Happy Monday and welcome back. It’s Josh Lewis, Certified Mortgage Consultant with BuyWise Mortgage, back with the weekly mortgage market update, where we take a look at what happened last week in the mortgage markets and the economy, and what is likely impacting rates going forward, and what it means for you as a borrower or real estate professional.
Let’s jump in here. This is the quarterly view, taking a quick look as you know, we made a nice run up in bond prices and lower mortgage rates through the beginning of the year. Since January 1, we’ve really been in this tight range here, about a quarter percent in interest rate from top to bottom at the most.
But, what I really wanted to look at is let’s stretch out a little further and look at the one year window here. When this pops up, you’re going to see bond prices here just about where we were a year ago. We go back to February of March of last year, we’re now back to that level.
We had this period from late summer, so sort of trailed off here about September, October, November, where rates had take a big dive worse and we got this fear in the market that everyone’s saying, “Hey, rates are shooting up. Home prices are high.
It’s impacting affordability and we may have some problems in the housing market.” But, we’re seeing the early returns on spring housing are showing good. We’re seeing some decreases in the volume of homes on the market and increasing buyers coming out now that we’re past the Super Bowl.
Let’s take a look, as we said here, from February of a year ago to now. We’re looking very similar at interest rates. Well, let’s take a look here. A week ago, we were at 4.46. On the best qualified borrowers, 30 year fixed rate conventional loans, ticked down to 4.41 this week. But, if we go back a year ago to February 15, we’re at 4.38. So, from 4.38 to 4.41 in a year? Yeah, we had a little detour where rates had spiked up.
But, we’re really looking, the forecast here is to be in the mid to high fours for the majority of the year. If you missed the window with really low rates, and you have some more equity in your property, you’re looking to refinance, consolidate some debt, or move and buy a new property, buy your first home, looks like we’ll have a really good window here with a little bit more of a stable market and not quite as much rapid depreciation, not the big swings in interest rates that we saw in the last few years.
With that, probably the most important thing I wanted to hit on this week, seeing a couple of crazy things. We actually closed a loan last Friday for a borrower who had some credit challenges. It was a FHA loan. They went to a direct lender. It was actually a family member of theirs. They were supposed to close at five and a half. They get to closing their loan docs, go out at 6.125. You’re like, that’s pretty awful. But, the worst part was they were paying a point and a half in origination, and $2200.00 in lender fees on top of that.
Long story short, our realtor put us in contact. We were able to get up the loan closed for about 5.12, a full percent lower with no lender fees, and a half of a point credit versus a one and a half point cost. A full percent difference in the interest rate. 2% difference in the origination fee, and it eliminated all closing costs for them.
Strangely, saw another number from another realtor said that, “Hey, can you give me a second opinion on this?” Borrower came in with their own lender, a VA loan. A veteran of all people, they had a quote again at five and an eighth, and you would think that would come with a big lender credit to cover their closing costs, ’cause the borrower wanted to do a true VA no-no, and no down payment and no closing costs, but the loan officer was instructing the agent to ask for $7000.00 in closing costs credit on a five and an eighth loan. Essentially that same loan, we could do at four and a half and cover all of those costs, and not have to get any credit. Or, if they did get the $7,000.00 credit, we get 3.875 right now.
Again, that’s not to talk in terms of any specific borrower, but just two scenarios I saw this week where lenders out there were a full point in interest out of the market. The most important thing, you don’t have to go out and talk to 52 lenders, but don’t go with the first lender you talk to. Talk to a couple people. If two or three of them are in the same range, then you know what you’re looking at.
Pick the person that you have the best rapport with and the most trust in. If you’re out there, you’re looking at numbers, you’re looking at this report checking some things out, you’d like a second opinion, we’d be happy to give you one. If you’re in good hands, certainly not looking to take anyone’s business, just trying to make sure that no one’s paying more than they have to.
Again, thank you for checking in. If you have any questions, all my contact info is on the last screen here, and we would love to hear from you. Alright? Have a great week and we’ll see you next week.