Jun 25

Have You Ever Been Lucky?


Brad smallHave you ever been lucky? If you are one of the 1000+ loans I have closed a loan for in the last 15 months, you should consider yourself lucky because rates have been at historic lows. After hitting an all-time low of 3.25% in the fall of 2012 and again for a few hours in April 2013, rates are up significantly. Since May 2nd, the avg. 30 yr. fixed has risen to 4.5% up 1.25%. This enormous spike is something we haven’t seen in 50+ years as treasury yields have also spiked from 1.42% to 2.63% today. While rates are climbing, mortgages are still much cheaper than they were between 2005 and 2007, when the rates were around 6%. Even with mortgage rates increasing, home prices are expected to increase further as the chronically low inventory isn’t changing anytime soon. Last week the fed commented that, with an improving economy, they would be taking the gas off of their economic stimulus. The reasoning behind the tapering of their stimulus definitely caught a lot of us in this business off guard. Rates had already risen .50% before that meeting on hints he would say that. By reiterating it, we lost another .75% in rates. It is my belief and my prayer that the markets will calm down, and rates will settle if this is the new normal. It could take several weeks for this to happen. If the jobs report next week on the 5th of July is weak and unemployment goes up, rates should see drop as we see a nice rally. If the jobs numbers are better than expected, than we will definitely go higher.

I would be lying if I told you I wasn’t worried and concerned for the spike in rates. The refinance activity is down 80% from last month and it will continue to decline further. The purchase business is hot but there are only so many purchases to go around. There are always deals to be had and with rising values, those who couldn’t refinance in previous years might be able to do so now. Even those who had FHA loans with expensive mortgage insurance on loans to $417K with 5% equity or loans to $625,500 with 10% equity can get better terms with what’s called single premium mortgage insurance where more of the payment is tax deductible. Also, with the divorce rate approaching more than 50%, there is always a family who needs to refinance and take someone off the loan and possibly need to qualify another person for a new loan.

I appreciate everyone’s business and their referral’s over the last 16 + years and I am thrilled I could be a part of so many of your paths to financial freedom. If you have any friends, neighbors or family that are looking for some assistance for free and sound advice, I am always here to help. Even if there is no loan to be had, I want to help and make sure you aren’t taken advantage of. I can lend all over the country too except New York and Texas. Please give me a call or visit me at www.0points.com.







Permanent link to this article: http://new.0points.com/wp/2013/have-you-ever-been-lucky/