Posts

Still No Housing Bubble – Because Rates Are 3% Lower Than In 2006!

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MBS HIGHWAY HITS HOUSING BUBBLE AGAIN Barry Habib, Founder of the MBS Highway, hates it when the media spreads irrational fear about a housing bubble. He also shares marketing materials that subscribers to his content are allowed to share without attribution to him, but that is anathema to me. Below is a script he recently […]Read More

Inflation Up; Rates Up; Explained In Terms of Porsches; All About “Buying Power”

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THE REFI BOOM THAT WASN’T When rates plunged a few weeks ago in response to renewed COVID concerns and weak economic news, the entire mortgage world was gleeful b/c we thought we had another refi boom on our hands. But alas, it was not meant to be, as strong employment numbers AND INFLATION crashed the […]Read More

Using PMI To WAIVE Appraisal Contingencies

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Many homebuyers do not realize that PMI can be an option for those who might want to make offers with no appraisal contingencies. This, of course, is a great idea, but with a HUGE CAVEAT: BEWARE OF JUMBO! PMI is always a great way to cover appraisal shortfalls on the conforming front. Example: Borrower intends […]Read More

Why Housing Is Actually More Affordable Today Than In 1980!

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WHY HOMES ARE MORE AFFORDABLE TODAY In the midst of my daily excursion into the bowels of Twitter, I saw a great tweet from the Center for Human Progress. It had a link to this excellent article, titled U.S. Housing Became Much More Affordable Over The Last 40 Years. It was fascinating to say the […]Read More

Beware of VACATIONS :) Rates Way Down Again; Why? Stimulus Will End

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HOLY LOW RATES, BATMAN! (Wallowing in Wrongness) For months now, I have been repeating the warnings of various pundits about runaway inflation and rising rates. But rates seem to continually fall despite inflation concerns, and this week was another example as rates fell precipitously again. I and many others (like Barry Habib) thought we’d see […]Read More

Inflation Way Up & Rates Down? What Does The Bond Market Know?

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I blog about inflation over and over b/c its potential to send interest rates into the stratosphere and to disrupt our entire economy is so strong. The last time we saw significant inflation in the 1970s, the stock market tanked and didn’t recover for a decade and interest rates remained in double digits for years. […]Read More

The One Thing That Can CRASH The Housing Market!

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I have repeatedly blogged about reasons why we are not in a housing bubble: Demographics & Demand: Homebuying demographics are peaking, as a surge of millennials is just now hitting peak homebuying age (early 30s). This is in sharp contrast to the 2008 housing meltdown when homebuying demographics hit all-time lows. Supply Issues: (A) Builders […]Read More

Inflation Is Here! Why Didn’t Rates Climb More?

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Inflation numbers came in sharply higher today and rates increased – but only a little. Here is a brief summary of the numbers from the Bureau of Labor Statistics. Long story short: Inflation numbers are higher than expected and at their highest level since 2008. So, the question is why didn’t rates spike up further […]Read More

Higher Capital Gains Taxes? 2 HUGE Effects On Real Estate & Mortgages

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INVESTOR WITH 70 HOMES REFUSES TO SELL I know an investor who owns over 70 single-family homes in California that he accumulated in the 1980s. Almost all are rented at below-market rates** with minimal or no mortgages, and he refuses to sell any of them. **Pro Tip: In my 27-year mortgage career, I have observed […]Read More

Why A Giant Stuck Ship (Suez Canal) Impacts Mortgages & Real Estate

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YouTube gets me – and thank goodness for that b/c it sends me entertaining videos all day long, every day! This is why I know that Komodo dragons eat deer alive (Komodo saliva paralyzes the deer), why I know about the mating habits of cicadas (they only live a few weeks and come out every […]Read More

Rates Climb Again; Panic Time? Paying Points? Affect On Buying Power

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PANIC TIME? Interest rates climbed again yesterday, primarily in response to inflation fears – so we are now officially back to pre-pandemic interest rate levels. It is not time to panic, however, as rates seem to be following the trajectory I outlined in this recent blog: 4% by June. In that blog, I referenced Barry […]Read More

Rates Up Again! Why Nervous Appraisers Sometimes Appraise Lower Than We Expect

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RATES 3/8% HIGHER NOW Interest rates continue to climb in response to positive economic reports (strong retail and home sales numbers), inflation concerns relating to both price signals and massive increases in the money supply, and President Biden’s $1.9 trillion COVID Relief package. Rates are now a solid 3/8% higher than where they were in […]Read More

5 Key Credit Reminders & Misconceptions; Albert Einstein On Interest Rates!

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Albert Einstein On Predicting Interest Rates (true story) When Einstein died and went to heaven, the doorman told him his room was not ready, and that he had to wait in a dormitory with others. So, he was led to a dorm and introduced to his roommates. The doorman said, “Here is your first roommate. […]Read More

Mortgage Rates Way UP; Refi Now… Or Forever Hold Your Peace

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Remember last year when I said rates could either go up, go down or stay the same? Well, I was right. 😊 OK – I was actually right about the rates going up part. And I was just repeating what Barry Habib was saying. Habib thought rates would go up early this year and then […]Read More

Mortgage Rates Climbing As Predicted; “Average Rates” Are Often Very Misleading

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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 […]Read More

Why Rates Went Up After Democrats Took Senate; Affect On Mortgages & Housing

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10 YEAR TREASURY EXCEEDS 1% FOR FIRST TIME SINCE MARCH As soon as it became apparent that the two Democratic Senatorial candidates would win in Georgia, rates started to edge higher. As most readers know, mortgage rates tend to correlate to the 10 Year Treasury Bond – although this year that correlation has not been […]Read More

How To Choose the Best Mortgage Company

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Working with an experienced mortgage lender can be beneficial to you in several ways. But how can you determine which of the countless mortgage companies near you is the best? As you start your research to choose a mortgage lender, the first thing you’ll want to identify is what type of property you want. Mortgage […]Read More

Three Factors That Influence Your Mortgage Interest Rate

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The interest rate tied to your mortgage directly affects how much you are required to pay over the term of your loan. If you are considering purchasing a home, researching the market’s current interest rate is essential. There are three major factors that can influence the interest rate you can lock in for your mortgage. […]Read More

What Will Happen To Mortgage Rates in 2021

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Here is my bold prediction for mortgage rates in 2021: They will go up and down. You can take that to the bank! OK – here’s a more specific prediction – they will edge up about 1/2 percent before coming down again to where they are now or even lower. This is from rate-guru, Barry […]Read More

Negative Rates Are Coming; What It Means For Real Estate And Mortgages

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Negative interest rates are heading our way – with certainty – according to Luke Gromen, a macroeconomist who was featured on The Investor’s Podcast recently. Mr. Gromen believes that the Fed and the U.S. government have no choice but to continue to push rates down in whatever way possible in order to finance our massive […]Read More

Biden Wins & Vaccine News; Effect On Mortgages & Interest Rates

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Joe Biden was declared the winner of the election over the weekend, and the markets … did very little. When I refer to “the markets,” I am referring to both stocks and bonds – which often move in opposite directions. Hence, when stock prices move upward, bond prices often move downward (with the effect of […]Read More

What Are “Interest Rates?” Do They All Move In Unison?

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This is from a training module we just updated for our now very elaborate JVM Lending Training Program©. I thought it made for perfect blog fodder, as it is information all of us in real estate and mortgages should understand. We are all so focused on mortgage interest rates that we often forget that there […]Read More

5 Reasons Why Mortgage Banks Charge Different Rates; Mortgage Rates Don’t Correlate To Other Rates

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JVM funded $135 Million in mortgages for the month of September – a new all-time record for us. Our “Big Hairy Audacious Goal” was $125 Million, and we pretty much crushed it 😊. Congrats to our team! WHY MORTGAGE BANKS CHARGE DIFFERENT RATES I know many loan officers whose mortgage banks pay for substantial co-marketing […]Read More

How Do Credit Scores Affect Your Mortgage Rate

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Credit scores are among the most critical factors that lenders look at to assess a homebuyer’s loan qualifications. Credit scores can affect the mortgage interest rate homebuyers receive from their lender. WHAT DETERMINES A MORTGAGE RATE? Many factors affect your mortgage rate, especially your credit scores. Here are a few of the most common and […]Read More

Lender Credits For Closing Costs – When & Why

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Most buyers understandably want the lowest rate possible when they lock in their rate. This is particularly the case when they believe rates are at an all-time low and when buyers believe they will keep their loan for 30 years. But, as I remind readers often, very few people keep their mortgages for more than […]Read More

Fed: “We’ll Ignore Inflation & Keep Rates Low Forever!” Or Not

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Media outlets are abuzz with news about The Fed’s new commitment to keep rates low pretty much forever and to also change its inflation targets. This WSJ article is just one of many I saw today discussing this. So what does this mean? The Fed will no longer give credence to what is called the […]Read More

Fannie Mae’s New 50 Basis Point Fee Slams Refinance Borrowers

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As I mentioned yesterday, Fannie Mae and Freddie Mac imposed a new fee of 1/2 point, or 50 basis points, on all refinance loans – catching the entire mortgage world completely off guard. What the new fee means in reality is that all refinance borrowers will now face 1/8 to 1/4 percent higher rates when […]Read More

When 1.99% Is A Bad Deal; Why Rates May Not Fall Further

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1.99% – YAY!!!! OR NOT…. (LOOK AT THE FEES) Several lenders were touting their 1.99% interest rates recently, and we were getting emails from agents and borrowers alike asking about the “amazing rates.” But, that rate is not amazing when you look at the fine print, and almost all lenders, including JVM, can offer it […]Read More

Why I Love And Hate Freddie Mac’s Mortgage Interest Rate Surveys

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Here is the link to Freddie Mac’s Mortgage Interest Survey Data. I recommend sharing this link often b/c it is one of the best sources available to see where interest rates really are. You might, however, also remind clients that Freddie Mac shows “average rates” only and that there are as many as 12 Factors […]Read More

Rates Hit Another All-Time Low… Yawn; Why and Will They Go Lower?

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Rates edged lower again, allowing me to quote the lowest 30-year fixed-rate I have ever quoted (see our rates here). MARGINAL DROP/MARGINAL HELP FOR CONSUMERS Rates only fell marginally though, so it is not like borrowers with currently locked rates are missing the boat. In addition, b/c the mortgage industry cannot begin to process all […]Read More

7 Myths About Motorcycles and Mortgage Rates

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OK – I am not really going to blog about motorcycles, but I did see a video last night called 7 Myths You Shouldn’t Believe About Motorcycles, and it got 2.3 million views! The video maker joked about how well list-style-video-descriptors attract viewers (which is a great marketing reminder). So, I thought I’d try it […]Read More

“Fed Plans to Keep Rates at Low Levels for Years” What Are “Rates?”

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This blog’s subject line is borrowed directly from this WSJ article. Fed Chairman Powell stated in early June that there are no rate increases in sight and that the Fed will do whatever it has to do to keep rates down through 2022. These actions include keeping the Fed Funds rate near 0% and massive […]Read More

Jumbo Financing Lives! Appraisals Getting Done; Bridge Loans; Interest Rate Update

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JUMBO FINANCING STILL AVAILABLE Agents continue to ask us if we are still offering jumbo financing – and the answer is emphatically yes! Rates remain in the mid-3% range for strong borrowers with 20% down and ample reserves. Weaker borrowers (with less than 20% down, limited reserves and/or lower credit scores) in the jumbo price […]Read More

Interest Rates/Mortgage Industry Update; When NOT to File Taxes

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Interest rates have come back down but they are still about 1/4% to 3/8% higher than where they were when they bottomed out on March 9th. This is because the mortgage industry is still trying to fend off excess volume brought on by low rates and a surge of refis. And – it is also […]Read More

Appraisal Relief’s Here, But Limited; Purchase Appraisals Going Well; Interest Rate Updates

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Fannie and Freddie released “Appraisal Relief” guidelines yesterday that consisted primarily of waiving interior inspection requirements. They agreed to accept “exterior inspection” and/or “desktop appraisals” in lieu of full, traditional appraisals. But, the relief is turning out to be more limited than we hoped. LIMITATIONS Appraisal relief is only available for conforming (Fannie and Freddie) […]Read More

COVID-19/Mortgage Industry Update

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Here are a few reminders and key updates that are warranted (despite some repetition) b/c the overall situation remains so fluid and b/c we are still getting so many questions. MORTGAGE INDUSTRY REMAINS OPEN Most lenders remain open and fully operational and are still funding and recording loans (with most team members working remotely), as […]Read More

Mortgage Rates Barely Move; Hell Actually Breaks Loose; Fed Cuts Rates to Zero

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FED CUTS FED FUNDS RATE TO ZERO; $700 BILLION IN QUANTITATIVE EASING In a shocking and surprise weekend move, the Fed cut the Fed Funds Rate to 0% yesterday – which may or may not have moved mortgage rates for reasons I explain often (cuts in short-term interbank borrowing rates don’t often translate to cuts […]Read More

What Happens When Entire World Wants to Refi? RATES WAY UP; Turmoil; Service Way Down

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In January and February, interest rates dropped as much as 1/2 percent over the course of a few weeks and the mortgage industry experienced a refinance boom like it has never seen before. The result is now higher rates, confusion, turmoil and utterly inadequate capacity. Lenders are not even close to being able to handle […]Read More

Interest Rates Hit Record Low; Closing Cost Tricks Big Banks Play

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CLOSING COSTS ARE ALMOST THE SAME FOR ALL LENDERS A buyer said this to me yesterday: “Both of the banks I visited offered to match your rate and give me $4,000 less in closing costs; I only went with you b/c you could close on time and the banks could not…” Both of those banks […]Read More

The Tale of Two Lenders – Who Really Pays the Cost of Co-Marketing?

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We were approached last year by an extremely successful leader of a large team of real estate agents – together they close dozens of transactions every MONTH! The leader asked me if we were willing to co-market for online leads to the tune of about $20,000 per month, as that is what his current lender […]Read More

Interest Rates Hit All-Time Low? Yes & No

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10-YEAR TREASURY YIELDS HIT ALL-TIME LOW; MORTGAGE RATES DON’T ALWAYS FOLLOW THE 10-YEAR There is so much talk about rates hitting “all-time lows” that I wanted to discuss it in a blog quickly. 10-year Treasury bonds are hitting all-time lows and then some, currently sitting at 1.16% as I type. It is the 10-year Treasury […]Read More

5 Key Credit Reminders & Misconceptions

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#1 – Consumer credit scores are not the same as mortgage credit scores. Borrowers often share their credit scores with us, as if those scores are set in stone. Those scores, however, are often generated by online “consumer” oriented scoring models that are much less stringent than the scoring models mortgage lenders employ. As a […]Read More

Why I Was So WRONG About Interest Rates Rising – Part CCXXIX

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If you Google the word “Wrong,” the below picture pops up in the results: OK… that is a real photo taken at a holiday party (in a photo booth – thank you Danny Winkler) when I really did think rates were going to shoot up. BUT, I am pretty sure I was not thinking about […]Read More

Rates Do NOT Always Go Down In Election Years

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We have a great client who was holding off on a “no cost” refinance because he was convinced rates were going to fall further this year “because it’s an election year.” But fortunately, he finally locked in his rate last week, taking advantage of the temporary rate drop (caused by the Iran skirmish) right before […]Read More

Charles Schwab No Longer Charges Commissions for Trades

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Charles Schwab started to offer discount brokerage services (low commission trades) way back in 1975. Much of the financial industry paid little attention to the upstart firm but it nonetheless continued to grow and capture more and more market share. And then finally, 44 years later, Schwab announced that they would charge no commissions at […]Read More