It has been a rough few months in the stock market with the DOW falling from 12,724 (7/21/2011) to below 11,000 (9/9/2011). Fears of credit default both nationally and internationally have moved people away from stocks into other investment vehicles or cash. If there has been any good news for consumers, its been mortgage rates. Freddie Mac recently reported that mortgage rates hits new record lows last week with the 30 year fixed rate average landing at 4.12% with .7 points. Last year at this same time, 30 year rates averaged 4.35% (which was also ridiculously low). The 15 year fixed rate mortgage average also headed lower going from 3.39% to 3.33% with .6 points. The 5 year treasury index ARM average remained unchanged from the previous week at 2.96% with 0.6 points.
OK, so those are the averages. In the mortgage industry, there is a wide gap between “discount lenders” and other “not-so discount lenders”. Using web sites such as Bankrate.com and ForTheBestRate.com allows consumers to compare mortgage rates, closing costs, and fee and point combinations from a number of mortgage companies serving their states.
To give you an idea of the range in pricing and fees, here is an example pulled from Bankrate.com this morning:
30 year fixed rate California refinance mortgages with zero points:
LenderFi.com – 4.099% APR, 4.000% Rate, $1,950 Fees in APR
Amerisave.com – 4.227% APR, 4.125% Rate, $1,995 Fees in APR
Quicken Loans – 4.498% APR, 4.375% Rate, $2,375 Fees in APR
With rates being so low, many mortgage companies have not likely been that aggressive with their pricing. The mortgage industry is a roller coaster and many companies end of having to react quickly to fast moving rate environments. Meaning, rates drop and they have to quickly staff up and when rates move higher they have to quickly trim staff. Many of the companies that we have spoken with are in the hiring stage scrambling to find underwriters to help get loans moving through their pipelines.
If you are a considering refinancing and taking advantage of today’s rates, you may want to get your application submitted, lock your rate for a conservative number of days (ask your mortgage professional), and get your supporting documentation in order. Shaun Hamman, of American Financial Resources, a national mortgage lender based out of New Jersey told us that their retail mortgage division is likely going to have one of their biggest months ever in September. He commented, “It’s been an unbelievable past few months and there are still plenty of people who are jumping at the chance to refinance. We are trying to accommodate everyone we can, as quickly as we can.”