Where are Mortgage Rates Headed?

Does anyone have any idea what is happening with mortgage interest rates?  While I don’t pretend to know where rates are headed and I always recommend a borrower lock in their rate when they are comfortable with the resulting mortgage payment and lock period, I do like to present information that helps real estate agents and borrowers make good decisions.

Let’s start with some history.  The chart below shows the average 30 year fixed rate on a conventional conforming mortgage since Freddie Mac started tracking rates in 1972.  2014 shows the YTD average. Continue reading

Realtor Advice

QM, QRM, and ATR . . . Oh My

There has and will continue to be much discussion and hand-wringing about Qualified Mortgages (QM), Qualified Residential Mortgages (QRM),and Ability to Repay (ATR) rules that will go into effect in January, 2014. Why, because lenders making non-QM qualified loans will have to hold reserves against loans sold in the secondary market and lenders violating ATR rules could be subject to lawsuits from borrowers and investors claiming that the lender did not adequately determine if they could actually repay the loan.

The funny thing is that most lenders have already adopted the major provisions of these new rules. Income (and everything else) is verified, documented, and vetted to the nth degree. If you’ve applied for a mortgage lately you know how much scrutiny your buyers receive from lenders today. That said, there are a couple of things going away as a result of the new rules. For example, the maximum loan term for a QM loan will be 30 years, balloon payments will not be allowed (except in very limited circumstances), no negative amortization, and no interest only periods.

We will see how the market reacts to these new rules after January 10, 2014, but in our case we have already adopted virtually all of these provisions. When was the last negative amortization, interest only balloon loan you saw?

Market Comment

Mortgage bond prices finished the week higher which pushed mortgage interest rates sharply lower. Rates improved gradually throughout the week. There was no data the first portion of the week but the Fed MBS purchasing kept things in check. Weekly jobless claims came in @ 339k versus the expected 333k mark which helped rates improve throughout Thursday. Friday’s data also helped rates. Industrial production fell 0.1% versus the expected 0.1% increase. Capacity use came in @ 78.1% versus the expected 78.3% mark. Mortgage interest rates finished the week better by approximately 3/4 of a discount point.


30 Year conforming fixed rates are at 4.375% with 0 points for well qualified borrowers. Rates can vary depending on credit score, down payment, property type and other individual loan characteristics so please use this as a general guideline. Our 15 year fixed conforming rate is 3.50%, again with 0 points.

Jumbo rates continue to outperform conforming rates in this market (ask me why sometime and I’ll try to explain the phenomena). Our 30 year fixed rate Jumbo is currently 4.125% with 0 points – a full .25% BELOW the going confirming rate. The 5/1 ARM is very attractive at 2.75% with 0 points and is attracting a lot of interest from buyers looking for short term financing alternatives.

The weather looks terrific for the back part of the weekend with temperatures at the beach inching back up toward 70 degrees. A perfect Fall weekend to shop for a new home. I’ll e around this weekend if you need anything. Happy selling.

Realtor Advice

Everyone Needs Guidance? Do They Really?

Did You Know Your Clients Need Guidance to Purchase a Home?

“Consumers need and deserve the best guidance when making the decision to purchase a home,” said CFPB Director Richard Cordray. “Buying a home may easily be the largest investment a consumer makes, and we want to make it easier for them to find a housing counselor that is a good fit for them.”  These are the words of the director of the “gorilla in the room” – the Consumer Financial Protection Board – the king of the regulators that anyone involved in consumer credit must deal with.
Effective January 10, 2014, the CFPB is requiring lenders to provide consumers with a list of homeownership counseling organizations.  Consumers should be given such a list at the time they apply for a mortgage so they know where to get help or guidance to decide which loan is the best for them.
I think now I’ve heard it all.  I can certainly understand requiring homeownership counseling for a first time buyer or someone using a government insured or guaranteed loans, but I’m going to feel awful silly providing a list of housing counselors to my clients that are buying an $500,000 to $2,000,000 2ndhome at the beach.  Especially the ones with financial planners, CPA’s, stock brokers, and attorney’s all providing them with advice on the best way to structure the transaction.  You have to love the government watching out for our welfare.
If you are interested, consumers and lenders can access the new tool at
Market Comment
Mortgage bond prices finished the week lower, which pushed mortgage interest rates Continue reading

Weekend Update from the Jeff Baxter Mortgage Team


We are offering a FREE buy down of the interest rate of ½% on new purchase mortgage applications accepted and locked THRU NOVEMBER 15TH!  Our current 30 year fixed rate on a conforming loan is 4.25% (4335% APR).  If a new purchaser locks that rate on a new application, we will buy the rate down for the first year to 3.75%.  In years 2 through 30, the rate goes back to 4.25%.  On a $300,000 mortgage, that’s a savings of $86 per month or $1,037.  What a great closing tool to get a buyer off the fence and make that offer.  There are some restrictions so give me a call.

Market Comment

Mortgage bond prices finished the week lower which pushed mortgage interest rates higher. Continue reading