Market Update: Interest Rates At Record Lows
Contributed by Mark Chrisman of West Coast Mortgage
It seems to be the only positive thing going on financially in our country right now. You’ve heard it on the news, read it in the paper, and you can’t miss all of the advertisements for low mortgage rates. So, is it for real? Are mortgage rates at record lows? Should you quit reading this article and start refinancing right this second? As a matter of fact, that might be a good idea.
Currently I am writing 15-year fixed loans at 3.250% with no closing costs. 30-year fixed rates are at 3.875% with no points, and 5/1 ARMS can be locked at 2.500%. Rates fluctuate constantly, but for the right borrower who acts fast, even for someone who has a great rate now, this can mean several hundreds a month in savings.
Last year about this time we saw 30-year mortgage rates hit record lows. The mortgage industry had been in a transition period: the heyday of the early 2000’s was long gone, banks had failed, rates had gone up, the tax incentives had expired, even the massive institutional lenders were still trying to recover from the TARP hangover. I knew a lot of people who had left the business altogether.
Suddenly the media declared that rates were at an all-time low and the entire world wanted to refinance. A frenzy ensued. Within weeks lenders were so backed up with applications, many of them raised rates just to try and get caught up. Appraisers that were knocking out full appraisals in 3 days were quoting 3 week turn times. Lenders took away 30 day rate locks and replaced them with a minimum 45 day lock, then they bumped it to 60 day locks, at the borrower’s expense. I have a friend who was a recruiter for one of the large banks and she blasted out an e-mail “URGENT: 500 experienced underwriters needed immediately.”
Then it all went away as fast as it came. In November we saw rates jump half a percent in a couple days. Borrowers who had taken too long to submit their required paperwork or had not locked in hopes of even lower rates were out of luck.
Many lenders learned from what happened last year and they have implemented procedures to handle sudden influxes of loan applications, but huge increases in volume are still going to create delays. If you missed the opportunity last year and are thinking about refinancing, even if you are just curious about what rates you qualify for, you need to start the process today. A good mortgage banker can let you know in a very short time if a refinance is right for your situation. If rates stay this low, and especially if they drop even more, the first borrowers in line with a complete file will be the only ones guaranteed to close before it all disappears.
Mark Chrisman is a Mortgage Banker with West Coast Mortgage, specializing in purchase, refinance, and equity loans including Conventional, FHA, VA, and Jumbo loans.
West Coast Mortgage
Mark Chrisman
(619) 795-6517
mark@markchrisman.com
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Market Update from San Diego Mortgage Professional Mark Chrisman
MySanDiegoMortgage.com exists to bring information and education about mortgage loans, real estate, and the financing process to consumers. We can’t think of a better way to do that than to ask local professionals about the trends and issues they are seeing, as well as for their helpful tips for people who are in the market for a home mortgage. In this installment, we welcome Mark Chrisman of West Coast Mortgage.
How would you describe the current San Diego mortgage market?
My primary focus is residential purchase, refinance and equity loans. In regards to residential financing, purchase loan applications slowed down a bit after the tax rebate expired in April of 2010, but they have steadily increased for the past 9 months. With interest rates hitting record lows last year, I did a large amount of no-cost refinances until the rates started creeping up in November. Rates are still very good and we are seeing a large number of people who were waiting for the right time to buy putting in offers. There are still a lot of short sales and REOs (bank-owned homes) on the market. I would say that distressed properties make up about 60% of the purchases we are doing right now. Although we did see large declines in value in some parts of the county, San Diego held up pretty well in comparison to other parts of California and the nation. People love San Diego and want to live here. I doubt that will change. Continue reading
Where To Look For Your San Diego Mortgage
If I asked you where you buy your groceries, or your running shoes, you wouldn’t have to think too long before spitting out an answer. In fact, you probably wouldn’t have to think at all! But a mortgage is not the kind of thing that most people shop for every day, let alone on a regular basis. So when it comes time to look for that mortgage, whether you are a first-time buyer, someone who is moving up, or a person in need of a refinance, you may not know where to start. Here are a two ideas that will point you in the right direction. Continue reading