March Mortgage Market Report
When reviewing our March Mortgage Market Report, remember mortgage rates begin with you. You’ll need a loan if you don’t have or don’t want to spend the cash to buy a home outright. You could get other loans from other places, for example, borrowing against a 401k or a life insurance plan. But, for most people, a mortgage is the only option.
March Mortgage Market Report: Investing
It’s important to cover a bit about investing in this March Mortgage Market Report. “Investor” is a broad term. If you have any investments that are managed funds (like 401k), and if those funds have a “fixed-income” component, a percentage of that fund may be allocated to bonds that are backed by mortgages. In that sense, even you are part of the “investor” side of the equation. The important part is that there is “money” out there looking for a home where it can generate a return for investors. Most mortgages become investments via the securitization process. A government agency sets specific standards for loans it will insure. For example, a government-sponsored enterprise, like Fannie Mae and Freddie Mac. The agency also provides a framework for mortgage companies to underwrite your loan scenario. If your future mortgage makes it through qualifications, if eligible, becomes part of a pool of similarly qualified mortgages. Mortgages grouped in this way are called Mortgage-backed Securities or MBS.
MBS carries guarantees from one of the agencies mentioned above. These guarantees protect the investor if the mortgage borrower doesn’t make payments for any reason and ensure they’ll receive all the interest and principal they would have otherwise received for as long as the underlying mortgage exists. This brings us to the first core concept of what drives mortgage rates: they tend to move much like US Treasuries of similar durations. What an investor loses in utter cash flow certainty, they gain in a higher rate of return. If that rate of return looks like a good deal compared to Treasuries, demand for MBS increases, and the effective rate of return falls. Vice versa if MBS returns look weak compared to Treasuries.
March Mortgage Market Report: Rates and Terms
Lenders vary somewhat concerning what they can/will offer in terms of rates. A lower rate isn’t necessarily a better deal if there’s a higher risk that something unexpected happens during your transaction. Many mortgage-seekers have had excellent experiences paying a rock bottom rate to a highly efficient operation without getting much one-on-one time with their loan officer. Plenty has had fantastic experiences paying higher rates because it afforded higher customer service. Some companies are just better than others, as they represent a sweet spot that balances the many factors driving the final cost of the loan. It’s equally valid that some loan officers are better than others, even inside the same company. Contact our preferred local lender for our March Mortgage Market Report and resource center.
Mortgage Company Fees
You might get a loan quote from any mortgage company for several reasons. Maybe you get several. During this process, remember that the mortgage company can only control the rates and fees it charges. There are other fees associated with a mortgage. Frustratingly, it’s up to the mortgage company to quote those other fees. Some of them are more careful about underpromising and overdelivering on affordability. Others will attempt to minimize the appearance of 3rd party fees to give the appearance of a more competitive quote. Be mindful, and read the small print! Regarding complex numbers, the ONLY basis for directly comparing one company’s rate to another is the interest rate and the fees charged by the mortgage company. From there, it’s up to you to decide how much value to place on trust, customer service, and other nonmonetary considerations.
Interested in Detailed Real Estate and March Mortgage Market Reports?
If you want to purchase real estate or are interested in knowing how much your home is worth, don’t hesitate to reach out. Contact Jon Wood of Atlantic Bay Mortgage to help you achieve your dream of homeownership and review the March Mortgage Market Report.
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Source: Mortgage News Daily
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