ABBA First Mortgage News

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.

Rates remain low through these troubling times

September 16th, 2020

For the week ending September 10, Freddie Mac announced that 30-year fixed rates fell to 2.86% from 2.93% the week before. The average for 15-year loans decreased to 2.37S% and the average for five-year ARMs increased to 3.11%. A year ago, 30-year fixed rates averaged 3.56%, over .50% higher than today. “Rates on home loans have hit another record low due to a late summer slowdown in the economic recovery. These low rates have ignited robust purchase demand activity, which is up twenty-five percent from a year ago and has been growing at double digit rates for four consecutive months. However, heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity,” said Sam Khater, Chief Economist, Freddie Mac.

Are foreclosures on the rise?

September 9th, 2020

CoreLogic is predicting the serious delinquency rate will quadruple by the end of 2021. That pushes up to 3 million homeowners into serious delinquency absent any additional government programs or support. There’s been much said about what the forbearance to foreclosure pipeline might look like once the CAREs ACT forbearance program comes to an end. Much of the sentiment has been optimistic with economists pointing to the record amount of equity that homeowners have these days. Meaning that if homeowners get to the end of the line and find they still can’t pay their mortgages, they always have the option to sell their homes. Also lending to that optimism is the fact that the forbearance uptake is on the decline. CoreLogic’s forecast puts some black clouds on that outlook. “Barring additional intervention from the federal and state governments, we are likely to see meaningful spikes in delinquencies over the short to medium term,” said Frank Martell, president and CEO of CoreLogic, in a press release.

Every little bit helps as rates inch back down again

September 2nd, 2020

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.

The typical 1% origination fee or discount point is used when most banks or lenders quote rates unless you are savvy enough to ask for a rate with no points and with no origination fees.  When compared to ABBA First Mortgage, the savings can be seen by obtaining either lower fractional points for the same rate or a better rate if using a higher origination fee or discount point.  Please compare apples and apples when shopping for your best rate and always give ABBA First Mortgage the opportunity to quote you aggressively to earn your business.

For the week ending August 27, Freddie Mac announced that 30-year fixed rates fell to 2.91% from 2.99% the week before. The average for 15-year loans decreased to 2.46% and the average for five-year ARMs remained at 2.91%. A year ago, 30-year fixed rates averaged 3.58%, over .50% higher than today. “This year has been anything but normal and as the uncertainty lingers, interest rates remain near record lows. These rates continue to incentivize potential buyers and the home buying season, which shifted from spring to summer, will likely continue into the fall,” said Sam Khater, Chief Economist, Freddie Mac.

Call 910-332-0650 and ask for Rich Biagini to quote you on your next mortgage inquiry for the best rate and terms.

Fannie and Freddie added a half point fee and then they took it back

August 27th, 2020

On Tuesday afternoon, Freddie Mac and Fannie Mae announced that the implementation the GSEs’ universally hated Adverse Market Refinance Fee would be postponed from September 1 until December 1.

Rumors of the delay surfaced over the weekend, after the Wall Street Journal reported that the Federal Housing Finance Agency had been in contact with mortgage industry groups, many of whom expressed outrage at the fee and its bizarre mid-pandemic timing.

“It was completely uncalled for and at the worst time possible,” Arcus Lending CEO Shashank Shekhar said of the fee. “The economy is tanking, the unemployment rate is near an all-time high, and the only saving grace, financially speaking, is the low mortgage rate.”

Foreclosure crisis in our future?

August 19th, 2020

Just recently, statistics have been released showing the lowest foreclosure rate in history for the first half of this year, according to ATTOM Data Solutions. How can that be true during a deep recession? These low foreclosure rates are actually a function of two different factors. For one, the rate of foreclosures was low before the COVID-induced recession hit. Secondly, the government quickly implemented a moratorium on foreclosures as soon as the economy was shut down.

Eventually we will have to “pay the piper” for this combination of a deep recession and a foreclosure moratorium which will certainly end. The result should be a flood of foreclosures, not only because we will be catching up from the foreclosures which would have occurred without the recession — but also because many who lost their jobs during the recession will not be able to make the payments when they resume.

Will this be the housing crisis of 2008 all over again? Most analysts think not — again because of two reasons. First, a greater percentage of homeowners have equity in their homes, unlike during the Great Recession. Secondly, there is great demand for homes and a shortage of listings today. If you have equity and you can sell your home quickly, you will sell rather than turning it over to the bank. As a matter of fact, this phenomenon may help solve the listing shortage we now have by making more homes available. In conclusion, we will have more foreclosures in the near future. However, a foreclosure crisis is not necessarily a certainty, depending upon how long the economy suffers.

Back to RECORD LOWS ending August 6th

August 12th, 2020

For the week ending August 6, Freddie Mac announced that 30-year fixed rates fell to 2.88% from 2.99% the week before. The average for 15-year loans decreased to 2.44% and the average for five-year ARMs fell to 2.90%. A year ago, 30-year fixed rates averaged 3.60%, almost .75% higher than today. “The resilience of the housing market continues as rates on home loans hit another all-time low, giving potential buyers more purchasing power and strengthening demand. We expect rates to stay low and continue to propel the purchase market forward. However, the main barrier to rising demand remains the lack of inventory, especially for entry-level homes,” 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.