Is Now The Time To Re-Finance Your Mortgage?
What’s going on with the mortgage market, is now the time to Re-Fi my home loan? Why is it so hard for lenders to give me a basic quote right? Should I apply or wait?
All of these questions are abound for homeowners right now. Here is some insight.
Will rates go down?
Is now the right time to Re-Fi in Los Angeles?
How can I lock in the best rate possible?
We have had an extended period of generally low-interest rates and many homeowners started at a low rate or took advantage of lower rates when rates dropped over the past couple of years, but when rates drop to 3% or less, re-financing is always top of mind.
When COVID-19 began it’s rumblings in China, interest rates dropped in the US to spark the economy, unfortunately, it sparked a firestorm of re-fi requests and resulted in a major uptick in rates.
Realtors love to share data and commiserate when things get wonky in the market, resulting in a flurry of video conference calls over the past three weeks, on one of these recently, a lender that I respect, talked about how massive the volume of re-fi requests that occurred in late February / early March was. He remarked that the US mortgage industry as a whole generally writes $2.3 Trillion in mortgages annually, but the recent spike drew in over $1 Trillion in re-finance applications.
This massive wave occurred in a one-week timeframe, overwhelming their processing and funding systems. The market spiked to quell the demand. This is one of the key reasons we say a rapid uptick in mortgage rates in mid-March.
Add the fluctuations of the stock market, Stay at Home orders and we can see why it has been challenging to have lenders quote rates or even accept re-finance applications.
So What Is My Move?
As of writing this article rates for a 30 year fixed rate mortgage is up to 3.75% (from a low on March 2nd of 3.13%). We know that we will see economic challenges once the dust settles from COVID-19 and our current quarantine requirements.
Rates are not low right now, but the word on the street is that they will come back down. We know the Fed will look to spur the economy later in the year, maybe as soon as June. This will most likely be another stimulus package and a drop in the Federal Interest Rate.
My advice to clients is to build a relationship with a lender and be ready to move quickly once the rate drops. Applying now could be beneficial, remember, a lot of people will be operating on a similar strategy. Listed below are the lenders I trust wholeheartedly.
NOTE: calling all of them right now to “what if” them on rates is probably not a strong move as they are flooded with these inquiries. My advice is to reach out to them and make an intro and ask to be put on their email newsletter list. All of them send them out weekly. Build rapport and then ask them if it is wise to apply now and wait to lock the rate or apply in the future.
Derek Teklak
Essex Mortgage
714-745-6747
dteklak@essexmortgage.com
Simon Atik
Guaranteed Rate Affinity
310-880-8414
simon.atik@grarate.com
Hektor Medoza
Option One Lending
626-864-3265
hektor@OptionOneLending.com
Daniel Arias
We Fund LA
323-697-3240
daniel@WeFundLA.net
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Michael Robleto
REALTOR®-Compass Real Estate
213-595-4720
Michael Robleto is a Los Angeles based REALTOR® that specializes in Historic Pre-War residential properties and those with architectural merit. Home buying and home selling is extremely challenging in Los Angeles County. Michael uses his vast knowledge of historic homes, residential construction and modern day marketing and digital technology to predict and solve the many problems that arise in real estate transactions. His client accolades of insight, integrity and hard work support the fact that he is not your average agent.
Michael leverages his personal passion for historic architecture to provide his clients the unknown insight on the pros and cons of older homes. Michael, the son of a contractor, a California native, grew up in an older Bungalow home and has spent 23 years in Southern California admiring the unique architecture of the region. He often writes on homeownership strategy, historic residential architecture and related topics which can be found on Facebook, YouTube, Twitter and Instagram under the common profile name of his blog; BungalowAgent or at www.BunaglowAgent.com/blog.
Michael is a committee member and frequent volunteer for the preservation efforts of Pasadena Heritage, the LA Conservancy as well as a supporter of the Five Acres center for children.