Interest Rates Up?

If you know me at all, you know the LAST thing I like talking about is interest rates! They are what they are. I never get too excited when they come down, and I try not to get too upset when they go up. I spend a lot of time figuring out what’s driving them and where they may be headed over the next few weeks, months, and years.

Before we go any further, full disclosure:
I AM BIASED! I am naturally an optimist. I almost always believe there is an opportunity somewhere, so feel free to discount anything I say accordingly! LOL!

So what happened Wednesday? The Fed did what everyone expected and raised the Fed Funds Rate another .25%. Initially, the bond market liked it, and mortgage pricing improved earlier in the day.
YAY!

Then Fed Chairman Kevin Warsh spoke, and the Fed’s projections indicated there could very well be another increase or two before the end of the year.
Not so YAY!

The bond market immediately reacted. Treasury yields moved higher, and mortgage pricing worsened. Then we woke up Thursday, and much of that move has reversed.
Why?

OIL! Oil prices came down sharply yesterday. Woo Hoo! Does that mean we are all going to celebrate because gasoline might eventually be a few cents cheaper?
LOL! Not exactly.

The bigger issue is INFLATION.
Today we went back to where we ended on Wednesday, and the 10-year Treasury is poking its head at 5.00%!

Oil affects transportation, manufacturing, shipping, airfare, food production, and almost everything else that eventually shows up in the price of something we buy. Lower energy prices can reduce inflation pressure. Lower inflation pressure can help the long end of the bond market. And THAT is what can ultimately help 30-year mortgage rates. This is why I believe oil is going to be one of the biggest things to watch going forward.
We have talked about the potential impact of Venezuelan oil. The biggest short-term wild card continues to be the war involving Iran and what happens to energy supplies and oil prices.

So where do mortgage rates go from here?
I HAVE NO IDEA!
There. I said it!

And that is actually the reason I don’t spend all day talking about rates.

I can’t do a damn thing about them! Talking about rates doesn’t lower them. Worrying about rates doesn’t lower them. Complaining about rates definitely doesn’t lower them. We have to work with WHAT WE HAVE TODAY.
And today’s market has opportunities.

Let’s say someone takes out a $700,000 mortgage at 7.25%.
If rates eventually fall .75%, their principal and interest payment could drop by roughly $350 per month. If rates fall another .75% later?
We refinance them again for free!
That is exactly why we created our FREE REFI FOR LIFE program.
On qualifying loans over $420,000, we can help someone purchase the home they want today and, when rates improve enough to make sense, refinance them without the normal lender, escrow, or title costs associated with refinancing.*
*Some restrictions apply!

LOCK IN THE HOUSE. DON’T LOCK YOURSELF INTO THE RATE FOREVER. That is the story I am selling.
I am also selling something else that’s often overlooked.
SELECTION.

In 2020 and 2021, rates were incredible, but good luck buying the house you wanted! You had 20 offers. People waived contingencies. Homes sold immediately. Buyers routinely paid above asking price.
Today, buyers have something they didn’t have then:

CHOICES. More homes on the shelf. More negotiating power. More opportunities for seller credits and rate buydowns. And, most importantly, the ability to find a house that better fits their life.
Bigger house – Smaller house – Bigger kitchen – Bigger bathroom – Bigger closet – Better yard – A view – Better school district – Closer to the kids – Farther away from the in-laws…
Whatever it is.
A tremendous number of homeowners are sitting in houses that no longer fit what they really want simply because they don’t want to give up their existing mortgage rate.
I understand that. But there is a difference between having a great mortgage and having the right HOME.
This is an OPPORTUNISTIC real estate market. Our job isn’t to convince someone that 7% is a great rate. Our job is to show them what is POSSIBLE, structure the financing intelligently, protect them on the refinance side, and help them take advantage of opportunities when they appear.

And now for the REALLY important financial news…

FANTASY FOOTBALL WEEK 1!
Steve Hershberg: 150.50 points. WINNER! $25!
Quick Snap Mike: 156.86 points. WINNER! $25!
And the BIG winner of the week… 12 Personnel Mike: 183.76 points. $25+ $25 for most overall points = $50!
Oh yeah… Quick Snap Mike is ME. 12 Personnel Mike is ALSO ME. LOL!
I can’t control interest rates… But Fantasy Football was pretty solid! Have a great weekend, and I am around and ready to work!   

Interest Rates
See above! Not pretty!

 Loan Programs Snapshot

• Government loans (FHA/VA/USDA): in the Mid to high 6s –
• Conventional (≤ $832,750): high 6s and low 7’s
• High-balance: high 6s and low 7’s
• Jumbo: High 6’s and low 7’s
• Bridge Loans  7.75-7.99

Additional options:

• Bank statement loans (10% down+)
• P&L loans (20% down, no bank statements)
• 0% down options (620+ score)
• DSCR loans (15% down)
• Buydowns Available (3/2/1, 2/1, 1/0)
• Private Money loans – Hard Money
• Construction Loans
• 203K loans
• Commercial Loans
• Fix and Flip Loans

Rates subject to change without notice. 

Condo Update
Good news:
Nothing this week!

Bad news:
Acacia Village in Glendale – deferred maintenance – SB 326 Stuff!

We love your Non-Warrantable Condo loans!!
Need help checking a condo? Call me, and we can look it up in real time.
Also:
Full California “naughty list” available here:

https://mikemeena.com/non-warrantable-condos/

If you or your clients, friends, or family need guidance, I'm here.

📞 661-291-2222 (Direct)

📞 661-714-6258 (Cell)

📞 661-260-2970 ext. 2222 (Office)

📧 Mike@AugustaFinancial.com

Sincerely,