DS News - U.S. Bank

» VISIT US ONLINE @ DSNEWS.COM 13 MORTGAGE OFFER APRS TRENDING HIGHER LendingTree has released its latest Mortgage Offers Report, breaking down the lending landscape for February 2018. e Mortgage Offers Report serves as a useful companion to other standard industry surveys on mortgage rates because, as LendingTree points out, "Most quoted industry rates are for a hypothetical borrower with prime credit who makes a 20 percent down payment." Many borrowers, however, do not fit this profile. For the month of February 2018, LendingTree reports that February's best offers for money borrowers showed an average annual percentage rate (APR) of 4.22 percent for conforming 30-year fixed purchase loans. is was up from 3.93 percent over the December 2017 rates. Refinanced loans were also up 38 bps (spell out BPS?) to 4.13 percent. Mortgage rates vary greatly depending on parameters such as credit score, loan-to- value, borrowers' income, and property type, but for the average borrower, purchase APRs for conforming 30-year fixed loans offered on LendingTree's platform were up 25 bps to 4.80 percent in February. e loan note rate hit 4.70 percent for the month, up 25 bps over January and marking the highest rate since March 2016. Consumers with credit scores above 760 were offered APRs of 4.68 percent in February, whereas consumers with scores of 680-719 were at 4.95 percent. e APR spread of 27 bps between these score ranges was 2 bps narrower than in January, which still stands as the widest spread since April 2016. e spread represents over $14,000 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $240,955, owing to factors such as higher interest rates and larger fees. e refinance APRs for conforming 30-year fixed loans were up 31 bps to 4.77 percent in February. According to the report, the credit score bracket for February narrowed to 24 from 25 bps. is works out to nearly $13,000 in extra costs over the life of the loan for lower credit score borrowers, assuming an average refinance loan of $244,279. is report contains real data from actual loan terms offered to borrowers on LendingTree.com by lenders, including the average quoted APR by credit score, average down payment, and other. CONSUMER HOUSING SENTIMENT WEAKENS e U.S. housing market may be starting to get volatile. Fannie Mae's latest Home Purchase Sentiment Index report found that consumer confidence in housing took a hit in February. e worry seems to be stemming from some general upheaval at the federal financial level. "Volatility in consumer housing sentiment continued into February, with the new tax law beginning to impact respondents' take-home pay and the stock market creating negative headlines due to early-month turbulence," said Doug Duncan, SVP and Chief Economist at Fannie Mae. "Additionally, consumers' expectations for higher mortgage rates suggest that consumers expect the Fed to hike rates a few more times in 2018." In raw numbers, Americans' feelings about the housing economy translated into a nearly 4 percent drop in confidence in February. e net share of respondents to Fannie's survey who said now is a good time to buy a home decreased 5 percent (to 22 percent) from January, while those who said it's a good time to sell dropped 2 percent (to 36 percent). e number who said home prices will go up in the next 12 months decreased to 45 percent overall in February. at's a 7 percent drop that mirrors the number of consumers who said mortgage rates will go down over the next 12 months. "Americans expressed a weakened sense of job security, with the net share who say they are not concerned about losing their job decreasing 2 percentage points," the report stated. "Finally, the net share reporting that their income is significantly higher than it was 12 months ago increased 1 percentage point." e number of respondents who said they are not concerned about losing their job fell 2 percent, to 71 percent. However, wages are up, if only barely. e number of those who told Fannie Mae that their household income is significantly higher than it was 12 months ago rose 1 percent, to 17 percent, while those reporting a significant decrease in their income compared to a year ago dropped by 2 percent, to 9 percent overall. According to the annual Home Improvement Survey conducted by LightStream, the online lending division of SunTrust Bank, the percentage of respondents who said they were planning to spend $35,000 or more on home improvements this year doubled over 2017's numbers. KNOW THIS

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