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3 hours ago, pecorino said:

I’ve been trying to refinance our rental property (single family house) in Florida but with no luck. Currently at 4.25% which is fine but I wouldn’t mind getting some cash out. No one wants to refi in Florida and I’ve kind of given up. Is it worth it to keep working on this or just live with what I’ve got?

Same.  My rental is at 4.50% and I was just quoted 4.75% on a refi.  No thanks.

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Shout out to @Chadstroma.  I had a ton of questions and ran multiple scenarios by him via pm.   He was able to answer everything and I ended up applying for a refi.   

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9 hours ago, SayWhat? said:

Florida.

Ya, I get that a lot. Many don’t want to refi investment or vacation properties in FLA.

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9 hours ago, Chadstroma said:

🤣

PM me. We can talk. Investment properties are a whole different ballgame. But I have options. Might find something that does what you want to do. 

Thanks, will do later today. 

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Bump - what do you mortgage guys say about the 10 yr collapse today?  I’m in the middle of a refi, currently locked at 2.85% on a 15 yr.  Should I back out? 

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19 minutes ago, tommyGunZ said:

Bump - what do you mortgage guys say about the 10 yr collapse today?  I’m in the middle of a refi, currently locked at 2.85% on a 15 yr.  Should I back out? 

Mortgage bonds are only up 17bps right now, they're not moving the same anymore. Investors are worrying about the runoff in their portfolios and at the same time you have lenders messing with margins to try and keep control of their processing and underwriting times. At my company at broke records for our region with the number of loans locked every day so far this week. I've been working 12 hour days just to try and keep up with the phone calls and appointments. So much crazier than Brexit when I was originating at Wells Fargo and they went to 60 day locks due to the influx of volume. 

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Aaaaaaannnnndddd now they're up 42bps. Will be very interesting to see pricing today among the major lenders...

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14 hours ago, flapgreen said:

What's the problem with Florida? 

They can't tally a ballot

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5 hours ago, tommyGunZ said:

Bump - what do you mortgage guys say about the 10 yr collapse today?  I’m in the middle of a refi, currently locked at 2.85% on a 15 yr.  Should I back out? 

Right now the rates are not following the treasury as much as they normally do due to convexity buying. 

I am advising my clients to get their applications in and float for now. Take a wait and see. 

2.85% on a 15 yr is generally a  good rate (being blind to all else)

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4 hours ago, CR69 said:

Mortgage bonds are only up 17bps right now, they're not moving the same anymore. Investors are worrying about the runoff in their portfolios and at the same time you have lenders messing with margins to try and keep control of their processing and underwriting times. At my company at broke records for our region with the number of loans locked every day so far this week. I've been working 12 hour days just to try and keep up with the phone calls and appointments. So much crazier than Brexit when I was originating at Wells Fargo and they went to 60 day locks due to the influx of volume. 

I have heard Wells is at 90 day mandatory locks.... that was over a month ago..... they might be at 120 now. A meme is going around that says 

"Look, if Wells Fargo says that they will refinance you, they will. You don't need to remind them every six months." 

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Ok.... I need to take a break..... so.... let me give some info here....

RATE ENVY: Guys (meant as the non gender- all of you) you need to understand that there isn't just one rate out there. One person can have a rate at 2.75% with truly no cost and there is no way in BLEEPITY BLEEP you can get that. I can't get that for myself even if we did the loan for free. Another person can be getting a 3.75% rate and it is a damn good rate for them. 2.75% and 3.75% is a big swing. But it all matters about the specifics and that isn't even talking about points, credits and fees. You have to be careful of the tricks that are played with lenders. Some love to offer attractive rates but then fine print is 2 or 3% in origination points OR an attractive rate and no points but then several thousand in various fees. Finally, everyone is very busy right now- supply and demand. That means margins will increase and not decrease for lenders. They can be pickier right now. 

 

The following things impact what kind of rate is available which means you are likely not comparing apples to apples when talking to someone else and their rate.

Type of property- SFR, Condo, etc

Occupancy of property- owner occupied, second home, investment, etc

Location of property

Type of loan- VA, FHA, conventional, USDA, non-QM, portfolio, etc

Amount of loan

Credit score

Loan to Value and Combined Loan to Value 

Type of transaction- purchase, rate and term refi, cash out refi

Amortization type- ARM, fixed, IO

PMI type- Upfront, monthly, lender paid, etc

Escrow type

Documentation type

I might be forgetting something.... I am running on fumes and caffeine right now. 

 

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By the way... VA IRRRL 2.75% at no cost is a thing. God bless our vets- they earned it. 

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6 hours ago, Chadstroma said:

 

The following things impact what kind of rate is available which means you are likely not comparing apples to apples when talking to someone else and their rate.

Type of property- SFR, Condo, etc

Occupancy of property- owner occupied, second home, investment, etc

Location of property

Type of loan- VA, FHA, conventional, USDA, non-QM, portfolio, etc

Amount of loan

Credit score

Loan to Value and Combined Loan to Value 

Type of transaction- purchase, rate and term refi, cash out refi

Amortization type- ARM, fixed, IO

PMI type- Upfront, monthly, lender paid, etc

Escrow type

Documentation type

I might be forgetting something.... I am running on fumes and caffeine right now. 

 

Most of these make sense, even if I wouldn't have thought of them. 

But how does escrow type factor in? I removed escrow, rate didn't change (wouldn't have removed it if the rate increased)

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45 minutes ago, -OZ- said:

Most of these make sense, even if I wouldn't have thought of them. 

But how does escrow type factor in? I removed escrow, rate didn't change (wouldn't have removed it if the rate increased)

That is more about over 80% LTV (Loan to Value) there are options on getting a waiver on escrow accounts. That may or may not increase rate/cost on a loan. Under 80% LTV it is your decision to have or not have it with no impact on rate/cost.

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12 minutes ago, Chadstroma said:

That is more about over 80% LTV (Loan to Value) there are options on getting a waiver on escrow accounts. That may or may not increase rate/cost on a loan. Under 80% LTV it is your decision to have or not have it with no impact on rate/cost.

How much does it cost to have escrow set up and how much each year during the loan?

I never even realized it was optional at any point.

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Posted (edited)
7 hours ago, ghostguy123 said:

How much does it cost to have escrow set up and how much each year during the loan?

I never even realized it was optional at any point.

Escrow is just giving the mortgage company a free loan, having them hold on to your money to pay insurance and taxes. It shouldn't cost anything. 

I wouldn't recommend everyone get rid of it, but if you could pay your taxes and insurance out of pocket easily, or budget/ plan for those expenses, you don't need escrow. The risk of not using it is simply that you could be late or fail to pay either expense and that could put your home at risk. (Which presumably is why the mortgage companies use it, it's safer for them too)

I got rid of it mostly because I like having a known expense, I pay the exact same payment every month from here until the house is paid off. (Could always increase the payment if I wanted) and I don't have a problem paying taxes (less than $2k/year) or insurance (roughly the same)

Edited by -OZ-

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18 minutes ago, -OZ- said:

Escrow is just giving the mortgage company a free loan, having them hold on to your money to pay insurance and taxes. It shouldn't cost anything. 

I wouldn't recommend everyone get rid of it, but if you could pay your taxes and insurance out of pocket easily, or budget/ plan for those expenses, you don't need escrow. The risk of not using it is simply that you could be late or fail to pay either expense and that could put your home at risk. (Which presumably is why the mortgage companies use it, it's safer for them too)

I got rid of it mostly because I like having a known expense, I pay the exact same payment every month from here until the house is paid off. (Could always increase the payment if I wanted) and I don't have a problem paying taxes (less than $2k/year) or insurance (roughly the same)

FWIW - Some states can require a lender to pay interest on your escrow account, e.g. New Hampshire. However, I believe there may be conditions under which the interest requirement does not apply. I don't know what those conditions might be and today's low interest rates are not enough to compel me to find out.

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Lender for the buyer on our investment property asked for an 11 day (7 Bus day) extension yesterday because they are slammed with refi activity. I get it, and all lenders are probably slammed right now but I’m tempted to tell them to pound sand. One of the reasons we took this buyer’s offer is the lender said the couple was already through underwriting and could do a quick close. Every day we don’t close costs me money and I have 3 other offers waiting on the wings (but unfortunately no all cash offers so I am probably stuck either way.)

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10 hours ago, ghostguy123 said:

How much does it cost to have escrow set up and how much each year during the loan?

I never even realized it was optional at any point.

No cost. 

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Rates: 

Overall, rates are exceptionally low. I mentioned before that the single biggest factor to mortgage rates is the 10 year treasury. Right now, we are at a yield of .767%, I think we dipped to .66% as the now all time low. Previous to this the all time low was around 1.3% (I can't remember exactly). What we are seeing right now is that mortgage rates are not following the 10 year treasury for two big reasons. This is pretty much across the board in both retail and wholesale, the typical spread of what you expect from retail and wholesale remains. Those reasons are the following. 

1) Every lender is overloaded. Pipelines are full. People are working OT. Turn times are increasing. Many lenders will use the rates as a way to ensure quality control on their pipelines and take a larger margin anyways. 

2) MBS are not being bought up. To encourage buyers a larger premium needs to be offered versus market conditions would otherwise allow. 

What does this mean? I am advising my clients at this point to apply (if they have not yet) and then float. Floating means you do not lock in the rate with the application. Why? I expect the downward pressure of the treasury yield to win out at some point. We should see some volatile movement on rates. If you are sitting on the fence and then rates drop where you want to apply, you may end up missing the boat. As I mentioned before, everyone is behind... an application and submission which use to take me 1-2 days is now taking 3-4 days. Further, if you have your application in and the 'work' on the loan is done then you can lock in for a shorter lock (which saves money) as well. Apply, get your loan ready, wait and then be ready to lock in is what I am telling my clients to do. 

I am still happy to connect any FBG to a broker or if I can help, help them directly myself. 

At this point, there are very few mortgage holders out there that shouldn't at least look at their options. Your friends and family should be too. Feel free to give out my info to them if they want assistance from me or me to refer to a good broker. If myself or my brokerage isn't licensed in their state (IL, IN, WI, CA, WA, FL, and VA), I will refer them to someone good: 

Chad Masters 

NMLS 960505

Market Place Mortgage Corp

(708) 400-1799

cmasters@marketplacemortgage.com

Alternatively, an online resource for them to search a www.FindAMortgageBroker.com if they are more comfortable with that. It will show brokers within a 25 mile radius. 

 

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12 minutes ago, Chadstroma said:

Rates: 

 

What does this mean? I am advising my clients at this point to apply (if they have not yet) and then float. Floating means you do not lock in the rate with the application. Why? I expect the downward pressure of the treasury yield to win out at some point. We should see some volatile movement on rates. If you are sitting on the fence and then rates drop where you want to apply, you may end up missing the boat. As I mentioned before, everyone is behind... an application and submission which use to take me 1-2 days is now taking 3-4 days. Further, if you have your application in and the 'work' on the loan is done then you can lock in for a shorter lock (which saves money) as well. Apply, get your loan ready, wait and then be ready to lock in is what I am telling my clients to do. 

 

 

My lender has me floating right now on the refi of a SFH rental that was at 5.20.   We are at 4.0 right now, but she thinks it will go lower.  Appraiser was there last Tuesday.

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Will I find anything below 3.375?

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Posted (edited)
32 minutes ago, belljr said:

Will I find anything below 3.375?

My broker is quoting 3.25% but I’d be paying $600-ish in points to get down from 3.375%. For my situation that $600 is easily earned back by the total savings over the life of the loan. 
that said, we’re standing by to hopefully land 3.25 without points. 

Edited by joey

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1 hour ago, Chadstroma said:

Rates: 

Overall, rates are exceptionally low. I mentioned before that the single biggest factor to mortgage rates is the 10 year treasury. Right now, we are at a yield of .767%, I think we dipped to .66% as the now all time low. Previous to this the all time low was around 1.3% (I can't remember exactly). What we are seeing right now is that mortgage rates are not following the 10 year treasury for two big reasons. This is pretty much across the board in both retail and wholesale, the typical spread of what you expect from retail and wholesale remains. Those reasons are the following. 

1) Every lender is overloaded. Pipelines are full. People are working OT. Turn times are increasing. Many lenders will use the rates as a way to ensure quality control on their pipelines and take a larger margin anyways. 

2) MBS are not being bought up. To encourage buyers a larger premium needs to be offered versus market conditions would otherwise allow. 

What does this mean? I am advising my clients at this point to apply (if they have not yet) and then float. Floating means you do not lock in the rate with the application. Why? I expect the downward pressure of the treasury yield to win out at some point. We should see some volatile movement on rates. If you are sitting on the fence and then rates drop where you want to apply, you may end up missing the boat. As I mentioned before, everyone is behind... an application and submission which use to take me 1-2 days is now taking 3-4 days. Further, if you have your application in and the 'work' on the loan is done then you can lock in for a shorter lock (which saves money) as well. Apply, get your loan ready, wait and then be ready to lock in is what I am telling my clients to do. 

I am still happy to connect any FBG to a broker or if I can help, help them directly myself. 

At this point, there are very few mortgage holders out there that shouldn't at least look at their options. Your friends and family should be too. Feel free to give out my info to them if they want assistance from me or me to refer to a good broker. If myself or my brokerage isn't licensed in their state (IL, IN, WI, CA, WA, FL, and VA), I will refer them to someone good: 

Chad Masters 

NMLS 960505

Market Place Mortgage Corp

(708) 400-1799

cmasters@marketplacemortgage.com

Alternatively, an online resource for them to search a www.FindAMortgageBroker.com if they are more comfortable with that. It will show brokers within a 25 mile radius. 

 

So I would just call my broker and say I want to apply but float and he'll be cool with that?    How long can I put off locking in a rate?

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4 minutes ago, NutterButter said:

So I would just call my broker and say I want to apply but float and he'll be cool with that?    How long can I put off locking in a rate?

They should be... I am not sure why they wouldn't be... 

Indefinitely in theory though after time some docs will need to be updated with current docs. 

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Posted (edited)

10 year just dropped below .5%.  There isn’t always a direct correlation to the 10 year. This is crazy. Thx to Chad’s referral we turned our app/docs in on Friday. 

Edited by Phil Elliott

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15 hours ago, joey said:

My broker is quoting 3.25% but I’d be paying $600-ish in points to get down from 3.375%. For my situation that $600 is easily earned back by the total savings over the life of the loan. 
that said, we’re standing by to hopefully land 3.25 without points. 

Thanks. I refied about I think 7 years ago and 3.375 is my rate on 30.  Just wasn't seeing anything definite lower.   

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1 hour ago, belljr said:

Thanks. I refied about I think 7 years ago and 3.375 is my rate on 30.  Just wasn't seeing anything definite lower.   

I will say that I've found this calculator to be invaluable during this refi process:

https://www.calculator.net/mortgage-payoff-calculator.html?cloanamount=250000&cloanterm=30&cinterestrate=3.375&cremainingyear=23&cremainingmonth=0&cadditionalmonth=0&cadditionalyear=0&cadditionalonetime=0&cpayoffoption=original&type=1&x=0&y=0#loanterm

(plug in your number, of course. I just used a generic number for the original loan amount)

I keep 2 tabs of that page open in my browser: 1 tab with my current info (with an eye on the critical # of "Remaining Payments") and 1 tab with the new info.

I then put the amount in "Repayment with extra payments" to bring the new, lower payment in line with my current payment. If I can get the Remaining Payments # on the new loan to be < my current loan, then it's worth it to refi over the life of the loan.

Since you're 7 years into a 30, I think you'll find that the rates will need to dip more than 1/2 ro 3/4 of a percentage point to be "worth it".

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1 hour ago, joey said:

I will say that I've found this calculator to be invaluable during this refi process:

https://www.calculator.net/mortgage-payoff-calculator.html?cloanamount=250000&cloanterm=30&cinterestrate=3.375&cremainingyear=23&cremainingmonth=0&cadditionalmonth=0&cadditionalyear=0&cadditionalonetime=0&cpayoffoption=original&type=1&x=0&y=0#loanterm

(plug in your number, of course. I just used a generic number for the original loan amount)

I keep 2 tabs of that page open in my browser: 1 tab with my current info (with an eye on the critical # of "Remaining Payments") and 1 tab with the new info.

I then put the amount in "Repayment with extra payments" to bring the new, lower payment in line with my current payment. If I can get the Remaining Payments # on the new loan to be < my current loan, then it's worth it to refi over the life of the loan.

Since you're 7 years into a 30, I think you'll find that the rates will need to dip more than 1/2 ro 3/4 of a percentage point to be "worth it".

Thanks so I just did assuming 3.25% on 10 year fixed and its says I'm done in 8 years with extra payment vs 8 years 5 months I have left.  Currently at 4.125.  I don't think it worth it - right?

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40 minutes ago, stlrams said:

Thanks so I just did assuming 3.25% on 10 year fixed and its says I'm done in 8 years with extra payment vs 8 years 5 months I have left.  Currently at 4.125.  I don't think it worth it - right?

yeah, you're in an interesting phase of paying back your current loan where you're probably paying MOSTLY principal and very little interest, so late in a loan's payback period.

To me, the bottom line is the Remaining Payments line in that web page since it "ignores" history and simply says "from this point forward, how much money will actually come out of my pocket to pay this off" so it's a great way to compare scenarios of a new loan vs. one you're already X years into.

@Chadstroma or other mortgage experts should chime in if they disagree.

 

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2 hours ago, stlrams said:

Thanks so I just did assuming 3.25% on 10 year fixed and its says I'm done in 8 years with extra payment vs 8 years 5 months I have left.  Currently at 4.125.  I don't think it worth it - right?

Would that be with any fee rolled in? 

I'm a pretty simple guy, I want to see how much I'll pay total (including any fee rolled in) and compare to the status quo. If I'd pay less with the refi, and I'm willing to bet I'd stay in the house long enough to recoup, I'd do it. 

It sounds like yours is close enough where the benefit isn't significant enough for the hassle. (Not to mention any out of pocket costs)

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1 hour ago, -OZ- said:

Would that be with any fee rolled in? 

I'm a pretty simple guy, I want to see how much I'll pay total (including any fee rolled in) and compare to the status quo. If I'd pay less with the refi, and I'm willing to bet I'd stay in the house long enough to recoup, I'd do it. 

It sounds like yours is close enough where the benefit isn't significant enough for the hassle. (Not to mention any out of pocket costs)

I didn’t include fee since didn’t know exactly how much.  That’s the conclusion I came to was the benefit small so why bother.  

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This is bonkers. 

Lenders are swamped. Capacity is stretched both in terms of ability to handle the loans and their warehouse lines (the lines of credit the lenders use to fund loans before they can sell to secondary market and take off their books). We are seeing rates move up even though the normal indicators of mortgages have dropped down even further. 

The largest wholesaler in the country started the day off with rates lower than Friday... then had two price increases, a price decrease and then another price increase. (It is not unheard of to have a mid day price chance... most days don't though. You typically will get one change or two and usually in the same direction). 

I have heard of one lender that has officially STOPPED taking refinance applications. 

I still think the best course of action is to apply and float... when the pipelines ease and the warehouse lines have room prices should go down based on market conditions. There should be some better than current lock periods ahead. (But I could be wrong, make your own personal judgement for what is right for you. You can't go broke making profit). 

I am going to continue to try to catch up on things and then crawl into the fetal position.

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51 minutes ago, Chadstroma said:

This is bonkers. 

Lenders are swamped. Capacity is stretched both in terms of ability to handle the loans and their warehouse lines (the lines of credit the lenders use to fund loans before they can sell to secondary market and take off their books). We are seeing rates move up even though the normal indicators of mortgages have dropped down even further. 

The largest wholesaler in the country started the day off with rates lower than Friday... then had two price increases, a price decrease and then another price increase. (It is not unheard of to have a mid day price chance... most days don't though. You typically will get one change or two and usually in the same direction). 

I have heard of one lender that has officially STOPPED taking refinance applications. 

I still think the best course of action is to apply and float... when the pipelines ease and the warehouse lines have room prices should go down based on market conditions. There should be some better than current lock periods ahead. (But I could be wrong, make your own personal judgement for what is right for you. You can't go broke making profit). 

I am going to continue to try to catch up on things and then crawl into the fetal position.

Makes sense and why I haven’t heard anything in several days since applying.

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Been working with chads Michigan guy, got approved and just locked in 2.625% on  15 year

bought it down to that but made sense, was less than 4 year payback, don’t see me moving in that timeframe and can’t imagine re-if to anything lower in that timeframe either

And honestly of something came up where I had to move in the next few years I’m not gonna sweat $2K in points

appraisal still pending, so not a done deal yet but everything looking good

should close right around the time my original 30 year would have had 15 years left 

 

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The corporate market is shut down and if liquidity slows we may see another 2008 crisis.   Hopefully, this is a short term problem, but the Russia/Saudi oil war isn't helping either.

Spreads can certainly widen despite rates being at ridiculous lows.

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Rates going up again at my lender.  15 year back at 3

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Locked yesterday morning. 

30 year fix,  2.875 - no cash out 

Previously at 3.875

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2 minutes ago, One said:

Locked yesterday morning. 

30 year fix,  2.875 - no cash out 

Previously at 3.875

Nice.  Rates at my lender just went up .25% this morning.

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Posted (edited)
2 hours ago, One said:

Locked yesterday morning. 

30 year fix,  2.875 - no cash out 

Previously at 3.875

wow. I'm trying to get to 3.25% without any origination fees and that's tough these past couple of days. Things are creeping back up so may have missed my window...

Edited by joey

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Most of the last 10 days or so have been like being in quicksand. Today, I finally have made progress on catching up (not fully caught up) 

Here is where we are at.... 

We are totally in uncharted and unprecedented territory. For the week + mortgage rates which normally are mostly impacted by the 10 year treasury have decoupled. Even though yield has gone down and keeps below 100 bps, mortgage rates have gone up. My advice has been to float on loans right now. I still believe that... but honestly, my BP was going up today starting to second guess myself as I see my rates continue to go up. I listened to a couple of smart people in the know today... the CEO of the largest wholesaler in the country, a guy who basically called what we are seeing back in Oct and a few brokers I know who I value their thinking.... and I heard echoes of my thinking which put me at ease. 

Essentially the thinking is that mortgage rates will eventually follow normal patterns and fall back down. The are a few reasons but the biggest is what an industry magazine put this way "So, why are the rates so high? Last week, HousingWire spoke to numerous lenders, mortgage brokers and other mortgage professionals who hinted that some lenders may be keeping their mortgage rates above where they could be in an effort to control the demand for mortgages. Put simply, many lenders are so busy right now trying to process the loan applications they’ve already received that they’re pushing their interest rates well above the prevailing market rate so they can actually deliver on the loans they already have in their pipeline." There is some hedging and MBS stuff too going on but overall, as the dust settles I still think it will go down and unless there is a huge reversal in the 10 year treasury, we could be seeing all time low rates... then again, as rates drop, applications will increase and we could see the same push of rates back up. 

 

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12 minutes ago, ghostguy123 said:

So I refinanced too early?  And didn't switch to bonds early enough?

No this has nothing to do with mortgage rates. See last week when they still went up after the rate cut. They’ll normalize at some point but rates are crazy right now, higher than before the dip and with points!

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Fed Funds Rates does not directly impact mortgage rates. 

In short, I think this puts more downward pressure on getting rates down. This is all never before type of stuff so we need to see what happens. 

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Could the uncertainty get so bad that Bank simply don’t want to take on additional mortgages at this point?

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11 minutes ago, mr roboto said:

Could the uncertainty get so bad that Bank simply don’t want to take on additional mortgages at this point?

No. 

What has happened has been a convergence of things like the MBS market not buying up because of fears of Early Pay Offs and capacity issues which has seen an unprecedented amount of loans being worked on pushing rates up. 

The actions today should help ease up liquidity in the MBS market (more so about the bond buying program than the Fed Funds change). 

The real issue is the ability to get loans done. Can we get verification of employment done? Are Title companies working? Are appraisers working? On top of the capacity issues of lots of loans, there is work at home programs happening, does productivity go down and add to those issues? 

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