We have been witnessing and navigatiing a volatile Yo-Yo Refinance Boom! Its been a pleasure helping folks who have been in those upper 3's and even some 6% ers we've found. Cha-Ching for them! The best way to be prepared is be Pre approved/Approved and ready to pull the trigger when it looks good. This target is moving and you can't pull the trigger on where it WAS. The rates change daily so let us get you set up for when we see that sweet spot we can lock you in. We do this Concierge style. Contact us and let our team do the work for you.
Great information from The Mortgage Reports.com outlining the situation:
4 ways to prepare for the next big drop in refinance rates
Casey Morris The Mortgage Reports contributor
June 3, 2020 - 4 min read
When refi rates fall again, be the first in line
Mortgage rates have hit record lows again and again this spring. But something strange is happening.
In recent weeks, rates for home buyers hit new lows while rates for refinancing stayed relatively high.
That’s largely because lenders are still overwhelmed by the huge volume of refinance applications from early spring.
But lending is starting to open back up. And there’s a good chance refi rates could drop again.
If you haven’t been able to refinance this go-round, you should position yourself to be first in line when next the opportunity comes up.
Here’s how to get ready.
Verify your new rate (Jun 10th, 2020)
1. Apply now, lock later
If you apply for a refinance loan now, you’ll have gotten past the initial hurdle. This will allow you to act that much faster next time rates drop.
You can go through the whole application process, but wait to lock until you get the rate you want. And you can hold off on the appraisal as well.
Then as interest rates go down, you can request to lock and move forward with the loan. But having started the application in advance will put you ahead of everyone else who’s trying to catch the next wave of refinancing.
Having started the application in advance will put you ahead of everyone else who’s trying to catch the next wave of refinancing.
Remember, lender overwhelm is a big reason for the current rate increase and tightened application process. To avoid those issues in the future, you want to get in while lenders have the capacity to process your loan — not when everyone else is just beginning to apply.
Chances are lenders will become overwhelmed again, which could lead to another slowdown, which is why you want to be prepared ahead of time.
Start you refinance application today (Jun 10th, 2020)
2. Pay attention to rate reports
Your goal is to be ahead of the game the next time rates drop, so keep an eye on news reports about rate cuts and mortgage applications. If further drops are forecasted, you may want to move quickly on your loan.
If you’re still not sure whether it’s a good time to lock, talk with your lender. Ask whether they think rates will likely go lower, and walk through the different scenarios with them. What do you gain by locking now? What are the chances you’ll benefit from refinancing later?
>> Related: Mortgage rates today, June 10, 2020
3. Know your limits
While it seems likely that rates will go down again this year, there’s no guarantee that that will be the case. In fact, the opposite could happen, and rates could actually go up.
If you get to a rate that is a substantial improvement over what you’re currently paying, you may want to lock it in to avoid missing out if rates increase.
Your goal is likely to make your mortgage more manageable, so be realistic and prudent as you wait for the next big moment.
>> Related: Is it worth refinancing for 0.5%? Or should I wait for 1% or more?
4. Keep your credit score high and your debt-to-income ratio low
If your credit score isn’t within the good-to-excellent range, see if you can pay down some existing debt while you’re waiting to refinance. Not only will that boost your score, but it will also lower your debt-to-income ratio (DTI).
Lenders want to see good scores with clean credit histories, and they want to know you can make the monthly payment on your loans.
Your DTI could be especially important if you want to take out a cash-out refinance loan. That’s because you’re asking your lender for more money, which means higher monthly payments. The lower your DTI, the less risky you’ll appear on your application.
Avoid opening new loans and credit accounts while you wait to jump on the next drop in interest rates.
But low DTI is a key factor regardless of what type of refinance loan you’re pursuing, so avoid opening new loans and credit accounts while you wait to jump on the next drop in interest rates.
The best thing you can do to prepare for the next rate drop is to stay vigilant. Monitor your credit score and watch for news about a rate decrease, and don’t forget to check in with your lender.
Everything is uncertain right now because of the pandemic, but if you become complacent, you may miss out on an opportunity to save. Staying aware and starting your application early will help you get ahead of the pack.
Verify your refinance eligibility (Jun 10th, 2020)
What happened to refinance rates in 2020
Refinancing has been all the rage in 2020, even before the coronavirus pandemic drove mortgage interest rates to historic lows.
In late 2019, refinances were the highest they’d been in 6.5 years. Tthey represented 57% of all lending for the last quarter of the year, according to mortgage data firm Black Knight.
Then as the coronavirus spread in early 2020, it created market volatility and pushed interest rates even lower, sending homeowners scrambling to refinance.
Unfortunately for many, however, the rush on refinances overwhelmed lenders. To cope, they raised interest rates and tightened their lending criteria, slowing down approvals and leaving some homeowners out of the refinance boom.
Lenders also ran into issues with investors being reluctant to buy mortgages that were at risk of default, or which could be refinanced again soon during another rate drop. The result was that many homeowners missed their window on these low rates — for now.
But the opportunity isn’t necessarily gone. Interest rates could drop again in the coming weeks and months.
As refinance demand slows, lenders will likely start reducing their rates to entice homeowners once again. And if some lenders do it, others (such as the big banks) are likely to follow, creating fresh opportunities for homeowners to save.
If you take the time to get your application ready now, you could be in the position to capture an ultra-low rate before the next big refinance boom hits.
Verify your new rate (Jun 10th, 2020)
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We are opened and pumping out great rate refinancing, cash-out/refinancing, new home prequalifications. VA, FHA, Jumbo, conventional.... You name it! All from the social distances of your homes and computer terminals. E signing and encrypted uploading for documentation. Veteran owned and operated. Hit us up! God bless everyone for a safe and speedy recovery to a better normalcy.
ATTENTION: FIRST TIME-ERS, STEPPING UP-ERS, REFINANCING TO LOWER RATE-ERS HOME LENDEES:
FREE PRO TIPS:
The sustained and growing economy has caused an influx of folks who now are financially in a position to get out of those high rents and build equity in their OWN lives and homes. Ditto for established buyers looking to step up or make that desired move and those families looking to save money grabbing these lower rates by Re-financing. How about higher property values getting you out of that possibly wasted $ on Mortgage Insurance (PMI) especially in those FHA loans. These are many of the reasons we here at Ohmstar love what we do.
IS YOUR CREDIT READY?
You may be ready, but what does your credit score numbers say? The economy was NOT always this good. We have to answer for what already happened to get those even lower rates. A little foresight may help us help you. Check these five tips out:
1. Don’t lie or hide the truth
Most people instinctively try to hide or shy away from bad news. Don’t do this with your lender. It’s basically impossible to hide buying a home with bad credit from lenders forever, and when they find out, they might not lend you money. Honesty is important, and be sure to explain any questionable financial issues that may come up during the underwriting process.
2. Don't mess around when buying a home with bad credit
Continue making on-time payments for all your bills and do not take out any new loans. Keep your credit card utilization at a maximum of 30% of your limit. Don’t open any new lines of credit, either—you don’t want your lender to think you’re ready to take on more debt on top of the loan when you're buying a home with bad credit.
3. Dispute errors
Get a free copy of your credit report and review it. Make sure any negative items are accurate, and if not, dispute them. This can be done online, but you can also inquire by mail. This can turn the process from buying a home with bad credit into buying a home with not-so-bad credit.
4. Wait, if necessary
Whatever negative items that still exist will affect your credit score less the more time passes. The more recent the problem, the more your score will drop. But as long as you don’t accrue new negatives, like continual late payments, your score will go up again. For example, a collection will stay on your report for seven years, but it will weigh much less after five years than after six months.
You have a better shot at buying your home with bad credit the further away you are from the time of the credit reporting incident. If your score is riddled with negatives from several years ago, be prepared to explain what happened and how you corrected it. If you have too many issues from the not-so-distant past, you might be better off waiting. Go for a pre-approval to see if you need to hang back.
5. Show responsibility with a mix of credit
When buying a home bad credit, your report also needs to show that you can handle paying debts. Lenders want to see that you are actively handling a mix of credit, like installment loans and revolving credit. These lines of credit should be at least a year old—the longer the better. Try to anticipate this—don’t open a different line of credit right before buying a house. But if you need to repair credit for a year, adding a different type of credit and handling it properly can slightly boost your score.
We hope you Contact us for an analysis and Prequalification/Approval, but we don't mind waiting to get you what you need instead of putting you into something you may think you want. Lets discuss it and set up a plan...
From our Team to You: Merry Christmas and the Happiest of Holidays. "Believe!" We can help. See you in 2020!
Boom!... CTC means Clear to Close. Obviously interest rate and terms are subjective to individual's situation.
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