Rates.
With a huge THUMP, the Federal Reserve put the thumb down on rates falling in 2014.
Federal Reserve came out on Wednesday, after their monthly meeting and indicated:
1-They will continue to not buy mortgage bonds by another $10B this month and will continue to do so until they end their bond buying sometime in September.
2-Economy is doing quite well.
3-They are going to start raising their Fed Funds rate sooner rather than later.
Remember the Fed Funds rate is not a one to one correlation to interest rates, they actually don’t have any direct relation. Now indirect, if the Fed raises its Fed Fund Rate, that typically means that the economy is doing quite well, thus more people are investing in stocks and less likely to invest in bonds, thus mortgage rates go up.
Other reports of notes this week:
1-Homebuilder index up, just slightly from last month 47 from a 46.
2-Consumer Price Index (inflation) up 0.1% vs est. of 0.1%
3-Building permits break 1M up 1.018M, first time building permits have gone over 1M in FOREVER!!!
4-Initial jobless claims 320K vs. est 325K, getting less and less each week.
So economically, based on all of this data, rates are going to go up.
Now the 800lb gorilla in the room, Geo-politics, mainly right now Russia. But it looks like Putin’s land grab will go forwards and the EU and the US are going to let it happen.
If Putin goes further into Ukraine, then we will definitely see rates dip lower, but temporarily.
I am in a total lock zone right now, you can gamble day by day and maybe get some better rates, slightly, maybe by a 1/8 of a point, but I don’t think anymore. Lots of upside risk.
IHA Changes
IHA has changed their lock policy and might affect some people, especially for people wanting to build and the builders being so slow!!!
Right now IHA will lock a loan for 45 days. And typically they would extend the lock for another 15 days for free, and then after that charge you.
Also previously, IHA would lock all new construction loans for 90 days.
Well IHA was being taken advantage of the generosity by lenders so as of April 1st:
All locks are 45 days.
A 15 day extension or 60 days total, will cost the borrower .125 (i.e. $125 for every $100K they borrow)
Another 15 day extension or 75 days will cost the borrower .25 (i.e. $250 for every $100K they borrow + the original .125)
A 90 day lock will cost the borrower 1.00 point or $1000.00 for every….ahhh you get the picture.
So my opinion, if you can’t close a loan in 45 days, something is wrong.
For new construction, I would recommend to the Realtors that they negotiate that the builder. If it is the builder’s fault, then the builder should pay for the delay. And vice versa with the buyer. Unless it is weather related, which now that it is spring, there really should be that excuse.
IHA still rocks!
Even with these changes in IHA, they still ROCK.
GREAT rates, probably better than most lenders.
Restrict fees, so IHA help the borrower.
Pays lenders, so lenders should NOT be charging your clients and Origination Fee, if they are, they are being GREEDY!!!
100% financing, let me repeat that 100% financing on Conventional, FHA, VA, RD.
Will GIFT borrowers up to 2% for downpayment, GIFT, FREE MONEY, no payback, no strings attached!!!
$8000 GRANTS for closing costs and downpayment assistance!!!
Can’t say enough about IHA, if you lender isn’t using them, switch lenders!!! (I have a suggestion J)
Lead Generator
ListingBooster, need I say more.
This is a fricken GREAT Program!!
It runs the Realtor $12 per year, yes $12 PER YEAR.
Just last week, the Realtors I have participating in this program got over 10 leads from the ListingBooster Signs.
AND we can associate 1 signed contract directly to a ListingBooster lead!!!
Call me or Email me with any questions, it really is working!
Link to Flyer HERE!!!!