March Mortgage Newsletter

Coronavirus
The Coronavirus is the major concern of the day. It has been spreading all over the world. Each day the reports seem to be getting worse. Hopefully it will come under control and there will be a vaccine developed. Johns Hopkins has created a wonderful report that is very helpful to understand the Coronavirus.https://www.medpagetoday.com/infectiousdisease/publichealth/84698″

On March 3rd, the Federal Reserve had an emergency rate cut to Interest rates. There was a full .5% rate cut. To put in in perspective, in the entire year of 2019, there were three rate cuts totaling .75%. So .5% in an emergency situation is a good indication of the concerns of senior economists and policy makers.

Prior to the Coronavirus, forecasts were for interest rates to come down. Typically mortgage lenders forecast the economy and offer interest rates accordingly. We are currently at the lowest mortgage rates in the past 30 years, perhaps the lowest in history.

One of the key indicators of interest rates is the 10 year Treasury yield. We did see the lowest yield in history. Even if the 10 year note goes down, I don’t think interest rates will go down too much. There needs to be a spread between the mortgage rates and the 10 year note. In order for the 15 Year Mortgage rate to come down .125%, the 10 Year Note would have to go to .6% or so and I don’t think that will happen.

Holden Lewis of Nerd Wallet stated, “The Fed is catching up. Mortgages respond to market forces and not to the Fed. The Fed is actually following and not leading when it comes to mortgage rates.

We have an exceptional float down policy. If rates go down a full .25%, your loan is approved and within 10 days of closing, we will try to renegotiate your rate.

As always, our rates our .25% or so less then our competitors. We are one of the longest tenured lenders on the Zillow platform. Be sure to call us and get a quote. Not only are our rates lower, we routinely provide a “no lender fee” closing cost and have world class customer service. I look forward to hearing from you!.

A year ago, many economists predicted a recession in 2020. There has been some pull back and now the consensus seems to be that there will be no recession on 2020. Unemployment is still at all time lows. Consumer confidence (not associated with Coronavirus) seems to be strong. Lets hope for a continued balanced market. Win-win for both buyers and sellers.

Here are our current rates as of March 4th:
30 Year Fixed 3.125%
20 Year Fixed 2.75%
15 Year Fixed 2.500%
5 Year ARM 2.875%

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Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

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