RATES UP 1/4%
Yesterday, we were quoting rates a full 1/4% higher than what we quoted as recently as last week.
Rates have been climbing despite negative economic news – which normally pushes rates down.
This is partially b/c investors expect the negative news to spark more stimulus from Congress which could trigger more growth and/or inflation.
Inflation concerns in general are also pushing rates higher, as COVID continues to disrupt supply chains which increases costs across the board.
FREDDIE MAC/NEWS REPORT AVERAGES LAG THE MARKET
In response to yesterday’s rate quotes, several borrowers asked why our rates are higher than the “average rates” they see published in various news sources.
BUT – many if not most major news sources get their “average rate” data from Freddie Mac – which ALWAYS lags the current market.
Here is Freddie’s most recent survey from January 7th, when rates were about 1/4% lower.
Please also note that the average rate comes at a cost of 0.7 points, while we quote almost ALL of our loans at “No Points.”
NERDWALLET IS MORE CURRENT & ACCURATE
Here is NerdWallet’s rate survey, as of today, with the average 30-year rate very close to 3.0%.
I should add though that NerdWallet does not define all of its “assumptions” and lenders often mislead borrowers with their online advertising and rate-quotes (and this also misleads survey-takers).
I recently blogged about this too – 5 Misleading Rate Quote Tricks.
BE LEERY OF ONLINE QUOTES
Along the line of misleading rate quote tricks, borrowers should be particularly leery of the many call-center lenders who advertise on the various major online sites.
Those lenders seem especially apt to mislead in regard to points, lock periods and/or qualification criteria. They do it very carefully and compliantly, but they mislead nonetheless.
SHOULD BORROWERS STILL REFI EVEN IF RATES ARE GOING UP?
Yes! If the refi is “no cost,” they can just refi for free again in six months if rates fall again.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167