Mortgage Rates Hit Near Lows Due To Coronavirus Market Selloff

Gustan Cho Associates are mortgage brokers licensed in 48 states
BREAKING NEWS: This Breaking News ARTICLE On Mortgage Rates Hit Near Lows Due To Coronavirus Market Selloff Was PUBLISHED On March 4th, 2020

Mortgage Rates Hit Near Lows

Mortgage Rates Hit Near Lows due to the coronavirus scare:

The Dow Jones Industrial Average dropped more than 3,500 points last week. That was a 13% drop in the Dow.

In this article, we will discuss and cover the breaking news on Mortgage Rates Hit Near Lows Due To Coronavirus Market Selloff.

Mortgage Rates Hit Near Lows After Stock Market Correction And Selloff

Mortgage Rates Hit Near Lows after the stock market correction and selloff.

  • While stock investors are in a panic mode and selling their stocks, mortgage borrowers are benefiting from low mortgage rates
  • Mortgage loan applications were up almost 30% last week
  • Some mortgage companies are reporting an increase of 40% or more in mortgage applications
  • In general, mortgage rates drop when the stock market and 10-year yield on treasuries drop
  • The 2020 housing market forecast was strong
  • Now, the 2020 housing market forecast became much stronger with mortgage rates hit near lows due to the coronavirus scare

Refinance Boom

Mortgage rates peaked at 4.9% back in 2018. This was the par rate for borrowers.

  • Par rates mean a prime borrower with over 740 credit scores, 80% equity, and low-risk borrowers
  • However, most borrowers had much higher rates than the par rate of 4.9%
  • Lenders assess mortgage rates to borrowers depending on risk factors
  • Loan Level Pricing Adjustments (LLPA) are pricing hits on mortgage rates for risk levels
  • For example, a lower credit score borrower will get higher mortgage rates than the par rate due to their risk level. Same with higher debt to income ratio borrowers
  • There are countless of pricing hits
  • Due to LLPAs, many borrowers who closed on their home loans back in 2018 had mortgage rates higher than 5.0%
  • Rates have been dropping most of last year
  • However, mortgage rates have rebounded in the fourth quarter of 2019
  • However, mortgage rates have never tanked as they did in recent weeks

Will Mortgage Rates Head Lower In 2020?

Will Mortgage Rates Head Lower In 2020?

Mortgage Rates Hit Near Lows but will it head lower? This is the million-dollar question. Nobody has a crystal ball and cannot predict the future. Mortgage rates will fluctuate this year. Back in 2013, mortgage rates hit a historic low of 3.25% Many homeowners who were in the refinance process and did not lock their rates lost the opportunity to refinance. Mortgage rates shot up over 4.0% literally overnight with no rebound back to the 3.25% rate. This can easily happen during the stock market volatility and the coronavirus scare.

It is up to the borrower whether they want to refinance today or take a gamble for mortgage rates to drop further. 50% of the experts are betting rates will drop further and the other 50% are claiming mortgage rates are at a bottom. Further rate drops would put rates in uncharted territory. It is highly recommended not to gamble with bottom fishing and pull the trigger in refinancing if you have rates over 5%.

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