Consumer mortgage rates have continued their decline and normally this would be great news for those financing the purchase of their home or refinancing their existing mortgage.
Low rates do not mean a thing if you can’t qualify!!!
Today Freddie Mac released its weekly rate survey. The benchmark thirty-year mortgage is now at 4.450%. The fifteen-year mortgage came in at 3.890%. The Freddie Mac rate survey is the industry standard which consumers and professionals used to gauge and monitor rate activity. The report data is compiled from a sample of Freddie Mac lenders across the nation.
Verifying income hampered
The dip in mortgage rates has resulted in a spike in mortgage applications. The trick for lenders processing those applications is being able to have the loans fund in light of the Government shutdown.
Some applicants who are tied to the shutdown have voluntarily pulled their applications and some have seen lenders pull their applications because it is hard to verify income that does not exist.
IRS affected by shutdown
Another effect is not being able to verify income using the standard 4506T process. The 4506T is a process initiated by lenders in wake of the 2008 financial crisis. It is an internal revenue form that most borrowers execute as part of the documents when making an application. It is used to match the income as reported on your federal income tax reporting. Unfortunately, due to the shutdown the IRS cannot verify income as reported.
The drop-in rates have helped to spur what was stalled real estate activity. While the shutdown is one metric affecting the economy, experts are pointing to the imposed tariffs and basic international uncertainty as further softening that may erode consumer confidence.
In the meantime, those whose income can be verified are more aggressive in taking advantage of the rate dip before the window closes.
Snapshot of this week’s rates:
- 30 year fixed rate – 4.450%
- 15 year fixed rate – 3.890%
- 5/1 Adjustable rate mortgage 3.83%