Mortgage Rates Rallying

By Chris Richter | Published: March 11, 2011

It has been a brutal few months.

Since seeing a low of 4.23% in October’s report, we’d reached as high as 5.05% in the February 10th survey.

Yesterday’s results posted a rate of 4.88%, a modest .17% recovery in the past month.

What’s NOT in the survey may be more important.  seldom wait for Freddie Mac to compile their outdated survey which uses an average of rates from Monday-Wednesday.

Most respondents did not include the 100 basis point / 1 point rally in the market that occurred Wednesday and Thursday.  That pushes the actual current mortgage rates down by one of two numbers.

If you were quoted a rate of x% paying one point, you should be able to see that rate without the point today.

If you were quoted a rate of x% paying no points, you’d probably have dropped by about .25% at the start of today’s trading.

Just in time for the spring market, mortgage rates are rallying and further enhancing our already strong levels of .

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Current Mortgage Rates v. November

By Chris Richter | Published: February 25, 2011
What a difference a few months can make.Home loan rates have been on the rise since the announcement of the Fed’s policy, but what does that really mean?

In the big picture, it means that the Fed is printing about $600 billion to stimiluate the economy.  That, by definition, is inflationary.  Inflation means higher rates.  But what does that really mean?

It means about $80/month on a $200,000 loan.  It’s been a really quick rise.  The  results from February came in at 4.95% and the November figure was at 4.30%.

Over the course of 10 years, that’s a $12,627 increase in total mortgage cost.

Feel free to update the calculator to fit your loan amount.  Read More »

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Current Mortgage Rate Predictions

By Chris Richter | Published: February 16, 2011

’s  is due out tomorrow.  Last week’s results came in at 5.05% for the 30 Year Fixed.  

Last week’s rates were dominated by an absolutely brutal Tuesday trading session that significantly influenced the survey’s results.  Since then, Wednesday and Thursday were a wash, +28bps and -25bps, respectively.  We’ve then been on a Friday-Tuesday tear of +47bps, +19bps, and +25bps. 

don’t truly exist in weekly surveys, but the PMMS is the closest thing to a national average rate that we’ll find.

Barring a huge reversal today, it wouldn’t surprise me to see the survey come in nearer to 4.875% than 5% for this week. 

The Freddie Mac survey methodology is a little outdated–having a rate quote survey that allows respondents to participate on Monday OR Tuesday OR Wednesday is moderately useless in an Internet enabled era, but I digress.

Assuming that rates come in closer to 4.875% than last week’s 5%, it’s about a $2,400 swing over the first ten years.  Here are the full numbers.

 

Assumptions

These are the values used in this loan comparison. To update any values, go here

Comparison Term (Years): 10
Property Value: $250,000.00
FICO: 720
Input

Last_Week Forecast
Loan Type Conv Conv
Loan Term (Years): 30 30
Loan Amount: $200,000.00 $200,000.00
Interest Rate: 5.00% 4.875%
UFMIP: 0.00% 0.00%
MI Factor: 0.00% 0.00%
Closing Costs ($): $0.00 $0.00
Closing Costs (%): 0.700% 0.700%

Monthly Analysis

Based on the information provided, this table shows the monthly payments for principal, interest, and mortgage insurance
(if applicable).

Loan & Payment Summary Last_Week Forecast
P&I Payment $1,073.64 $1,058.42
Mortgage Insurance $0.00 $0.00
Monthly Payment $1,073.64 $1,058.42
Monthly Savings $0.00 $15.23
Total Loan Amount: $200,000.00 $200,000.00

Full Mortgage Analysis

Over the comparison term of 10 years, this table reviews the true cost of the loan over time in a way that monthly payments cannot. We remove the principal portions of payments to isolate the cost of interest, mortgage insurance, and any closing costs to calculate the total cost over time.

Real Cost Analysis Last_Week Forecast
Total Payments $128,837.19 $127,009.97
Principal Payments $37,315.87 $37,932.17
Interest & MI Payments $91,521.00 $89,077.00
Remaining Balance $162,684.13 $162,067.83
Total Cost $92,921.00 $90,477.00
Total Savings $0.00 $2,444.00
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