Mortgages Rates are Hopping Up April 6, 2007
Rates are up again from last week. March’s Jobs Report came in much stronger than expected (180,000 new jobs vs. 135,000) and revisions 
to the past two months’ Jobs Report dropped the unemployment rate to matching the lowest level in 6 years at 4.4%! All this good labor news is bad news to mortgage bonds.
The following rates are as of 8:30 a.m. on April 6, 2007 pst. The rates below are based on a 680 mid credit score with a 20% down payment, full documentation and are priced with 1 point. For more information on how I priced the following rates, please read my original Friday Rate post.
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties)
30 Year Fixed: 6.00% (APR 6.135%). Payment per $1000 = $6.00
30 Year Fixed with 10 Year Interest Only: 6.25% (APR 6.261%). Payment per $1000 = $5.21
7/1 ARM: 5.625% (APR 5.757%). Payment per $1000 = $5.76
5/1 ARM: 5.50% (APR 5.631%). Payment per $1000 = $5.68
5/1 ARM with 10 Year Interest Only: 5.625% (APR 6.631%). Payment per $1000 = $4.69
JUMBO (Non-Conforming) Rates
30 Year Fixed: 6.125% (APR 6.268%). Payment per $1000 = $6.08
30 Year Fixed with interest only payments: 6.125% (APR 6.268%). Payment per $1000 = $5.10
5/1 ARM: 6.00% (APR 6.146%). Payment per $1000 = $6.00
5/1 ARM with 10 Year interest only payments: 6.00% (APR 6.146%). Payment per $1000 = $5.00
Mortgage rates aren’t the only thing on the rise…local home prices are up, too.
Check out these related posts:
- Mortgage rates slightly up following a strong Jobs Report
- Mortgage Rates for Friday the 13th
- Mortgage interest rates are going down…but for how long?
Article Tags>> arms | fixed | interest-rates | jobs-report | Mortgage and Lending
- Posted in : Buyer Information, General Real Estate, Mortgage and Lending
- Author : Rhonda Porter
Comments»
Hi Rhonda,
Thanks once again for the weekly mortgage interest rate report. However, I’ve never really understood the relationship mortgage int rates have with other economic indicators & interest rates, such as bond int rates, unemployment rates, etc. such as you mention in this article. Is there a simple explanation you can give me on this?
Thank You!! :o)
Joe
Has anyone in the loan/escrow/mortgage industry seen any noticeable credit tightening in the last month or so?
The quick answer, Joe, is that mortgage interest rates are based on mortgage backed securities/bonds. They are publically traded. They react just as economic indicators impact the stock market. I could do an entire post on economic indicators….
Matthew, YES. (How’s that for a short answer).
How can home prices be up again, this is impossible!! Housing prices are still due for a 50% haircut sometime, any time this century. Watch and learn. I’ve seen alot in my 20 something years on this planet!
Timmy, what area are you from?
Rhonda,
Thanks for the quick answer. However, it would help me to hear a little more detailed info. If you wanted to write such an article, I would certainly appreciate it. One of the things I’m interested in knowing is how mortgage int rates change relative to other economic indicators (e.g. corp bond int rates, employment rates, bank prime int rates, etc.)…is that something you could cover in your article, if you write one?
Thanks!!
Joe, I would be happy to. It won’t be today (and probably not tomorrow)…but I will put together a post for you on what impacts mortgage rates with respect to economic indicators.
Thanks for the request!
Matthew, I just received a rate quote from a subprime lender. The rates that are being quoted for a 690 score would have been for a 600 score just a few months ago (significantly higher).
Matthew, yes. Including the results of the tightening, which is lost revenue for most of those in the entire real estate food chain when transactions fail. Many of my allied real estate pro’s would concur that we severely dislike working for free. It’s even more pronounced when you have payroll, leases, etc..which must be paid regardless of whether transactions close.
OT: It also makes escrow offices really cranky when you work all the way to the very last moment prior to closing and sign clients at 8pm at night, after working an entire day, only to have the clients refuse to sign because the loan program and loan fees were not (anywhere near) what the borrower expected.
Tim, if “the loan program and loan fees were not (anywhere near) what the borrower expected” is happening constantly with a specific LO, I would “fire them”…if I were you.
That’s why I did not want to become a lender… my escrow days! It’s often not fun being the last one holding the bag in a transaction. If any one is upset with the transaction, the signer is the last pinyata, I mean, person they see.
Hopefully with the tightening of the market, licensing of SOME loan originators (those who work for banks and credit unions will be un-licnesed), will help reduce the unhappy borrowers at closing.
“…only to have the clients refuse to sign because the loan program and loan fees were not (anywhere near) what the borrower expected. ”
Not what they expected in relation to what? The figures changed from the good faith estimate? Did they not lock their loan? I also would be very cranky if I got to the closing table and found the loan was not what I’d been told, and seen, in the documents you get way before the closing table.
Adrianna,
I always recommend that all borrowers bring their GFE to the closing table with them. Let your LO know you plan on doing that…you might want to ask your LO if they guarantee their GFEs as well.
I, as I would hope most, LOs review the est. HUD before the borrower sees it. If there is a discrepency, I address it early on. If it is one of my cost that I missed, I eat it. Thankfully, this doesn’t happen often!
When I was in escrow/title, I would just grin when the borrower would pull out their GFE and review the costs from the HUD-1. You can also request a copy of your HUD-1 Settlement in advance from the EO or your LO.
Thanks for the info. I certainly do plan on doing that. I know that our LO contacted escrow to get more accurate numbers as far as that end goes, so I would hope it’s going to be on target. But as far as the loan itself goes, if we’re locked, shouldn’t that part be the same?
You are correct. It SHOULD BE. Technically, being locked is locking in the interest rate only and your lock confirmation should include how many points you may have paid in association with the rate. Ethically, that should include the additional closing costs that correspond to the GFE. Some third party cost are harder to pin down in the early phases of providing a quote. Such as the title and escrow which may vary and is dictated on the p&s agreement. The appriasal may vary. I typically use the highest figure for owner occupied and adjust it downward if we receive findings from u/w calling for a reduced or waived appraisal (happens less these days).
[...] No One is Illegal-Vancouver wrote an interesting post today onHere’s a quick excerptMarch’s Jobs Report came in much stronger than expected (180000 new jobs vs. 135000) and revisions to the past two months’ Jobs Report dropped the unemployment rate to matching the lowest level in 6 years at 4.4%! … [...]
Rhonda,
I’m sorry did I Hare U right? Sorry could not help that one, I did see where mortgage apts were up some last week too. Do you think it is because of the shopping season?
Hi Shane, business (for me) typically picks up this time of year. Plus, there are many people concerned about their ARMs adjusting. Especially if they have subprime mortgages.
BTW, you’re eggstra funny!
Hi Rhonda,
Thanks for writing an article for me some time in the future about what economic indicators impact mortgage rates. I’m not trying to create a lot of extra work for you…it’s just something I’ve never understood that well. I hope doing this isn’t a huge undertaking for you…that’s not intended…I was thinking something in summary fashion…sorta’ a “cheat-sheet”, if you will.
Thanks again for going the extra mile!
Hi Rhonda,
I second Joe’s request for a post on how economic indicators impact mortgage rates! Just whenever you have the chance. But I really think that it would be a good post!
Hi Nickie (I have a Nikki sister),
I promise I will. I just want to do a nice job and it’s 80 plus degrees here…Seattle’s first sign of summer. My brain is focused on calling it a day and hanging out on my deck. Don’t worry, it’s suppose to rain over the next several days!
Hey Rhonda,
No problem! Enjoy your warm weekend! It’s 77 degrees up here in Bellingham and I’m off in 20 minutes! I’ll be enjoying some sun on the deck as well!
while it’s true that the median price is up, that won’t be for long. Why didn’t you mention that Active KC Listings are up 33% YOY while pending sales are DOWN 11% YOY?
Those figures are much more interesting and valid than a temporary spike in median pricing.
From comment number 15
[Ethically, that should include the additional closing costs that correspond to the GFE.]
This is not an ethical issue; it is a WA state law for retail mortgage salespeople who are licensed under the Wa State Mortgage Broker Practices Act.
If the closing costs shown on the final HUD I exceed the total amount shown on the Good Faith Estimate, and the amount inures to the benefit of the mortgage broker or his or her retail mortgage salesperson, the broker is required to redisclose with a new GFE and a new Truth-in-Lending form three days prior to SIGNING documents.
http://apps.leg.wa.gov/RCW/default.aspx?cite=19.146.030
scroll down halfway. It is number (4)
This is so that there are no surprises in Tim’s closing room.
A refinancing homeowner or home buyer can request to see the final HUD I (or estimated final HUD) 1 day prior to closing, once again, so that the consumer is not surprised in the closing room. This is from RESPA, the federal Real Estate Settlement and Procedures Act.
http://www.hud.gov/offices/hsg/sfh/res/resconsu.cfm
scroll all the way down to the bottom for the Consumer Tips.
Synthetik, my apologies…what does YOY mean?
I think overall (beyond the Seattle Times having press for the raise in median prices) having a slow first couple of months and then picking up in March is very normal and predictable.
Tim,
How often does this happen:
“If the closing costs shown on the final HUD I exceed the total amount shown on the Good Faith Estimate, and the amount inures to the benefit of the mortgage broker or his or her retail mortgage salesperson, the broker is required to redisclose with a new GFE and a new Truth-in-Lending form three days prior to SIGNING documents”
Jillayne, how do you (or the state of WA) define: “retail mortgage salespeople” .
A licensed loan originator working under a licensed mortgage broker who is licensed to operate under the state’s Mortgage Broker Practices Act.
So if you work for a bank like, let’s say WaMu, Countrywide, Wells Fargo, Chase, First Horizon or … well I guess I could name some banks…do they apply? (just curious)
Banks are regulated under federal bank charters, or if they are a state bank, under a state bank charter.
Everyone has to follow federal laws governing mortgage lending. State laws for mortgage brokers are more strict than some federal laws, as they should be.
Let’s ask Tim if his problems occur most frequently with:
employees of a bank,
employees of a credit union
loan originators who work for mortgage brokers
or
employees of consumer finance companies.
Refinancing homeowners and homebuyers all have the ability to ask for a copy of the final HUD 1 to review one day prior to coming in to the closing room, no matter which form of institution is originating the loan. See comment #24 for the link to RESPA.
YOY = Year over year…
Thanks, Dustin…. I was guessing it was “yaughing out youd”.
Jillayne,
does a bank LO (like WaMu, Wells Fargo, Countrywide), credit union employee or consumer finance LO have to
“If the closing costs shown on the final HUD I exceed the total amount shown on the Good Faith Estimate, and the amount inures to the benefit of the mortgage broker or his or her retail mortgage salesperson, the broker is required to redisclose with a new GFE and a new Truth-in-Lending form three days prior to SIGNING documents.
http://apps.leg.wa.gov/RCW/default.aspx?cite=19.146.030
scroll down halfway. It is number (4)”
I know they’re regulated under different guidelines…what are they?
When I provide my lock confirmation, I attach my GFE and TIL to it. I know I have to redisclose my GFE if terms or cost change (ex. the original loan is not approved).
[...] The Jobs Report and Mortgage Interest Rates April 9, 2007 Last Friday, I posted that mortgage rates were on the rise due to the strong labor reports. Joe and Nickie both asked excellent questions regarding how economic indicators impact mortgage interest rates. One (just one) of the big daddies is the Jobs Report. Before I get into that deeper, I want to address economic indicators in general. [...]
[...] Friday’s Rates April 13, 2007 Conforming 30 year fixed rates are slightly improved from last week (by the time this is posted, rates may have increased); adjustable rate mortgages and non-conforming are unchanged. This is mainly due to the Producer Price Index Report (PPI) coming in better than expected. The PPI is an economic indicator that measures wholesale inflation. A more important economic indicator to watch is the Consumer Price Index Report (CPI) which will be released on Tuesday. [...]