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TODAY’S MORTGAGE RATES

Mortgage Rates stayed mostly the same
over the past 7 days with the Mortgage
Backed Security (MBS) market trading
down -2 bps.

Here are your Average Mortgage
Rates across the country according
to Mortgage News Daily.

The big news over the past week
has been alternative labor market
reports that are gaining more attention
since the BLS Jobs Report is not being
reported with the Government shutdown.

On November 5^th, the ADP Employment
report showed 42,000 jobs created in
October which beat the estimates of
24,000 jobs. On November 7^th, the
Revelio Labs Jobs Report showed
9,000 jobs lost in October.

It’s clear that each report’s unique
way of gathering data produces different
numbers. Overall, the labor market still
looks relatively weak with even the ADP
Employment report showing job losses
in the 2 of the past 3 months.

The big news this week is the U.S.
Senate voting to reopen the Federal
Government. Now this moves to the
U.S. House of Representatives. If
passed, the Federal Government
could be reopened this week.

There are a lot of characteristics that
go into a mortgage rate – credit score,
investor, loan to value, loan amount,
costs, etc. Please call me to go over
your specific scenario so we can
price your loan out accurately.

TRUMP’S 50 YEAR MORTGAGE IDEA
CAUSES QUITE THE STIR IN THE
HOUSING INDUSTRY

President Trump caused quite the stir in
the housing industry floating the idea of
a 50-year Mortgage on Social Media to
make housing more affordable.

This announcement caused Loan Officers
and Real Estate Agents from across the
country to give their takes for and against
what a 50-year mortgage would do for
the U.S. Homeowner.

Here are the facts.

1. Usually when you have a longer term –
the mortgage rate will be higher. Since
a 50-year mortgage has not been
released, we don’t know how much
higher the rate would be compared to
a traditional 30-year mortgage.

40-year mortgages exist right now,
and they are rarely used because the
higher rate eclipses much of the monthly
payment savings of a longer term.

2. For an apples-to-apples comparison,
let’s assume the rate was the same.
Here is what a comparison would look
like on a $400,000 mortgage at a
6.25% Rate.

30 Year Mortgage

P+I Payment: $2,462.87
Amount Paid over Term of Mortgage: $886,633.20
Amortization Schedule for First 10 Years:

50 Year Mortgage

P+I Payment: $2,179.89
Amount Paid over Term of Mortgage: $1,307,934.58
Amortization Schedule for First 10 Years:

In this comparison, the monthly payment
would go down $282.98 per month /
$3,395.75 per year.

Because most homeowners get out of
their loan within 5-7 years, it’s helpful to
see what the differing terms would do
to the principal balance.

Over 7 years, the 30 Year Fixed
Mortgage would have a $29,723.42
lower principal balance than the 50-year
mortgage. And over the life of the loan,
the consumer would be paying
$421,301.38.

If rates were the same, the homeowner
would lower their payments monthly,
but increase their amount paid significantly
over the course of the loan.

Remember that homeowner’s always have
the ability to make a higher payment than
required, or use methods like a bi-monthly
payment or one extra payment per year,
to significantly reduce the amount of
interest paid and effective interest rate.

Hope you have a fantastic week!!