Why a Fed Rate Hike Won’t Affect Mortgage Rates in the Short Term

Normal media channels do a terrible job of explaining what affects mortgage interest rates. And rest assured, every time the Fed talks about or raises interest rates, the cable news networks start shrieking about how mortgage rates are going up in a cloud of their own ignorance.  An appetite for investors to buy Mortgage Backed Securities (MBS) and US Treasury Notes, particularly the 10 Year Treasury Note (10 Year UST), are in fact the driving factors of mortgage rates and that appetite continues to be healthy.  When people invest in Treasuries and MBS, the yields drop and when their yields …

Long Term Mortgage Rate Forecast Going Into Winter Market

As the winter weather hits or threatens to hit, many people who have actively or passively been searching for a home ask, “Should I just postpone the idea until spring?”  There are many reasons to either wait or hasten the purchase of a home.  If you happened to be considering mortgage rates as one variable in your decision, we thought that we’d share the one reliable forecasting model that we follow for long term mortgage rate forecasts: Mortgage Rate Forecast for 30 Year Conventional Loan 30 Year Conventional Mortgage Rate. Percent Per Year Average of Month. Month Date Forecast Value …

Today’s Rate vs. Today’s Rates – Mortgage as a Second Language

The mortgage industry is almost cruelly filled with nearly impossible jargon.  Most of it is inconsequential from the consumer’s perspective and only serves to make communication easier for industry insiders.  However, when it comes to the concept of choosing an interest rate from your lender par rate, buy ups, buy downs, discount points and lender credits are a must know. Definitions: Today’s Rate – “Today’s Rate” is a myth perpetrated as a reality.  It is something the mortgage lending industry came up with because it’s an intellectually condescending industry that doesn’t believe that its clients can do math or understand …

The iLoan Lock and Shop Program

Many buyers are concerned about rising mortgage rates and the implications on their plan to buy a home or sell their home and then buy another home.  The frequent question is, “Can I lock in my interest rate before I find my home?”  Typically one can’t do this until they have a fully executed purchase agreement and this amplifies a homebuyer’s fear prior to going under contract to buy their dream house.  Now, with the iLoan Lock-N-Shop program, this fear can be put to rest. Here’s an outline of how it works: The lock may be for 60 or 75 …

Principles of Locking or Floating Your Mortgage Rate

At some point during the application process, your mortgage rate needs to be locked in.  This short video will provide you with the basics regarding “locking” or “floating.”  For more information, follow our interest rate forecasting page or call your loan officer for details.  Enjoy the show! Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is …

The Cost of Waiting to Buy a Home in fall of 2013 vs. Now

With all of the recent strength in the Twin Cities housing market and Minnesota’s relatively low unemployment rate one might be confused about why we’re experiencing all-time lows (ours are even lower) in mortgage rates since typically the beginning of a recovery is followed by higher interest rates. But the truth is that the Minnesota story is not the national or global story. Events on the national and international stage have caused the Federal Reserve and global bond markets to drive US mortgage rates down. This too will end and will carry a cost to those contemplating a mortgage. First, …

Say Goodbye to the Lowest Minnesota Mortgage Rates in History

The market is at a turning point for the worse due to growing worries about inflation. While it is not a problem right now (although the consumer price index did just rise the most in 10 months), there are several strong economic factors emerging that typically lead to higher prices to the consumer and thus higher mortgage interest rates down the road. While the Federal Reserve said they wouldn’t raise rates until 2014, Mark Zandi, chief economist at Moody’s Analytics and many more economists don’t believe that they’ll be able to stick to that promise. A stronger dollar, improving jobs …