TODAY’S RATES & HOUSING NEWS Interest Rates moved up .15% this week with the Mortgage…
🏡 Mortgage Rates Hit 14 Month Lows
Mortgage Rate Update – August 2024
TODAY’S RATES & HOUSING NEWS
Interest rates had a fantastic past 7 days.
Mortgage rates hit 14 month lows
after the Mortgage Backed Security
market traded up +71 bps. The market
was even hotter before we had some
market correction on Monday.
On Wednesday, the FED did not change
the Federal Funds Rate but said a
September rate cut is on the table.
Chairman Powell also stated that when
rate cuts happen, it’s a process and not
a one and done event. So when rate
cuts start, they will likely continue for a
period of time.
The FED is paying attention to inflation
data, which has improved but isn’t
currently on course to hit the FED’s goal
of 2%. The FED is also paying attention
to the Labor market.
Which leads us to Friday’s BLS
Jobs Report which really put the
market in a frenzy.
The BLS Jobs reported 114,000 jobs
created in July, below the estimates
of 185,000. June and May were also
revised lower.
The unemployment rate rose
from 4.1% to 4.3%.
The BLS Jobs Report brought into
picture that the economy isn’t as
rosy as originally thought. It now
seems like a certainty that the FED
will cut the Federal Funds Rate
25 bps in September and possibly
even 50 bps.
Remember that when the market
expects something to happen, it
prices the event into the market.
The September rate cut of 25 bps
is priced into the market right now,
which is a big reason we are seeing
the lowest mortgage rates we’ve
seen in 14 months!
Expect a lot of volatility in
interest rates and the stock market.
Below are Mortgage News Daily’s
average interest rates across the
country. There are a lot of characteristics
that go into a mortgage rate – credit
score, investor, loan to value, loan
amount, costs, etc.
Please call me to go over your specific
scenario so we can price your loan
out accurately.
or reply to this email with the answers
to the questions below for Mortgage
Options for your scenario.
REFINANCE QUOTE:
Goal of Refinance – Lower Payment, Cash Out, Etc:
Address of Home:
Estimated Value Of Home:
Current Loan Amount:
Loan Amount You Would Like to Finance:
Current Rate:
Do you know what type of Loan you are Currently in – FHA, VA, etc:
Estimated Credit Score:
Are You a Veteran or Active Member of the US Military:
If you are a Veteran, do you get VA Disability:
PURCHASE QUOTE:
What City and State Are You Looking to Buy In:
Estimated Purchase Price:
Loan Amount You Would Like to Finance:
Will Property be a Primary Residence, Investment Property, or Vacation Home:
Estimated Credit Score:
Are You a Veteran or Active Member of the US Military:
If you are a Veteran, do you get VA Disability:
Thank you!
WHEN TO REFINANCE
Many homeowners are looking at their
current mortgage rate deciding if it’s
worth it to refinance today, or should
they wait to see if interest rates go lower.
Here is how I would approach looking
at a refinance.
Calculate your monthly payment savings:
Calculate the hard costs to get the loan:
Hard costs to get the loan deserves
an explanation. When you refinance,
you have to pay interest from the day
your loan funds until the first day of the
next month. This is called prepaid
interest. This is not a hard cost as you
are paying daily interest in your current
loan or your new loan. You also have to
establish a new taxes/insurance
escrow account when refinancing
but your old escrow account will
be refunded to you after closing.
These are not costs of doing a
refinance since they both end up being
a wash.
Divide the hard costs by the payment
savings and calculate how long it takes
to recoup your closing costs.
For example:
I can lower my rate .5% and I save
$150 per month. The hard costs to
get that loan are $1,500.
Recoup period is $1,500 / $150 = 10 months.
If you can save money monthly
and recoup the costs relatively quickly,
I would recommend refinancing. The
reason is because you are not investing
a ton in costs to get a better rate/payment
so if you end up refinancing again, you
are not paying for a bunch of costs that
you won’t use.
You will be saving money today while
you wait for a potential refinance
opportunity in the future.
Remember that there is no guarantee
that rates will continue to drop and it
usually takes longer to drop than we expect.
Because refinances allow you to roll
costs and prepaids into the loan, you
also end up getting some immediate
cash in your pocket through a 1-2 month
payment deferral and a refund of your
existing escrow account after closing.
Everyone’s situation is different. If you
want an honest assessment if refinancing
is worth it for your current situation, please
reach out to me and I’ll be happy to run
the numbers for you.
THE STOCK MARKET SELL OFF
The news of a stock market sell off
dominated headlines over the weekend
and on Monday. On Monday, the
Dow Jones dropped over 1,000 points
and S&P 500 went down 3%.
See what happened and what to
expect in the CNBC article below:
Have a great week!
