The Fed (Federal Reserve) has kept rates the same in their latest meeting. No up, no down…so what does this mean for you and me? Well, since they at least hinted that they might raise rates again at their next meeting, then the obvious action to take is do your purchasing or refinancing now, not later! Remember, because of where interest rates are currently, you have less competition for that home you are dreaming about. Less competition means you might get seller concessions for closing costs, or maybe a lower purchase price…or maybe…BOTH! This of course only applies to the folks that have to do something now. Over the long run, I think we will see lower rates. The ones who buy now, can take advantage of a refinance if this scenario proves out. At any rate, “rates” are what they are for now! If you want to discuss how all this might affect your current situation, then call Michael E. Mitchell at Mitchell Mortgage today and use my cell phone of 707-337-5970. Good luck!
Thinking Points! What goes up, must come down! The reverse is true as well. Remember the Covid-19 years? Mortgage rates hit all-time lows and stayed that way longer than they should have. This created the need to raise rates rapidly to cool down the economy. It should have never come to that, but it seems no matter who is in charge of the Federal Reserve, they all seem to make the same mistake of never anticipating an end to a cycle…therefore, low rates for too long and then high rates for too long! The cycle we are in now, high rates, will most likely continue until well past the obvious signs that the economy has slowed down, if history has anything to say about it. Sooooo, here is my suggestion. If you are purchasing, and can afford it, buydown the interest rate with discount points. A one percent discount point will, in almost all cases, drop your mortgage rate by 1/4 percent. Usually it takes around five years to make that back in the form of lower payments verses the money output of the discount point. For example: a $500,000 loan on a $625,000 primary residence property purchase today would be 7.25% for a 30 year fixed rate at zero points. If you were to pay one discount point ($5,000.00) then your mortgage rate would drop to 7.00%. The difference is $84.78. That means after approximately 59 months (just under five years) you will have made that discount point back. Also, make sure you tell your tax-preparer because you most likely will receive a deduction for paying any points on a mortgage purchase loan! Mortgage rates change daily and sometimes several times a day. This could also benefit you if you happen to hit a day when the spread in interest rate for that discount point is larger than normal. That means your one discount point will get you 3/8’s lower interest rate! In those cases, you will make that discount point back, in the above scenario, in around 39 months with the same tax advantage! If rates come down after you have purchased your home, then hallelujah, you can refinance to a lower rate. This is a lot to take in if you don’t do it everyday, so that’s where Mitchell Mortgage comes in to help guide you. Call Michael E. Mitchell at 530-406-2200 or 707-337-5970 cell, and we will get you in that new home with financing that works for your pocketbook!
Real estate rates are stagnant for 30 year fixed mortgages and have remained stagnant for a couple of months now. There doesn’t appear any shocking news that will make them change either. The war in Ukraine, North Korean rocket tests, Iranian Navy boats harassing other countries ships in the Persian Gulf nor any other subject seems to affect how Real Estate market changers (think large mortgage backed securities purchasers) go about their business! Real Estate mortgage rates for a conforming loan with 20% down on a purchase are drifting from very high sixes to very low sevens for zero points. That’s not bad for the history of interest rates, but it is far from the mind blowing lows that were available, and still linger in the backs of all our minds (even though it has been well over a year since those rates were available). So it is decision time if you are in the market for a new home now…keep waiting for the Real Estate rates to drop, or get in now and protect yourself from the chance rates could go even higher! My advice is to make an offer now. The more competition sits on the waiting fence means the fewer people you have to worry about when bidding on a new home. So make the stagnant real estate rates work in your favor and call Mitchell Mortgage today to get pre-qualified for your first or next home!
Pre-qualifying for a home loan is always a smart thing to do, but today’s real estate market makes it even more important. Pre-qualifying for a real estate loan in a buyer’s market is wise, but not as necessary, because you are likely to be the only person making an offer on the home. But today, the real estate market has low inventory, which makes it a seller’s market. This means you are likely to be compared to several other offers on the home you want to buy, and if you don’t have your pre-qualification letter handy, yourchances of winning a bidding war are diminished! Don’t make the mistake of waiting until the last minute. Make sure you are considered at the same time as all the other offers! Call Mitchell Mortgage today at 530-406-2200 Work or 707-337-5970. We will get you Pre-qualified for that dream home right away!
Mortgage interest rates as January 11, 2023!
Mortgage interest rates today reflect the steadiness of the market throughout the holidays. Mortgage interest rates have stayed in a narrow range for the last three to four weeks, with today’s looking at about 6.125%, 30 year fixed and no points for 20% down payment on a conforming loan amount (up to $726,200) and 5.99% for the same scenario but 30% down payment. 30 year fixed mortgage rates seem to be the way to go right now, as shorter term fixed rates with 30 year amortizations, ( 5 year, 7 year and 10 year that roll over to adjustable rates) are slightly higher and have more points attached. This isn’t always the case, but as long as mortgage interest rates remain this way, it is an added bonus to get 30 years of the same interest rate and take out the risk of shorter term mortgage instruments. My advice, if you are capable, is to home shop now, before you run into a purchase market that will place you up against multiple other buyers who bid up the home price. If rates go down after you purchase, you can refinance. If rates go up, you can be satisfied that you were smart enough to hit the interest rates at their low point. Either way is a win! To obtain current mortgage interest rates and get pre-qualified to buy that special home, call Michael Mitchell 530-406-2200 or 707-337-5970 cell.
Make sure you put out your flag for Veterans Day today! As the old saying goes, “If you love freedom, thank a veteran!”. Veterans Day is the perfect time to bring out Charles M. Province’s poem, “It is the Soldier,”: It is the Soldier, not the minister, Who has given us freedom of religion. It is the Soldier, not the reporter, Who has given us freedom of the press. It is the Soldier, not the poet, Who has given us freedom of speech. It is the Soldier, not the campus organizer, Who has given us freedom to protest. It is the Soldier, not the lawyer, Who has given us the right to a fair trial. It is the Soldier, not the politician, Who has given us the right to vote. It is the Soldier who salutes the flag, Who serves beneath the flag, And whose coffin is draped by the flag, Who allows the protester to burn the flag.
While you are at it, it would be a good time to donate to your favorite veterans charity! Mitchell Mortgage thanks all Veterans, past and present for their contributions to this great nation!
Veterans can take advantage of VA financing at Mitchell Mortgage as well. Up to to 100% of the value of the home can be borrowed in purchase circumstances, with no mortgage insurance! Call Michael E. Mitchell at 530-406-2200 or 707-259-1117 cell, to discuss Veterans Options for purchase or refinance.
Is a reverse mortgage right for you? Are you 62 or older with low income and high equity in your home? If so, a reverse mortgage just might be the right tool for your household budget. A reverse mortgage will allow you to stay in your home as long as you live (providing you keep your property taxes and property insurance current). You also won’t have to make that pesky mortgage payment every month! With home prices still high, this would be the best time to get your home appraised, as, the higher the appraisal, the more equity you can use for cash, if that is necessary. The first move should be to give Michael Mitchell a call at 530-406-2200 or 707-337-5970 and talk about your current and long term financial needs. If a reverse mortgage is the answer, then now is the time to get started!
With fewer buyers vying for the same home, you are likely to be the only one making an offer on the home your prefer. So with this lack of competition, comes, in most cases, the ability to negotiate concessions from the seller, or even your real estate agent! For instance, if you were to purchase a home in Woodland for $650,000.00 and put 20% down, your loan amount would be $520,000.00. Today’s 30 year fixed rate at no points would be in the mid sixes, but lets use 6.5% for the sample. If the seller agrees to concessions of $11,835.00 that would buy down your rate to 4.50% for the first year and 5.50% for the second year, then fix at 6.5% for the remaining 28 years. If rates go down in that first two year period, or shortly after the two year period is over, then you can always refinance to the lower rate! If rates go higher, you at least know you will never be higher than 6.50%! The first two year period will see you making $11,835.00 less in payments – that is quite the savings! If you have questions for yourself or a friend regarding the use of concessions in a real estate purchase transaction, give Michael Mitchell a call at 503-406-2200, 707-259-1117, or 707-337-5970 Cell!
Spent the day yesterday with a Napa realtor. He told a story of a couple he represented that wanted to buy a home in Napa during the recent time period where multiple offers were the norm. In a nutshell, and against his advice, the couple he represented did not give their final and best offer for the home they really wanted. Consequently, they did not win the bidding war for their dream house, even though they could have afforded it. So they ended up buying a home in another close by community. But guess what, to this day, they lament not going all out for the home they really wanted. So the lesson is, “See home you must have…Give best offer if you must!” Certainly that applies to markets like the multiple offer market we were in, but does it apply now? Yes, the only difference is, in today’s market, you probably have some negotiation tools to use. Just don’t go so far to upset the seller so that they would never sell the home to you no matter what you offer! Make your dream home happen while you are the only buyer. If interest rates go down after you purchase, then you can refinance to the lower rate. Call Michael Mitchell at 530-406-2200, 707-259-1117 or 707-337-5970 cell to pre-qualify today!
Yesterday I told you the Federal Reserve had raised short term interest rates, but long term rates (mostly affected by treasury bonds) had remained little changed. Well, they caught up today! In most cases rates went up anywhere from 1/8th to 1/4 of a point. That still keeps them in the low 6’s, but not as comfortable as yesterday. Seems the Fed not only spooked the stock market, but the bond market too. The fed’s stated goal is to reign in inflation, so buckle up everybody…they are dedicated. It probably makes sense to start considering 7 year fixed and 10 year fixed (both amortized over 30 years) to keep payments down. If you have questions about that or want scenarios run, give Michael Mitchell a call at 530-406-2200, 707-259-1117 or 707-337-5970 cell!