I hope you and your family are doing well! I wanted to answer a question you may have about the wonderfully low interest rates.
Many of my clients asked me when would best the very best time to refinance their Idaho home loan. Should they lock in and refinance now or should they wait to see if home loan rates will continue to drop. While this is a very good question, unfortunately, I do not know and neither does anyone else.
With the current uncertainly in our Idaho financial markets, following the interest rates and knowing when the home loan rates will be at their lowest point, is impossible to know. If fact, the only way we will know when home loan rates are at their lowest, will be after they have started to head back up! I do know that the interest rates available right now is lowest they have been in over 50 years!!!
My advice to clients is to refinance their mortgage now when the interest rates are low. If they dip in the future, which is uncertain, then you can still rest assured knowing you still secured a great rate and saved money in the process!
If your current interest rate is above 6% then give me a call to discuss your refinance options. Also if you have been considering purchasing a new home, there has NEVER been a better time to do so!
Warmest regards,
John West
Idaho Homes are on sale, sellers are motivated, and interest rates are at historic lows...but may not stay that way, which means it makes sense to get moving on that home purchase or refinance you've been contemplating. But if you or one of your clients is among the smart individuals who are going ahead and taking advantage of the low home loan rates to be had right now, there are a few things to be aware of.
With Idaho's interest rates at record lows, all lenders in the US have recently seen a sharp increase in loan applications - right at the time that many lenders have cut headcount to save money in a challenging economy. This means that timeframes needed for underwriting, approvals and closing have become longer than normal. Some companies have chosen to actually raise rates just to slow down the volume to a manageable level.
Sound crazy? No crazier than when you go to buy that hot new vehicle...only to find that there is no price negotiation. In fact, you wind up lucky to just pay the sticker price, as the demand usually allows the Dealer to add a markup to the price. And you don't get the car right away; you have to wait on a list for your turn to come up.
Right now, Idaho home loans are like that hot new car - but with the timer ticking on interest rates locks, there are a few things you can do to protect yourself.
First, longer lock in time frames than might normally have been considered are a necessity, to ensure that the file has time to be processed, underwritten, approved and closed in time to protect the rate lock in this extremely volatile climate. And that longer, safer lock-in period may be a bit more costly - but it's money well spent. Overall, the mind set here should not be one of greed. Don't try to squeeze every last drop out of rates. If you are within a quarter percent of the lowest rates offered in the history of this country, you did very well. And rates always shoot up higher at a much faster pace than when then dip lower. So if the savings or opportunity make sense - grab it.
Next, responding quickly to requests for information or documentation is important - the faster the file is submitted and approved, the better off we are to keep that great interest rate protected.
Finally, be aware that it may be a smart idea to pay points to gain the best interest rate - and sometimes is even necessary in today's market. Giant mortgage buyers Fannie Mae and Freddie Mac have recently imposed more "risk-based pricing adjustments", meaning that even credit scores and loan to values which in the past would have been considered very low risk, may now be subject to mandated fees by Fannie and Freddie. And based on the way lenders have changed their rate sheets over time, there is now very little "premium pricing", which used to allow options for fees like these, points or other closing costs to be covered in return for a slightly higher interest rate.
Right now is still an excellent time to act, before the great low rates of today get away from us. But let's be smart - call me for information on how we can get started right away.
John West - (208) 321.4161
January 12, 2009
We have just been informed that a bill to reinstate reformed downpayment assistance will be introduced as early as tomorrow! The bill is expected to be introduced by Congressman Al Green (TX) with bipartisan support. The bill will have the same language as unanimously passed last year by the House Financial Services Committee. This will allow for the seller to pay for the buyers 3% downpayment allowing the client to come to closing with 0% down.
We will keep you informed as we continue to support efforts to reinstate downpayment assistance.
Successfully,
Wow, the last few weeks have been amazing and much welcomed! I hope you have seen your activity speed up as well. We have taken more loan apps then I can last remember and our team’s pipeline is swelling. On Friday, I locked a client’s 30 year fixed loan at a rate of 4.5%!
With rates as low as they are and house prices easily affordable, clients are clamoring to take advantage of the market.
The Forecast for this Week:
The Fed's purchasing program will continue to be something to watch in the weeks and months ahead, and there are also several reports that may impact whether Bonds and rates continue to explore new territory during this coming week.
On Wednesday, we will see the Retail Sales Report for December, and since many retailers have already said this holiday season was the worst in a long time, it wouldn't be a surprise if this is a horrible report...which could be friendly for Bonds and home loan rates.
This week also brings news on the inflation (or deflation) front, with Thursday's wholesale measuring Producer Price Index (PPI) Report and Friday's Consumer Price Index (CPI) Report. With the recent concerns on deflation, it will be important to see which way these reports have moved, and what the impact may be on home loan rates.
2008 turned out to be a historic year on many counts, and most people including me were glad to close the books and say goodbye to the old year. In observance of the New Year's holiday, the Bond market closed early last Wednesday and was closed all day Thursday, but there was still plenty of time for volatility due to several noteworthy news items. With a great deal of midweek activity, Bond pricing ended the week slightly worse with home loan rates about .125% higher than where they began.
Rest assured that as 2009 kicks into full gear, I will be watching closely and keeping you updated as to all the latest financial news stories, market action, and home loan rate developments. Because windows of opportunity can be fleeting, please call me to look over your own financial situation so that we are ready to act on your behalf.
Forecast for this Week:
As the first full trading week in the New Year begins, more important news is coming as we look forward to Friday's Jobs Report, which will show the number of jobs lost or gained in December. Remember that the Department of Labor averages their numbers, and part of each month's report includes "revisions" to the several prior months' numbers.
The employment news last month was record-breaking: 533,000 jobs were lost during the month of November, which represented the most job losses the US has seen in 35 years. Additionally, November was only the fourth time in 58 years that our economy lost over 500,000 jobs. And adding more pain to last month's Report were heavy downward revisions for September and October, which erased an additional 199,000 jobs.
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