts Target for Federal Funds by 0.50%
September 19th, 2007
Yesterday the Federal Reserve announced a decrease in their target for the Federal Funds Rate. They reduced the target by 0.50% to 4.75%. This cut was widely expected; interest rate futures had already adjusted for at least a 0.25% cut prior to the announcement. The fact that the Fed went with a half-point cut suprised some on Wall Street and sent stocks on a two day rally. First mortgage interest rates went mostly unchanged, though. The biggest short term impact that borrowers may notice is a decrease in the payment on their HELOCs.
Rate Update
September 10th, 2007
The markets are waiting with bated breath for the Federal Open Market Committee meeting on September 18th. Despite cautionary comments from several Fed officials late last week, the market widely expects a cut of 0.25% or 0.50% in the target for the Federal Funds rate. Such a cut may result in lower interest rates for residential mortgages as well as directly affect the Prime Rate, meaning less interest expense for HELOC borrowers.
Summer Wrap-Up
September 5th, 2007
With the passing of Labor Day, the height of the summer tourist season in Estes Park has passed. In my opinion, though, we are just now coming into the best time of year in our town. Mornings and nights are cool, soon the aspens will be changing, huge bull elk are strutting along the golf course and bugling...late summer and early fall is a fantastic time of year in Estes Park.
Rate and Report Update
August 29th, 2007
The mortgage market has been in turmoil lately. Our investors are financially solid and continuing to provide great service for us and our borrowers. Rates are on the decrease given widespread expectations of a decrease in the Federal Funds Rate target at the next FOMC meeting on September 18th.
The stock markets have taken a wild ride this week, reacting to a large drop in nationwide home prices reported yesterday and decreased (yet better than expected) Consumer Confidence reported on Tuesday.
Interesting and upcoming economic reports include the 5-Year Treasury note auction tommorrow, Consumer Sentiment on August 31st, and Employment on September 7th. 30 year fixed mortgages have been fluctuating around 6.375% and trending lower for well qualified borrowers.
Of course, everyone's situation is unique, so contact us to see exactly what Home Financial can do for you.
Home Financial Broker Attains NAMB Certification
August 1st, 2007
Philip J. Magistro, a registered mortgage broker at Home Financial of the Rockies in Estes Park, Colorado, became one of only a small percentage of mortgage professionals to attain the standing as a nationally recognized General Mortgage Associate. Magistro passed the National Association of Mortgage Brokers (NAMB) written certification examination on November 29th, 2006 to become the only NAMB certified mortgage broker in the Estes Park area.
The General Mortgage Associate designation is administered by the National Association of Mortgage Brokers (NAMB) and is developed through extensive research by industry experts in the mortgage industry. This certification is gained only once the candidate has met certain requirements of experience and knowledge of the mortgage industry and has passed a rigorous examination. General Mortgage Associates have also agreed to abide by a Code of Ethics.
Philip Magistro has been a mortgage broker with Home Financial of the Rockies since early 2006. Magistro holds an undergraduate degree in Political Science and is working towards certification as a Personal Financial Planner.
With the myriad options available in today's mortgage market, Magistro believes in a comprehensive approach to mortgage planning. "My focus is on helping people build wealth by obtaining a loan that is affordable and makes sense within the larger framework of their personal financial picture. By obtaining the General Mortgage Associate designation and pursuing certification in Personal Financial Planning, I feel better equipped to serve the broad and complex needs of the residents of the Estes Valley."
The National Association of Mortgage Brokers (NAMB) is a not-for-profit organization committed to promoting the highest degree of professionalism for members and to provide ethical and professional standards against which mortgage brokers and other mortgage professionals can be measured. NAMB accomplishes its mission by setting certification and continuing education standards for mortgage brokers and through public education.
