Rates up yesterday but outlook is to remain low

As you may have heard, the market went bananas yesterday so here is a quick analysis.

The mortgage market was so volatile yesterday that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day. Mortgages significantly sold off yesterday afternoon. The 4.0% and 4.5% was down over 2.25 pts and 2 pts respectively. The reason is that there was an excessive dumping of supply. Servicers and banks were selling and more notably, the Fed never came in and made any purchases. There’s more room to fall and the expectation using technical analysis shows we could sell off by another point over the coming days. Volatility is through the roof which makes hedging expensive and tough. Still the sentiment is that the Fed is expected to keep purchasing and keep rates low.

Rates have relaxed slightly today. Some may see short term ARM interest rates as a more attractive option while fixed rates stay north of 5%.

Opportunistic rate catchers

Everyone knows that Mortgage rates today are at a historic low so what does it take to capitalize & catch the market while it hits that proverbial bottom?

Understanding if you what you qualify for can take the burden of uncertainty out of the home shopping experience.
If you are purchasing a home, there are plenty of programs to take advantage of. First time home buyers qualify for Obama's $8000 tax credit. FHA loans require a minimal 3% down payment and they can be coupled with DPA (down payment assistance) programs that exist in most MN townships. Looking at the foreclosed inventory? A 203k loan can provide funds to get a distressed property in to move in condition. If you want to take advantage of super low conventional rates you need to be aware of a few things. Conventional lenders are requiring more documentation than ever to approve your loan so be prepared with all of your income and asset documentation at the ready. Also, don't go car shopping or apply for any credit during the mortgage process as inquiries can negatively effect your credit score. In order to avoid any rate bumps, a conventional borrower needs to have a 740 credit score.

Refinancing? Having some equity in your house is key to getting a new loan. If your current mortgage is less than 80% of the value of your home or less than 75% of your condominium or co-op, you should have refinancing options.
If your mortgage is between 80% and 105% of your home value, you're current on your payments and your loan was bought by Fannie Mae or Freddie Mac, you may be able to refinance under a two-month-old government program called "Making Home Affordable." Fannie and Freddie have different requirements, so go to the program's Web site (www.MakingHomeAffordable.gov) or contact us to see if you qualify. 952-548-8840.

Trust and Mortgages

Having gone through the housing crisis and the sub-prime meltdown, home owners and perspective buyers have emerged as a much more savvy and more notably wary crowd. Rightfully so! There are still a lot of choices to sift through. To start with, who are you going to trust with what is most likely the largest loan in your life? Primestar Mortgage has an A+ Accredited Business rating with the Better Business Bureau and its not because we just opened our doors yesterday. We have been around since 2002 and our reputation has remained unscathed through thousands of mortgage transactions and through the toughest of all lending environments. You can trust us and the proof is in the rating. https://www.bbb.org/online/consumer/cks.aspx?id=10407098525144643