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Mortgage News Letter


Mortgage News Daily

Mortgage Rates Little-Changed But The Fed Raises Some Doubts
Wed, 25 Nov 2020 21:36:15 GMT

Mortgage rates have been operating relatively close to their all-time lows recently and today was no exception. The Fed raised some doubts as to how much longer that would be the case this afternoon when it released the minutes of its most recent policy meeting (from 3 weeks ago). The Fed questioned whether its mortgage-specific bond buying was having any ill effects. That's only a vague hint of a threat, to be fair, but on top of that, market participants also felt the Fed did less than expected to telegraph any enhancement of its bond buying plans (something that traders saw as a stronger possibility for the upcoming Fed announcement in mid-December). The market reaction was almost negligible in the bigger picture, but it looks like it would give a modest bump to rates if markets had more ...read more

How The New Loan Limits Affect Mortgage Rates
Tue, 24 Nov 2020 21:58:55 GMT

If you follow the MBS Commentary channel on this site, you will have already seen most of the following, but it's relevant for consumers as well. As far as mortgage rates are concerned, the increase in conforming loan limits doesn't have a direct impact, but it does change rate availability for those seeking certain loan amounts. There's a link below where you can see exactly what the new loan limit is for any given county. If you'd like to read the official FHFA press release, here you go , but here's the skinny on the new conforming loan limit of $548,250 for 2021, up from $510,400 in 2020. Which loans does this apply to? Conventional, conforming loans (those sold to or securitized by Fannie Mae and Freddie Mac, which is a vast majority of the market), both refinances and purchases Does this ...read more

Mortgage Rates Start New Week Slightly Higher
Mon, 23 Nov 2020 22:26:16 GMT

Everything is relative when it comes to following day-to-day movements in mortgage rates . Yes, they're technically higher than they were on Friday afternoon, but they're still lower than just about any other day... ever. Most prospective borrowers will see very little difference from last week. On average, the actual interest rate itself (aka, the "note rate") is unchanged, in fact. It's only when we get more granular and look at the closing cost side of the equation that rates got higher. So if the note rate is the same as it was on Friday, why am I telling you rates are higher? Rates are typically quoted in increments of 0.125%. When it comes to financing hundreds of thousands of dollars, 0.125% actually accounts for a pretty big difference as far as mortgage lenders are concerned. The bond ...read more

Biggest Housing Boom Since 2006 And The Truth About "All Time Low" Rates
Fri, 20 Nov 2020 23:44:04 GMT

The National Association of Realtors' Existing Home Sales report is the broadest measure of housing market activity. It just hit a 14-year record for the 3rd month in a row. It's not just existing homes. The new home market is crushing it as well. This week's data on Housing Starts (the ground-breaking phase of new construction) showed another solid step back toward the boomy levels of late 2019. Builders may not be breaking ground as fast as they were a year ago (before covid), but that has everything to do with covid and nothing to do with demand. This week's record result for builder confidence reflects that. To top it all off, this week brought another round of news articles proclaiming "all-time low" mortgage rates. But are they really? For some borrowers in some scenarios, yes. But in ...read more

Time Once Again to Discuss "All-Time Low" Mortgage Rates
Thu, 19 Nov 2020 22:28:32 GMT

August 4th, 2020 was the best day ever for mortgage rates . That's when we hit the lowest all-time lows we've ever seen, and none of the most prevalent news stories about all-time lows since then have been technically accurate. What's going on here? So many things... but they're not too complicated. First off, there is no universal mortgage rate . The closest thing to a purely universal benchmark that will ever exist is the trading price of the bonds that underlie the mortgage market. These bonds (mortgage-backed securities or MBS) determine how much mortgage loans are worth to investors, thus setting the boundaries of mortgage lender profitability. In other words, there's a certain line in the sand for mortgage rates below which a lender is losing money. The only objective and universal contributor ...read more