Delaware Mortgage Rates Weekly Mortgage Market Update for January 13, 2014
Delaware Mortgage Rates weekly mortgage rate update for the Week of January 13, 2014, by John R. Thomas with Primary Residential Mortgage, Inc. in Newark, Delaware. John Thomas is the Newark, Delaware Branch Manager and the author of the best selling book, Your Guide to Buying Your First Home in Delaware. Call 302-703-0727 to get a mortgage planning consultation or APPLY ONLINE for Delaware mortgage loan
Delaware Mortgage Rates dropped lower on Friday after a very unexpected and disappointing jobs report was released by the U.S. Labor Department. If you look at the mortgage bond chart below you can see the big green candle on Friday where bond market rallied on the bad economic news coming out of the December 2013 Jobs Report. Mortgage bonds had been trading lower all week and moving mortgage interest rates higher in anticipation of another good jobs report. We are recommending FLOATING your Delaware Mortgage Rate to start the week to see if mortgage bonds can ride the bad news from the job report and move home loan rates lower. But we may have to switch to a locking stance as the bond was capped from moving higher by resistance at 103.86 and also the intersection of the 50-day moving average and the 100 days moving average. If bonds begin to sell off then we would suggest locking in these unexpected gains as the long term trend for mortgage rates is for them to continue to move higher throughout the year.
December 2013 Jobs Report was released on Friday by the Labor Department and it was a shocker as only 74,000 jobs were created versus the 197,000 jobs expected to be created. This was the lowest number of jobs created since January 2011. In stark contrast to a lower jobs number, we had the unemployment rate actually drop from7.0% to 6.7%. This was the lowest reading on unemployment since 2008 but the number is very misleading as it is not indicative of the number of people that are back to work. The reading dropped because 346,000 people left the workforce and are no longer being counted in the unemployment reading. The Labor Force Participation Rate (LFPR) is more in line with the number of jobs created dropping as the LFPR dropped back to the low of October at 62.8%, the lowest reading since 1978! The LFPR measures the number of people 16 years and older eligible to work that is actually working.
Weekly Initial Jobless Claims were released on Thursday and dropped 15k to 330,000 which was below expectations of 338k. The lower weekly jobless claims are not going to have much effect on the market with such a bad December Jobs Report that was released on Friday. Jobless claims need to fall below 300k to start having an effect on the labor market.
New Mortgage Rules Took Effect on January 10, 2014. The Qualified Mortgage Rule (QM) and the Ability to Repay (ATR) Rule took effect on Friday and will impact how mortgages are done and will have an effect on consumers. The biggest effect will be felt on borrowers trying to obtain Conventional Loans and who wish to buy out the mortgage insurance, this is called Borrower Paid Upfront Mortgage Insurance (BPUFMI). The new rule calls for a 3% cap on points and fees and the BPUFMI will be counted in this 3% cap which will make it so that most borrowers will no longer be able to buy out the mortgage insurance unless putting down at least 10% of the purchase price. Another unintended consequence of lawmakers making rules that they don’t understand how they will affect consumers. The next biggest consequence of the rule is it will limit how much a consumer can choose to pay discount points to buy down their mortgage rate. The discount point may or may not be counted in the 3% cap on points and fees.
Call 302-703-0727 to schedule a mortgage consultation to get pre-approved for a mortgage to purchase a home or to refinance your existing mortgage to lower your rate and save thousands of dollars in interest. There are several special governments refinance programs to help underwater Delaware homeowners refinance. There is the FHA Streamline Refinance Program, the VA IRRRL Streamline Refinance Program, and there is the HARP 1.0 and HARP 2.0 refinance programs. Call us or e-mail us now to get more information or you can APPLY ONLINE.
The next Delaware First Time Home Buyer Seminar is Saturday, January 18, 2014, in Newark, Delaware. Register by calling 302-703-0727 or Dover Delaware First Time Home Buyer Seminar February 8, 2014, Register online at http://www.delawarehomebuyerseminar.com/. Register by calling 302-703-0727 or Register online at http://www.DelawareHomeBuyerSeminar.com
Then next Maryland First Time Home Buyer Seminar is Saturday, January 25, 2014, in Towson, Maryland. Register by calling 410-412-3319 or Register online at http://www.MarylandHomeBuyerSeminars.com
If you would like to apply for a Mortgage Loan, you can APPLY ONLINE HERE, you can call John Thomas at 302-703-0727.
John R. Thomas – NMLS 38783
Certified Mortgage Planner – Primary Residential Mortgage, Inc.
302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office
248 E Chestnut Hill Rd, Newark, DE 19713