April holds no shortage of market-moving news.
Mortgage rate shoppers should prepare for a volatile month, but interest rates could actually fall.
Brexit¬†proceedings¬†could spark a flight to safe assets like U.S. mortgage bonds. That could drive down rates.
Additionally, Donald Trump's economic plans are proving tough to push through. These proposals first sparked rising mortgage rates after the election, but some of that damage could be reversed this month.
What's certain, though, is that mortgage rates are still historically low, hovering near 4%.
Seeing that a 6.5% rate was considered "good" about a decade ago, today's home finance shoppers have something to celebrate, no matter what happens this month.Click to see today's rates (Apr 24th, 2017)
The average conventional¬†30-year fixed rate mortgage started April at 4.14%, according to Freddie Mac's Primary Mortgage Market Survey (PMMS).
The 15-year was clocked at 3.39%, and the 5-year adjustable rate mortgage -- which will become more popular as rates rise -- dropped to 3.18%.
Rates haven't moved much since January.
Starting the year at 4.20%, the thirty-year fixed mortgage stood just six basis points (0.06%) lower to start April.
It's an advantageous time to be a mortgage rate shopper.
Though rates are up since the election -- reacting to the president's proposed policy shifts¬†-- they are in a remarkable holding pattern.
The current "wait and see" mode is making shopping for rates easier.
In a steady market, you shop for a home purchase mortgage or refinance, but maybe you aren't ready to move forward.
You wait a day or two, and that rate is still available.
Rising rates, though, can price you out of the home you really wanted -- or put you "out of the money" for a refinance.
Luckily, there's more than "one rate" in the mortgage marketplace.
Each Thursday, Freddie Mac publishes its national average rate. But the interest rate is a blend derived from a survey of more than 100 lenders.
Rates for these "alternative" programs are even lower than conventional ones.
All of this makes it¬†easier for today's refinancing homeowners to¬†qualify for streamlined loans such as the¬†FHA¬†Streamline Refinance,¬†the VA Streamline Refinance, and the USDA Streamline Refinance.
Streamlined refinance loans can close in as few as 30 days because of reduced paperwork requirements and no appraisal in most cases. These refinances are simpler for banks to underwrite and approve.Click to see today's rates (Apr 24th, 2017)
Today's mortgage rates are hovering in the low 4s, and many mortgage rates predictions¬†have them unchanged-to-higher through 2017.
It¬†should be noted, though, that although mortgage rates are still historically low, they may not stay that way for long. Mortgage rates change quickly with the economy, and with shifts in market sentiment.
Mortgage-backed securities (MBS) -- the Wall Street asset upon which mortgage rates are "made" -- have been¬†waiting for a reason to move one way or another. This has rates on shaky ground.
MBS pricing is currently responding to influences on the economy, including the Federal Reserve's monetary policy, the jobs market, and forecasts for the new administration's stance on economic issues.
The biggest market mover this month, though, could be¬†Brexit.
Nine months after Britain voted to leave the European Union (EU), exit proceedings have finally begun. That could be a good sign for mortgage rates.
In July 2016, mortgage rates plummetted to all-time lows in Brexit's aftermath. No country had ever left the EU. Investors had no roadmap for the move's possible outcomes.
Economic uncertainly¬†breeds "flight-to-safety" investing. The bonds that back mortgages are considered one of the safest in the world. So, individual and corporate investors worldwide piled into them, driving down rates.
Brexit is fully priced into today's rates. But the unexpected should be, well, expected.
Britain and the EU must come to an agreement by April 29 on how the country will leave the economic bloc. The agreement is sure to be one of the most wrangled-over in history.
It's akin to, say, Texas leaving the United States.
Suddenly, Britain will have to think about everything from new tariffs to aviation rules to¬†currency trading. As one example posited by CNN, the country might suddenly have to pay tariffs on car parts imported into the country, then incur extra costs selling those cars back into the EU.
Without a Britain-friendly deal, markets could decide that Brexit could cripple Britain's economy. That could renew interest in U.S. mortgage-backed securities, driving down rates.
The European Central Bank (ECB), Europe's version of the U.S. Federal Reserve,¬†held its rates low in March even as the Fed hiked its benchmark rate. The ECB cited¬†uncertainty about the effects of Brexit in Europe.
All signs point to a wild ride for U.S. mortgage rates as the Brexit drama develops.Click to see today's rates (Apr 24th, 2017)
Not to be outdone abroad, the U.S. will produce its own market-moving news in April.
Last month, Donald Trump introduced a health care bill that was to replace the Affordable Care Act, a.k.a. Obamacare.
The bill was pulled before a vote could take place in the House of Representatives. It failed to garner enough support, even from conservatives.
Markets took this as a harbinger of future bills. If the health care overhaul didn't make it, would economic stimulus plans?
Remember that the economic policies on which Trump campaigned caused the post-election mortgage rate jump in the first place. Tax cuts and increased government spending were supposed to goose the economy and kick inflation into high gear.
A hot economy and rising inflation are bad for mortgage rates.
But proposed plans must make it through the House and the Senate before becoming law.
Without widespread support, Trump's proposals may never work their way into the economy. The post-election mortgage rate jump could turn out to be¬†severely overblown.
For example, Trump's next effort is overhauling the U.S. tax code. But after the health care incident, support hasn't materialized.
Tax cuts could increase consumer spending and push inflation higher, which would hurt mortgage rates. But if the markets perceive the new tax code dead-on-arrival, mortgage rates could fall in response.Click to see today's rates (Apr 24th, 2017)
The Federal Reserve will meet two more times by the midpoint of 2017. Each meeting contains a chance of another rate hike.
But don't expect a move during the May 2-3 meeting. Currently, there is only a 7% chance of that. One point of interest, though, is that the chance of a June rate hike crested the 50% mark recently.
By the time the Fed meets, though, a hike (or no-hike) decision is all but a foregone conclusion. That's because members of the Federal Reserve drop hints within various speeches leading up to the meeting itself.
This is meant to help investors gradually digest the Fed's intentions. This strategy waylays huge market swings that would accompany an unexpected move.
As a mortgage rate shopper, then, it pays to know when members of the Fed are speaking. The following is a list of those engagements in April.
Often, mortgage rates will bounce -- either higher or lower -- based on Fed member rhetoric. It could be wise to lock in a rate before this string of speeches.
Mortgage programs today come with low rates in the 4s.
But some mortgage programs come with even lower rates than that.
Ellie Mae, a mortgage software firm which processes 3.7 million applications per year, gathers data on loans¬†run through its system monthly. Its February Origination Insight Report was telling.
Government-backed programs, falsely perceived to have worse terms, actually carried the best mortgage rates.
The following average rates were reported by¬†Ellie Mae.
You might notice that these rates differ from Freddie Mac's average rates, and you would be correct.
That's because Freddie Mac rates are based on conventional loan quotes for "prime" borrowers only. Ellie Mae's rates, though, report averages from real people -- a mixed bag of applicants. Some have great credit, other carry lower FICO scores.
Plus, Ellie Mae formulates averages for more than conventional loans. FHA and VA loans come with different rates altogether.
Each loan type has its place in the market. Fannie Mae and Freddie Mac -- purveyors of conventional loans -- have rolled out new programs for a wider array of buyers. A newer option donned HomeReady‚ĄĘ requires just 3% down and is available to those with modest incomes.
Fannie Mae and Freddie Mac -- purveyors of conventional loans -- typically cater to applicants with higher credit and large down payments.
Still, both have rolled out new programs for a wider array of buyers. A newer option donned HomeReady‚ĄĘ requires just 3% down and is available to those with modest incomes.
The government-backed VA home loan is even easier to qualify for. It comes with lenient credit requirements and is available to home buyers who have served in the U.S. military. There is no down payment necessary, and no monthly mortgage insurance charged.
FHA loans are extremely popular, used by about 40% of first-time home buyers in their 20s and 30s. Flexible lending requirements allow new graduates to obtain an approval just after starting their careers.
A loan program not covered by Ellie Mae's report is the USDA home loan, otherwise known as the Rural Development (RD) Guaranteed Housing Loan or "Section 502" loan.
It supports homeownership in less dense areas in which incomes often lag those within cities. There's no downpayment required, and minimum credit scores are low.
USDA mortgage rates are about as low as VA ones, making them one of the most affordable home buying options on the market.
For rural and suburban home buyers, there are few better options than the USDA loan.
Mortgage rates for these programs are still¬†low, and could go lower in 2017.Click to see today's rates (Apr 24th, 2017)
The next four weeks hold no shortage of market-moving news. Notably, watch for¬†the developments in Britain's exit from the EU.
April could be a¬†volatile month for mortgage rates.¬†Lock in now to avoid potentially negative mortgage rate fluctuations this month.
Mortgage rates are currently just above 4 percent. Home buyers have excellent purchasing power at today's rates; and refinancing households can¬†save more cash¬†with a refinance.
Get today's live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.Click to see today's rates (Apr 24th, 2017)
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2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)