Tag Archive for: mortgage rates

Oil & Rates Plummet; Why “Portable” Mortgages Are A Really Dumb Idea

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Oil prices plunged last night on credible rumors that the U.S. and Iran are close to an agreement to end the war. And, as I’ve been noting since the war started, as goes oil, so go rates. Rates fell sharply Portable mortgages are loans that homeowners can transfer from one home to another. Naïve housing analysts often float portable mortgages as a great way to free up “locked down” inventory (homes with very low rates that owners do not want to lose – so they refuse to sell). Homeowners with very low rates also often get excited by the prospect of portable mortgages.Read More

Iran Tensions Push Rates Up Again; Dead Boomers – Good or Bad? Appraisal Waivers Saving Deals!

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Mortgage rates bottomed out at 5.99% on February 27th – the day before the Iran war started. Rates peaked one month later on March 27th – hitting 6.625%. Rates then fell steadily into April but have since been rising in response to escalating tensions and rising oil prices. I share all this because rates shot up again today in response to Trump’s latest action, called “Project Higher Interest Rates.” OK – actually it is called “Project Freedom.” It is an effort by the U.S. to restore freedom of navigation through the Strait of Hormuz and free stranded commercial vessels. This action escalated tensions and pushed oil prices (the main cause of higher rates) higher again. Today’s average mortgage rate is 6.52%. We’re still below the peak we saw in March, but we’re getting close.Read More

Uh Oh!! Fed Says No More Rate Cuts This Year!! Panic Time?

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Interest rates shot higher yesterday after the Fed signaled there would be no further interest rate cuts this year. And because 99% of Americans mistakenly believe the Fed is all-powerful when it comes to all interest rates, I am going to dispel the Fed myth one more time. We share these blogs with clients who insist on “waiting for the Fed to cut” before buying homes or locking in rates. SIDEBAR: This post explains that for every $1 rise in gas prices, the sitting president loses 6% of his support – meaning Trump has now lost 15% of his support. A) It is super interesting. B) You can be damned sure Mr. Trump is aware of this, so it will be interesting to see him pull out all the stops to push oil and gas prices lower. And that bodes well for rates.Read More

Expect Higher Rates In The Near Term; Two Huge Takeaways

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I predicted mid to low 5% mortgage rates later this year several times in blogs and talks – but I did not expect three things: Ukraine to get so good at attacking Russian oil facilities. The Iran war, and its continuance. And Too fast of an increase in the money supply. As recently as two weeks ago, I discussed energy analyst Doomberg’s reminder that oil producers always overproduce in response to high oil prices, which always results in gluts later on. Doomberg predicts that oil will drop to as low as $30 per barrel (from $105 today). But that could take several years to play out. High oil prices push up all other prices, sparking the inflation concerns that have been pushing rates way up since the Iran war started. Iran’s resistance and Trump’s escalatory language pushed oil prices up to a new high today, and rates are up again as a result.Read More

Rates Fall Back to the Sweet Spot After Oil Crash

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Oil Prices (WTI) Plummeted To $92 Per Barrel From $104 Per Barrel On Monday. Interest rates followed and are now almost 3/8% LOWER than they were a few weeks ago. This unprecedented plunge in oil prices indicates again that very astute oil traders believe the Iran war will not escalate (again, huge investors with money on the line are often more accurate predictors of world events than “expert” pundits).Read More

Why We Could See 9% Rates By June

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Uh oh… There is a real risk we could see 8%+ mortgage rates over the next few months. Economist Steve Hanke is on the warpath, sharing post after post about the enormity of the threats to the world’s oil supplies. Here is a post in which commodity markets guru, Jeff Currie, explains that we’re facing one of our biggest oil supply shocks EVER, but we have not yet felt it because countries are still able to draw down reserves.Read More

30% Down Requires No Appraisal Contingency Or Shortfall Funds, UNLESS…

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This is a reminder that appraisal contingencies and/or proof of funds to cover appraisal shortfalls are unnecessary with large down payments. This is because lenders can easily shift financing from 30% down to 10% down, for example. Buyers can then use the savings from the smaller down payment to cover shortfalls – if an appraisal comes in low. We have, in fact, saved many 10% down purchases by shifting them to FHA financing with only 3.5% down. But there is a huge exception to this rule – and it is also good news!Read More

Can Non-Citizens Still Get Mortgages?

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Oil prices – which have been sparking inflation fears and driving rates higher – rose again over the weekend. But rates fell sharply today in the face of rising oil prices. Rates fell because the prospect of a weaker economy outweighed inflation concerns. The University of Michigan Consumer Sentiment Index came in very weak, particularly regarding employment concerns; 61% of participants expected unemployment to increase over the next 12 months.Read More

Fast Closes Are Back! How To Instantly Solve The Affordability Crisis – This Year!

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This is something I thought I’d never see in this rate environment! Our extremely well-qualified buyers are repeatedly getting outbid in multiple-offer situations in the SF Bay Area – with as many as 20 offers in some cases. This Is Why We Are Touting Our 10 to 14 Day Closings Again! This is “calendar days” too; NOT “business days.” If you need to make your offer more competitive, call us to see how fast we can close.Read More

Fed Day! Should The Fed Cut Rates To Offset High Oil Prices?

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Today is “Fed Day” – when the Fed announces whether or not it will cut rates. And – given that PPI (Producer Price Inflation) came in hotter than expected today, the Fed will very likely not cut. PPI is from February too, BEFORE the Iran war and the run-up in oil prices, so we can expect an inflation-leery Fed to be very concerned.Read More

Irony: Today’s Very High Oil Prices Will Result In Very Low Oil Prices & 4% Mortgage Rates (A Very Bad Thing)

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Prior to the Iran war, the average mortgage rate was 5.99%. Today’s average is closer to 6.4%, and our brief purchase-and-refi boomlet has come to a screeching halt. Rates shot up so quickly because oil prices shot up so quickly – from about $65 per barrel (WTI) to about $94 per barrel today. So that is why loan officers and real estate agents should care so much about oil prices; they have an enormous influence on rates.Read More

Woohoo! Another Financial Crisis Is Coming – And It’s Gonna Be Bad!

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“What’s good for General Motors is good for America!” That is a slight bastardization of a quote famously uttered by GM’s CEO in 1953 – and he was largely right. What is ironic, though, is that the opposite is true for the mortgage industry (and for real estate).Read More

I Still HATE Permanent Buydowns; 5 Reasons Why Rates Will Keep Falling; 5.5% By The End Of May

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A “permanent interest rate buydown” is simply the act of paying “points” or “origination fees” to buy down one’s interest rate. Buyers or sellers can pay for them – and I hate them. 1 point (1% of the loan amount) will permanently buy down an interest rate by about 1/4%. The problem is that borrowers often refinance before the buydown cost is recouped through lower payments or the lower rate.Read More

Cross-Collateralized Loans; More 6% Mortgages Than 3%; Rates 1% Lower Than Last Year; Loans For Canadians

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A Cross-Collateralized Mortgage Is One That Is Collateralized By More Than One Property Fannie Mae, Freddie Mac, FHA, and competitive jumbo lenders do not allow it, as it fosters foreclosure, payoff, and secondary-market issues. Non-QM and bridge loan (buy-before-sell) lenders do, however, allow for cross-collateralization – and it is proving to be a very valuable tool!Read More