The Fed released the minutes from their recent meeting, and they all but guaranteed a rate cut in September.
More interesting is the large number of Fed members who wanted to cut in July.
Most interesting though is the fact that rates went UP today after the news was released.
The reason of course is that the market has already priced in or accounted for the rate cut, so the market was reacting to other news.
The only question for September now is how big will the cut be? 1/4% or 1/2%?
A recent survey of fund managers showed that they now expect rate cuts of at least 1% by year-end.
Appraisers Correlate to Purchase Price for 12 Months
We often have borrowers come to us six months after they purchase – and ask if they can refinance and get better terms because their home appreciated.
And occasionally they can. But not often.
This is because appraisers correlate strongly to the purchase price for at least a full twelve months after a purchase.
They will make exceptions if substantial improvements have been made and/or if there are an overwhelming number of comparable sales to support a higher value.
But, outside of those factors, appraisers are very reluctant to come in over the purchase price.
Refi Boomlet Expected – Appraisal Waivers Could Save the Day
The mortgage industry is expecting a refi boomlet of sorts over the next year or so, as rates continue to fall.
Every purchase that closed over the last 18 to 24 months will likely be eligible for a refinance.
Many, if not most, of the Fannie Mae and Freddie Mac loans will likely be eligible for an appraisal waiver now too – as long as the borrowers are pursuing a “rate and term” refinance (instead of cash out).
This bodes well for borrowers for a few reasons: (1) it streamlines the refinance process, as appraisal backlogs were a huge issue in 2020 and 2021; and (2) if values happen to be softening in a particular area, an appraisal waiver will save deals that would have died in the pre-waiver era.
Sign up to receive our blog daily
