December 03, 2013: “4 Smart Personal-Finance Moves for Treacherous Times,” a Kiplinger article appearing on Nasdaq.com with commentary by HSH.com VP Keith Gumbinger:
Nail down a mortgage ASAP. The shutdown postponed approval of some types of government-insured mortgages. Private mortgages were affected, too, because lenders were unable to verify borrowers’ income with the IRS. Applications for government-insured mortgages fell 7% during the week ended October 11, and applications for conventional mortgages dropped 4%, reports the Mortgage Bankers Association. If the shutdown had lasted longer, “it would have been a lot worse,” says Keith Gumbinger, vice-president of HSH, a mortgage consultant. You may already face tough competition from all-cash buyers. A delay in your loan approval could give them an even bigger edge.
November 27, 2013: “Low Jumbo Rates Moving Members to Banks,”an article by David Morrison from the Credit Union Times discussing the competition between banks and credit unions with commentary from HSH.com VP Keith Gumbinger:
“I agree that some banks have begun to look for higher wealth borrowers who could take one of these mortgages,” said Keith Gumbinger, vice president at HSH.com, a housing finance analysis and information site.
“But they are doing so for a variety of reasons.”
Gumbinger explained that the current low interest rate environment suggests that loans taken out now are not likely to be refinanced quickly, which means wealthy borrowers could remain with their lending institutions longer.
“There is a potentially significantly longer time frame to offer wealthier customers additional products and services,” Gumbinger said.
“Banks can offer investment services, other loan products or other kinds of services.”
Wealthy borrowers may also have an easier time meeting the regulatory requirements that prove they have the ability to repay these larger loans, he observed. Elements like larger down payments, smaller debt loads and larger asset pools tend to make jumbo loans, at least on paper, more secure, Gumbinger said.
Finally, banks also realize that there are limited numbers of these borrowers around, he explained.
“Not only are there not a whole lot of the borrowers who could take out a jumbo mortgage and repay it,” Gumbinger said, “they are also not found everywhere. There are only a limited number of geographic and primarily urban areas where you will find both the property prices to require these loans, as well as the people who could make their payments. So there is a lot of competition for those borrowers.”
November 27, 2013: “Are Adjustable Rates worth the risk?” a Jumbo Jungle Wall Street Journal column on adjustable-rate mortgages by AnnaMaria Andriotis with rates and comments provided by HSH.com VP Keith Gumbinger:
Consider a borrower who signed up for a 7/1 jumbo ARM, which has a fixed rate for the first seven years of the loan, this week in 2006. At the time, the average rate on this loan was 6.21%, according to mortgage-info website HSH.com. The rate would now drop to 2.83%, assuming the mortgage rate is pegged to the one-year London interbank offered rate, which stands at roughly 0.58%, and that 2.25 percentage points are tacked on as the lender margin (a typical amount). That 2.83% is also lower than the rates of other mortgages that a borrower could refinance into: Rates on 30-year fixed-rate jumbo mortgages average 4.41%, while rates on new 7/1 jumbo ARMs average 3.33%, according to HSH.com.
Extending repayment period. By refinancing, borrowers start the repayment period on a 30-year loan from the beginning. Monthly payments could shrink (since the remaining balance is spread out over a longer period), but the total interest they will pay by the end of the loan will almost certainly be more, says Keith Gumbinger, vice president at HSH.com.
November 25, 2013: “Faucets at $1,000 Abound as Home Equity Spigot Opens,” a Bloomberg feature by Kathleen M. Howley with commentary by HSH.com VP Keith Gumbinger:
Helocs typically are held by banks in their mortgage portfolios rather than being sold in the secondary market to be securitized by Fannie Mae or Freddie Mac, common for primary home loans, said Keith Gumbinger, vice president of HSH.com, a mortgage data firm in Riverdale, New Jersey.
Lenders use them as a hedge against rising rates because they rise in tandem with bank borrowing costs, Gumbinger said. Heloc financing costs usually are tied to prime rates, the interest charged by banks to their most creditworthy customers, with the addition of a margin predetermined by the lender that often is around 2 percentage points.
“If you walk into a bank today and apply for a home equity loan, they are going to want to know what you’re using it for,” Gumbinger said. “In addition to requiring you to have the best credit and retain at least 20 percent equity in your house, they want to know your intentions are good. No more using your home as a cash register to have some fun.”
“These loans usually are in second-lien position, so they don’t recoup any money until primary mortgage investors get all their money back,”
Gumbinger said. “The money just disappeared as home prices went down.”
November 21, 2013: “Mortgage rates fall amid weak economic data,” a weekly CNNMoney report by Les Christie appearing on Yahoo Finance regarding mortgage rates and the effect the Federal Reserve will have on long-term interest rates:
“Ms. Yellen would likely continue the QE policies started under Chairman Bernanke until there was very clear evidence that the economy would thrive, not just endure, without them,” said Keith Gumbinger, a spokesman for HSH.com, a mortgage information company.
November 12, 2013: “Rich people are getting mortgages cheaper than you,” a CNNMoney article by Les Christie which describes the unusual occurrence of some jumbo mortgage rates being lower than conforming rates:
That works especially well in these days of strict underwriting standards, according to Keith Gumbinger, a mortgage expert with HSH.com.
“Borrowers have to open up their whole financial picture to lenders,” he said. “They can see where there’s value, which they might be able to sell against.”
Once a wealthy client takes out one of these low-rate loans, they are likely to stick around. “With rates as low as they are, borrowers are never going to refinance the loans. Those affluent clients will stay on the bank’s books forever,” said Gumbinger.
October 31, 2013: “Lenders Extend the Clock on the Lock”, a Jumbo Jungle Wall Street Journal update on changing market conditions by AnnaMaria Andriotis with rates and comments provided by HSH.com VP Keith Gumbinger:
Mortgage-rate volatility is pushing borrowers to lock. Rates on 30-year fixed-rate jumbos averaged 3.82% in the beginning of May – the lowest this year – and hit a peak of 4.88% by mid-September, before dropping again, according to mortgage info website HSH.com. They are currently hovering around 4.4%.
Still, a rate lock alone won’t suffice for many affluent borrowers. While rates have been rising, there have been brief pullbacks. As a result, some borrowers have turned to a so-called float-down option – which is essentially the best of both worlds: protection from rising rates and the ability to break the lock if mortgage rates decline by at least an eighth to a quarter of a percentage point. Borrowers typically have to pay a fee to have this option, which often equals around a quarter of a percentage point of the total dollar amount of the loan, says Keith Gumbinger, vice president at HSH.com.
This also appeared on MarketWatch on Nov. 4, 2013 as “How to lock in a mortgage rate for a whole year”
October 31, 2013: Keith Gumbinger was a featured guest on the National Association of Realtors syndicated radio program “Real Estate Today” with Gil Gross.
October 28, 2013: “2.5% mortgage rate: Worth the risk?”, a MarketWatch.com AnnaMaria Andriotis column discussing an old-is-new mortgage product that included data and context from Keith Gumbinger and HSH.com
Rates on a 1/1 ARM can rise by as much as six percentage points, based on most loan terms. A borrower who signs up for a 1/1 ARM at a 3.05% rate, which mortgage-information website HSH.com cites as the average rate, could see the rate rise to a maximum of 9.05% during the life of the loan. With ARMs that have a one-month fixed-rate period, rates can jump by 10 or more percentage points over the life of the loan.
While the short-term scenario seems risky, some mortgage analysts question the likelihood of big rate increases: Many 1/1 ARMs are pegged to the one-year London interbank offered rate (Libor), which is at 0.61% and would need to hit roughly 7% for a borrower with this loan to end up with the maximum rate, says Keith Gumbinger, vice president at HSH.com. The last time the one-year Libor was so high was in 2000. Lenders say that wealthy borrowers can manage these mortgages largely because they have the funds to pay off the loan if rates increase.
October 24, 2013: “US Mortgage Rates Fall to a Four-Month Low”, Prashant Gopal’s update of mortgage market conditions on Bloomberg that included some background from HSH.com VP Keith Gumbinger:
“The weak economy is helping to keep mortgage rates from rising,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-data firm.
October 23, 2013: “Families Blocked by Investors From Buying U.S. Homes”, a Bloomberg feature about changing real estate conditions by Kathleen M. Howley with context from HSH.com Vice President Ketih Gumbinger:
“There’s a tremendous pressure on inventory in the areas that are being dominated by investors,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage website. “People end up wanting to buy a home, but they can’t. All the homes have been converted into rentals.”
October 23, 2013: ” Home loans become a little easier to get”, Julie Schmit’s column in USA today covering mortgage market conditions that included comments from Keith Gumbinger, HSH.com’s Vice President:
Along with improving home prices, more access to private mortgage insurance is also enticing lenders to do smaller down payment loans, says Keith Gumbinger of mortgage tracker HSH.com.
Mortgage giants Freddie Mac and Fannie Mae require mortgage insurance for loans where borrowers have less than a 20% stake. When the housing market crashed, the mortgage insurance industry lost billions and insurance became tough to get. Now that industry is recovering, too, Gumbinger says.
October 17, 2013: ” The Pre-emptive Rate Lock”, Lisa Prevost’s Sunday New York Times column about extended mortgage rate locks with comments from HSH.com VP Keith Gumbinger:
The likelihood is that rates will move higher rather than lower in the coming weeks, said Keith T. Gumbinger, the vice president of HSH.com, a financial publisher.
Even in “more normal” times, Mr. Gumbinger added, “we don’t advise people to try to time the market. If you have a mortgage deal in place that makes your transaction work, go get it and lock it in. No one can be certain what will happen in the future.”
Borrowers considering a float-down should weigh the fee against the potential savings from a slight drop in interest rates. It makes the most sense on larger mortgages, Mr. Gumbinger said. And, he added, “if it does come true, it’s like scratching off a pretty good lottery ticket.”
October 14, 2013: “5 tips for borrowers to secure the best mortgage”, a Denver Post article which originated from Kathleen Lynn of the North Jersey Record with an outlook from HSH.com VP Keith Gumbinger:
“For planning purposes, if I were thinking of getting into the market next spring, I’d be working with numbers in the 5 percent range,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based publisher of mortgage information. That would be up from around 3.5 percent earlier this year.
October 11, 2013: “Use Your Nest Egg to Qualify for a Mortgage”, a Kiplinger.com article by Rachel L. Sheedy with some quotes from Keith Gumbinger, HSH.com’s Vice President:
Freddie Mac, the government-sponsored housing finance giant that guarantees mortgages, now allows lenders to consider retirement-account assets to help retirees qualify when applying for a new mortgage or to refinance an existing one. The provision “lets you take advantage of your holdings to a greater degree,” says Keith Gumbinger, vice-president of HSH Associates, which publishes mortgage information and rates.
For those who are interested in refinancing, now may be the time to figure whether it makes sense for your situation. Mortgage interest rates were at 60-year lows, from about 3.5% to 4.5%, this spring. Although rates have risen, Gumbinger says that if you have an older mortgage with a higher rate, there could still be an opportunity for you to refinance.
The nationwide average interest rate for a 30-year fixed-rate mortgage was recently 4.76%, and a one-year adjustable rate mortgage averaged 3.02%, according to HSH Associates. For a snapshot of current mortgage rates in your area, check HSH.com and plug in your zip code.
October 10, 2013: “Housing market shut down along with government”, an AnnaMaria Andriotis feature on MarketWatch.com that contained some expertise from HSH.com VP Keith Gumbinger:
Lenders say the longer the shutdown lasts, the greater the consequences will be for home buyers. Mortgage applicants who locked in the interest rate for their mortgage could see that lock expire if the shutdown persists. Before that happens, they may want to consider asking their lender if they can extend this lock-in period. Some lenders will permit a 10- to 15-day extension, but borrowers could have to pay as much as a quarter of a percentage point of the total dollar amount of the mortgage, says Keith Gumbinger, vice president of mortgage-info site HSH.com.
In addition, buyers could lose out on the home they’re trying to buy if the shutdown persists. If sellers need to move quickly, they could pass on buyers who need to get a mortgage in favor of all-cash buyers. And when the government does get back up and running, a delay in closings will persist, says Gumbinger, as lenders work through the backlog of applications that were held up.
October 7, 2013: “How long is too long… Effects of shutdown vary with its duration”, a HousingWire.com summary of market conditions which included quotes by HSH.com VP Keith Gumbinger:
The government shutdown could go multiple directions, according to a writer with The Los Angeles Times. The longer the shutdown lasts, the more serious the impact.If it is a short shutdown…
But a short government shutdown should cause only small headaches, because most loans close at the end of the month and take up to 60 days to do so, said Keith Gumbinger, vice president of HSH.com, which tracks mortgage rates. Lenders are still taking applications, Gumbinger said, expecting the shutdown will end soon.
October 5, 2013: “Five things to know about mortgages now”, a North Jersey Record a consumer outlook by Kathleen Lynn that includes some forward thinking from HSH.com VP Keith Gumbinger:
“For planning purposes, if I were thinking of getting into the market next spring, I’d be working with numbers in the 5 percent range,” said Keith Gumbinger, vice president of HSH.com, a Riverdale-based publisher of mortgage information. That would be up from around 3.5 percent earlier this year.[on the importance of a mortgage rate in a transaction] And the mortgage rate is “only one part of the [home-buying] transaction,” Gumbinger said.
[Some comments on selecting a mortgage term] Gumbinger agreed. He said that in any market, ARMs are probably right only for a small percentage of buyers. And in the current interest rate environment, ARMs make even less sense: “There’s really only one direction interest rates are likely to go, and that’s up.”
Even if you’re not sure you can afford the higher monthly payments that come with a 15-year loan, you can shorten the life of a 30-year loan yourself by paying extra toward the principal each month, Gumbinger said.
October 4, 2013: “Long shutdown could hurt housing market recovery”, a Los Angeles Times a review of market conditions by E. Scott Reckard, Andrew Khouri and Alejandro Lazo with some hopeful news from HSH.com VP Keith Gumbinger:
But a short government shutdown should cause only small headaches, because most loans close at the end of the month and take up to 60 days to do so, said Keith Gumbinger, vice president of HSH.com, which tracks mortgage rates. Lenders are still taking applications, Gumbinger said, expecting the shutdown will end soon.Most lenders use IRS transcripts of borrowers’ tax filings to confirm their income and ability to pay.
“A few days’ delay in getting documentation shouldn’t derail too many deals,” Gumbinger said.
October 4, 2013: “Shutdown could impact recovering housing market”, a UPI item capturing a quote from Keith Gumbinger in the Los Angeles Times:
In addition, the Times said, while the shutdown continues, buyers will not be able to use the IRS to verify qualifications for a loan. “A few days’ delay in getting documentation shouldn’t derail too many deals,” said Keith Gumbinger, vice president of HSH.com, which monitors mortgage rates.
October 3, 2013: “Average 30-year mortgage rate drops to 4.22%”, a USA Today a market update by Julie Schmit with a quote and some context from Keith Gumbinger, HSH.com’s Vice President:
For the five business days ended Wednesday, the average rate for a 30-year fixed-rate loan wavered between 4.34% and 4.39%, show data from mortgage tracker HSH Associates.”We seem to have leveled off,” says HSH’s Keith Gumbinger.
Mortgage rates pushed up from historic lows in May and bounced higher to mid-August before leveling off. They’ve been trending downward in recent weeks since the Federal Reserve said last month it will not begin tapering its monthly purchases of mortgage-backed securities and Treasuries, which has kept interest rates low.
The drumbeat of mediocre economic news has also worked to keep rates in check, Gumbinger says.
October 1, 2013: “A long shutdown could slow some mortgage loans”, a USA Today an update on government shutdown impacts by Julie Schmit that had some context added by Keith Gumbinger, HSH.com Vice President:
Last week, the average 30-year fixed-rate loan hit its lowest level since July, Freddie Mac says. Typically, lenders lock rates for 45 to 60 days while loans get processed, says Keith Gumbinger of mortgage tracker HSH Associates.Consumers concerned about loan-closing delays should check with lenders to see what rate-lock extensions are available, he says.
October 1, 2013: “Time for Advisors to Revisit HELOCs?”, a Financial-Planning.com an advisory piece to financial planning professionals by Donald Jay Korn, which contained statistics and commentary from HSH.com’s Vice President Keth Gumbinger:
The HELOC market is thawing slowly. In the Federal Reserve’s Senior Loan Officer Opinion Survey in July, a net 1.5% of lenders said they had eased standards for HELOCs, with 4.4% easing and 2.9% tightening.”Lenders’ books are in better shape than they have been in some time,” says Keith Gumbinger, vice president at HSH.com, a mortgage information website. “They are looking for profitable lending opportunities. Firming home prices makes lending for second liens less risky, so there is a little more enthusiasm for making these kinds of loans, with restrictive terms and conditions.” Those include a strong credit history – a credit score of at least 720 is usually necessary – and ample home equity.
“Lenders generally will not allow you to leverage beyond 80% of your home’s value, including the first lien,” Gumbinger says. “Before the recent crisis, you could easily borrow to a 90% or even a 100% level.”
Gumbinger argues that HELOC holders still need to sock away cash reserves for emergencies. “In most HELOC contracts,” he says, “there is a clause that discusses adverse conditions. If property values or someone’s credit has gone south – which might happen because of a job loss or a medical situation – this clause allows lenders to limit new borrowing or disallow it altogether, while also demanding immediate payments sufficient to begin to retire the debt.”
In such cases, Gumbinger notes, clients might not only lose the borrowing capability they were relying on, but also face higher monthly payments on any outstanding debt. “That’s the reason to have cash handy at all times,” he says.
While revised guidelines from Freddie Mac allow lenders to include assets like IRAs and 401(k)s in calculating income eligibility, Gumbinger says “those rules apply to mortgages, which can be securitized. There is no secondary market for HELOCs, which usually stay on the lender’s own books.”
HELOC lenders have varying criteria for approving applications and some might provide a line of credit to retirees with sufficient assets. Without excessive research, Gumbinger says, planners should be able to help clients track down a lender willing to toss a valuable line to a reliable retiree.
September 28, 2013: “Rising foreclosures hurt Island as nation recovers”, a Newsday update on local real estate conditions by Maura McDermott that contained a qote from HSH.com VP Keith Gumbinger:
Banks also experience losses in the foreclosure process, said Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based mortgage information website.”A lender taking a home back for a loan that was originated with very little down payment in 2005 or 2006 faces a substantial loss,” due to the decline in home values, legal fees and the cost of preparing the home for sale and selling it, Gumbinger said.
September 20, 2013: “Bernanke gives home buyers a breather”, a MarketWatch.com item on the Fed’s lack of action by AnnaMaria Andriotis that provided a short-range forecast by Keith Gumbinger, HSH.com’s VP:
And rates have remained elevated since then, but the Fed’s unexpected decision to not scale back on its program will likely result in a break from rising mortgage rates. Instead, rates are likely to drop at least for the next month, says Keith Gumbinger, vice president at mortgage-info website HSH.com.For home buyers who are about to get a mortgage, the announcement should result in lower rates. The average rate on 30-year fixed-rate mortgages fell slightly to 4.64% by end of day Wednesday, down from 4.68% for the week ended Sept. 13, according to HSH.com. Gumbinger says rates could drop by as much as 10 basis points, the equivalent of 0.10 percentage point, in total by the end of the week, which would bring average rates to 4.58% and they could drop to as low as 4.48% on average by mid-October, especially if the economic reports released during this period are weaker than expected. At 4.48%, rates would be back to where they were in the beginning of July.
September 19, 2013: “Are we still heading toward 5% mortgages?”, a CNNMoney review of market conditions after the Fed inaction by Les Christie that contained a forecast from HSH.com VP Keith Gumbinger:
But now that the Fed has said it will continue to purchase the bonds, rates will likely retrace some of those gains, said Keith Gumbinger of mortgage information provider HSH.com. “Now, we do have some space for rates to fall,” he said. “I don’t expect a plummet, just a drop of 0.1 percentage points or so over the next week or two.”
September 19, 2013: “Mortgage rates decline as U.S. homebuyers get reprieve from Fed”, a Bloomberg article on market conditions by Elizabeth Dexheimer which included some quotes from HSH.com VP Keith Gumbinger:
Mortgage rates, which increased from near-record lows in May on speculation of a scaled-back stimulus, probably will fall for another few weeks, said Keith Gumbinger, vice president of HSH.com, a mortgage-data firm in Riverdale, N.J. That gives would-be homebuyers a limited opportunity to take advantage of lower costs.”If you are in the game for a mortgage, or if you have been on the cusp of jumping in, it’s a good idea to capture these dips if you can,” Gumbinger said in a telephone interview Wednesday. After the temporary decline, rates are “more likely to be higher as we go forward then they are to be lower.”
September 18, 2013: “Tapering and you: how the expected shift in Fed policy affects homebuyers and others”, a Star-Ledger piece by Ed Beeson discussing the expected Fed move with HSH.com VP Keith Gumbinger:
“The worst of the rise arguably is already in place,” said Keith Gumbinger, vice president of HSH Associates, a mortgage research firm based in Riverdale. “The markets took that as a fait accompli. They adjusted as if the Fed was already gone.”Still, rates have a long way to go to get back to more normal levels. Gumbinger said he expects they could hit the mid- to upper 5 percent range by the middle of next year, if the Fed’s economic forecasts hold and it fully exits the bond-buying program on time.
September 18, 2013: “DeMarrais: Fed expected to cut bond buying”, a North Jersey Record review of the expected Fed move by Kevin Demarrais that included some likely impacts provided by Keith Gumbinger, HSH.com’s VP:
But any changes in mortgage rates are not likely to be dramatic unless the Fed makes bigger or smaller reductions than expected, said Keith Gumbinger, a vice president at HSH.com, a Riverdale-based company that tracks mortgage market trends.”The [mortgage] market had already reacted to what they think the Fed is going to do,” he said. Rates remain near their historic lows but have been on the rise since May.
And don’t expect any change in the near future in CD and saving rates, Gumbinger said.
“Banks are flush with cash and don’t need to attract more money in the door through higher interest rates,” he said. “Even with an increase in interest rates for mortgages, banks still have tight lending standards and have plenty of money to lend.”
The action was meant as a stopgap, but financial markets reacted “rather violently” when the Fed said that it was discussing pulling back, Gumbinger said by phone.
“It was as if the Fed had not only decided to cut back but that it had already done so,” he said. “There was not a change in policy; they just said they were thinking about changing policy.”
September 18, 2013: “Fed expected to cut bond buying”, a North Jersey Record article by Kevin Demarrais that included some context from HSH.com VP Keith Gumbinger:
According to a survey by The Associated Press, most economists expect that the Fed will begin to reduce its monthly bond purchases by about $10 billion, although some economists, citing a slowdown in economic growth, say it could be only 5 percent.Either way, it shouldn’t be a shock to markets, because reductions of that size have already been factored into borrowing rates, Gumbinger said.
“Letting the market know in advance what you’re thinking keeps the shock at a minimum,” he said.
September 16, 2013: “Housing Market: 5 Years Later”, a FoxBusiness.com review of the housing bust by Kathryn Buschman Vasel that contained a characterization of the present market from Keith Gumbinger, HSH.com’s VP:
“There are still many homeowners who are underwater, there are still many foreclosures in the pipelines, and there are still too many folks whose access to credit is still impaired,” says Keith Gumbinger, vice president with HSH Associates. But we’ve come a long way.In the years following the bursting of the bubble, the credit markets essentially froze as banks became more risk adverse after getting burned by loose mortgage practices.
“We’ve experienced a near full reboot of mortgage lending standards, back to those commonly seen in the ’70s and considerable portions of the ’80s and ’90s,” says Gumbinger. He says lending practices loosened around 2006 as home prices seemed to be on an endless rise. “Rising prices means that the risk of making a loan to even a poor-quality borrower diminishes over time. When sales slumped due to higher rates in 2006 and ARM resets drove up costs, there was nothing left to keep the price bubble inflated, and when it popped and prices fell, losses spread like wildfire.”
[on Fannie Mae and Freddie Mac] “Without them, what comes next?” asks Gumbinger. “There’s no way to know at present what the mortgage markets of the future will be, and that will determine to a large degree what kinds of financing are available, to whom, and at what sorts of terms, conditions and costs. It is access to mortgage money, although not necessarily always price, which can drive the housing market.”
This story also appeared on AOL.com on September 18, 2013.
September 16, 2013: “New rules will reinforce conservative home lending”, a San Francisco Chronicle review of forthcoming mortgage regulations by Kathleen Pender that contained a quote from HSH.com VP Keith Gumbinger:
Keith Gumbinger, a vice president with HSH Associates, says there could be some disruptions as lenders and borrowers get used to the new rules, which are quite complex. “I think there will be a period of change. The mortgage market has always proven adaptable, sometimes to the detriment of the market itself. There will be stumbling blocks to overcome.”
September 16, 2013: “Mortgage options can be dizzying, so how do you decide?”, a Washington Post discussion of lending conditions by Katherine Reynolds Lewis that had some encouraging news for prospective homebuyers from HSH.com VP Keith Gumbinger:
On the plus side, if your credit isn’t stellar, FHA won’t penalize you by raising your interest rate. Technically, your FICO score could be as low as 580, although most lenders require at least 620, said Keith Gumbinger, vice president at HSH.com, a mortgage information website.
September 15, 2013: “Tips for the self-employed buyer” , a Smart Moves column by syndicated author Ellen James Martin discussing market conditions with HSH.com VP Keith Gumbinger:
“Lenders are now less paranoid about making non-standard mortgages because their financial picture has improved,” says Keith Gumbinger, a vice president at HSH Associates, a firm that tracks the mortgage industry.Most mortgage lenders are comfortable handling loan applications by phone, fax, email or overnight delivery. But Gumbinger, the HSH Associates vice president, encourages self-employed applicants to request a meeting in person.
Gumbinger says you can make life a little easier for your lender’s office staff by staying in touch and responsive to their needs while your loan is in their pipeline. For example, that might mean responding quickly to their request for a profit-and-loss statement for your business.
September 12, 2013: “MarketWatch: ARMs Are Back in Vogue”, a Moneynews.com item by Michael Kling with context on interest rates from HSH.com VP Keith Gumbinger:
“It’s a reasonable bet that rates are going to be higher – the question is how much,” says Keith Gumbinger, vice president of mortgage-info website HSH.com, according to MarketWatch.
September 11, 2013: “6% mortgage rates may be what stalls housing”, a San Francisco Chronicle item by Kathleen Pender that asked HSH.com VP Keith Gumbinger about what interest rate might most affect the housing market:
Keith Gumbinger, a vice president with HSH Associates, doesn’t think mortgage rates will derail the housing recovery until they hit 6 percent. “Five percent is still a very decent interest rate,” he says. “I don’t think you get much of a serious shutdown unless we went to 6, and to 6 in a very swift fashion.”
September 8, 2013: “Fuzzy credit”, a Reuters/SeekingAlpha analytical piece by Felix Salmon on a purported inversion in certain mortgage rates, with additional clarification by HSH.com VP Keith Gumbinger:
Both of Levine’s ideas are pretty good ex post explanations for why jumbo mortgage rates might be lower than the yield on agency bonds. But Levine – along with Matt Yglesias, and myself – failed to ask the most obvious question: are jumbo mortgage rates, in actual fact, lower than the rates on conforming mortgages? It certainly looks that way, in the WSJ article. But then I got a very interesting email from Keith Gumbinger, of mortgage-rate information service HSH.com.The WSJ’s Nick Timiraos cites some data about the spread between the two rates from HSH, but his chart uses information from the Mortgage Bankers Association. And what Timiraos never says is that if he just stuck to HSH data throughout, the spread would never have turned negative.
Part of the problem is that there’s no such thing as a simple, commodity mortgage. These things are all pretty complex beasts, and most of them include the borrower paying “points” up front, which need to be converted into percentage points using a rule of thumb like four “points” = 1 percentage point. According to HSH’s data, jumbo mortgage rates were actually closer to 4.86% last week, a full 15 basis points more than the WSJ’s 4.71% figure.
On top of that, according to HSH, the MBA figures used by the WSJ show conforming mortgage rates about 12-15bp higher than the figures coming out of both HSH and Freddie Mac.
In other words, use a different dataset, and you don’t see the crossover phenomenon at all. Gumbinger has a few ideas about why the MBA’s data might be such an outlier; one reason, he says, is that the MBA counts all mortgages of more than $417,000 as jumbo mortgages, even when they’re in markets like New York and Los Angeles where mortgages can be conforming when they’re as large as $625,500. Additionally, he says, the MBA rates reflect actual quoted mortgage rates to borrowers – which means that if borrowers are becoming less creditworthy for whatever reason, the rise in conforming rates might not really be comparing apples with apples. For a borrower of given creditworthiness, mortgage rates won’t have risen as much as the WSJ chart shows.
September 5, 2013: 8:34 PM “Jumbo mortgage interest rates now same, or lower, than standard loans”, a Newsday discussion of a purported inverion in certain mortgage rates by Maura McDermott that had a quote from HSH.com VP Keith Gumbinger:
What is new, said Keith Gumbinger, vice president of mortgage data publisher HSH.com, is that “at the moment there’s either no penalty or very little penalty for needing a large mortgage. For the vast majority of history there’s always been a penalty.”
September 1, 2013: “Home equity loans make a comeback”, a USA Today a review of home equity borrowing conditions by Susan Tompor which contained data and expertise from HSH.com VP Keith Gumbinger:
Some homeowners can still find lending conditions pretty tight, said Keith Gumbinger, vice president for HSH.com, a mortgage-information website.Expect some sort of appraisal on the home. The time frame for obtaining the home equity loan can range from about two weeks to roughly 30 days.
Homeowners generally need a credit score of 720 or higher; they’ll need to verify employment, offer proof of income and shop harder to find a home equity loan for $10,000. Some lenders no longer offer small home equity loans or lines, Gumbinger noted.
Gumbinger noted that the average home equity line of credit in his July survey was 5.18%. Fixed rates on home equity installment loans averaged 6.27%.
Home equity rates are higher than refinancing your mortgage. But cash-out refinances aren’t really happening as much at the moment because it’s tougher for homeowners to refinance to take cash out than trying to take out a home equity loan or line of credit, Gumbinger said.
August 29, 2013: “Risks Aside, ARMs Gain Ground”, a New York Times feature by Marcelle Sussman Fischler that included some perspective from HSH.com VP Keith Gumbinger:
For some borrowers, the initial savings may be worth the risk. By taking an adjustable-rate mortgage with a 5/1 term (with the rate fixed for the first five years) at 3.21 percent rather than a fixed 30-year jumbo mortgage at 4.69 percent, someone borrowing $750,000 could save $637.68 a month off the $3,885.28 payment, enough to “lease a nice car or more,” Keith Gumbinger, the vice president of the financial publisher HSH.com, said in an e-mail.
After 60 months, the borrower would have paid $54,565.92 less in interest, or $114,181.61 rather than $168,747.53. Kept in a piggy bank, it would be “enough to put your kid through at least one year of a good college,” Mr. Gumbinger added.
The potential hitch is that borrower may need to refinance or sell the home before the fixed portion of the loan ends “or possibly be exposed to significantly higher interest rates and monthly payments,” Mr. Gumbinger said, “which could wipe out the savings pretty quickly, not to mention causing you budgetary duress.”
August 28,2013: “Housing Slows But Recovery Still On Track, Data Show”, an Investor’s Business Daily market update by Andrea Riquier, which contained some observations from HSH.com VP Keith Gumbinger:
“The reality is that the rise in interest rates in late spring and early summer is starting to have some impact on home sales,” said Keith Gumbinger, vice president of mortgage research firm HSH.com.
The Fed is likely to take the softer housing data in stride. “I don’t think what we’ve seen so far is enough to derail them from a tapering process,” Gumbinger said, “but it may mean the tapering process is slower and more protracted than it might have been.”
But he and McBride note that the Fed is more focused on employment as an indicator of the health of the economy.
“Are we running from something that was running hot to something that’s more sustainable? I think so,” Gumbinger said.
August 24, 2013: “Your Money: Home equity loans make a comeback”, a USA Today article by Susan Tompor with some home equity rates and comments from HSH.com VP Keith Gumbinger:
While lending for home equity products has picked up, some homeowners can still find conditions pretty tight, said Keith Gumbinger, vice president for HSH.com, a mortgage-information website.
Expect some sort of appraisal on the home. The time frame for obtaining the home equity loan can range from about two weeks to roughly 30 days.
Homeowners generally need a credit score of 720 or higher; they’ll need to verify employment; offer proof of income; and shop harder to find a home equity loan for $10,000. Some lenders no longer offer small home equity loans or lines, Gumbinger noted.
Gumbinger noted that the average home equity line of credit in his July survey was 5.18%. Fixed rates on home equity installment loans averaged 6.27%.
Home equity rates are higher than refinancing your mortgage. But cash-out refinances aren’t really happening as much at the moment because it’s tougher for homeowners to refinance to take cash out than trying to take out a home equity loan or line of credit, Gumbinger said.
Many lenders want the homeowner to retain more equity in the house, say 25% or so, after taking cash out when refinancing.
August 23, 2013: “Builder can’t dictate where buyer obtains financing”, a Chicago Daily Herald help desk article by David Myers with a shout out to HSH.com:
Builders routinely offer special financing packages, either through their own company or a local bank. Terms of the loans are often very good, so they’re certainly worth checking out. Compare the builder’s terms with those quoted by at least three other lenders and independent mortgage brokers. Internet sites such as www.hsh.com can provide average rates quoted by lenders in your particular area for free, while the site operated by credit-scoring innovator Fair Isaac will tell you what other borrowers with similar FICO scores are being charged for mortgages.
August 22, 2013: “The Siren Call of the Adjustable-Rate Loan”, a New York Times market update by Lisa Prevost directing folks to some of the free mortgage content found on HSH.com:
Mr. Schwaber advises borrowers to find out which index applies to the ARM they are interested in, and then do some quick Internet research to look at how it has performed in the past. HSH.com tracks the performance of a variety of ARM indexes.
August 21, 2013: “Why it might be cheaper to get a jumbo loan”, a MarketWatch feature by Anya Martin, discussing the state of conforming and jumbo mortgage markets with from HSH.com VP Keith Gumbinger:
The average rate for a 30-year fixed-rate jumbo was 4.69% on Aug. 9, compared with 4.51% for a 30-year fixed-rate conforming loan, according to HSH.com, which tracks rate trends.
For much of the spring and summer, the jumbo-conforming gap has been less than 20 basis points for a 30-year fixed-rate mortgage and even tighter for five-, seven- and 10-year adjustable-rate mortgages, said Keith Gumbinger, vice president of HSH.com. In December 2008 – the height of the mortgage crisis – the gap between rates for a 30-year fixed-rate jumbo and a government-backed loan rocketed to 180 basis points, Gumbinger said.
August 16, 2013: “July Housing Starts Come in Below Estimates”, a US News market update by Danielle Kurtzleben, with some observations and outlook from HSH.com VP Keith Gumbinger:
The housing market has gained a lot of ground over time, but it’s not clear how long such strong growth can continue.
“There is constant demand, but there are headwinds for increasing demand,” says Keith Gumbinger, vice president at mortgage information site HSH.com. “Unless we see stronger economic growth, unless we see stronger job growth, it’s going to be hard for housing starts to move significantly higher in the near term.”
He also adds that even if job growth picks up soon, housing growth will likely lag behind, as people save up for new homes after getting their new jobs.
August 9, 2013: “Did You Miss Your Chance to Make a Real-Estate Killing?”, a Wall Street Journal article by Joe Light, with a rule of thumb guideline from HSH.com VP Keith Gumbinger:
If mortgage rates rise one percentage point, the same buyer would need to see home prices fall 10% for the payment to be the same, according to mortgage-information website HSH.com
August 8, 2013: “When Condo Developers Suggest Preferred Lenders”, a Wall Street Journal feature by Anya Martin, with comments from HSH.com VP Keith Gumbinger:
Because of the challenges inherent in condo mortgage approval, a preferred lender can offer “speed and convenience” in closing a purchase, but borrowers should still shop around in case another lender can close a deal and save them money, said Keith Gumbinger, vice president of HSH.com, a website that tracks mortgage trends.
“It depends on how much you are putting down, your credit score and the type of loan. But all things being equal, if the preferred lender is a quarter point higher than the lender in the open marketplace, you have to weigh whether that convenience is worth the extra cost,” Mr. Gumbinger said.
Even if a buyer wants to use the preferred lender from the get-go, it’s best to contact other lenders because the preferred lender may no longer be in business when the buyer becomes a seller down the road, Mr. Gumbinger said. “It matters more for resale purposes than you might think because the ability for the next buyer to get a loan is crucial, too,” he said.
September 2013 issue: “How to Deal With Volatile Mortgage Rates”, a Kiplinger’s Personal Finance advisory piece by Pat Mertz Esswein, with some interest rate data from HSH.com:
If you plan to buy and are concerned about rising rates, don’t procrastinate.
Choose one with an initial fixed-rate period that matches how long you expect to remain in the home or keep the mortgage. In late June, the average rate nationally was 3.2% for a 3/1 ARM that adjusts after three years, 3.37% for a 5/1 ARM and 3.89% for a 7/1 ARM, according to HSH.com, a rate-tracking service. Also, consider what the payment would be if the interest rate rises to the maximum allowed at the first adjustment (often to a cap of two percentage points).
August 5, 2013: “South Jersey couple, bank battle over missed mortgage break”, a Philadelphia Daily News consumer piece by Jeff Gelles, with some mortgage rates from HSH.com:
DiEnno and Bjornsson applied jointly, locking in a 15-year fixed-rate loan at 2.87 percent – near the week’s national average, according to HSH Associates.
Rates actually dipped in the first month, but then they began climbing – by half a percentage point when their deal was canceled, and to about 3.60 percent last week, HSH says. If they borrowed at that rate, they’d pay about $14,000 more over the life of a 15-year loan.
August 1, 2013: ” Rent or Buy a Home? More Choose Rental”, a discussion piece which appeared on Financial-Planning.com by June Fletcher, citing HSH.com content:
While buying has many advantages – including guaranteed fixed housing loan costs over the long term (assuming the owner has a fixed-rate mortgage), the potential for appreciation, tax deductions for mortgage interest and favorable treatment of capital gains – drawbacks exist. Homeownership requires a substantial down payment, typically 10% to 20% of a home’s purchase price, and will generate an annual property tax bill as well as hefty annual maintenance costs – anywhere from 1% to 4% of a home’s total value, according to HSH.com, a real estate publisher.
July 29, 2013: “Today’s Housing Market Making It Extra Tough on First-Time Homebuyers”, a FoxBusiness feature by Kathryn Buschman Vasel that included some observations from HSH.com VP Keith Gumbinger:
There is now an older group of first timers who couldn’t buy before the housing burst because they were just getting established and prices were insanely high,” says Keith Gumbinger, vice president of mortgage and consumer loan website HSH.com. “But then they also couldn’t buy during the recession because they lost their job or had massive debt.” He estimates that about 15 to 20 percent of the new-homebuyer market is made up of people over 35.
It’s hard to fault would-be-homebuyers’ lack of confidence. “These young adults have a lot of hurdles they have to overcome, they are still underemployed or work part time, so they don’t have the job history or income strength to get a mortgage,” says Gumbinger. “The ability to increase your income is slight in this marketplace of rising home prices.”
“There is no doubt now is a great time to buy, but there is this fear of loss that is stopping them,” says Gumbinger. “This is jumping in with both feet into the deep end; they watched friends and family lose their life savings, get removed from their homes and have to start all over, and for them, it’s just not worth the risk and responsibility.”
July 28, 2013: “How underwater homeowners can get a cheaper interest rate”, a Bergen (NJ) Record story by Kathleen Lynn that contained a quote from HSH.com VP Keith Gumbinger:
“For underwater borrowers, just having access to the ability to refinance is very valuable,” said Keith Gumbinger, vice president of HSH.com, a Riverdale publisher of mortgage information.
July 26, 2013: “So You Wanna Be a First-Time Homebuyer?”, a Fox Business article by Kathryn Buschman Vasel included some market context from HSH vice president Keith Gumbinger:
“There is now an older group of first timers who couldn’t buy before the housing burst because they were just getting established and prices were insanely high,” says Keith Gumbinger, vice president of mortgage and consumer loan website HSH.com. “But then they also couldn’t buy during the recession because they lost their job or had massive debt.”
The attitude of potential first-timers has also shifted as memories of the recession continue to haunt them.
“There is no doubt now is a great time to buy, but there is this fear of loss that is stopping them,” says Gumbinger. “This is jumping in with both feet into the deep end; they watched friends and family lose their life savings, get removed from their homes and have to start all over, and for them, it’s just not worth the risk and responsibility.”
Note: this story also appeared on AOL as “Today’s Housing Market Making It Extra Tough on First-Time Homebuyers”.
July 26, 2013:“How to Win a Bidding War”,a weekend Wall Street Journal item by Molly Hensley-Clancy included some advice from HSH.com’s mortgage expert Keith Gumbinger:
If you are getting a mortgage, lenders will set a maximum that you are allowed to borrow based on your down payment and your income. But outside of exceptional circumstances, you shouldn’t be borrowing the maximum, says Keith Gumbinger, vice president at mortgage-information website HSH.com.
Consider how much of your income you are willing to apply every month for your mortgage payment, and don’t forget about insurance and taxes. It also is important to have enough reserves to cover unexpected repairs and other housing expenses.
If you are paying cash, think about how that house matches up against your other investments. “Would you commit all of the funds in your portfolio to a single investment?” Mr. Gumbinger asks.
July 25, 2013: “U.S. Mortgage Rates Fall as Homebuying Gains”, a Bloomberg market update by Elizabeth Dexheimer, with an outlook by HSH.com VP Keith Gumbinger:
“Markets have become more accustomed to the idea that the Fed is going to remove the extraordinary supports that have been in place sometime soon,” Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage website, said in a telephone interview.
July 24, 2013: “Americans Gambling on Rates With Most ARMs Since 2008″, a Bloomberg story on the use of ARMs by Kathleen M. Howley & Prashant Gopal, with a comment from Keith Gumbinger, HSH.com’s vice president:
“When you give unqualified buyers a rate they won’t be able to afford based solely on the presumption that home prices will always go up, it’s not going to end well,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage website.
July 19, 2013: “Refinancing, Despite a Rate Rise”, a Sunday New York Times column by Lisa Prevost included some market evaluation by HSH.com VP Keith Gumbinger:
The rise in rates by “better than a point” since early May has effectively killed off a lot of the refinancing business, in what amounts to a “purely an interest-rate-driven decision,” said Keith T. Gumbinger, the vice president of HSH.com, a financial publisher. But getting into a new mortgage still makes sense for some categories of homeowners.
Borrowers who couldn’t refinance when rates were lower because their homes were barely worth what they owe may be better positioned now, Mr. Gumbinger said. “Maybe you didn’t have a deep enough equity position before,” he said, “but with home prices rising” in some places, up 10 percent over last year “market forces may be more favorable for you, even with the rise in rates.”
He noted that although the federal Home Affordable Refinance Program, or HARP, was set up to help underwater borrowers refinance, not everyone qualifies. So some borrowers could still be “sitting on a loan in the sixes or sevens.”
July 18, 2013: “Why adjustable-rate mortgages are hot again”, a Washington Post article by Katherine Reynolds Lewis incorporated some commentary from HSH.com’s Keith Gumbinger:
“It’s not ARMs that were exploding, it’s that some of the products that were engineered and the payment methodologies did put borrowers at a disadvantage. What we have in the marketplace today are more traditional adjustable-rate products,” said Keith Gumbinger, a vice president at HSH.com, a mortgage information web site. “The most toxic ARMs have completely vanished from the market.”
July 18, 2013: “Misfit Borrowers Attracting Lenders as Housing Revives”, a Bloomberg discussion of market trends by John Gittelsohn & Prashant Gopal featured a characterization of a new market wrinkle from Keith Gumbinger, HSH.com’s vice president:
“At least a few lenders are starting to dig into the nooks and crannies of borrowing,” Keith Gumbinger, vice president HSH.com, a Riverdale, New Jersey-based mortgage information website, said in a telephone interview. “These are misfit mortgages because they don’t align well with the new standards in the marketplace.”
July 15, 2013: “US ‘jumbo’ loan rates as cheap as standard mortgages”, a Financial Times article by Stephen Foley incorporated a discussion with HSH.com VP Keith Gumbinger:
For the past seven weeks, the rate on the average new jumbo mortgage has been no more than 21 basis points higher than the rate on the average standard loan, according to mortgage research company HSH Associates. This was the typical differential before the crisis. It widened to 1.8 per cent at its worst in 2008.
“The benefits are available to a limited spectrum of borrowers and particularly desirable ones at that,” said Keith Gumbinger, vice-president of HSH, who said jumbo loans tend to be given to well-heeled people that banks want to lure as customers. “There are cross-selling opportunities to the wealthy.”
July 14, 2013: “Home-equity lines bedeviling Americans” a MarketWatch.com item by Jonnelle Marte with some advice from HSH.com vice president Keith Gumbinger:
The rise in delinquencies among home-equity lines “could continue on for a while,” says Keith Gumbinger, vice president of HSH.com, a mortgage information site.
Homeowners should be upfront with their lenders about any financial difficulties and ask the bank to restructure the loan in a way that might make the payments more manageable, says Gumbinger. Because banks often carry home-equity lines directly on their books and would need to coordinate with another lender to foreclose on a property “when mortgages and home equity lines are not issued by the same bank, they may be willing to help a borrower out”, he says. “You are not necessarily in as weak a position as you think,” he says.
For instance, some lenders might be willing to delay the start of the payment period slightly, says Gumbinger. Borrowers who know they will be on better financial ground in six months to a year might be able to request an extension, he says.
Borrowers can also ask for a longer repayment period, extending the time over which the loan must be paid back from, say, 10 years to 15 years, which could lead to smaller monthly payments, he says. And some banks may also be willing to lower the interest rate on the loan, says Gumbinger. (Though not all loans allow for rates to be adjusted, he adds.)
This article also appeared on AOL Real Estate as
“Home Loans That Sting”
July 14, 2013: “Higher rates may slow housing here”, a St. Louis Post-Dispatch story by Jim Gallagher, where HSH.com VP Keith Gumbinger discusses the local impact of rising mortgage rates:
“It’s a little bit of a deterrent,” says Keith Gumbinger vice president at the mortgage information firm HSH.com. He expects the biggest effect on the low end of the market.
People who suffered most in the recession – perhaps losing a job – are likely to feel the rate hike the most, he says. They may have spent years rebuilding their credit while rates were low. Now that they’re ready to buy, higher rates will put even cheaper homes out of reach.
“They’re just at the cusp of qualifying,” he said.
July 11, 2013:“Mortgage rates reach highest level in 2 years”, a CNNMoney market update by Les Christie which included context from HSH.com VP Keith Gumbinger:
This time, the culprit is the economy, said Keith Gumbinger, vice president of HSH.com, a mortgage information web site.
“Strengthening employment data put the bond and mortgage markets on the defensive again,” he said. “The employment report for June, released last Friday, was firmer than expected, and upward revisions to April and May figures showed that hiring is on stronger footing than was previously believed.”
Earlier this week, the Fed seemed to calm fears about an early end to its bond buying program and, as a result, there was some speculation that mortgage rates would start to drop again. Gumbinger said rates leveled off earlier this week, but it’s still too early to tell if they will move lower.
Either way, bond investors seem to have grown accustomed to the reality that the Fed will opt out of its buying program, according to Gumbinger. “What’s not known is how quickly that will happen,” he said.
July 4, 2013: “Deals on jumbo mortgages are beating those for regular loans”, a Bloomberg News item by Prashant Gopal, Jody Shenn and Dakin Campbell which appeard in the Boston Globe, and contained observations on the jumbo mortgage market by HSH.com VP Keith Gumbinger:
On average, the extra cost of 30-year fixed jumbo loans reached a six-year low of 0.16 percentage point last month, HSH.com reports. Bigger adjustable-rate mortgages with payments that can rise after five years ended last week 0.09 percentage point cheaper, the most since at least 1998.
“It’s unusual to see jumbos priced below the conforming rate,” said Keith Gumbinger, vice president of Riverdale, N.J.-based HSH.com. “These are very valuable customers and also a very small group, so competition for them can be intense.”
July 3, 2013: “U.S. 30-Year Mortgage Rates Drop From a Two-Year High”, a Bloomberg mortgage market update by Prashant Gopal which incorporated some context provided by HSH.com vice president Keith Gumbinger:
Rates are adjusting after spiking over expectations that the Federal Reserve will scale back bond purchases, said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-information website. Last week’s increase in the 30-year average was the biggest since 1987.
“We see rates starting to settle back after the panic move,” Gumbinger said yesterday.
June 28, 2013: “Rising Mortgage Rates: Straw that Breaks the Recovery’s Back?” , a FoxBusiness.com story by Kathryn Buschman Vasel that includes expertise from HSH.com VP Keith Gumbinger:
However, Keith Gumbinger, vice president of HSH.com, says the boon might have already happened. “We may have seen it already in the May numbers that came in so strong, since those are propped up by homebuyers already well aligned and thoughtfully planning to buy. For people looking for a price signal to get into the market, that really hasn’t happened, so even if sales are turned off by the margins, the trajectory of the improvement is likely to soften.”
Gumbinger points out that in 2003 the interest rate stood at a 37-year low of 5.24%, without any Fed assistance. “If rates went past the 5% mark in a very short period of time, let’s say before the year was out, that would probably cause enough people to get concerned and hurt the market.”
The rise in interest rates will price out some buyers, especially since lending practices remain stiff. “The masses aren’t scattering with the recent moves, but those that just meet the lending qualifications and need those low prices are likely going to move to the sidelines, and each potential borrower is very important today,” says Gumbinger.
June 27, 2013: “Rising mortgage rates threaten surging home prices”, a USA Today article by Julie Schmitt with an observation of mortgage rates and home sales from HSH.com VP Keith Gumbinger:
Yet, if 30-year-fixed rates remain above 4.5% — as they were Monday, based on a survey by mortgage tracker HSH.com — some buyers will be priced out of the home market, says Keith Gumbinger, HSH.com vice president.
“If rates hold at these levels, there definitely will be an impact on home sales,” he says.
June 26, 2013: “Ultralow mortgage rates are going, gone”, a MarketWatch.com Home Economics story by Amy Hoak with an outlook by HSH.com vice president Keith Gumbinger:
Daily surveys by HSH.com show mortgage rates improving somewhat since the beginning of the week. HSH data showed the 30-year fixed-rate mortgage at 4.63% on Monday, 4.56% on Tuesday and 4.54% on Wednesday, said Keith Gumbinger, vice president of the consumer loan information firm.
“Early indications are that rates we gather today should be lower than yesterday. However, the market has been so volatile over the last five days that any dip might not be passed along immediately to the retail market,” Gumbinger said.
Gumbinger said it’s likely the market overreacted and that mortgage rates will move downward. But it’s probable that very low rates are gone for good. “Do I think we’re going back to 3.5%? No. Do I think we should be closer to 4% than 4.5%? Probably,” he said.
June 26, 2013: “Business Feels Pinch of Swift Rate Rise”, a Wall Street Journal article by Jon Hilsenrath and Victoria McGrane including daily data from HSH.com
Rates on conventional 30-year mortgages were 4.56% on Wednesday, up from 3.74% a month ago, according to HSH Associates; rates on investment-grade-rated corporate bonds went to 3.47% from 2.73%, according to Barclays; and yields on 10-year U.S. Treasury notes were 2.54%, up from 1.94%.
June 25, 2013: , “Run-up in mortgage rates raises questions about housing recovery”, an article by E. Scott Reckard which appeared in the Los Angeles Times including rates provided by HSH.com:
A standard 30-year fixed-rate home loan hit an average of 4.63% on Monday before backing off just slightly Tuesday, according to HSH Associates. That’s up from 3.49% on May 3 and an all-time average low of 3.44% during a week in December. (a graphic accompanies the text)
June 25, 2013: “A Hawkish Signal Bernanke Didn’t Send”, a Wall Street Journal column by David Wessel included a breaking update on mortgage rates and a graph from HSH.com:
Global stock markets plunged. The bond market pushed yields on 10-year U.S. Treasury notes close to 2.6%, higher than they’ve been since August 2011. Rates on 30-year fixed-rate mortgages leapt, hitting 4.6% this week, up from 4.1% the week before, according to HSH Associates. Futures markets are betting the Fed might lift short-term rates from zero as soon as mid-2014. (a graph of rates accompanies the text)
June 21, 2013: “High-End Home Loans Stage a Comeback”, a Wall Street Journal article by Ruth Simon which included rates and expertise from HSH.com and HSH Vice President Keith Gumbinger:
This week, rates on 30-year fixed-rate jumbo mortgages averaged 4.29%, according to HSH.com, a mortgage-information website based in Riverdale, N.J. – just 0.16 percentage point more than the average rates on similar conforming mortgages. That is down from as much as 1.8 points in December 2008 and around 0.2 point before the financial crisis.
- Match your loan to your time horizon. Most borrowers with smaller loans opt for 30-year fixed-rate mortgages. But adjustable-rate loans can sometimes provide significant savings for jumbo borrowers.
If the amount of time you plan to stay in the home matches the fixed-rate period, an adjustable will “provide great savings and is really rather risk-free,” says Keith Gumbinger, a vice president at HSH.com.
On a $1 million loan, a borrower could save $67,000 in interest and pay off $24,000 more in principal over five years by opting for an adjustable-rate mortgage that carries a fixed rate for five years instead of a 30-year fixed-rate loan, Mr. Gumbinger says. An ARM with a 10-year fixed period provides less savings but more protection against rising rates, he adds.
- Protect yourself against further rate moves. If you have a deal in place that makes sense at current mortgage rates, lock in the rate to protect against further increases, advises Mr. Gumbinger of HSH.com.
If you think rates might drift lower, ask for a “float-down” option, which typically costs $200 to $400 and will allow you to lower your borrowing costs if rates fall before closing, he adds.
June 21, 2013: “Rising Mortgage Rates Are the Least of Buyers’ Worries”, a Bloomberg Businessweek article by Carla Fried using rates and data provided by HSH.com VP Keith Gumbinger:
Keith Gumbinger, vice president at loan data firm HSH Associates, expects the quick rate increase to put a fork in the refinancing market, which currently accounts for more than two-thirds of all new loan activity. After five years of record low rates, most homeowners have already refinanced at least once; the average rate on outstanding mortgages is below 5 percent. When the interest rate on a 30-year loan was at 3.5 percent back in early May, serial refinancers could still make the math work on doing another deal. Not now.
For potential home buyers, though, the recent rate spike is far from mortgageddon. Sure, 4.25 percent isn’t as sweet as 3.5 percent, but it’s still downright cheap. Gumbinger points out that the lowest rate in normal times (i.e. times of no Fed intervention) was 5.24 percent in June 2003. “Is the bottom past? Probably. But we’re still well below the historic low,” says Gumbinger.
June 21, 2013: “Mercurial Mortgage Rates to Stabilize Soon, Analysts Say”, a New York Times piece by Nelson Schwartz used a graphic of data from HSH.com
June 20, 2013: “Despite Fed, Cost of Consumer Borrowing Could Rise”, a Kelli B. Grant article in CNBC.com with context about rates provided by HSH.com VP Keith Gumbinger:
House hunters and would-be refinancers may have missed their window of opportunity. Rates are likely to keep trending higher. Borrowers could see the rate for a 30-year fixed-rate mortgage hit 4.25 percent by next week, said Keith Gumbinger, vice president at HSH.com.
Consumers who are partway through the process have some ability to halt hikes. “If you’ve got a deal that works at 4, 4.25 percent, lock it in,” he said. Ask about so-called float-down options, which, if rates drop, allows for that locked in rate to fall too. That can add several hundred dollars to the cost of the loan, but may work in borrowers’ favor, he said.
Home Equity Loans and Lines of Credit
Rates aren’t likely to budge much, because they’re tied to the prime lending rate. But the recovering real estate market may help borrowers here. “Rising home prices has rebuilt equity,” he said, and that makes it easier for some homeowners to get a home equity loan or line of credit.
June 20, 2013: “Ben Bernanke’s power over your money, a CNNMoney column by Melanie Hicken included a consumer update on mortgage costs from HSH VP Keith Gumbinger:
The recent rate increase amounts to about $100 more a month on a $300,000 mortgage, totaling $36,000 more over the course of 30 years, said Keith Gumbinger, vice president of HSH.com, a mortgage information company.
June 19, 2013 “Jump in US mortgage rates cools refinancing demand”, a Financial Times article by Michael Mackenzie and Stephen Foley in New York including quotes from HSH.com VP Keith Gumbinger:
Keith Gumbinger, vice-president of mortgage research company HSH, said that refinancing activity in particular had briefly been spurred by headlines about rising rates, as potential borrowers feared that the opportunity to change their loan may be pulling away.
It is a phenomenon that will “peter out” over coming weeks, he said. “If rates continue to rise then we will see the slowdown increase and more people will be pushed off to the sidelines.”
June 7, 2013: “Excellent Credit but Can’t Refinance”, an Ask Farnoosh: (Farnoosh Torabi) column that appears on Yahoo Finance which includes a response from HSH.com VP Keith Gumbinger:
If you’re not eligible for HARP and you do, in fact, lack enough equity to refinance, Keith Gumbinger, vice president of HSH.com, a mortgage information website, suggests you consider a ‘cash-in’ refinance. “Essentially, the borrower is making a new down payment so as to start with an equity stake,” he says. “These are and have been employed by many homeowners in recent years not only in order to refinance, but also to buttress an equity stake” so you won’t need mortgage insurance. In theory, the savings of the refinance should “pay back” the money needed to cash in over some period of time. Think of it as additional closing costs, he says.
June 6, 2013: “Farewell 3% mortgage rates”, a piece by Les Christie on CNNMoney incorporating quotes from HSH.com VP Keith Gumbinger:
“Up until recently, expectations were that the Fed would begin to taper purchases of mortgage-backed securities (MBS) and Treasury bonds late in 2013, but that timeframe appears to have moved to September, possibly sooner,” said Keith Gumbinger, vice president of HSH.com, a mortgage information company.
But now conditions have improved considerably since the economy emerged from recession four years ago. As the economic revival gains traction, it is creating a tailwind for interest rate increases, according to Gumbinger.
3.3% rates are unprecedented. “The 30-year [mortgage rate] hit a 37-year low in 2003 at 5.23%,” said Gumbinger. “That was the previous low-watermark prior to this financial crisis and it’s likely we will move closer to that mark as we grind forward.”
June 6, 2013: “Investors Show Renewed Interest in Mortgage-Backed Securities”, a Wall Street Journal Jumbo Jungle article by Anya Martin included some context provided by HSH.com VP Keith Gumbinger:
- New rules coming. New Consumer Financial Protection Bureau regulations take effect in early 2014 that may require lenders and/or securitizers to hold 5% of the amount of securitized loans that aren’t qualified mortgages. Some loan types, such as interest-only loans, may be more difficult for borrowers to find, since securitizers will be less likely to want to buy them from lenders due to the 5% rule, said Keith Gumbinger, vice president at HSH.com, a mortgage-information website.
June 4, 2013: “Banks loosen standards on down payments”, a MarketWatch.com article by Jonnelle Marte including a discussion of down payment trends from HSH.com VP Keith Gumbinger:
But the decision to buy a home with less money down could come with consequences. Homeowners with little equity in their property could have a hard time selling their homes down the line if home prices decline, says Keith Gumbinger, vice president with HSH.com, a mortgage information website. They could find themselves owing more than their homes are worth, says Gumbinger, as many have in recent years. This could force them to stay in the home longer than they would like while they wait for home prices to rise.
The shrinking down payments are partly due to the growth of mortgage insurance, which is typically required for homebuyers who want to put less than 20% down, says Gumbinger. Insurers became more willing to offer the coverage as the credit quality of borrowers improved. Could this eventually lead to a comeback of no-money down mortgages? “I would never say never,” says Gumbinger.
June 4, 2013: “Fed ‘tapering’ fears push up US mortgage rates”, a Financial Times market update by Stephen Foley and Michael Mackenzie in New York with some insight from HSH.com VP Gumbinger:
Keith Gumbinger, vice-president of mortgage research company HSH, said: “The rise in the rate is enough to slow down the refinancing market, as even a small bump up in rates can put homeowners on the fence.”
Even after the latest jump, long-term borrowing costs for homeowners remain historically low.
Before the financial crisis and efforts by the Federal Reserve to suppress interest rates, the low for 30-year fixed home loans was 5.2 per cent in June 2003, said Mr Gumbinger.
May 30, 2013: “How the financial crisis messed up all our benchmarks”, an NPR / Marketplace.org story by Noel King included some comments and context from HSH.com VP Keith Gumbinger:
For mortgage watchers with longer memories, Godinez’s anxiety seems slightly overblown. Keith Gumbinger, the vice president of mortgage information website HSH.com*, has been in the mortgage business since 1984 and says when he started, “the average 30-year fixed was 13.14. And rising.”
Gumbinger said many buyers “have become accustomed to low and stable interest rates because they don’t know that there were weeks when interest rates rose a full percentage point back in those days.”
May 30, 2013: “A Calculator to Compare Closing Cost Options”, a New York Times Bucks Blog feature by Ann Carrns with a discussion of HSH’s new FeePay BestWay closing cost comparison tool, included a conversation with HSH.com VP Keith Gumbinger.
May 30, 2013: “Calculate before you cry over fixed mortgage rates”, a discussion of HSH’s PreFi and LowerRate calculators appeared on the St. Louis American website.
May 30, 2013: “Mortgage rates are highest in a year”, a CNNMoney.com market update by Les Christie featured commentary from HSH.com VP Keith Gumbinger:
“Home buyers can blame it on Bernanke, according to Keith Gumbinger, vice president of HSH.com, a mortgage information company.
“Comments he made … left the impression that the Fed’s [stimulus] policy might start to be pulled back soon, perhaps as early as September,” said Gumbinger. “That fostered a spike in interest rates as investors scrambled to adjust their positions.”
May 30, 2013: “Fed leader backs cautious course”, a Minneapolis Star-Tribune article by Adam Belz with comments from HSH.com VP Keith Gumbinger:
Whether the Fed slows asset purchases in summer or early fall, “both of those time frames are definitely accelerated from what the market was expecting,” said Keith Gumbinger, vice president of HSH.com, a mortgage information firm.
So mortgage rates have risen as investors anticipate there being fewer buyers for mortgage-backed bonds.
“With a lack of demand, yields go the other way,” Gumbinger said. “Essentially you’re losing a big buyer in the marketplace.”
May 29, 2013: “Mortgage rates may be heading higher”, an article in USA Today by Julie Schmitt which included an observation about mortgage rate movements from HSH.com Vice President Keith Gumbinger:
“…markets reacted to mixed signals from the Federal Reserve that raised the possibility it might begin to taper its purchases of mortgage-backed securities and Treasury bonds sooner rather than later. Those purchases have helped keep interest rates low. “That’s created a little panic wobble,” says Keith Gumbinger of mortgage tracker HSH.com.
May 29, 2013: “Fixed-rate jumbo mortgages make a comeback”, a MarketWatch.com article by Anya Martin which also appeared in the May 24 Wall Street Journal included both analysis and statistics from Keith Gumbinger, HSH.com’s Vice President:
Still, hybrid ARMs remain attractive to borrowers with other financial priorities, Gumbinger said. Sample late-April interest rates were 2.65% for a five-year hybrid ARM, 2.85% for a seven-year hybrid ARM and 3.24% for a 10-year hybrid ARM, he added. “Wealthier clients may be better able to protect themselves against the future risk of higher costs,” he said.
The general wisdom when deciding between an ARM and a fixed jumbo is the same as with any mortgage, Gumbinger said. Answer the question: How long are you going to stay in the house? If the length of time is near or less than the length of the ARM, then you’ll save money with the ARM, he said.
May 23, 2013: “Mortgage Rates in U.S. Rise, With 30-Year at a Two-Month High”, a market update by Prashant Gopal included context provided by HSH.com VP Keith Gumbinger:
“A sustained move upward for a number of weeks can push buyers off the fence,” Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-information website, said in a telephone interview yesterday. “It can be a signal that the time is becoming right to move before rates go up further.”
May 20, 2013: “More Than Refinancing: Why Low Mortgage Rates Matter to Homeowners” a guest column on USNews.com authored by HSH.com VP Keith Gumbinger appeared.
May 6, 2013: “Color of Money: A cheaper refinancing alternative” discussion of HSH’s PreFi and LowerRate calculators appeared in The Buffalo News website.
May 2, 2013: “15-year mortgage rate hits record low”, a CNNMoney feature by Les Christie, with context from HSH VP Keith Gumbinger:
“There was a chance that the Fed would start to taper their purchases as summer approached,” said Keith Gumbinger, of HSH.com, a loan information provider. “But that is starting to look less likely, given the still-soft state of the economy. Odds favor that the programs will continue until much later in the year, so mortgage rates should continue to be available at fantastic rates.”
May 2, 2013: “Mortgage Rates Drop for Fifth Week as 15-Year Sets Record”, a Bloomberg market update by Brian Lewis, including context from Keith Gumbinger, HSH.com VP:
“Low rates have certainly created demand in the marketplace, but there is not enough supply,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey- based mortgage-information website. “The low interest rate environment is likely to persist for some time yet.”
April 30, 2013: “Borrowers see glitches as big banks sell off mortgage rights”, a Charlotte Observer feature by Andrew Dunn citing HSH.com VP Keith Gumbinger:
“Servicers have a tremendous amount of obligations now,” said Keith Gumbinger, vice president of mortgage industry publication HSH.com. “It’s become a more burdensome opportunity.” Deeper in the piece, he added: “Expertise in business and excellence in customer service don’t necessarily go hand in hand,” Gumbinger said. “The point of the servicer is to handle the loan for the investor. Does that necessarily mean you’re going to get fantastic customer service or a sympathetic ear? No.”
April 25, 2013: “15-year mortgage rate at record low” a CNNMoney article by Les Christie which appeared on WGAL.com with some insight from Keith Gumbinger, VP of HSH.com:
“There’s no better way to welcome the spring home-buying season,” said Keith Gumbinger, vice president at HSH.com, a mortgage information company. “But [there's] not much inventory available. Some sellers may be holding out for higher prices before putting their homes on the market this spring.”
April 19, 2013 “How to pay a lower rate without refinancing”, a Washington Post column by Michelle Singletary, discussing HSH.com’s new mortgage prepayment calculators:
There is a way to cut the amount you’ll pay in mortgage interest to achieve savings as if you refinanced. HSH.com, which publishes mortgage and consumer loan information, has created two calculators for homeowners who are unable to refinance at today’s low interest rates.
The company’s ‘PreFi” and ‘LowerRate” calculators help homeowners figure out how to attain a lower effective mortgage interest rate through prepaying their mortgage principal.
“If you can’t refinance your mortgage but can afford to pay some additional money each month, that prepayment might save you as much as an actual refinance,” said Keith Gumbinger, vice president of HSH.com.
April 19, 2013: “Ask Farnoosh: Best Ways to Pay Off Your Student Loans”, an advice column written by Farnoosh Torabi on Yahoo.com citing HSH.com expert Keith Gumbinger:
“The total interest cost — even at 4% — may be higher than she thinks,” says Keith Gumbinger, VP, HSH.com, a mortgage information web site. “Even with a five-year loan, that’s two extra years of interest charges, even at a lower rate.”
April 16, 2013: “M&T earnings rise, but mortgage banking shows recent weakening”, a new item by Richard Newman which appeared in the Record (NJ) and on northjersey.com discussing refinance trends with HSH VP Keith Gumbinger:
Keith Gumbinger, vice president of HSH.com in Riverdale, also said the pool of home buyers who could qualify for and benefit from refinancing has shrunk, even as 30-year rates this month again inched down below 3.5 percent, from 3.77 percent in mid-March.
April 10, 2013: “Home Prices Seen Falling in Some Areas as Rates Increase” a Bloomberg Businessweek article by Prashant Gopal that featured a long-range outlook by HSH VP Keith Gumbinger:
“Rates may rise to about 4 percent by the end of this year, and 4.5 percent by late 2014, Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-information website, said in a telephone interview.”
April 4, 2013: “When Will Mortgage Lending Standards Ease?“ a guest column appeared on USNews.com, authored by HSH.com Managing Editor Tim Manni.
March 29, 2013: “Rental Investment May Seem Safer Than It Really Is”, a New York Times piece by Tara Siegel Bernard with quotes about mortgage market conditions from HSH VP Keith Gumbinger:
Can I get a mortgage? Not only is getting a mortgage on an investment property more difficult than getting a loan on your primary home, it also tends to be more expensive. Mortgages on investment properties tend to carry slightly higher interest rates “anywhere from 0.25 of a percentage point to a full percentage point and may require higher down payments”, according to Keith Gumbinger of HSH.com, a mortgage data firm. “Things can also get more complicated where the income from the property is needed to support the loan,” he added. “The purchaser may need to provide a rental history for the property, if any exists, or they may need to have a rental market analysis conducted.”
March 23, 2013: “Homebuying: Should you take the plunge?” a Baltimore Sun item by Carolyn Bigda included some statistics and commentary from Keith Gumbinger, HSH.com’s VP:
[on FHA loans]
These loans charge just 3.45 percent in interest today and require a down payment of only 3.5 percent. Also, you don’t need sterling credit. You may be approved with a FICO score as low as 580, though many lenders want a minimum of 620 today, says Keith Gumbinger of HSH.com, which keeps tabs on the housing industry.
March 21, 2013: “U.S. Mortgage Rates Decline“, aBloomberg Businessweek syndicated market update by Prashant Gopal that included context from HSH.com VP Keith Gumbinger:
“For American mortgage borrowers, bad news is good news,” said Keith Gumbinger, vice president of HSH.com, a Pompton Plains, New Jersey-based mortgage-information website. “Every time it looks as though things are calming down, something else crops up to throw another set of jitters into the marketplace.”
March 20, 2013: “New Math for Old Mortgages” a Reuters syndicated “Stern Advice” column by Linda Stern which discusses HSH.com’s new PreFi and LowerRate calculators:
In a way, you can, says Keith Gumbinger of HSH.com, a Riverdale, New Jersey, mortgage research firm. His theory is that you can lower your effective interest rate by pre-paying the loan. That’s a strategy that might be especially useful for homeowners who can’t refinance or who have a low balance left on their loans and can’t find a refi deal that is worth its closing costs.
March 10, 2013: “The Time, and Place, to Buy“, a New York Times feature by Lisa Prevost included some insight from HSH.com VP Keith Gumbinger:
Despite an upward trend over the last few months, the 30-year rate is unlikely to rise beyond 3.75 percent “for the foreseeable future,” said Keith T. Gumbinger, the vice president of HSH.com, a financial publisher.Stan Humphries, the chief economist of Zillow.com, agreed.
February 26, 2013: “Analysis: Jumbo mortgages are back, but at far from 2007 levels“, a Linda Stern/Reuters story which appeared on Yahoo.com and containing context from HSH.com VP Keith Gumbinger:
Pre-crisis, rates on jumbo loans were typically around 0.25 percentage points higher than those on conventional loans, says Keith Gumbinger of HSH Associates, a mortgage research firm in Pompton Plains, New Jersey. At the height of the financial crisis in December 2008, it hit 1.8 percentage points.
Without more Redwood-like deals, lenders – and particularly smaller banks like Everbank – will run out of cash to lend to jumbo borrowers. If rates rise, they will have other places to find yield.
Says HSH’s Gumbinger: “There’s no doubt (jumbos) are profitable today. But when you’re sitting on $100 million in mortgages yielding 4 percent and you can use that capital to earn 6 or 7 or 8 percent? You’re going to have to liquefy them somehow.”
February 26, 2013: “ How to make sure housing doesn’t bring down the economy again“, a Marlys Harris column which appeared on MinnPost.com, quoting HSH VP Keith Gumbinger:
Whether the commission’s recommendations would actually change much is open to question. Keith Gumbinger, vice president of HSH, the largest publisher of mortgage information, says that many of the problems the think-tank is trying to fix are now behind us.
Getting a mortgage, for example, is no longer impossible. “The days are gone when you could breathe on an application and get it approved,” he says. “But the vast majority of humans with decent credit can qualify.”
As for Fannie and Freddie, they are returning to solvency. In the last quarter of 2012, Fannie Mae brought in a net income of $1.8 billion. Gumbinger didn’t see a need to scrap the agencies. In fact, he adds, “They were what kept the housing market going for the last five years.”
“It seems as though the commission is trying to solve yesterday’s problems,” he adds. “They should be looking at future problems, but, of course, nobody knows what those will be.”
February 26, 2013: “JPMorgan Mortgage, Community Units to Lose 19,000 Jobs“, a story by Dawn Kopecki on Bloomberg Businssweek including an observation from HSH VP Keith Gumbinger:
Reduced staffing may also signal an expectation that refinancings will decline after surging last year, said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey- based mortgage-information website.
“It’s a pretty good bet that the refi boom will be coming to an end” as mortgage rates climb, he said in a phone interview. “Add regulations on top of that, and it doesn’t get any better.”
February 24, 2013: “For Many, 2013 Will Be the Year to Finally Buy a Home”, a Wall Street Journal Sunday article by writer Andrew Coombs quoting HSH.com VP Keith Gumbinger:
And that means a potentially tough time for buyers. “You might have to look and shop around a lot,” says Keith Gumbinger, vice president of HSH.com, a housing-market data provider. “Competition for the most attractive properties is going to be stronger than you think.”
Before setting foot in an open house or lender’s office, check your credit reports at AnnualCreditReport.com (you can get one free report annually from each of three credit-reporting companies at this website). “If you see anything that doesn’t appear correct or needs updating, a good time to make those changes is before you’re in the process,” says Mr. Gumbinger.
Consider buying your credit score as well. (One option is MyFico.com.) With your score in hand, you’re in a position to negotiate, he says. You can say to the lender: “I’m looking for a 30-year-fixed [mortgage], I have a Fico [score] of 760, I can put 20% down. What sort of interest rates and closing costs can you offer me?”
March, 2013: “A Wealth Plan for Every Man”, a Men’s Health”article by Richard Sine containing advice from HSH.com VP Keith Gumbinger:
You’re likely to buy your first house this decade (nice!). It’s also the time to prove yourself. Use these tips to get ahead even as your time, money, and patience are stretched in every direction.
Fixed rates for 30-year mortgages can vary among lenders by as much as 1%, says Keith Gumbinger of hsh.com. Shop around: Try banks, credit unions, even online lenders.
$53,465: Amount you’d save over 30 years on a $250,000 mortgage if your interest rate were 4% instead of 5%
February 9, 2013: “Where Do Mortgage Rates Go From Here?”, a feature article on the Morningstar.com website from HSH.com VP Keith Gumbinger:
Keith Gumbinger of rate-tracking website HSH.com shares his outlook on where rates are headed and what the coming year looks like for the housing market.
February 7, 2013: “Typical 30-year mortgage rate levels off” , a Los Angeles Times market update by E. Scott Reckard featured quotes from HSH.com VP Keith Gumbinger:
As the economy improves, “Investors are less inclined to stash cash in bonds as they look for greater returns,” Keith Gumbinger, vice president of loan information publisher HSH.com, said in a separate report this week.
“And that, in turn, lifts yields and mortgage rates,” he said. But he added that the headway for additional increases is limited.
“We are at best still in a slow-growth pattern with little forward momentum,” Gumbinger said. “Couple this with current Federal Reserve policy to keep mortgage rates low and plenty of fiscal challenges yet to be addressed, and it seems unlikely that rates can go much higher that what we have presently.”
February 7, 2012: “Rent or Buy, What Today’s Military Family Needs to Know” an article which appeared on Patch.com for Fort Bragg (courtesy of USAA) had a quote from HSH.com VP Keith Gumbinger:
“Plan for the eventuality that you may need to make one (a payment), even if it’s an exit fee rather than a down payment,” says Keith Gumbinger, vice president of HSH.com, the nation’s largest publisher of mortgage and consumer loan information.
February 7, 2013: “Good Luck Getting a Vacation-Home Loan”, a Wall Street Journal item by AnnaMaria Andriotis featured some comments from HSH.com VP Keith Gumbinger:
In general, experts say, there’s a limited number of lenders willing to provide private jumbo mortgages – which start after $417,000 in most parts of the country and exceed $625,500 in pricier areas – on vacation homes. “You are down to a sub-sub-genre of the lending market at this point, so there will likely be fewer lenders and choices,” says Keith Gumbinger, a vice president at mortgage-info website HSH.com.
February 2, 2013: “New federal rules have buyers asking how they’ll get approved for mortgages now and when rules go in full effect”, a CTW Features article by Marilyn Kennedy Melia featured several quotes from HSH.com VP Keith Gumbinger:
Well, next year, “most borrowers won’t find it any more difficult” to get a mortgage than they do right now, says Keith Gumbinger of mortgage data site HSH.com. That’s because ever since the credit crisis, lenders have tightened standards, rejecting applicants with shaky income and bad credit.
With the focus on affordability, will credit scores, which for years have played a major role in determining whether a borrower is eligible for a certain loan, still matter?
“Lenders will still rely on scores,” Gumbinger says, but because “private firms supply scores, the government didn’t want to endorse one.”
February 1, 2013: “Are best mortgage rates gone for good? a USA Today story by Julie Schmit contained context provided by HSH.com VP Keith Gumbinger:
“If the economy is getting better, slightly higher interest rates are a natural occurrence,” said Keith Gumbinger, vice president of Riverdale-based mortgage tracker HSH.com in Morris County. “But there’s no reason to believe that rates are headed upward in a straight line.”
February 1, 2013: “Is Taxing Health Plans Next?” a Wall Street Journal item by Laura Saunders, some calculations from HSH.com were used:
For example, the first-year deduction on a $400,000, 30-year mortgage with a fixed rate of 3.75% is $14,874, says Keith Gumbinger, an mortgage analyst at HSH.com
January 25, 2013: “Navigating the new real estate apps”, a Chicago Tribune piece by Mary Umberger, pointing out one of HSH.com’s unique homeowner tools:
Got that sinking feeling? HSH Associates, a New Jersey-based provider of mortgage-industry data, has introduced its KnowEquity When feature at HSH.com, which the company claims will calculate how long your underwater home will remain that way. When you enter data about your home and your loan, it will offer an opinion of how underwater you are by dollars and suggest a time when you will no longer be that way – assuming you still make your payments.
January 25, 2013: “Home-Equity Loans Heat Up” a Wall Street Journal article by Ruth Simon, quoting HSH.com VP Keith Gumbinger:
Another piece of good news for borrowers: interest rates are at or near historical lows. Rates on home-equity loans averaged 6.32% in December, the most recent data available, according to mortgage tracker HSH.com, down from an average of 8% in January 2010. Rates for home-equity lines averaged 5.17% versus an average of 5.54% two years ago.
But it is important for borrowers to shop around. Keith Gumbinger, a mortgage analyst with HSH.com, says rates for home-equity loans and lines can vary by several percentage points – far more than for standard mortgages.
January 24, 2013: “Mortgage rates on rise” a Los Angeles Times market update by E. Scott Reckard, citing HSH.com VP Keith Gumbinger:
Rates have been hovering near all-time record lows for months, as another rate tracker, HSH.com, noted. HSH Vice President Keith Gumbinger called it “wandering around directionless.”
“They continue backing and filling, waiting for clear signals that the economy is picking up steam or losing it,” Gumbinger said.
“With the tax bite from the ‘fiscal cliff’ solution just starting to show in paychecks, it’s a fair bet that some slowdown in spending is likely. How much is anyone’s guess at this point.”
January 24, 2013: “The death of the mortgage broker?”, a Wall Street Journal article by AnnaMaria Andriotis quoting HSH.com VP Keith Gumbinger:
While the rules will make working with a broker safer for consumers, experts say they may also leave them with fewer brokers to choose from. “It certainly does put some of the more marginal players on the fence,” says Keith Gumbinger, a vice president at mortgage-info website HSH.com.
January 22, 2013: “Downsize Your Debt Before You Retire”, a Kiplinger.com article by Eleanor Laise discussing some of the great calculators you can find at HSH.com:
Online prepayment calculators such as the one at www.hsh.com can help you weigh the benefits of accelerating payments.
January 22, 2013: “Interest rates: The big freeze”, a short CNNMoney item by Lauren Gensler with a quote from HSH.com VP Keith Gumbinger:
Freeze your rate. Buying a home? Rates are at 40-year lows, so lock yours in with a fixed-rate mortgage; interest on a 30-year fixed was 3.57% in January.
“It’s a sure thing,” says Keith Gumbinger of mortgage data provider HSH.com.
January 19, 2013: “Time to Buy a Home?”, a Wall Street Journal article from Rachel Louise Ensign containing a quip from HSH.com VP Keith Gumbinger:
“It’s expensive to get in, down payments being what they are, closing costs being what they are,” says Keith Gumbinger, vice president at data provider HSH.com.
January 10, 2013: “Mortgage rates climb as the economy continues to recover”, a Bloomberg News item which appeared on NJ.com which included some context from HSH.com VP Keith Gumbinger:
Rates “had a little modest bump off the bottom,” Keith Gumbinger, vice president of HSH.com, a Pompton Plains-based mortgage-information website, said in a telephone interview yesterday. “You can’t continually expect them to decline unless you have impending economic doom.”
January 14, 2013: “Mortgage Delinquencies Jump in Areas Hit Hard by Sandy”, a Bloomberg News article by Prashant Gopal which includes a quote from HSH.com VP Keith Gumbinger:
While many homeowners fell behind because of brief disruptions, such as difficulty retrieving mail after the storm, some people lost homes and jobs that won’t be replaced easily, said Keith Gumbinger, vice president of HSH.com, a Pompton Plains, New Jersey-based mortgage-information website.
“A good portion of these are probably temporary,” he said in a telephone interview. “However, there are people who did suffer from catastrophic loss, whose houses are not habitable.”
January 8, 2013: “How the Opaque Mortgage Industry Hurts Consumers” a guest opinion column authored by HSH.com VP Keith Gumbinger appeared on USNews.com
January 7, 2013: “Should borrowers pay more mortgage points?”, a marketwatch.com article by AnnaMaria Andriotis, citing some HSH research:
On a $1 million mortgage, for example, borrowers who agree to one point could pay $10,000 upfront to lock in a rate of 3.75%, rather than 4%, which is about the average rate on private 30-year fixed jumbos with no points, according to mortgage-info website HSH.com.
January 6, 2013: “‘Fiscal cliff’ deal saved New Jersey homeowners underwater from tax man”, a Star-Ledger (NJ) article by Tom Depoto with several quotes from HSH.com VP Keith Gumbinger:
Despite the potential loss to the Treasury, “It was an intelligent decision the first time and it was intelligent to do it again,” said Keith Gumbinger, vice president of the Pompton Plains-based mortgage research firm HSH.com
Gumbinger said not extending the law would have had a ripple effect.
“Short sales would come to a close, or at least slow down to the levels of a couple of years ago,” he said. “That would result in lower home prices because there would be a greater inventory of distressed properties.”
January 2, 2013: “Housing Lobby’s Win Costing U.S. $600 Billion: Mortgages” a Bloomberg News piece by Jody Sheen which included some observations from HSH.com VP Keith Gumbinger:
“What it seems to have come down to is trying to do as little damage to the nation’s housing market as they possibly could,” said Keith Gumbinger, vice president of HSH.com, a mortgage-data firm in Riverdale, New Jersey.
Lawmakers will eventually have to touch the “third rail” of mortgage-interest deductions, because the benefits are viewed as disproportionately helping wealthier people, HSH’s Gumbinger said. Borrowers with loans larger than limits for government- backed programs are more likely to face changes than those with second homes, he said.
Earlier entries: See HSH.com in the news – 2012 for more.