FAQ - Where Are Home Loan Interest Rates Today?
Didier Malagies • March 8, 2022
Everyone wants to know "where the rates are?" But first you need to understand how published rates are actually determined.
Most people believe there is a "rate" for mortgages, and mortgage brokers can get you close to that "rate."
News broadcasters talk about rates going up, going down, and what's happening in the market. All of this makes you think there is a "rate."
The truth is, the "rates" that they talk about on the news and in the papers comes from a survey. Specifically, the Primary Mortgage Market Survey® (PMMS®) that surveys lenders each week on the rates and points for their most popular 30-year fixed-rate, 15-year fixed-rate, 5/1 hybrid amortizing adjustable-rate, and 1-year amortizing adjustable-rate mortgage products.
The "rates" they talk about online, in the paper, and on the news is simply a look back and an average. So, if you want to get an "idea" about what the average rate was across the United States last week. Go to freddiemac.com/pmms. This will tell you "where are home loan interest rates today"–again, an average, last week, for the entire country.
The average might give you a ball park idea, but this will not help you determine your interest rate. The only way to know what you can qualify for is to complete a mortgage application with a mortgage broker and shop your application to multiple lenders. The lenders will offer you terms and that will determine what interest rates are available to you.
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If you have been displaced by a hurricane and are currently renting, we have some good news for you. You may be eligible for an FHA 203H home loan . The FHA 203H home loan is available to renters who were displaced by a natural disaster and are looking to purchase a new home. The FHA 203H home loan is an excellent option for renters who want to become homeowners, and have been displaced by a hurricane or other natural disaster.
The short answer is Yes, you can sell your home or pay off your reverse mortgage. But here's what you need to know...
The answer is yes. If you take out a reverse mortgage, you are required to pay taxes and homeowner's insurance. Reverse mortgages are a way to convert your home equity into cash or a stream of payments. For seniors, they can be a great way to get the money they need without needing to liquidate other assets or sell their home.
Reverse mortgages are an increasingly popular way for seniors to get help with their bills and stay in their homes. But there are some misconceptions about how they affect Social Security and Medicare.
The short answer is yes, Condos, Villas, Townhomes, and Co-ops can qualify for reverse mortgages? But there are some important caveats.
Now is not the best time to refinance with rates going up. However, if you need cash to pay off high-interest adjustable debt that is climbing or if you want to take on a home project because of the increased equity of your home, cash-out refinancing is still a good option. Remember, you can always refinance again, when the rates are lower. If you don't need the money, I suggest waiting until rates come back down. Here's why. I've been in the mortgage industry for over 35 years. I've seen this cycle many times. The Fed is raising rates. Eventually, this will slow down the economy and lead to a recession. The Fed will lower rates to recover from the recession. Once this happens, it will be a good time to refinance, cash-out, pay down debt, and take on home projects. When rates drop, it will be a great opportunity to take advantage of all that equity you've built up. Rate drops are hard to predict for several reasons, but the cycle is consistent. Mortgage rates rise and fall based on a number of factors like: Changes In The Bond Market Affect Mortgage Interest Rates The bond market is a huge part of the mortgage rate equation. And that's because bonds are what most lenders use to fund their mortgages. When interest rates rise in the bond market, lenders have to pay more for their funds, which means they can't afford to offer as many mortgages at a lower rate as they could before. That makes it more expensive for borrowers to get a loan. Changes In The Secured Overnight Finance Rate Another factor that can affect mortgage rates is the Secured Overnight Finance Rate (SOFR). It's the rate banks charge each other overnight for short-term loans. The Federal Reserve sets this rate every morning and adjusts it throughout the day based on how well banks are doing financially. When SOFR rises or falls, so do other rates like LIBOR and T-bill yields — all of which impact mortgage rates. The Constant Maturity Treasury Rate Affects Rates This is another important factor that can affect your mortgage rate: The Constant Maturity Treasury Rate (CMT) is a benchmark used by lenders to determine how much interest they'll pay on bonds they buy from investors — such as those issued by Fannie Mae and Freddie Mac. When CMT rises or falls, so does your mortgage rate. The Health Of The Economy Affects Rates When the economy is strong and growing, it's likely that mortgage rates will decrease as well. This is because lenders are more willing to lend money when they're confident that they'll be repaid. In addition, homebuyers tend to have more job security when jobs are plentiful and salaries increase, so their ability to repay their loans is better than if they were unemployed or underemployed. The Health Of The Economy Affects Mortgage Rates When the economy is strong and growing, it's likely that mortgage rates will decrease as well. This is because lenders are more willing to lend money when they're confident that they'll be repaid. In addition, homebuyers tend to have more job security when jobs are plentiful and salaries increase, so their ability to repay their loans is better than if they were unemployed or underemployed. Inflation Affects Mortgage Rates Inflation is another factor that affects mortgage rates. Higher inflation leads to higher interest rates because lenders know that they will be paid back with less buying power than they lent if inflation continues at its current pace. The term structure of interest rates is another factor that affects mortgage rates. This refers to the difference between short-term interest rates such as three-month Treasury bills and long-term ones such as 30-year mortgages. The yield curve refers specifically to this spread between short-term and long-term yields on government bonds or home loans. When investors want higher returns from longer maturities, they usually require a higher yield on those investments. When all this will happen is hard to predict for several reasons, but the cycle is consistent. I'm Didier at DDA mortgage. I always want to give you options, so you can get the best loan with the best terms to fit your situation. If you have any questions about refinancing your home, call DDA Mortgage at (727) 784-5555 , or use the form below to send us your questions.
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During the mortgage process, several disclosure documents are provided to help you understand the terms of the loan, your rights, and the costs involved. These disclosures are required by law and are designed to promote transparency and protect you as a borrower. Here’s a breakdown of the key disclosures you'll receive: 1. Loan Estimate (LE) When: Within 3 business days of submitting a loan application. Purpose: Provides a summary of the loan terms, estimated interest rate, monthly payment, closing costs, and other fees. Key sections: Loan terms (rate, type, prepayment penalty, balloon payment) Projected payments (principal, interest, taxes, insurance) Costs at closing (origination charges, services you can/cannot shop for) Why it matters: Lets you compare offers from multiple lenders. 2. Closing Disclosure (CD) When: At least 3 business days before closing. Purpose: Provides final details of the mortgage loan, including actual costs. Key sections: Final loan terms (rate, payments, closing costs) Cash to close (how much you need to bring to closing) A detailed breakdown of costs and payments over time Why it matters: Helps you confirm everything is accurate before you close. 3. Mortgage Servicing Disclosure Statement When: Within 3 business days of application. Purpose: Explains whether your loan might be sold or transferred to another company for servicing. Why it matters: Tells you who will manage your payments and account. 4. Affiliated Business Arrangement (AfBA) Disclosure When: At the time of referral to an affiliated business (e.g., title company). Purpose: Discloses any relationships between the lender and other service providers and explains you’re not required to use them. Why it matters: Ensures you know if there’s a potential conflict of interest. 5. Home Loan Toolkit (for purchase loans) When: Within 3 business days of application. Purpose: A consumer-friendly booklet from the CFPB that explains the mortgage process, costs, and how to shop for a loan. Why it matters: Helps first-time buyers understand the steps and choices. 6. Right to Receive a Copy of Appraisal When: Within 3 business days of application. Purpose: Notifies you that you can get a copy of the appraisal at no additional cost. Why it matters: Gives you insight into the value of the home you’re buying or refinancing. 7. Initial Escrow Disclosure When: At or within 45 days of closing. Purpose: Details amounts to be collected in escrow for taxes and insurance. Why it matters: Shows how your monthly mortgage payment is allocated. 8. Notice of Right to Rescind (for refinances only) When: At closing (for primary residence refinances). Purpose: Gives you 3 business days to cancel the refinance loan. Why it matters: Protects you from making a rushed decision. tune in and learn at https://www.ddamortgage.com/blog Didier Malagies nmls#212566 dda mortgage nmls#324329
Buying a new home while keeping your current one can be a smart investment strategy—but it does come with financial challenges, especially when it comes to managing debt. Here are ways you can offset or manage the debt to make this dual-home scenario work: 🔑 1. Rent Out Your Current Home Offset: Use rental income to cover the mortgage on your existing home. Pros: Helps cover the mortgage or even generate cash flow. Note: Lenders often count a portion of projected rental income toward your debt-to-income (DTI) ratio. 💰 2. Use Equity from Your Current Home Offset: Take out a cash-out refinance, HELOC, or home equity loan to fund the down payment or reduce new home debt. Pro: Lower the mortgage balance on the new home or avoid PMI. Con: Increases debt on the existing property and monthly obligations. 📉 3. Refinance to Lower Monthly Payments Offset: Refinance either or both homes to reduce interest rates and monthly payments. Goal: Free up cash to manage both mortgages more easily. 💼 4. Increase Your Income or Reduce Expenses Offset: Boost your DTI ratio eligibility or free up monthly cash. Ways to Increase Income: Side gig, bonuses, rental income, etc. Ways to Cut Costs: Pay down other debts, reduce discretionary spending. 🏘️ 5. House Hack Offset: Live in part of one home (e.g., basement, ADU) and rent the other part out. Useful If: You’re open to creative living arrangements to reduce out-of-pocket costs. 🧾 6. Tax Deductions Offset: If one home is rented, you can deduct expenses like mortgage interest, taxes, repairs, and depreciation. Talk to a CPA to maximize tax benefits. 📊 7. Consider a Bridge Loan (Temporary Fix) Offset: Use a bridge loan to cover the gap between buying a new home and selling (or refinancing) the old one later. Note: Short-term, higher-interest debt—use with a clear exit strategy. Example Scenario: You keep your current home and rent it out for $2,000/month. Your mortgage on that property is $1,500/month. The $500/month profit helps cover your new home's mortgage, easing your debt load and possibly helping with mortgage approval. tune in and learn at https://www.ddamortgage.com/blog Didier Malagies nmls#212566 dda mortgage nmls#324329
A Specific Power of Attorney (POA) for a mortgage closing is a legal document that allows one person (the principal) to authorize another person (the agent or attorney-in-fact) to act on their behalf only for the purpose of completing a mortgage transaction—typically when the principal cannot be physically present at the closing. Key Points of How It Works: ✅ Purpose-Specific Authorization The document limits the agent’s authority strictly to the mortgage transaction, such as signing loan documents, the note, deed of trust, and other closing forms. It does not grant broad financial powers—only what’s specifically listed. ✅ Common Uses When the borrower is: Out of the country or state In the military Hospitalized or otherwise unavailable on closing day ✅ Lender and Title Company Approval Required The lender must approve the POA in advance. Some lenders are strict and may require the POA to be: Dated close to the closing date Notarized and possibly recorded The title company must also approve the document to ensure it's valid and complies with local regulations. ✅ Execution Requirements It must: Clearly describe the property address State the exact powers being granted (e.g., “to execute all documents required to close on the mortgage loan for [property address]”) Be notarized, and in some states, also witnessed Sometimes be recorded with the county clerk if it’s used to sign a deed or deed of trust ✅ Expiration Some are written to expire after a short period (e.g., 30 or 60 days), or immediately after closing. ✅ Revocation The principal can revoke it at any time before the closing by notifying the agent and any third parties relying on it (like the lender or title company) in writing. Example Scenario Suppose Jane is buying a home but will be overseas on the closing date. She signs a Specific POA authorizing her sister to sign all documents necessary to complete the mortgage transaction for the home at 123 Main St. The lender and title company review and approve the POA ahead of time. On the day of closing, Jane's sister signs the documents on her behalf, using the POA. tune in and learn at https://www.ddamortgage.com/blog Didier Malagies nmls#212566 dda mortgage nmls#324329
