MortgageStraightTalk.com

THE WEEK IN REVIEW

8/11-8/17

Last Friday

U.S. producer price index (PPI) climbed 0.8% in the 12 months leading to July, up from a 0.2% rise in the previous month, as costs of services increased. Economists had expected a 0.7% gain.


Monday

Financial markets see more than a 90% chance the central bank will agree to pause rate hikes next month.

The ruble hit a 17-month low against the dollar Monday, highlighting the growing squeeze on Russia’s economy from Western sanctions and a slump in export revenues. The Russian currency has lost nearly 40% of its value this year. A ruble is now worth about one U.S. penny.

Tuesday

Spending at US retailers rose in July at a much faster pace than in the prior month. It was also the fourth straight month that retail sales increased.

Wednesday

Housing starts, a measure of new-home construction, climbed 3.9% from June to a seasonally adjusted annual rate of 1.452 million in the month, beating market expectations of 1.448 million. Low inventory in the existing home market continued to boost interest in new homes; the number of units started was up 5.9% from July 2022.

Thursday

US mortgage rates surged this week, rising to their highest level in 21 years. The 30-year fixed-rate mortgage averaged 7.09% in the week ending August 17, up from 6.96% the week before. A year ago, the 30-year fixed-rate was 5.13%.


THIS WEEK’S FEATURED LOAN PROGRAM: 15-YR. TERMS

15-year loans are the terms with the lowest rates. Compared to a 30-yr. loan, a 15-yr. has significantly lower rates, pays off in half the time or less and saves tens and in some cases hundreds of thousands in interest.


- Purchase, Rate/Term refinances
- Eligible properties: primary, 2nd homes, investment (only
primary residences for FHAs & VAs)

- 620 minimum FICO score

- Conforming, Conforming High Balance and Jumbo loan
amounts available. Like a conventional loan in every other
regard

- Conforming 15-yr. Fixed @ 6.125%
- Conforming 15-yr. Fixed High Balance (HB) 6.375%
- Refi Now & Refi Plus 15-yr. fixed 6.250%
- Conforming 15-yr. Fixed FHA @ 5.990%
- Conforming 15-yr. Fixed FHA HB @ 5.990%
- Conforming 15-yr. Fixed VA @ 5.990%
- Conforming 15-yr. Fixed VA HB @ 5.990%
- HOME READY/HOME POSSIBLE 15- yr. fixed @ 6.125%
- Jumbo 15-yr. Fixed @ 7.250%

ROD HAASE

"I SELL MONEY AND SERVICE"

cell: 760-717-8584
office: 760-726-4600
fax: 760-730-5692

[email protected]
www.mortgageStraightTalk.com

Cypress Mortgage
2131 Palomar Airport Road
Suite 229
Carlsbad CA 92011

DRE Lic. 0069 3227
NMLS. 336541

Splash Page Welcome to the home page of Mortgage Straight Talk.com

Ask Morty

Q. Would you elaborate on the reserve requirements?

A. The reserve requirement for homebuyers is usually two months of PITI (Principal, Interest, Taxes and Insurance). But, as guidelines have tightened, lenders are now asking for greater reserves even with owner occupied properties. Mortgage reserves of 6 months of PITI are common. For less than full doc loans like self-employed borrowers and stated income loans, 6 to 9-months is not uncommon. A number of lenders require as much as 12 months of reserves for non-QM borrowers. For investment property, the reserve requirement is typically between six to twelve months.

Recipients of the survey are invited to any real estate or financing questions. The answer will be published the following Friday for the benefit of all, unless otherwise requested. Questions may be forwarded via mail phone or fax. Due to the high incidence of spam, if you email me a question it needs to be identified as a “real estate question” on the subject line of the email. Morty’s email address is [email protected]

THIS WEEK’S ERRANT OBSERVATION:

I’m interested in nothing, with the right story
I can make almost anything from it.

THE WEEK IN REVIEW
7/28-8/4

Last Friday

• US consumers have been feeling a whole lot better this summer as inflation has continued to slow. Consumer sentiment tracked by the University of Michigan rose 11% in July from the prior month, Americans’ expectations for inflation rates in the year ahead inched up to a 3.4% rate, “well below the high point of 5.4% from April 2022 but above the 2.3%-3.0% range seen in the two years prior to the pandemic.

• The Federal Reserve’s favorite inflation measure—the Personal Consumption Expenditures price index—rose 3% in June, easing for the second-consecutive month and stepping back from May’s 3.8% increase.

Monday

• Stocks edged higher, Monday, as the NASDAQ notched its 5th month of gains.

Tuesday

• The unemployment rate for June sat at 3.6 percent, a dip from 3.7 percent in May but higher than the 3.4 percent recorded in January and April, the lowest jobless rate since 1969. As the economy added 209,000 jobs in June, it marked the 30th consecutive month of gains in U.S. payrolls.

Wednesday

• Fitch Ratings pointed to the nation’s mountain of debt as the reason for its controversial decision to downgrade the US credit rating from AAA to AA+. Fitch expressed concern about large and growing fiscal deficits which currently constitutes 113% of GDP and the mounting cost to finance US debt as interest rates rise.

• Global stock markets fell Wednesday after ratings agency Fitch downgraded its US credit rating, citing “a steady deterioration in standards of governance” and the American government’s growing debt burden.

Thursday

• US mortgage rates worsened this week, climbing closer to 7%. The move follows last week’s rate hike from the Federal Reserve, and the downgrade this week by Fitch Ratings agency of US sovereign debt, and of Freddie Mac and Fannie Mae. The 30-year fixed-rate mortgage averaged 6.90% in the week ending on August 3, up from 6.81% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 4.99%, the lowest rates have been in the last 12 months.

IMPACT ON MORTGAGE RATES

Mortgage rates were hurt by the Fed’s ¼ point hike to Fed Funds rate last week, but this week’s bump courtesy of Fitch, the credit rating service, which downgraded the U.S. credit rating from AAA to AA+ which had an outsized impact on wholesale rates this week. Conforming rates for both fixed rate programs and ARMs worsened by 3/8ths of a percent. High balance programs were similarly affected by 0.25%. Jumbos became only an 1/8th less attractive. Governments, like FHAS and VAs, followed the path of conforming conventional programs.

THIS WEEK’S FEATURED LOAN PROGRAM: VA LOANS

VA Loans (100% financing for Veterans and service personnel).
• Purchases
• Refis or IRRLs are Interest Rate Reductions Refinance Loans
• Owner occupied only (up to 4 units), PUDs and condos are
eligible
• No credit score required
• Loan amounts up to $1,089,000 in San Diego County
• 100% LTV for rate/term or cash-out refinance
• Max DTIs are 50%, occasional exceptions to 55%
• Seller concessions up to 6%
• Assumable
• No monthly mortgage insurance premium
• No reserve requirement for 1 unit
• Impounds are required
• 100% Gift funds allowed
• Seller can pay off debt for borrower
• Citizenship is not required

PURCHASES

ARMs
5/1 ARM @ 5.625%
5/1 H.B. ARM @ 6.125%

FIXEDs
15 yr. fixed @ 5.750%
15-yr. fixed H.B. @ 5.750%
30 yr. fixed @ 6.125%
30 yr. fixed H.B. @ 6.250%

IRRLs

ARMs
5/1 ARM @ 6.000%
5/1 H.B. ARM @ 6.125% + .281

FIXEDs
15 yr. fixed @ 5.750%
15-yr. fixed H.B. @ 5.750%
30 yr. fixed @ 6.125%
30 yr. fixed H.B. @ 6.250%

ROD HAASE

"I SELL MONEY AND SERVICE"

cell: 760-717-8584
office: 760-726-4600
fax: 760-730-5692

[email protected]
www.mortgageStraightTalk.com

Cypress Mortgage
2131 Palomar Airport Road, suite 229
Carlsbad, CA 92011

DRE LIC 0069 3227 NMLS 336541

Splash Page Welcome to the home page of Mortgage Straight Talk.com

SURVEY OF THE LOWEST MORTGAGE RATES
AMONG 40 LENDERS AS OF 8/4/2023

CONFORMING 30 YR. FIXED 6.500%

CONFORMING 15 YR. FIXED 5.875%*

CONFORMING 7/6 ARM 6.875%*

REFI NOW/REFI POSSIBLE 6.500%*

HIGH BALANCE CONF. 30 YR. FIXED 6.625%

HIGH BALANCE CONF. 15 YR. FIXED 5.990%*

JUMBO 30 YR. FIXED 6.875%*

JUMBO 5/6 ARM 7.250%*

FHA & VA 30 YR. CONF. FIXED 6.125% & 6.125%

FHA & VA 15 YR. CONF. FIXED 5.750%* & 5.750%*

FHA & VA 30YR. HIGH BAL. CONF. FIXED 6.250% & 6.250%

HOME READY/ HOME POSSIBLE 30-YR. FIXED 6.250%*/6.500%

INTEREST ONLY 5/6 ARM 7.625%*

Interest Rates: 7/28/23

Conforming 30-yr. fixed 6.125%

Conforming 15-yr. fixed 5.625%

Conforming 7/6 ARM 6.500%*

Refi Now/Refi Possible 6.125%

High Balance Conforming 30-yr. fixed 6.375%*

High Balance Conforming 15-yr. fixed 5.750%*

Jumbo 30-yr. fixed 6.750%*

Jumbo 5/6 ARM 7.500%*

FHA/VA Conforming-30 yr. fixed 5.750%* / 5.750%

FHA/VA Conf.-15 yr. fixed 5.625%* / 5.625%*

FHA/VA High Balance 30-yr. fixed 5.875%* / 5.875%*

HOME READY/HOME POSSIBLE 30-yr. FX 6.000%* / 6.125%*

INTEREST ONLY 5/6 ARM 7.625%*

FED FUNDS RATE (INCREASED BY .25% ON 7/26/23) 5.000%-5.250%

1-MONTH SOFR 5.3016%

1-YEAR SOFR 5.3925%