February 2nd, 2023 10:49 AM by Jim Merrill
2/2/2023
The two-day FED meeting concluded yesterday. The Funds Rate was increased by .25%, but mortgage interest rates DROPPED by .25% overnight. Please remember the Federal Funds Rate will impact consumer loans like HELOC’s, and car loans far more dramatically than mortgage rates. Once again lenders over hedged to be safe in the event the FED increased greater than .25%, thus the reduction in rates. Mortgage rates are the lowest they have been in over 6 months.
Purchase season is in full swing, and sellers are once again offering incentives to buyers in the form of price reductions or closing cost credits. New products have hit the market making it more attractive to accept a closing cost credit in lieu of a price reduction.
3/1, 2/1 and 1/1 buydowns are available to temporarily drop the initial interest rate on the buyer’s mortgage by up to 3% below the current market rate. It is now possible for a buyer to have a 3-point reduction in their start rate and no closing costs on a purchase loan depending on the amount of the seller credit. Imagine a sub 3% start rate! I can work up a detailed analysis to illustrate if a sales reduction is best or a closing cost credit is best prior to contract finalization so please call for details.
One-time close construction loans are on the horizon. Stayed tuned as I roll out new products.
My job is to find you the best program at the cheapest rate and cost while professionally managing all details making this the easiest and most affordable mortgage transaction you ever closed. I am always available to my clients via email and available during normal business hours via my office phone line. My website is available 24/7. Rest assured if I receive a 911 email from you concerning a contract over the weekend you will receive a call back within the hour.
I hope everyone has a wonderful February. Thank you as always for the continued support and business.