Five Tips for Mortgage Rate Shopping Today

Five Tips for Mortgage Rate Shopping Today

Here are five tips for those shopping for a mortgage today, especially if you need to refinance an existing loan:

1. Do the Paperwork Early

Once you’ve found the mortgage professional you’d like to work with, get started on the necessary paperwork. Rates move regularly,
and if paperwork has been started your file can be processed more quickly when rates hit a low. When you start the application process, your credit score will be pulled and you’ll need to submit support documentation including W-2 forms and pay stubs. You might be asked for updated documents nearer to closing.

2. Shape Up Your Credit

Check credit reports and fix problems as soon as possible.  Even seemingly small charges can haunt a borrower: A forgotten, unpaid parking ticket, for example, can noticeably affect a credit score, she said.

3. Decide the Rate Point You Want

If you have a 7% rate now, rates would have to hit 6% or lower for it to make financial sense to refinance.  Talk with your mortgage
professional about what’s best for your particular situation.

4. Don’t Waver on the Rate

Once you determine the rate you need, it’s wisest to stick to that decision. Consumers sometimes gamble that rates will go lower, and the plan can backfire if rates reverse course.

5. Remember, Rates are Still Good

Yes, rates could fall and create another record low as a result of a deepening of a recession, but it isn’t likely that many consumers would crave lower rates at the cost of economic shocks.


Update on Real Estate Interest Rates

Fixed mortgage rates followed bond yields lower

For the third consecutive week, pushing 30-year mortgages below 5 percent once more. Similarly, ARM rates eased along with shorter-term rates, as the federal funds futures market indicates no increase in the Federal Reserve’s target rate following its upcoming committee meetings on January 26th and 27th.

Because of reduced sample sizes and work disruptions that occur with severe weather, housing starts tend to be more volatile during winter months. And, indeed, housing starts declined 4.0 percent in December, falling short of the market consensus of no change. Building permits, which are less vulnerable to weather interruptions, unexpectedly jumped 10.9 percent.

Conforming Loan Limits ($417,000 and Under)

Loan Program Interest Rate Points
30 Year Fixed 4.750% 1.000
10/1 ARM 4.250% 1.000
5/1 ARM 3.625% 1.000

Jumbo Loan Limits ($729,751 and Over)

Loan Program Interest Rate Points
10/1 ARM 5.375% 1.000
7/1 ARM 5.125% 1.000
5/1 ARM 4.750% 1.000

Agency Jumbo Limits ($417,001 – $729,750)

Loan Program Interest Rate Points
30 Year Fixed 5.000% 1.000

Money Rates

M11  M21
10 Yr Bond  3.61
Prime  3.25
6 Month Libor  0.42969

Any home buyers are looking at very good numbers right now.