Mortgage Rates
Rates are not trading today, so we have a little cooling off, after last week’s run up.
Mortgage rates over the next 60 days are going to be pretty volatile, with rates swinging up in anticipation of the Federal Reserve rate hike in December.
Federal Reserve will meet December 13-14, with the announcement happening on the 14th. The bets are that the Fed will increase rates by .50%.
A chart that has been utilized quite a bit by the Federal Reserve, that has been of interest of late is their Dot Chart, each dot is a voting member of the Federal Reserve, and shows that they expect rates to be over the coming time period.
You can see, that most of them anticipate rate in 2016 to be above .50% and in 2017 to be 1.25%. Now remember that this doesn’t have any direct correlation with mortgage rates, but it is a good guide. Basically seeing mortgage rates up by .50% by 1st quarter, which puts rates in the low 4’s. And by end of year 2017, we should see rate in the mid 4’s.
Moral of this story, lock them, and I will be in a locking mode until December 4th…why December 4th. Well that will be the day when Italy votes to remove themselves from the EU, called it ITEXIT. I believe the the EU will do everything in their power to prevent this from happening, but if Italy does vote to exit the EU, we will start to see the collapse of the EU, thus chaos in the EU, thus lower rates for the US.
Veterans Administration Loans
Did you know there are certain fees which a VA borrower can not pay for in a purchase transaction? Do you know what they are? Well if not, I have set up a web page, specifically for VA Non-Allowables, the link his here: VA Allowable Fees
Changes to Conventional Financing:
As expected, Fannie and Freddie changed the way they score FICO scores and underwrite credit reports. Trending Data, or how a borrower handles their revolving credit, is not a major factor in underwriting a file. I blogged about it a few weeks ago, back link is here:
http://www.375loan.com/blog/e_914/Keeping_the_Real_Estate_industry_informed_/2016/9/Trending_Data_will_affect_housing!.htm.
But expect some people not to qualifying for conventional financing now.
Rural Development Changes
RD has updated their funding fees, and for once in a very long time, fees have actually GONE DOWN.
The Upfront Funding fee has been reduced from 2.75%, down to 1.00%.
And the Monthly Mortgage insurance has been reduced from .55% down to .35%.
This is GREAT NEW!
Web page link here, and you can download a flyer and current Idaho and Treasury Valley maps.