Mortgage Rates Volatility And How It Affects Refinancing

This article on Mortgage Rates Volatility And How It Affects Refinancing

Mortgage Rates Volatility Concerns:

Mortgage Rates Volatility is a major concern for homeowners who are planning on refinancing or those who are in the refinance mortgage process.

  • Loan Officers should pay attention to locking mortgage rates before it is too late
  • Mortgage Rates can go up and down
  • However, if rates go up and do not make a correction, the refinance process is pretty much over
  • The time and cost of the appraisal can go down the drain if homeowners who are refinancing already ordered a home appraisal and did not lock their rates

Mortgage-Backed Securities

Mortgage-Backed Securities

Mortgage-backed securities tumbled again on Friday causing turmoil in the mortgage markets.

  • The mortgage-backed securities market tanked by more than 200 basis points which marked the steepest one day drop in recent mortgage back securities history
  • Mortgage Rates have never been so volatile

Mortgage Backed Securities Versus Mortgage Rates Volatility

When mortgage-backed securities drop and with mortgage rates volatility, mortgage rates rise.

  • Friday marked the biggest rise in mortgage rates in a single day
  • We have witnessed the biggest single-day mortgage rates increase in a single day in history
  • Mortgage rates have seen the sharpest increase in history in the past several weeks
  • Even with the holiday week, mortgage-backed securities plummeted 255 basis points
  • The previous two weeks, mortgage-backed securities dropped 314 basis points
  • Mortgage rates have risen 0.5% the past few weeks on almost all mortgage loan programs. 
  • Mortgage rates have risen for the 9th consecutive week

Better Than Expected Employment Report Adds Fuel To The Fire

Friday’s employment report came in better than expected which plummeted mortgage-backed securities.

  • This rallied the stock market and it was great news for the economy but the end result was mortgage rates rising
  • Labor analyst forecast 160,000 new jobs in June but records show that 195,000 jobs were added. 
  • Revisions of past months added an additional 70,000 jobs
  • However, the unemployment rate remained at a constant of 7.6%

Highest Mortgage Rates Volatility Since The Great Recession

Highest Mortgage Rates Volatility Since The Great Recession

The majority of the major banks were quoting mortgage rates just under the 5.0% mark for conventional conforming mortgage loans.

  • FHA mortgage rates were at 4.3875%
  • Just a little over a month ago, FHA mortgage rates for a 30 year fixed rate mortgage was 3.25%

Get Re-Qualified For Mortgage If Pre-Approval Is More Than Several Weeks Old

Mortgage Borrowers who have been pre-approved for a mortgage loan and need to go back to mortgage loan originator and get pre-qualified for a mortgage loan if mortgage rates are substantially higher.

  • Chances are borrowers will no longer be pre-qualified for the mortgage loan amount loan officer first quoted due to the rise in mortgage rates.
  • Higher mortgage rates mean higher monthly payments which affect debt to income ratios.

Borrowers who need to get qualified for a mortgage at today’s volatile mortgage rates, please contact The Gustan Cho Team at 1-262-716-8151 or text us for faster response. Or email us at [email protected] We are available 7 days a week, evenings, weekends, and holidays.

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