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Mortgage Rates

MN Mortgage Interest Rates

Refinancing after a bankrupcy

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Q: Do you have to reaffirm your mortgage with a bankruptcy to refinance the mortgage loan today?

Minneapolis, MN:  I hear this question on a fairly regular basis, and the plain and simple answer is NO.

You DO NOT need to reaffirm a mortgage loan that was in a bankruptcy to refinance that loan today. Anyone telling you otherwise is 1000% wrong.

refinance mortgage bankruptcy affirmation reaffirmationIf you did not reaffirm your mortgage during your bankruptcy, the mortgage did not disappear. It is still a lien on your house.  It is still owed and must be paid unless you are willing to risk losing the property.  The mortgage company — the servicer — virtually always wants you to make these payments.  And they often don’t care about the reaffirmation and will not waste their time (and your money) asking for it during the bankruptcy case.

If you pay, you get to stay

If you don’t pay, you will be foreclosed on and have to vacate the house.  The bankruptcy will protect you from ever having to pay any loses ON THAT LOAN.  But if you sign and take out a new loan, it is a new debt, a new loan, and the previous bankruptcy protection from the old loan is gone.

The problem new lenders have is because of the bankruptcy, the current lender is no longer reporting your payment history to the credit bureau.  A new lender is required to get a current payment history, and that can sometimes be very difficult.

The Loan Officer is Wrong!

With that said, some lender want you to reaffirm.  Sort of stupid, but that is up to them…  Not every lender feels the same way. Plenty of Loan Officer are also simply wrong in saying you need to reaffirm the loan first. If you are talking to someone telling you you need to reaffirm to refinance, call a different lender.
If you in this situation for a property in Minnesota or Wisconsin, we can help you.  Just apply online or call (651) 552-3681

 

2014 Interest Rate Predictions

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Minneapolis, MN:  It has come that time of year again where I make my mortgage interest rate prediction for the coming year. My long range forecast is based on multiple indexes, theories, past industry experience, and a little bit of guessing. The bulk of the weight this year goes towards the continuing reduction in the easing of the current Federal Reserve bond buying program, which started this month.  If the economy falters, and the Fed delays their easing, the anticipated increase in rates could be pushed back.

Below is my prediction for the average 30-year conventional fixed rate mortgage loan:

Month / 2014
 Rate
January 4.875%
February 4.750%
March 5.080%
April 5.200%
May 5.300%
June 5.400%
July 5.500%
August 5.550%
September 5.625%
October 5.750%
November 5.860%
December 5.875%

 

Mortgage rates – Should I Float or Lock

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Float or Lock your Mortgage Loan Interest Rate?

Minneapolis, MN:  I get asked the should I float or lock question many times every week, and I generally have the same answer. Lock.

Watching the markets, and trying to figure out what the markets will do is an exercise in futility. There are simply too many reports, commentary, and data constantly being analyzed from every angle and perspective. The last 10-years, much of the talk has not matched the actual trading of bonds.

Interest rates change daily

During the time most home owners are in what lenders call a lockable position, which generally speaking, this means the timeframe after you’ve signed a purchase agreement, and about 10-days before your closing. You can’t lock a rate until you have the exact house, and eventually the lender has to finalize your approval and send out documents for your closing.

Mortgage Interest Rates Minneapolis, MNMortgage interest rates are likely to move up and down many times during this lockable period, which is usually 60-days or less. Rarely do we see rates make big moves, rather just small moves of 1/8th to 1/4 percent higher or lower during that period.  A typical example week may be something like 4.625% on Monday, 4.75% on Tuesday, 4.625% on Wednesday, 4.50% of Thursday, and 4.625% again on Friday.

Now if we KNEW what rates were going to do, we could easily just lock on this example Thursday. Unfortunately, no one has a crystal ball, and no one knows what mortgage rates are going to do.

Therefore my float or lock advice is to always lock your rate the moment you are able to lock, and never look back.

If you lock:  You are OK with where mortgage rates are today, and how they relate to your loan payment.  You are all done with this part of the home buying process, and don’t have anything to worry about. You can focus on other aspects of your new home. While rates may go down before you close, generally speaking it might only be 1/8th percent.

If you float: Mortgage Rates can go up, or rates can go down. If they go down, great – you win.  If they go up, you lose. While rates may move before closing, generally speaking it is rare to see it move more than about 1/8th percent before closing.  Sure, you would like a little lower rate, but you are stressing yourself worrying about rates.  If 1/8th to 1/4 percent makes that much of a difference, you are probably buying a house you really can’t afford.

No one knows what interest rates are going to do. Lock, be happy, and don’t worry about it.

Myths about HARP 2 refinance explained

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HARP 2 refinance in MN or WIA Freddie Mac senior vice president is using the company’s blog to debunk a few myths she says may be keeping homeowners from refinancing with a HARP 2 refinance (the Home Affordable Refinance Program).

Tracy Mooney’s information about on nine HARP misconceptions might not only be helpful for homeowners themselves but a good resource for lenders to share with customers and the public.

READ THE FULL ARTICLE HERE

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HARP 3.0 refinance coming soon?

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HARP refinance in MN and WIA new evolution of the HARP refinance program MAY soon be upon us.

HARP 3.0 looks like it’s going to gain headway and make it’s way to the streets since Mel Watt is the new kingpin of FHFA.

HARP loans in MN (Home Affordable Refinance Program) have been one of the few programs to really assist homeowners since the real estate market collapse.  The program allows homeowners who has a loan owned by Fannie Mae of Freddie Mac to refinance to today’s lower rates, even if they’ve lost value on the home, or are actually underwater on their loan.

Since the start of HARP back in 2009, those without  a Fannie Mae of Freddie Mac loan have been out of luck, but that MAY be changing soon.

Under the current HARP refinance rules:

You may be eligible for a current HARP 2.0 refinance if:

  1. The mortgage must now be owned or guaranteed by Freddie Mac or Fannie Mae.
  2. The mortgage must have closed with your lender on or before May 31, 2009.
  3. Check for ownership with:  Fannie Mae or  Freddie Mac
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

Stay tuned… We’ll pass the word if and when HARP 3.0 becomes reality.

Jobs Report Sends Mortgage Rates Jumping

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Borrowers faced slightly higher mortgage interest rates this week due to a stronger-than-expected jobs report.

The benchmark 30-year fixed-rate mortgage rose to 4.48 percent from 4.35 percent last week, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average total of 0.36 discount and origination points. One year ago, that rate stood at 3.52 percent. Four weeks ago, it was 4.42 percent.

READ THE FULL REPORT from BankRate.com

 

Mortgage rates move slightly higher – Week ending 11/7/2013

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upFreddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving higher for the first time in three weeks amid more positive economic data out of the manufacturing and non-manufacturing sectors.

News Facts

  • 30-year fixed-rate mortgage rates averaged 4.16 percent with an average 0.8 point for the week ending November 7, 2013, up from last week when it averaged 4.10 percent. A year ago at this time, the 30-year FRM averaged 3.40 percent.
  • 15-year fixed rate mortgages this week averaged 3.27 percent with an average 0.7 point, up from last week when it averaged 3.20 percent. A year ago at this time, the 15-year FRM averaged 2.69 percent.
  • 5-year adjustable-rate mortgage (ARM) averaged 2.96 percent this week with an average 0.5 point, unchanged from last week. A year ago, the 5-year ARM averaged 2.73 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Fixed mortgage rates rebounded slightly this week on more positive economic data releases. Production in the manufacturing industry expanded for the fifth month in a row in October to the strongest pace since April 2011. Similarly, the non-manufacturing sector grew for the second consecutive month in October and beat the market consensus forecast of a decline. These increases were widespread across the nation, from Minneapolis, to Milwaukee to New York.”

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Freddie Mac’s survey is the average of loans bought from lenders  last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Expect low mortgage rates well into 2014 – Here is why

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According to the latest weekly Freddie Mac Rate Report,  the average rates for a 30-year fixed-rate mortgages hit the lowest levels seen since June last week after the Federal Reserve stated they will not taper their $85 billion per month mortgage bond purchase program anytime soon.

Until the Federal Reserve does start to taper, and then stop buying bonds,  expect to see low mortgage rates for some time to come. We’re going to be enjoying some very attractive interest rates well into 2014. The question is, is it going to be a 3.875% interest rate or a 4.25% interest rate? Either way, historically speaking, these are still great mortgage rates. People should be taking advantage with a new home purchase, or refinancing their existing mortgage loan.

Minneapolis Low Mortgage RatesThe general market still widely believes that the Federal Reserve won’t begin talk of tapering their massive bond purchases until at least June of 2014. Keep in mind that Congress just kicked the budget ceiling down the road until February,  where they are going to have to renegotiate again, so the Federal Reserve will also have to react to that budget battle too.  If  Congress comes up with a good long-term agreement, mortgage rates should move up, but we still anticipate under 5%.

Low mortgage rates well into 2014.

Really, there’s no way to know until February.  Until then, mortgage-backed securities are operating at a very thin range.  Low mortgage rates are here today. Better interest rates, over and above what we’re seeing right now, are remote. On the other hand, worse rates than what we’re seeing right now are remote too.

With current mortgage rates for FHA loans in the upper 3% range, and Fannie and Freddie loans in the low 4% range, there really isn’t any room to lower rates further to spur the housing markets.  What the county needs is jobs, and stable jobs.  When people feel good about their financial situation, they have no fear buying homes.

 

Refinancing activity down 55% – Rates still awesome

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Mortgages Rates in Minneapolis, MNAccording to recent surveys from the Mortgage Bankers Association, refinance applications are down 55% from recent highs. The latest survey shows the smallest amount of refinance activity in years, yet refinances still account for 63 percent of all mortgage applications.

Clearly the uptick in interest rates from the lows we say back in May 2013 are having an effect on activity. As mortgage rates move higher, refinancing makes less sense for more and more people.  Current best execution on 30-year fixed mortgage rates is running +/- 4.50%, which is about 1% higher than the recent lows.

From a historical perspective, interest rates are still fantastic, and surveys show there are still millions of people who could benefit be refinancing to today’s current interest rates.

HARP Refinance MNThere is also a huge mental aspect to refinancing. When people “hear” rates have gone up, many don’t even both to check with their local mortgage professional to run numbers.   But interest rates are only one aspect of refinancing.  Getting a short term, like a 15-year mortgage, can easily save many people well in excess of $100,000 or more.  That is nothing to ignore.   For others, refinancing back to a new 30-year fixed mortgage could save them hundreds of dollars a month.

Finally, many people still are under the belief that that can not refinance because of underwriting rules, or because their home has lost value.  But programs like HARP 2, the Home Affordable refinance Program for underwater home are working well for millions of people.

My advice is to never assume.  Call your local licensed mortgage professional for a quick review.  You may be surprised at what you hear!

 

Sorry, Minneapolis rates are NOT going back down!

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Minnesota mortgage ratesMinneapolis, MN:  This isn’t easy to say, but understand…  rates are NOT going back down to where they were last month.

Today’s mortgage rates for the best customers at about 4.625%, but range up to  above 5%, based on lender, credit score, program, down payment, etc..  Our quoted rates today are 1/2% higher than just last Monday. Volatility is the name of the game, as we have seen rates  jump by as much as .25% in interest rate in a single day. What we quote in the morning may be long gone by the afternoon.

With the drastic and dramatic jump we’ve seen since May 3rd, consumers may have thrown the brakes on for looking at houses, or refinancing  – waiting for rates to come back down.  It is important that you a work closely with your favorite Mortgage Loan Officer to understand rates, what they are, why they move, and if you should lock in a rate.

While I don’t know for sure, I believe the 4.50% – 4.75% range is our new floor of support for a little while.  We may see a slight uptick, and we may also see a minor drop as the market players settle into the new reality, but the 30-year fixed rate loan in the 3’s is now just a memory.

 

As mortgage rates climb, beware of not accurate quotes

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Fed Chairman Bernanke

St Paul, MN: Mortgage rates the last few weeks have climbed steadily on the statement from the Federal Reserve that they plans to scale back, and ultimately end the buying of Mortgage backed Securities by the middle of 2014.
This news translated into mortgage rates having one of the worst weeks in history, with Friday alone generating a 1/4% rise in interest rates. While 1/4% isn’t a killer by itself, combined with the rate increases from the earlier part of the week, the combination proves to be a nightmare for mortgage rates. Real mortgage rates ending Friday for the best clients are now about 4.625%.  This compares to 3.50% just a month ago.

BEWARE OF WHAT YOU READ – Not all Mortgage Quotes are current

I took numerous calls this week, where clients complained about the rate I was telling them compared to what they were reading elsewhere for “average rates.”  Most of the average rate information published on web sites, newspapers, and reported by the media comes from the weekly rate report published by Freddie Mac.  While the report is great for tracking averages over time, it is the AVERAGE of rates compiled through the end of the previous week, then reported on the following Thursday.

freddieAnother problem is many web sites don’t update daily, or even weekly.  Newspapers, and other print media may have collected rate information on Wednesday morning for publication in Sundays paper. This week, that would leave people with quotes at least .375% to .500% lower than reality.

If you are buying Google stock, does it matter what last week average price was, or what you can buy if for today?  Only rely on constantly updated and accurate rate reporting system, or while a phone call to a Loan Officer.

Check LIVE and CURRENT MN and WI Mortgage Rates 24/7

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Mortgage Rates Annihilated

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Minneapolis, MN: Mortgage rates continue to creep higher, as the Fed has announced a plan to scale back their buying of mortgage backed securities.

lmrWhat is causing rates to rise?

The Mortgage-backed-securities (MBS) market is what dictates loan pricing.  Simply put, the government has been artificially holding down rates by buying billions of dollars worth of mortgage backed securities. The ideal is simply to stimulate the economy and job growth with cheap money.  As the economy and job markets improve, the FED has said it would start to taper, then completely end their purchasing of mortgage bonds.

Without the FED buying bonds, fear has taken over.  Fear is never in the markets favor, as one can clearly see in the run up of mortgage rates.

As many of you know, we are currently in round three of the Fed buying bonds.  At the end of round one, when the Fed backed off of buying bonds, rates started moving higher, and quickly.  At that time, the Fed quickly jumped back in to settle things down. We don’t see that happening this time around.  As a matter of fact, the Fed has clearly noted that rising interest rates is something they want.

Actual Effect

The past two month, we have good from best execution 30-year fixed rates about 3.50%, to today, best execution 30-year fixed rates about 4.25%. That is the highest we’ve seen since late 2011. This is also the sharpest rise in rates in 10-years.

If you are even remotely thinking of refinancing, you’d better do it now.  If you are thinking of buying a house in the very near term, you should do it now.  If you are thinking of buying somewhere down the line, you are likely to see higher mortgage rates…  But nothing that should ever stop anyone from buying a home.

For perspective, read this previous article of mine on mortgage rate history.

Should you float of lock?  Read this daily rate lock advisory

Mortgage Rate Perspective

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balance_ratesMinneapolis, MN:  With rates having moved up slightly recently, it is good to keep current mortgage rates in perspective.

Here is a mini historic look at conventional 30-yr fixed loan rates

  • In the early 1960’s = 5.25%
  • In June 1971, about 7.53%
  • In June 1981, about 16.70%
  • In June 1990, about 10.16%
  • In June 1998, about 6.99%
  • In June 2000, about 8.29%
  • In June 2005, about 5.58%
  • In June 2009, about 5.52%
  • In June 2010, about 4.75%
  • Last month (May 2013) about 3.54%
  • Today… about 3.91%

I bought my first house in 1981.  I paid 16% for my FHA 30-year fixed!  That same loan today is 3.50%

Mortgage Rates up for 5th straight week

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Minneapolis, MN:  Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates climbing higher for the fifth consecutive week on concerns the Federal Reserve may slow its bond purchases amid a strengthening economy. This marks the first time the average 15-year fixed-rate mortgage has gone above 3 percent since the week of May 24th of last year.

check_ratesNews Facts

  • 30-year fixed-rate mortgages averaged 3.91 percent with an average 0.7 point for the week ending June 6, 2013, up from last week when it averaged 3.81 percent. Last year at this time, the 30-year FRM averaged 3.67 percent.
  • 15-year fixed rate mortgages this week averaged 3.03 percent with an average 0.7 point, up from last week when it averaged 2.98 percent. A year ago at this time, the 15-year FRM averaged 2.94 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.74 percent this week with an average 0.5 point, up from last week when it averaged 2.66 percent. A year ago, the 5-year ARM averaged 2.84 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Continuing market concerns that the Federal Reserve may slow its bond purchases amid a strengthening economy added upward pressure on mortgage rates this week. In its June 5th regional economic conditions report, known as the Beige Book, the Federal Reserve noted that overall economic activity increased at a modest to moderate pace over April and May in all its districts except for Dallas which indicated strong economic growth. In addition, pending home sales rose in April to its fastest pace since April 2010 and May’s consumer sentiment was revised upwards to its highest reading since July 2007.”

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Freddie Mac’s survey is the average of loans bought from lenders * last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s best MN and WI mortgage interest rates.

Rates Tick Up – Buyers Want to Lock Low Rates

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Minneapolis, MN: Mortgage interest rates have been near historic lows for a long time. Home buyers have fallen into a feeling that low mortgage rates are normal.  That attitude changed a bit recently as mortgage rates jumped up to the highest level in over a year.
lmrInterest rates on baseline  30-year fixed mortgage  surged 12 basis points to average 3.9% in the week ended May 24, the highest level since May 2012. The upward trend went even slightly higher this week, with most lenders reporting best execution rates at 4.00%
The slight up-tick in rates has caused many potential buyers to jump off the fence, and act now before interest rates go any higher.

So why are rates moving higher?  It is complicated, as there are many factors, but the simplest explanation is that the economy is slowly getting better.

Another big reason is that the FED has been propping up mortgages by being the primary buyer of mortgage backed securities. Without them buying these securities, the entire mortgage system would collapse. While they have, and continue to say they will buy the securities for the immediate future, there are signs that this policy may be changing, with a pull back of the buying because of the improving economy

Simply put, rates may be slowly starting to return to where the market should be if supporting itself, and not being propped up by the Fed.