After several weeks of economic data generally exceeding forecasts, weaker than expected labor and manufacturing data helped mortgage markets last week. The Chicago Purchasing Manager’s survey and the ISM Manufacturing Index both dropped unexpectedly. US employers cut 263,000 jobs in September, much higher than the 175,000 forecast, and the 21st consecutive month of declining payrolls. The Unemployment Rate climbed to 9.8%, the highest rate since June 1983. The Consumer Confidence Index also fell on a growing concern over the lack of jobs. In response to the data, investors shifted money out of stocks and into bonds, helping mortgage rates reach their lowest levels since May. The 30 Year Fixed currently sits at 4.375% (4.554% APR) and the 15 Year Fixed is at 4.250% (4.557% APR). There is very little in the way of economic data this week, so look for the $71 billion in Treasury auctions to have the greatest impact on mortgage rates.
Trying to find the right home loan can be difficult. Finding the right company to help you get your loan can be even more confusing. With literally thousands of lenders to choose from, borrowers can easily become overwhelmed. When deciding whether to use a mortgage broker or a bank for your next mortgage, carefully consider your options.
Brokers are generally approved with several banks and lending institutions, with each offering different “niche” programs, underwriting guidelines and interest rates. Banks, on the other hand, will be competitive in only one or two products, and will encourage their sales agents to sell these products to the consumer. Banks are usually most aggressive on the shorter-term adjustable rate mortgages that closely match the duration of their deposits. Brokers representing a number of lenders are able to sell a variety of products, fixed and adjustable, from multiple sources, and can be more objective in their recommendations.
The “multi-lender platform” offered by mortgage brokers allows their loan officers to shop for the best interest rate and terms, giving the consumer the best loan possible. Additionally, the wholesale arrangement with the banking and lending partners often allows brokers to be more competitive than the retail side of the same bank.
Central Coast Lending, Inc.