Rates and Federal Reserve

Mike Head Shot 9/17/19- I hope you are having a great day and I hope your weekend went well.  I am not sure about you, but my weekend was a blur, but we had a great time and got some work done too!

Last week we got some warning shots about just how a market can move up in a hurry!  We went from a 10 year Bond yield at 1.45% to over 1.90% in less than 10 days and then we dropped down to 1.81 where we sit at this time.  The Federal Reserve is in the process of their two day meeting and it is expected that they will cut short term interest rates by .250%.  If they do this, that does not mean that interest rates on a 30 year mortgage will go lower.  I have been in this business for 28 years and if there is one thing I know it is that predicting interest rates is like predicting which number we will hit on the Roulette wheel.  With rates at these levels, nobody should complain!  These rates with a decent to semi strong economy are truly a blessing and anyone who is waiting for rates to go lower is gambling!  If you are in the market to buy, or refinance then this is a great opportunity!

Funny story – Got 3 loans over the weekend that big banks turned down!  All due to Loan Officer error!  One did not know the guidelines, one did not know how to get a debt to income ratio down to the right level and the last one needs to get a credit score up which will happen in 3-4 days.  I laugh when I see this stuff because it is so basic to me and many of these people are just order takers and have NO KNOWLEDGE of what needs to be done to get a loan done.

Last note – I had a client sell a property they lived in earlier this year, and their agent told them that they has 12 months to reinvest the money or they would be taxed on the amount.  WRONG!  If they made under $500,000.00 as a married couple then they would not have to reinvest the money…EVER!  They would be taxed on the profits above $500,000.00, and that is the rule!  Good thing that it was a harmless mistake!

Interest rates are really whacky right now.  So I am just doing fixed rate mortgages today, but you can see that there are a couple of options:

  • 30-year fixed conventional 1st Mortgage with 25% down – 3.625% (3.691 APR). Loan amounts up to $484,350.00 = $2208.88 – .50 Points
  • 30-year fixed conventional 1st Mortgage with 25% down – 3.875% (3.903 APR). Loan amounts up to $484,350.00 = $2277.59 – 0 Points
  • 15-year fixed conventional 1st Mortgage with 25% – 3.375% (3.475 APR). Loan amounts up to $484,350.00 = $3432.88
  • 30-year fixed 1st Mortgage FHA loan 3.50% down – 3.375% (4.678 APR). Loan amounts up to $484,350.00 = $2178.77 + $349.08 PMI = $2527.85
  • 30-year fixed 1st Mortgage VA loan 0% – 3.375% (3.430 APR). Loan amounts up to $484,350.00 = $2141.29
  • 30 Year Fixed rate 1st Mortgage Jumbo Loan 25% down – 3.875% (3.971 APR).  loan amounts up to $3,000,000.00 =14,107.11  – 1 Point
  • 30 Year Fixed rate 1st Mortgage Jumbo Loan 25% down – 4.375% (4.399 APR).  loan amounts up to $3,000,000.00 =14,978.56 – 0 Points

Interest rates are subject to change without notice.  All of the above are based on a credit score above 740.

I will be in the office all week and I am waiting for your call!  Please let me know if you have any questions on anything and I would love to opportunity to work with you or your clients.  My office number is  661-260-2970 and my cell # is  661-714-6258.  Thank you for your time and I hope you have a great week!