Determining Loans and Rates

When seeking a loan or looking to refinance an existing loan, the most important thing most people need to contemplate is acquiring the best rate for their situation. The first step is finding a lender, and it's helpful to hire a broker to shop for the optimal rate among lenders to suit each borrower’s qualifications - credit score, income, ability to repay, and the terms being sought.  The lenders themselves are concerned with selling the loan to another company on the secondary market, thus enabling them to continue funding loans for other clients.  The rates offered are then based on those two sets of parameters. 

The next stage is to keep an eye on rate patterns.  It might be difficult at times since lenders base their risk level on what is occurring locally and globally.  The acquisition of US assets, such as the 10-year bond, or US debt, is motivated by risk.  Watching the 10-year bond and tapering (the process through which the government progressively reduces its purchases of these bonds and mortgage-backed securities) are more reliable ways to monitor rates.  Stock calculators can compute the 10-year bond, which has steadily climbed a point from the inception of Covid, to assist in tracking its growth and determining which direction it is moving.  Paying attention to these trends can pinpoint the most advantageous time to apply for that home loan.  Jeff's guests this week include:

- Darren Woodworth of Malibu Funding in Northern California discusses the softening seller's market, with multiple offers still being made in some areas.

- Eric Morgenson from Angel Oak talks about the investment potential of rental properties.