Let’s talk about this crazy real estate market before I dive into Denver mortgage interest rates. If you are a buyer in this market, I only have one piece of advice…”BE AGGRESSIVE”.
Inventory of homes for sale is ridiculously low. So, only the aggressive offers accepted or countered. This is no time to be shy. You’ll just pay more for the next house that you want. Take your experienced Realtor’s advice. If it doesn’t work, you know who to blame.
Record Denver Mortgage Interest Rates
This has been a ride. Remember when we started the year with an amazing 30 year mortgage rate average of 3.72%. Buyers paid about .7 origination points at closing to get it. That was within about a 1/4 percent of the lowest of all time Denver mortgage interest rate.
By the time COVID really hit in March, we were at 3.29 with people paying .7% at closing in points to get that. This was epic! Fast forward to August. 2.88% with an average of .8 in points to get it. Yes, people are paying more to get those lower rates. Usually, the national average for points associated with the rates are closer to .5 or a half of a point. So, that is $2000 on a $400,000 loan.
Now, back to rates. Rates have pretty much bounced around these amazing low levels for 2 months. Sure, there are spikes and dips, but they haven’t moved a lot. Keep in mind this is conventional loan data. VA and FHA rates are lower and jumbo rates are higher. Also, Denver Mortgage interest rates are higher on refinance home loans . Because, Fannie Mae and Freddie Mac are adding an adverse market fee of .5%! Again, that would be an extra $2000 in costs for the same rate on a $400,000 loan.
The media keeps telling us this goes into effect on December 1. What they don’t tell you is that the loan has to be locked, processed, underwritten, closed, processed after closing, and sent to Fannie Mae or Freddie Mac before December 1. That ship has sailed. The fee is already in there for refinance mortgage loans. You can take a higher rate with the same low costs as before, or get the same rate for the .5% in extra costs.
Where Are Home Loan Rates Headed?
First, know this. Nobody knows. The experts I trust are all over the place. The one consistent theme is that rates will likely spike during the volatility of the election. Where many experts start to differ is what they will do post-election. That depends on a million variables that I cant even start to list. Plus, nobody wants me to talk politics right now😊
Here is what I know will impact rates. If there is a huge stock market selloff to the point that investors are not moving to safer investments, but instead moving to cash, that will cause rates to rise. Also, if we keep spending trillions on stimulus checks to the point that inflation fears start to rise, this will cause rates to go up. I really don’t foresee anything that will make rates go down.
As I have said in the past, don’t wait if your going to do something. These rates have to go up at some point. I don’t think they can really go any lower as investors don’t want to invest in mortgage backed securities already because the rates are so low they cant make enough money. I hope this finds you all doing well. Please let me know if you ever need anything and thank you for taking the time to read this.