What happened to rates?

Happy New Year. Have you been getting a bunch of mailers about refinancing your current home loan? Me, too. Is it really a good time to refinance? Only “maybe.”

Many factors come in to play when evaluating a mortgage financing offer. Rate is only one of them, but in recent months it’s become a biggie. Let’s have a quick look back to see what has happened since Fall.

The Freddie Mac weekly interest rate survey is flawed in that it only considers a perfect borrower with 20% equity and no other loan-level price adjustments. Remember there are up to 26 different moving parts in a rate quote that are not accounted for in these rate quotes.

On November 3, 2016, the “going rate” according to Freddie Mac was 3.54% for a 30-year fixed rate conforming loan. On December 29, 2016, that rate had risen to 4.32%. For consumers with a $250,000 mortgage, that means $112 more per month in payments. The stock market rally has moved home loan rates to the worse since the election.

Any rate quotes you got before today aren’t worth the paper they’re written on. When you’re comparing loan offers, you really need to shop within an hour or so of each other to get a true comparison. There’s a detailed article on my web site that walks you through the details of how to compare offers.

The new year does bring some good news. Loan limits for FHA loans increased to $275,665 for single-family transactions. Conventional and VA loans can now be written up to $424,100.

You know what comes next: If you’re in the market for a home loan, it’s always best to talk to your local provider to hear what is true and possible. We’re easier to reach than those 800# and web site phone operators, too.

Tammy Engel is your local Mortgage Advisor and has been certified by USA Cares as Military Housing Specialist. Contact her at (661) 822-7325 for help with purchase, refinance, and reverse mortgage.