Will the Fed lower, or won’t they?

The Federal Reserve (the Fed), led by Jerome Powell will decide tomorrow (4/10/24) whether they will lower interest rates further to help boost the economy. Trouble for the Fed though, is the economy, at least with the numbers they are reporting, seems to be doing quite well for itself! You may not feel that way, and most of the people I have conversations with, don’t feel that way. But, how ya’ gonna fight City Hall“?  Powell, and the rest of the Fed members, have to weigh how much they may spur inflation if they do lower rates.

I am not sure that is the point…the following is how I feel about the situation. While there is a chance that lower rates could spark more inflation and make everything cost more, there is a feeling among many that the current inflation is affecting households in a negative fashion. Meaning, people are noticing it costs way more right now for groceries, gas, clothing…the items we all need on a daily basis…not to mention housing! These people would welcome some relief with lower interest rates. One of the reasons people are paying so much for housing is lack of inventory. Everyone who has a 2,3 4 or even 5% home mortgage, doesn’t want to sell their home and then find another with a higher interest rate! If the Fed begins to cut rates, this could open up the housing market. We will see what tomorrow brings and make our plans for the future based on the outcome.

If you would like to discuss this further or how tomorrow’s fed decision might affect you, call Michael Mitchell at Mitchell Mortgage 530-406-2200, 707-259-1117 or Mobile at 707-337-5970!

Conforming Loan Amounts Rise!

Conforming loan limits rise!

Conforming loan limits rise!

New conforming loan amounts rise and are live today!

Conforming loan amounts rise for 2024 and they went up more than expected! Now, if necessary, a purchaser or refinancer, can borrow up to $766,550 on a single family residence and still remain below Jumbo loan status! 2-units have been raised to $981,500, 3-units $1,186,350 and 4-units are now $1,474,400. In high cost areas, the (Hi balance, or Super conforming) limits can go up to $1,149,825! Make sure you call Mitchell Mortgage to find out if your county is in the upper range or just the standard conforming limit. Although these loans can not be submitted to Fannie Mae and Freddie Mac at this time, lenders are getting a jump on the news and taking loans now that they will keep and then deliver after the first of the year. That means there is no waiting to take advantage of the new conforming loan amounts rise! Call Michael Mitchell at 530-406-2200, 707-259-1117 or 707-337-5970 Cell. We will answer all your questions and get started on that new loan today!

FHA ADU helps borrowers qualify!

Now use 75% of rents on FHA ADU to help income!

FHA ADU (Accessory Dwelling Unit) helps borrowers qualify now by letting them use 75% of rents on the unit. This is not possible with Fannie Mae or Freddie Mac conventional loans nor can you do this with VA. The FHA ADU updated guidelines will help considerably when a client is just over the debt to income ratios allowed to approve a loan. By adding in 75% of the ADU’s income, this will bring the clients debt ratios into guidelines and the loan will be approved! One of the turnoffs to FHA loans is, despite the usually lower interest rate, the payment still is higher than conventional Fannie Mae and Freddie Mac scenarios because the borrower must have Mortgage Insurance. The use of the FHA ADU rent, now will pretty much offset that expense, leaving the client with the lower interest rate advantage at closing. Find out how this might work best for you by calling Michael E. Mitchell at Mitchell Mortgage, 530-406-2200, 707-259-1117 or 707-337-5970 cell.

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2-4 Units LTV reach 95 percent

Help is on the way for 2-4 Unit buyers!

2-4 Units LTV reach 95 percent!  Owner occupied 2-4 Unit residences have been stuck at lower LTV’s (loan to value) for as long as I can remember. That is changing as of November 18th of 2023. At that time, Fannie Mae will accept loans for primary residence 2-4 unit properties at an LTV of 95%! Strictly investment properties will not be eligible for this change.  This is a great opportunity to own a home and and collect rents on the other units.  Recently, most lenders, in guessing what the new conforming loan limits will be, raised the maximum up to $960,300 for 2 units, $1,160,750  for 3 units and $1,442,600 for 4 units!  As soon as November 18th rolls around, you can use those for the new 95% LTV when you purchase a 2-4 unit property and you live in at least one of the units.  This may be the best way to afford your new home in the sense that the other units can pay some of, if not all of your mortgage!  Help is on the way for 2-4 Unit buyers!  Give Michael E. Mitchell a call at 530-406-2200, 707-259-1117 or cell at 707-337-5970 and find out how this new information can help you!

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Lenders get a jump on higher conforming loan limits for 2024

Lenders are not waiting until the new conforming loan limits are official, as one has bumped up the conforming limit on single family residences to $750,000! That means you could borrow $23,800 more right now than you could at any other time this year and still have a conforming loan. That will come in handy to anyone buying right now as conforming rates, compared to hi balance conforming rates are usually about a half of a point lower. That’s a lot of savings over the life of your new loan! When one lender takes the jump, usually, others follow quickly, so you will probably be able to expect this windfall from multiple lenders within a couple of weeks. Fannie Mae and Freddie Mac typically announce the updated conforming loan limits on 11/28 and then take about two weeks to update their system to accept loans using the new maximum. The fact that buyers and refinancers can take advantage now, almost two months before the official change, is going to make some people very happy! Two unit, three unit and four unit properties have also been raised! To get more information on these numbers and to find out how you can take advantage of this change right now, call Michael E. Mitchell at Mitchell Mortgage. 530-406-2200 and 707-337-5970 mobile!

Fed rates same, so what does it mean?

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!single_family_house

Thinking Points

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!Meta Slider - HTML Overlay - couple-house-min

Real Estate Rates are Stagnant

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!

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Pre-Qualifying For A Real Estate Purchase

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 Today

Mortgage interest rates
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.