ABBA First Mortgage News

30 year mortgage rates on the rise

November 19th, 2020

“If you’re ever going to refinance your home, NOW is the time to do it.  With indicators pointing to rates on the rise in 2021, why wait?  If your looking for low interest rates in Wilmington, NC for refinancing or low rates for purchasing of a new home whether it be a primary, second home or investment property in NC or TN, call ABBA First Mortgage at 910-332-0650 and be treated to our excellent service known throughout all of NC and TN.  You’ll be pleasantly surprised by the level of superior excellence in processing your loan and with regard to our rates and terms- we are second to none.  Check us out at   www.abbafirst.com   or email me,    richsr@abbafirst.com    for your personal quote.”  Rich Biagini Sr.

American homeowners will refinance home loans worth nearly $1.8 trillion this year as they lock in historically low rates. However, the window of opportunity for refinancing into super-cheap loans could be closing. Many housing economists now expect rates on home loans to edge up gradually from recent record lows. Mike Fratantoni, chief economist at the Mortgage Bankers Association (MBA), said that he expects the average rate on a 30-year loan to rise to 3.5 percent by the end of 2021. If the scenario plays out as he predicts, refinancing will lose its appeal for many homeowners. The MBA expects refi volume to fall to $946 billion in 2021 and to $573 billion in 2022.

“Looking back on this, years from now, you will remember 2020 as an absolute banner year for this industry,” Fratantoni said. A 3.5 percent home loan is still low by historical standards. However, it would be high enough that far fewer homeowners would be enticed into refinancing. A key assumption in the MBA’s forecast is that the U.S. economy will continue its robust recovery. Unemployment soared to 14.7 percent in April but fell to 7.9 percent as of September. Fratantoni expects unemployment to continue to decline, hitting 7.5 percent this year and 6 percent next year. That’s still high, but well below the calamitous levels of joblessness early in the coronavirus crisis. A worldwide wave of stimulus packages also plays into the forecast. The U.S. government has spent trillions of dollars on such stimulus initiatives as generous unemployment benefits and forgivable loans to employers.

Source: BankRate

Home prices going up while rates are at all time lows.

November 16th, 2020

Prices for single-family homes across the US increased 12% in the third quarter, the biggest annual jump in seven years, according to the National Association of Realtors.

The cost of housing is rising everywhere, adding to affordability concerns as millions of Americans lose income during the pandemic. Prices rose from a year earlier in all 181 metropolitan areas measured by the group, and 117 regions had double-digit gains, compared with only 15 in the second quarter, according to a report Thursday.

Mortgage rates near record lows have fueled a surge in demand as buyers compete for an increasingly scarce supply of listings. Many are rushing to the suburbs, looking for more space to quarantine in comfort. Unless borrowing costs fall much further, first-time buyers will increasingly get priced out of homeownership.

“Favorable mortgage rates will continue to bring fresh buyers to the market,” said Lawrence Yun, chief economist of the Realtor’s group. “However, the affordability situation will not improve even with low interest rates because housing prices are increasing much too fast.”

The nationwide median price of a single-family home in the quarter was $313,500, according to the report.

Fairfield County, Connecticut — home of tony enclaves like Greenwich, as well Bridgeport, one of the state’s poorest cities — had the biggest increase in prices, with 27.3%. Following were Crestview, Florida; Pittsfield, Massachusetts; Kingston, New York; Atlantic City, New Jersey; and Boise, Idaho.

At the end of the quarter, 1.47 million previously owned homes were available for sale in the US, 19.2% fewer than a year earlier. It would take just 2.7 months to sell those homes at the current rate of deals.

From MPA (Mortgage Professional America)  November 14th (Copyright Bloomberg News)

Rates continue to remain low

November 12th, 2020

ABBA First Mortgage enjoys working with clients as they seek to lower their interest rate from an already low rate to a rate that may be lower due to the fact that rates are the lowest ever!  If you think that you’d like to see if you qualify for a better rate than what you’ve already got, please give us a call and let’s see if refinancing is worth it with reduced closing costs and a new lower monthly payment.

For the week ending November 5, Freddie Mac announced that 30-year fixed rates fell to 2.78% from 2.81% the week before. The average for 15-year loans remained at 2.32% and the average for five-year ARMs rose slightly to 2.89%. A year ago, 30-year fixed rates averaged 3.69%, almost 1.00% higher than today. “Rates on home loans hit another record low, the twelfth time this year, due to economic and political ambiguity. Despite the uncertainty that we’ve all experienced this year, the housing market, buoyed by low rates, continues to be a bright spot,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Rates are staying low even after the election

November 5th, 2020

For the week ending October 29, Freddie Mac announced that 30-year fixed rates rose one tick to 2.81% from 2.80% the week before. The average for 15-year loans decreased slightly to 2.32% and the average for five-year ARMs rose slightly to 2.88%. A year ago, 30-year fixed rates averaged 3.78%, almost 1.00% higher than today. “The record low interest rate environment is providing tangible support to the economy at a critical time, as housing continues to propel growth. Strong purchase demand is helping to lift the construction, manufacturing and transportation industries that build new homes and it is also leading to more consumer spending for owners, who are selling or improving their homes. On the refinance front, many consumers are smartly taking advantage of the ability to lower their monthly payment, which means they can spend, save or pay down debt more so than they have in the past,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Steady as she goes for home more mortgage interest rates

October 14th, 2020

For the week ending October 8, Freddie Mac announced that 30-year fixed rates fell one tick to 2.87% from 2.88% the week before. The average for 15-year loans increased one tick to 2.37% and the average for five-year ARMs decreased slightly to 2.89%. A year ago, 30-year fixed rates averaged 3.57%, .70% higher than today. “The year-long slide in rates on home loans seems to be ending as rates have flattened over the last month and the economic rebound has slowed. But with near record low rates, buyer demand remains robust with strong first-time buyers coming into the market. The demand is particularly strong in more affordable regions of the country such as the Midwest, where home prices are accelerating at the highest rates over the last two decades,” said Sam Khater, Chief Economist, Freddie Mac.

However, according to one loan guru looking at the whole picture and whether we will see rates improve or not, he believes that there are other factors that may come into play- especially during this month leading to November.  The idea of a stimulus package getting done before the elections has all but disappeared, as talks have devolved to a bunch of political finger pointing. He states that regardless of which side of the aisle you’re on, “these folks all have serious ego problems that get in the way of doing what they were elected to do”. The only good thing here is that a lack of a stimulus bill helps bonds to hold steady, no longer afraid of a glut of supply. That in and of itself will calm the seas of a rising and/or falling tide of radically moving interest rates.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Federal Reserve promises to keep rates low until our economy recovers from the effects of the virus.

October 12th, 2020

Last month, the Federal Reserve promised to keep interest rates near zero until the labor market recovers from the coronavirus crisis.

Mortgage rates have remained under 3%, according to the Freddie Mac Primary Mortgage Market Survey (PMMS).

The 30-year fixed-rate mortgage dipped even lower for the week ending Oct. 1, the PMMS showed. The 30-year FRM averaged 2.88%, down from 2.90% the week prior. A year ago, it averaged 3.65%.

The 15-year fixed-rate mortgage also dropped week over week, down from 2.40% to 2.36%. Last year, the 15-year FRM was 3.14%. Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage stayed unchanged at 2.90%. A year ago at this time, the 5-year ARM averaged 3.38%.

“As a result of low mortgage rates that have stayed under three percent since July, the housing market has seen a strong, upward trajectory during a very uncertain time,” said Freddie Mac Chief Economist Sam Khater. “We’re seeing potential homebuyers who now have more purchasing power and many current homeowners who have the option to refinance their loan for a better rate. However, several factors could disrupt this activity, including high home prices, low inventory and lender capacity.”

ABBA First Mortgage offers an even better solution with rates and terms that meet or beat the competition when given the chance to show what they can do.  Call us at 910-332-0650 and give us the opportunity to help you save money now and for a lifetime.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

What’s happening with the future of lending between banks?

October 8th, 2020

The latest FOMC Meeting ended on September 16th. The Fed Statement released after the meeting reiterated their commitment to keeping Banking Interest Rates at or near zero through 2023. They also reinforced their tolerance for higher Inflation by allowing it to run above 2.0%, even up to 3.0%, for the next 5 years. During many speaking engagements in September, Chairman Powell and other Fed Governors publicly emphasized the need for additional Fiscal Stimulus from the Federal Government. The Fed (Federal Reserve Board) said they will continue to provide credit by purchasing Mortgage and Treasury Securities at the current pace. At this point, the Fed owns roughly a third of all mortgage bonds in the country.*

ABBA First Mortgage continues to monitor the lowest mortgage rates in NC and TN by following the most newsworthy articles such as the one found above.  We believe that an educated consumer will find that working with us will satisfy their needs for what they are seeking- the best mortgage product at the lowest mortgage interest rate supported by exceptional service that is second to none.  Please give us a call at 866-676-3349 and see for yourself what others have found to be true for 15 plus years.

*The content in this newsletter has been created by an independent third party for use by Mortgage and Real Estate Professionals only and not for use by Consumers. The material provided is for informational and educational purposes only and should not be construed as investment, legal, financial, or mortgage advice. The information is gathered from sources believed to be credible, some is opinion based and editorial in nature. Act Appraisal Inc and Mortgage Elements Inc do not guarantee or warrant its completeness or accuracy and there is no guarantee it is without errors.  

© Copyright 2020 Mark Paoletti, Mortgage Elements Inc, All Rights reserved 

Where are rates really? With or without points? Purchase or refinance?

October 7th, 2020

For the week ending October 1, Freddie Mac announced that 30-year fixed rates fell to 2.88% from 2.90% the week before. The average for 15-year loans decreased to 2.36% and the average for five-year ARMs remained at 2.90%. A year ago, 30-year fixed rates averaged 3.65%, more than .75% higher than today. “As a result of low interest rates that have stayed under three percent since July, the housing market has seen a strong, upward trajectory during a very uncertain time. We’re seeing potential home buyers who now have more purchasing power and many current homeowners who have the option to refinance their loan for a better rate. However, several factors could disrupt this activity including high home prices, low inventory and lender capacity,” said Sam Khater, Chief Economist, Freddie Mac.

At ABBA First, we strive to find the best rates available from more than a dozen lenders across the country.  Please give us a call and let us help you find the best rate for your needs at 910-332-0650.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Should you refinance? Will you be approved?

September 30th, 2020

Rates are still strong as we head towards the November elections.  But will they stay strong?  That is yet to be determined, however today is a good day to save money if you haven’t refinanced your home with ABBA First Mortgage  yet!

With mortgage rates at record lows, the refinance boom continues despite the challenges of the COVID-19 pandemic. Last month, refis represented the majority of closed loans. But how likely are homeowners in your state to be approved for a refi loan?

The answer: Pretty darn likely in most states. In a new study, a leading lender sifted through data from more than 15 million mortgage applications using the latest Home Mortgage Disclosure Act numbers. The study found that nationally, about 86% of refi applications were approved – and some states had approval rates above 90%.

“Your readers might be concerned about their chances of getting a refi approval, but according to our analysis, most applications are successful,” an employee of this lender told MPA.

Report author Tendayi Kapfidze, a vice president and chief economist at this leading lender, stressed the importance of letting borrowers know the advantages of refinancing.

“Borrowers don’t always take advantage of refinancing despite the obvious financial benefits,” Kapfidze said in the report. “For example, a borrower who took out a $300,000 loan five years ago in September 2015 at 3.91% could save about $300 per month on their payment and more than $15,000 in lifetime interest by refinancing at 2.87% now.”

The study broke down which states had the highest and lowest refi approval rates, based on two key factors: credit score and home-price appreciation.

“Generally, borrowers with a decent amount of equity in their home and a solid credit score can expect a higher chance of approval,” Kapfidze said.

Kapfidze said that 80% or more of refi loans are approved in 48 out of the 50 states – and in no state does the approval rate fall below 78%.

“This is good news for potential refinancers, as it means their odds of approval are strong no matter what part of the country they live in,” he said.

South Dakota, Utah, North Dakota and Nebraska all have approval rates above 90%, this lender found. Florida and New York have the lowest refinance approval rates – but approval rates in both states are above 78%.

Unsurprisingly, states with better average home-price appreciation and credit scores tended to have higher refi approval rates, Kapfidze said.

“Ten-year home-price appreciation and a borrower’s credit score correlate positively to the refinance approval rate,” he said. “While there are exceptions and other factors to consider, this means that homeowners who have higher credit scores and whose homes have increased in value are more likely to be approved for a mortgage refinance.”

Call us at 910-332-0650 for great rates and the financing of homes in NC or TN.

Excerpts and materials used from article used with permission from MPA 9-30-2020

Low rates remain low despite bank pipelines filling up

September 23rd, 2020

For the week ending September 17, Freddie Mac announced that 30-year fixed rates rose one tick to 2.87% from 2.86% the week before. The average for 15-year loans decreased to 2.35% and the average for five-year ARMs decreased to 2.96%. A year ago, 30-year fixed rates averaged 3.73%, over .75% higher than today. “Despite the recession, the very low interest rate environment has spurred many first-time homebuyers to jump into the real estate market. In August, first-time homebuyer activity rose 19 percent from July to the highest monthly level ever for Freddie Mac. The first-time homebuyer driven rebound in the housing market has come at a critical time for the economy,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.