The Lending Team Corp.

09/03/2024

One of the most common questions we've gotten lately is, "Will the Fed rate cut in September lower mortgage rates?" Below is a great explanation to answer this question.

Many future homeowners are looking toward this important date as the opportunity they've been waiting for to access an affordable mortgage. Unfortunately, even if the promised rate cut occurs, some buyers may end up disappointed. Here's why:

The rate cut won't come as a surprise to lenders, which is why rates are already down more than a point since their peak in the fall of 2023. Since lenders have priced in the rate drop, there's no reason to believe the cost of a home loan is likely to decline sharply if the Fed acts as anticipated.

The Fed's actions could, however, set the stage for continued mortgage rate drops throughout the fall and into 2025 if the central bank signals it will start to get aggressive at bringing rates back down after repeated increases to fight inflation.

For some borrowers, a smaller-than-anticipated mortgage rate drop could come as a surprise because they don't fully understand the relationship between the Federal Reserve's benchmark rate and the mortgage market.

Mortgage rates are not directly tied to the Fed fund rate.

When the Fed lowers rates, that reduces the overnight rate at which banks can borrow from each other. While banks often respond to cheaper credit by lowering the cost of consumer debt like mortgages, the Fed's decisions are not the only things that impact the mortgage market.

The 10-year treasury rate impacts mortgage costs because mortgage-backed securities compete with treasury bonds for investor dollars.

Other economic indicators may also have an effect.

Finally, economic and political instability may impact mortgage rates into September and beyond.

The bottom line is that those hoping for a low-cost mortgage or refinance loan may not find many new opportunities this month. With the September rate cut already baked in and unlikely to move the needle much, those sitting on the sidelines may need to decide whether to wait for rates to fall further or whether it's best to move forward soon by exploring options already available today.

Source: https://www.cbsnews.com/news/whats-the-mortgage-interest-rate-forecast-for-september-2024/
By Christy Bieber
Edited By Angelica Leicht
September 3, 2024 / 9:51 AM EDT / CBS News

Some experts expect mortgage rates to drop a little this fall, but how much will that rate drop be?

05/28/2018

Remembering all of the brave men & women that have sacrificed their lives and those who continue to sacrifice to make our country great. Thank you to all of you for your service!

11/11/2016

ON BEHALF OF EVERYONE AT THE LENDING TEAM, WE WOULD LIKE TO SINCERELY THANK ALL VETERANS FOR THEIR SACRIFICE & SERVICE TO OUR GREAT NATION.

11/11/2013

On behalf of The Lending Team, we are very thankful for all the brave heroes who have fought and fight for this country! Happy Veterans Day!!

09/14/2012

Did you know?

The Lending Team can do all of the latest Conventional, HARP, Streamline, and FHA programs without any added overlays or restrictions.

What does this mean?

We can qualify you for more prgrams and better rates & closing costs than retail banks - even your own current lender. Just compare us and see for yourself why our clients love us!

09/14/2012

Lots of people are asking, “Hey, I want to wait for rates to fall now that the Fed is going to buy a bunch of mortgages. What should I do now with the Fed's QE3 announcement?”

Here’s what you need to consider: As anticipated, the Fed shot its gun yesterday. And that’s a good thing. Rates got about 1/8% to ¼% better. That’s nice – but it’s not a giant move – especially given that the Fed just told everyone they are going to spend hundreds and hundreds of billions buying mortgages. Mortgage rates have been bouncing around the HIGH 3% to LOW 4% rates for a while now despite these massive efforts by the Fed to push them down. Can mortgage rates drop a bit lower from here? Yes. BUT, can they also jump up a lot very quickly? YES!!!

A great piece of wisdom used by experienced traders is this – Don’t pick up nickels in front of a bulldozer. What does that mean? It means, don’t take on massive risk (rates spiking higher quickly) to try and get marginal gain (rates falling a few 1/8ths). If you saw someone trying to pick up nickels in front of a bulldozer you’d rightly say, “What a fool. Doesn’t he know he’s dead if he accidentally trips? Why would he do that for a few stupid nickels?” Would you really prefer to pay hundreds of dollars more each month at your current interest rate just in hopes of saving $10-50 each month IF HOPEFULLY the rates go down another 0.125%? More importantly, would it be worth risking missing out on these rates if they go up a bit again?

More importantly, these current HARP & updated FHA Streamline programs won’t last forever. Some programs such as the HARP Freddie Open Access refi have already tightened up the guidelines so waiting can kill the chances of doing a refinance even if the rates did drop. Another cliché – A bird in the hand is worth two in the bush...or in this case, maybe worth more than two.

The simple obvious here is that the banks are in business to make money – and “he with the gold makes the rules.” If banks didn’t make money, then we’d all be in a lot of trouble regardless of whether or not we think the banks have become "too greedy.” The banks most likely won’t lower the rates much more simply due to the fact that even if the banks borrowed the money at 0.001% they would still need/want to make a 3.5-4% margin (which are still the lowest margins in history regardless of their recent posted profits reports) meaning mortgages probably won’t get much lower than current rates. Don't miss out on your chances!!

09/06/2012

Should you Buy or Rent right now? That is the question…

The answer is as simple as, should you drink milk or orange juice with breakfast?

That’s because it depends on your current situation.

There is certainly no arguing that housing prices are near the lowest they’ve been in the past 10 years and mortgage interest rates are about the lowest in recorded history. But, that’s not always a good reason to buy! Deciding whether to buy or rent depends on several factors. Among them: where you live, how long you plan to stay in your home and how home prices compare to rents in the area.

If you figure out how long you would have to own your new home before it would make better financial sense to buy, this would be considered the “breakeven horizon” – this is where the total rental costs would exceed the total cost of home ownership.

There are also other intangible factors to consider, such as, your current or near-future life plans: Do you foresee yourself relocating in the very near future (ie. job change/relocation, marriage, etc.). These can become more difficult to do if you have to worry about what to do with your home. Even a short-distance move can become cumbersome on your daily commute to a new place for work or for your new partner if it adds to their drive. Of course, there is the option of renting it out, which can be a wise investment option given the right situation, but you’ll need to determine if it’s the right choice for you.

In three-quarters of the U.S., that horizon is three years or less, according to Zillow's chief economist, Stan Humphries.

Of course, in some markets, like New York and San Francisco, home prices are so high that it takes much longer than that -- five years or more. In those cases, it might make more sense to rent unless you plan on keeping the home long-term.

And the breakeven point can vary wildly within metro areas. In the Boston metro area, for example, it can range from just over two years in the town of Lawrence to a decade in suburbs like Concord and Brookline.

To make these calculations, Zillow accounted for the costs associated with buying a home, including the down payment and transaction costs (such as commissions and fees), mortgage payments, property taxes, maintenance costs and tax deductions, among other things. It then compared that with rental costs, including monthly payments and commissions and adjusted the numbers for inflation and forecasted home value and rental price increases.

Thus, if you find that the breakeven point for purchasing right now vs. the cost of renting and consider the likelihood of keeping the home for the breakeven period, then you’ll have your answer.

Portions of this article by Les Christie from CNN Money and Caleb T. Nasseri.

08/28/2012

An issue that we see very often is a client that "thought" they had great/perfect credit so they held off on having their credit pulled until last minute for their refinance or purchase loan, only to find out that they had some unknown derogatory items on their credit or lower scores than what they pulled from a credit reporting agency website on their own. Do you know why this happens?? It's because there are numerous scoring models so even if you pull your own Equifax, Experian, and/or Transunion scores, they can still be very different than the empirical model used for mortgage purposes.

The BEST option is to plan early and call ahead. We do not charge for applications or credit checks. Don't wait to get surprised that you don't qualify for the best rates available because of something you didn't know. You can call Caleb Nasseri at 727-331-8400 ext. 201 or Andrew Kashella at ext. 202 with any questions or simply email us. We're happy to help.

http://money.cnn.com/2012/08/28/pf/fico-credit-scores/index.html?iid=Lead

The credit score you get isn't always the same score a lender is looking at. In fact, there are 49 different FICO credit scores that lenders use.

06/01/2012

Florida's housing market is coming back strong. Still lots of unbelievable values - and with rates at record lows, it makes it a great time to buy. The current pricing & rates allow you to own for less than what you would pay in rent. This also makes for a great opportunity to purchase an investment property to rent out right away or down the road for more than your mortgage payment. Take the first step by giving us a call at 727-331-8400 or 877-407-8326 and we'll help you plan your future investment. You can't get what you don't try to achieve.

According to sales numbers reported in April, the number of homes sold in March decreased 2.61% vs. February's results to a 4.5 million home annual run rate. The weakest region was the Northeast, with a 1.9% year-over-year decline in prices strongest region was the South, increasing 6.2% year-over-year.

First column for each item bleow is the Current Level Month Over, 2nd column is Month Change Year Over, 3rd column is Year Change
Existing Home Sales 4.5mm (2.61%) 5.16%
Existing Home Inventory 2.4mm (1.25%) (21.78%)
Existing Home Median Price $163.8k 5.30% 2.50%
New Home Sales 328k (7.08%) 7.54%
New Home Inventory 144k (1.37%) (19.10%)
New Home Median Price $234.5k (1.01%) 6.35%
Case-Shiller Price Index 134.20 (0.76%) (3.49%)
US Pending Home Sales Index 101.4 4.10% 12.80%
NAHB Traffic of Prospective Buyers 18.0 (18.18%) 38.46%

Home prices continue to stabilize as inventory declines, the jobs market improves and low interest rates create record affordability conditions. Existing home inventory has fallen from a record high of 4 million homes to what we consider a more normal level of 2.4 million homes. Inventory has returned to normal levels despite elevated foreclosure activity contributing to supply. Although the job market is not as strong as we would like for it to be, the U.S. economy continues to create new jobs. Interest rates are at historic levels as the spread lenders demand above the 10-year treasury decreases. We believe the most powerful factor in price stability is the home affordability index hitting a record high of 206. The home affordability index measures the median family's ability to afford the median home; a reading above 200 means the median family can afford the monthly principal and interest payments for two median homes.

Existing home inventory is returning to levels that we consider normal. Inventory continues to normalize even as increased foreclosure activity contributes to the supply. Homeowners are choosing to keep their homes off the market as foreclosure activity pushed prices lower. A market where the primary sellers are forced sellers is often sign of bottoming. Sellers with the luxury of choice hold out for higher prices while forced sellers are liquidated, and smart money buyers are attracted by low prices. Forced sellers quickly find opportunistic buyers, causing inventory levels to decline and prices to move higher.