Tyler Frank,
Paramount Mortgage
NMLS ID 942420
Nationwide 30-year fixed mortgage rates have climbed to their highest level of the last five weeks according to last week’s rate survey conducted by Bankrate.com.
This has spurred concern from many home refinancers and potential homebuyers who “worry the low rates won’t last much longer as they try to beat the clock on rising mortgage fees and policy changes on low down payment loans,” reports Polyana da Costa, Bankrate.com.
At a recent major women’s consumer show in St. Louis, MO, veteran mortgage banker Don Menendez, Paramount Mortgage, said, “many of the homeowners I’m talking to who want to refinance and who still have interest rates above 5 percent are quickly realizing that the historic low rates we’ve had over the last several months could be coming to an end.”
“For many people who’ve tried to refinance more than a year ago, and couldn’t, now they are thinking that this may be their last chance to get a great rate,” continued Menendez.
Fellow booth worker Jerry D’Agostino, mortgage banker with Paramount Mortgage added, “It’s not uncommon for some homeowners, especially with larger loans, to inquire about bringing money to the table to pay down the balances of their loans so that they can be eligible to refinance before rates rise.” Homebuyers looking for low down payment options to purchase a home should be aware of upcoming deadlines.
Beginning April 1, Federal Housing Administration insurance premiums will go up again, ranging from 1.30% to 1.35%, raising the monthly cost of taking out an FHA-backed mortgage. And beginning June 3, most borrowers won’t be able to cancel their mortgage insurance policies, while others will have to hold onto it for 11 years.
Demand for FHA loans will normally increase as a fee change date approaches. Many lenders, especially those with expertise in FHA loans, may be busier than usual in the next few weeks. Menendez expects his team of mortgage bankers to receive their share of last-minute applicants.
As the buying season continues to unfold for 2013, homebuyers will be facing a seller’s market according to the National Association of Realtors. The supply of existing homes for sale reached nearly an eight-year low in January which translates into a 4.2-month supply of existing homes for sale. Experts consider a 6-month supply of existing home to be a health inventory.
The national median existing-home price for all housing types was $173,600 in January, up 12.3 percent from January 2012, which is the 11th consecutive month of year-over-year price increases says NAR.
January new home sales soared 15.6% over the December number of 378,000 and that was a 28.9 percent increase compared to January 2012 when sales were at a rate of 339,000. These figures were compiled by the US Census Bureau and department of Housing and Urban Development.
How much time do you have left to get a good rate? Industry observers don’t expect rates to spike overnight, unless the Federal Reserve ends its bond-buying program, known as QE3. But rates have been on the rise even as the Fed spends billions of dollars per month purchasing mortgage and U.S. Treasury bonds.
“Don’t take a chance,” says Menendez, “if you can get a rate under 4 percent on a 30-year fixed, you are doing well.”
About the author: Tyler is Paramount Mortgage Company’s general counsel as well as a licensed mortgage loan originator. Tyler is a 1999 graduate of the University of North Carolina at Chapel Hill where he was a member of the university’s Dean’s List. He received his J.D. from Washington University’s School of Law in 2002 and is a member of the Missouri Bar Association and the Illinois State Bar Association.
Tyler is “big brother” mentor and role model to a young man through the Big Brothers Big Sisters of Eastern Missouri. He is a member of the St. Louis Sports Commission’s Associates Board, the University of North Carolina at Chapel Hill’s Alumni Admissions Committee and Mary Institute and St. Louis Country Day’s Alumni Executive Committee. In 2012, Tyler successfully summited Mt. Kilimanjaro (19,341 ft.) in Tanzania, Africa, and ran his first full marathon.
Tyler can be reached by email at tfrank@paramountmortgage.com or by phone at 314.372.4313.
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