1-844-346-6639

info@mortgages.us

Uncategorized

Oct 17

Dropping Mortgage Rates sees Increase of First-Time Home Buyers

The recent dip in mortgage rates is seeing many Americans deciding to take their first plunge into home buying. One big trend we are seeing is a huge spike in first-time homebuyers! Freddie Mac is reporting of all their 2019 mortgage loans they purchased, a whopping 46% stem from first-time buyers! That translates into an astounding twenty-year high for Freddie Mac.
“Despite the economic slowdown due to weakening manufacturing and corporate investment, the consumer side of the economy remains on solid ground,” said Sam Khater, Freddie Mac’s Chief Economist. “The fifty-year low in the unemployment rate combined with low mortgage rates has led to increased homebuyer demand this year. Much of this strength is coming from entry-level buyers – the first-time homebuyer share of the loans Freddie Mac purchased in 2019 is forty-six percent, a two-decade high.”

A recent survey focusing on Generation Z (18-24-year-olds) by Homes.com found that the top reasons for them to buy were because they want to have a ‘place to call home’ and also saw it as a good investment value. The fact that approximately half of Gen Z want to buy because they believe owning a home is a good investment reflects how far the wealth-building aspects of homeownership have rebounded since the housing crash of 2008 when less than 1% of first-time buyers said financial security was their main purchase motivator. Another reason to buy residential property for Gen Z is to ensure they have a good home for their pets, which believe it or not actually outranked safety and a sense of community as key buying incentives. 
Another huge home buying population segment emerging is single women according to the National Association of Realtors. Currently, they are the country’s second-largest group of homebuyers, many being millennial women. Meanwhile, young baby boomer women are even more likely to take the property plunge, with 25 percent of female homebuyers being between the ages of 54 to 63 in 2018. 
For those looking to buy their first home and want to increase their chances of landing their dream home, they should get their mortgage pre-approved before shopping around. Don’t forget, it’s a competitive real estate jungle out there. Just because someone makes an offer that meets the asking price, don’t assume that the offer will get accepted. A very much sought after prime property can and often will go above and beyond the asking price, so homebuyers beware and keep that in mind when making an offer. 
The low mortgages is also creating a big demand when it comes to loan refinancing. Refinance activity is up a whopping 163% higher compared to a year ago, according to the Mortgage Bankers Association’s most recent report. The 30-year fixed-rate mortgage (FRM) averaged 3.57 percent, down 8 basis points for the week ending October 10, 2019, according to a recent Freddie Mac report. Compared to last year, it’s a big difference with the 30-year FRM averaged 4.9 percent. 

Oct 17

Mortgage Rates Dip Sparks Loan Refinancing

Falling weekly mortgage rates is leading to not only an increase in home buying but is also seeing an even bigger demand when it comes to loan refinancing. That’s because when mortgage rates drop it’s viewed as a buyers market because it typically translates into lower interest rates being offered by lenders. Borrowers are then able to purchase property or refinance their mortgages at an even lower rate, which means more money in their pockets. 

The 30-year fixed-rate mortgage (FRM) averaged 3.57 percent, down 8 basis points for the week ending October 10, 2019, down from last week when it averaged 3.65 percent according to a recent Freddie Mac report. Compared to last year, it’s a substantial difference with the 30-year FRM averaged 4.9 percent. 

15-year fixed-rate mortgage averaged 3.05 percent for the week ending October 10, 2019, with an average 0.5 point, down from the previous week at an average of 3.14 percent. 

“Despite the economic slowdown due to weakening manufacturing and corporate investment, the consumer side of the economy remains on solid ground. The fifty-year low in the unemployment rate combined with low mortgage rates has led to increased homebuyer demand this year,” says Sam Khater, Freddie Mac’s Chief Economist. Much of this strength is coming from entry-level buyers – the first-time homebuyer share of the loans Freddie Mac purchased in 2019 is forty-six percent, a two-decade high.”

Meanwhile refinance activity is up a whopping 163% higher compared to a year ago, according to the Mortgage Bankers Association’s most recent report. 

“U.S. Treasury rates moved sharply lower last week, as data showing weakness in the services sector was a sign that slowing economic growth is not confined to the manufacturing sector. This in turn caused a flight to safety by investors, resulting in mortgage rates dropping across the board, with the 30-year fixed rate decreasing nine basis points to 3.9 percent – the lowest level in a month,” said Joel Kan, Associate Vice President of Economic and Industry Forecasting. “As seen a few times this year, the large drop in rates caused another surge in refinance applications. The refinance index increased 10 percent to its highest level since late August, with both conventional and government refinances experiencing an upswing.”

But when it comes to purchase loan volume, that’s a completely different story. MBA reported at a modest increase of 10% in comparison to the same week one year ago. 

Mortgage rates are tied to yields on 10-year Treasury notes which declined 0.4 percentage point this June yet the average mortgage rate dropped a stellar 0.16 percentage point. Financial gurus and mortgage industry experts always keep a close eye between the 10-year Treasury yield and the 30-year mortgage rate to keep a pulse on America’s mortgage market health. 

Dow Jones Market Data reports the gap between mortgage rates and 10 year Treasury notes is higher than it has been in over seven years.  

Oct 9

Mortgage Rates Hold Steady

US Mortage rates appear to be holding steady despite a shaky economic outlook, which is welcome news for those looking to buy a home. According to the latest numbers from the Federal Home Loan Mortgage Corporation (FHLMC), also known as Freddie Mac, shows the 30-year fixed-rate mortgage ticked up to 3.65 percent with an average point of 0.6. Even though mortgage rates spiked in September, compared to last year’s rate of 4.71 percent, rates are definitely down. That works out to a noteworthy 1.06 percent dip, year-over-year. 

“While mortgage rates generally held steady this week, overall mortgage demand remained very strong, rising over fifty percent from a year ago thanks to increases in both refinance and purchase mortgage applications,” said Sam Khater, Freddie Mac’s Chief Economist. “As economic growth decelerates, it is clear that low mortgage rates will continue to support the mortgage market and we expect that to persist for the remainder of the year.”

The 15-year fixed-rate mortgage averaged 3.14 percent with an average 0.5 point, down from last week when it averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 4.15 percent. Meanwhile the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.38 percent with an average 0.4 point, unchanged from last week. A year ago at this time, the 5-year ARM averaged 4.01 percent.

Oct 2

Digital Mortgages Decreasing Discrimination Against Minority Borrowers

Home shoppers have way more options when it comes to applying for a Mortgage in the US. But when it comes to choosing whether you should buy your mortgage in person or shop online, more and more people are choosing to go the digital route for their home loan needs. Why? Because it’s seen as a quicker and easier choice. Now there’s another good reason to opt for a digital mortgage. According to the National Bureau of Economic Research”s report “Consumer-lending Discrimination in the FinTech Era,” discovered minority borrowers are facing less discrimination and lower interest rates when they opt for an online mortgage. This trend is based on the increased number of people going with digital mortgage solutions, which in turn is pushing down discriminatory practices when it comes to home borrowing. 


According to NBER, right now Black and Latin borrowers can generally expect an interest rate that is 0.79 % higher for first-purchase home mortgages when working with face to face lenders compared against other borrowers. While the number may seem disappointing, when it comes to racial discrimination in the US mortgage industry, it’s actually a bit of an improvement. Black and Latin borrowers back in 2009 were seeing interest rates close to 1.25% higher as compared to other ethnic communities when opting for a traditional mortgage. 


The change can be attributed to home buyers preference for shopping for their mortgages online as opposed to traditional face to face interviews. When it comes to digital mortgages or app-based borrowing, Black and Latin homebuyers pay 0.53 % more interest compared to other communities which is just over a quarter of a percent down when compared to face to face lending. Refinancing is no exception and also is cheaper online for Black and Latin communities in America.


According to NBER’s research, “Fintech algorithms discriminate approximately 40% less than traditional face to face lenders. When it comes to loan rejections, the data shows that in-person lenders reject minority applicants roughly 6 percent more often than non-minority applicants, while algorithmic lenders show no difference in loan rejection decisions.” 
Rocket Mortgage pioneered one of the first online mortgage solutions that could get you conditional preapproval in a matter of minutes. They turned the lending industry on its head when they announced last year that they were the largest home lender in America! Quicken’s Rocket Mortgage was the clear winner with the largest-volume mortgage product in the US market in 2018. Other lenders decided quickly to get in on the online mortgage buying action, forty-five percent of the country’s largest mortgage lenders now offer online or app-based loans.  

Digital Mortgages decreasing Discrimination Against Minority Borrowers 
So if you’re looking to find the best mortgage rate out there, don’t forget to check out the numerous mortgage options out online. Because according to the National Bureau of Economic Research, shopping online for your mortgage, just might be the safest bet!  

Sep 26

Commercial & Multifamily Mortgage Delinquencies Remain Low in the Second Quarter of 2019

Commercial and multifamily mortgage delinquencies remained low in the second quarter of 2019, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Delinquency Report. What kept mortgage delinquencies low again for the second quarter of 2019? According to MBA analysts, the strong economy, low interest rates, and liquid finance markets are all contributing to delinquency rates that are at or near record lows for commercial and multifamily mortgage loans. The report also added, “Despite uncertainty on many economic fronts, it is hard to identify factors that would dramatically change the delinquency rate picture in the near term.”


 MBA’s quarterly analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac. Together, these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.


Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the second quarter were as follows:
Banks and thrifts (90 or more days delinquent or in non-accrual were at 0.46 percent, a decrease of 0.02 percentage points from the first quarter. Life company portfolios (60 or more days delinquent) were at 0.04 percent, which remained unchanged from the first quarter. Fannie Mae (60 or more days delinquent) came in at 0.05 percent, which amounted to a decrease of 0.02 percentage points from the first quarter. Freddie Mac (60 or more days delinquent) remained unchanged from the first quarter at 0.03 percent. Commercial mortgage-backed securities (30 or more days delinquent or in REO) dropped 2.46 percent, a decrease of 0.15 percentage points from the first quarter.


A delinquent mortgage occurs when the borrower has failed to make the promised payments as required in the home loan documents. Failure to make the required payments gives the lender the right to foreclose the mortgage and report delinquency to the credit bureaus.

Sep 24

Online Buying Mortgage Trend Continues

The American home buying game is forever changing, thanks to the advent of online mortgages. Whether it’s commercial banks, savings and loans, credit unions, mortgage bankers and mortgage brokers, there is no shortage of where to get a loan to buy your home. But one trend that is becoming clear is American homebuyers are ditching meeting with mortgage advisors at the bank and instead opting to go digital and are getting their mortgages online. Now with just a tap of a finger on your smartphone or click of a mouse, you can have your mortgage application completed, within a matter of minutes! While there might be different pro’s and con’s with applying in person or online, it seems more and more people are opting to go online for their home loan needs. 

One of the main reason homebuyers prefer online mortgage solutions is because it’s incredibly convenient. You can fill up your digital application right in the comfort of your own home, whenever and wherever it suits you. Another reason why people prefer to apply for their home loan online is because it’s super fast. How fast? Rocket Mortgage launched by Quicken Loans can get you a conditional preapproval for a mortgage in as little as 8 minutes! Launched in 2016, Rocket Mortgage offered one of the first online personalized mortgage experiences that quickly turned the mortgage industry on its head. Intuit Inc. is the parent company of Quicken Loans, also known as QuickBooks, a small business accounting program. Rocket Mortgage launched Quicken Loans into a new digital mortgage landscape and they managed to completely circumvent the tedious traditional home loan process by offering an easier option. It’s clear that Quicken Loans are the digital mortgage disrupters when they announced last year that they were the largest home lender in America! The company managed to beat out major commercial banks, savings and loans, credit unions, mortgage specialists across the country by bringing in over 30,000 more lenders!  
Curious about the secret to their success? Their mortgage software managed to take a very complicated old fashioned mortgage system and simplified it into an online mortgage process that could get you preapproved in just minutes! Quicken Loans started their digital transformation in 2000, when it shifted its fundamental business model to an online platform. This strategy was pivotal in catapulting the lender into a 50-state, centralized, consumer-direct mortgage lender with the capacity to close large volumes of mortgage loans in thousands of counties across America. Rocket Mortgage’s fast and easy online mortgage application process has forever changed the mortgage industry model. 
While the mortgage industry competition continues to heat up between traditional banks and alternative lenders who are trying to grab your business, one thing is for sure. All this competition is welcome news for potential homebuyers because it gives them more options to shop and they are more likely to grab a better interest rate on their mortgage! Now with the huge popularity of applying for a mortgage online thrown into the mix, it’s never been easier to become a home buyer in the US!  

Sep 23

Mortgage Demands from Buyers on the Rise

While last week’s interest rates did an unexpected turnaround, it doesn’t seem to be slowing down interested prospective homebuyers. Hungry real estate shoppers helped to offset the slightly lower numbers of potential homebuyers wanting to refinance. Mortgage applications remained at a somewhat standstill this week with a light dip of 0.1%, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week. 

Home loan applications to refinance fell by 4% but were nearly 150% higher this year. Meanwhile, mortgage applications to buy a home went up by 6%, leading to an overall annual increase of 15%. What caused the spike? Potential property shoppers are recently coming back to the market even though the supply of homes are far from meeting market demand. Last year, many homebuyers opted not to buy properties thanks to increased interest rates and higher prices, so some of that buying interest is returning now. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.01 percent from 3.82 percent, with points decreasing to 0.37 from 0.44 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week but is the highest numbers in the past two months but still down 87 basis points, in comparsion to last year.

“The jump in U.S. Treasury rates at the end of last week caused mortgage rates to increase across the board, with the 30-year fixed-rate mortgage climbing to 4.01 percent – the highest in seven weeks,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Refinancing activity dropped as a result, driven solely by conventional refinances.”

Mortgage applications to buy a freshly constructed, brand new home shot up by 33% this year according to another report by the Mortgage Bankers Association. 

It seems mortgage demand from home buyers are jumping, despite interest rates spike.