Time to cash out refi people. Get the money buckets ready.
Itās breathtaking to see rates fall as they have. There is always a bottom in rates. Knowing the cost of origination, servicing, marketing, etc is about 1.25%. The rate of inflation of 1.5-2.0%. With a 2.75 to 3.0 percent cost to originate and service the odds of zero fee loan rates getting below 3% are slim. āSlimā is not āimpossibleā. and it might still occur. Prepayment velocity is another issue altogether. If Lender A makes a loan on a Wednesday, and Lender B refinances that loan on a Friday, Lender A is out quite a bit of cash for services rendered. (yes, Iāve seen this done recently - a closed loan refinanced within 48 hours!) These loan rates and costs are getting to the point where itās no longer a profitable business model for many funding lenders. Waiting then for a universally available sub 3% no cost mortgage to happen is unwise IMHO.
There is a case to be made for paying points and fees when refinancing now. If you can get a zero fee 3.125% 30 fixed, why not 2.75% for 1.0 point and some fees at closing? As long as the break even between costs and payment is under 5 years, the case to buy the lower rate is very compelling. Remember - Any sub 3% fixed rate mortage you can get is now a loan you will never, ever refinance again.
Why arenāt $1m plus Jumbo Rates at 3.125? They can be at 60% LTV and with a strong banking relationship with the funding lender. Itās the Conforming Fannie/Freddie stuff that is low right now, not the $800k plus rate products.
There are some VA options for disabled Vets that some of my compadres in the Broker world are quoting in the 2.75% 30 fixed rate range with zero points! 2.75%ā¦ 30 year fixedā¦ whoodathunk that was possible?
If a reader of this is more comfortable keeping their loan at their Bank, itās imperative to get a Loan Estimate, an E-mail from a lender, something of substance with rate, program, points, and fees, so that your bank can match the deal on a competitive basis. Iāve seen at my shop a mid 3ās rate in house get matched to a near bottom 3% rate based on the kind of competitive matching documentation you can get. Yes, itās a hassle to do so, but if you want a good rate directly from a bank that you want to keep your loan at, the data is mission critical to get early on.
If there is a plateau in Covid-19 deaths, if there is a vaccine coming soon, if there is any kind to stock market reversal, if Super Tuesday means one candidate remains standing on the Democrats ticket (unlikely, but who knowsā¦) then this rate rally is going to evaporate. Weāre close to the bottom, which also means weāre close to a turning point. Timing this is impossible, so lock if you can live with the price. Youāll sleep better when you do so.
Thanks for reading.
LbJW
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Getting quotes of 3.25% 0 points+0 costs+ 0 appraisal costs.
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Iām guessing from a Broker, not a Bank. The Brokerās funding lenders are likely Quicken Wholesale or United Bankers, the two largest low rate providers today.
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Yep. Likely funding through one of those two companies. Owning, Cash Call, and 90% of the Zillow/Lending Tree companies are funding their Agency (Fannie/Freddie) deals through either Quicken or UB.
If that company gives you a Loan Estimate, Wells, Chase, Citi, BofA, US Bank, etc, all of the biggies will match that pricing. Yes, it takes some doing to get the LE, but if also keeps your loan where you may want it to be.
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LE??
Should be loan estimate
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Yes, Loan Estimate, in essence a commitment.
Anyone do stated income loans?
Have not seen anyone offer lower rates than PNC bank for a jumbo be it 7/1 or 15/ 30 fixed.
Folks,
Any lender recommendations for a cash-out refinance? I got a quote from SOFI at 3.875% no points to take 130k cash-out.
Lowest I see today for 30 year fixed is 3.125. However, it might have some costs+points.
Stated income loans are 12-24 month bank statement mortgage programs. They take your cash flow to determine qualifying income. Rates in the 5x range on average.
Regarding cash out, best to know loan size your asking for. That 3.875 is pretty rough relative to the present market.
Some lenders have 3.0 at or near zero cost ($510k standard conforming) or 3.125 Jumbo conforming. Iām at a big bank and can assure you we are not there right now. If youād like a good referral to someone who will have this kind of conforming pricing with no nonsense service, PM me for contact details.
LbJW
The loan size of the quote I got from SOFI was for 700k. I will pm you
Depends on FICO, loan size, property type. Something best sent in a PM
Thanks for reading
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Weāre getting 3.25% for 30 year Jumbo.
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