Posts Tagged ‘Mortgage Rate Outlook’

We're back to and maybe even setting new year-to-date mortgage rate lows right now. These positive developments follow a short period of stagnation where volatility in the secondary mortgage market kept us on edge, but never really amounted to much on rate sheets. Loan pricing has drifted mostly sideways since setting new YTD lows on June 8th. And even though we didn't have far to travel, we're back to those lows again. And maybe even teetering on lower lows....

SEE A CHART OF NEW YTD RATE LOWS

CURRENT MARKET: The "Best Execution" conventional 30-year fixed mortgage rate is 4.50%. Some lenders may be quoting 4.375%, but that offer is aggressive and will likely carry increased closing costs in the form of origination fees.  These costs could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to breakeven on the extra upfront costs.  On FHA/VA 30 year fixed "Best Execution"  is 4.25%.  15 year fixed conventional loans are best priced at 3.75%. Five year ARMs are best priced at 3.125% but the ARM market is more stratified and there is more variation in what will be "Best-Execution" depending on your individual scenario. 

PREVIOUS GUIDANCE:   This is as good as it's been all year. Since the middle of November really.  If you're on a short lock/float timeline (15 days), now is a good time to considering locking. While a few sessions of continued loan pricing rallies could lead to a lower overall note rate offer, we've been here before (recently) and failed to see investors commit to a sustained rally in the bond market. Our long-term outlook still supports the case for lower rates though, however until we see investors display a commitment to rally, we will be reluctant to advise floating in the short-term, especially with volatility only 2-days behind us.

CURRENT GUIDANCE:  As volatility continues in the secondary market, we remind rate watchers that lenders are known to price loans from a defensive stance when the broader bond market is in limbo. It might seem safer to float when lenders are defensive by default,  especially if you're able to act quickly and are somewhat flexible with respect to the risk of slightly higher closing costs, but floating is really best reserved for those operating on a longer-term timeline. This creates a buffer to allow for corrections when/if the market moves in an unfavorable direction. While a few sessions of continued loan pricing rallies could lead to a lower overall note rate offer, we've been here before (as recently as Friday) and failed to see investors commit to a sustained rally in the bond market (today).

THE WEEK AHEAD:  Indecisive Attitudes Dictate Short-Term Directionality. Greece Headlines, Treasury Auctions  and the End of QEII. Read more about indecisive attitudes HERE.

----------------------------

"Best Execution" is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

Important Mortgage Rate Disclaimer: The "Best Execution" loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process

We're back to and maybe even setting new year-to-date mortgage rate lows right now. These positive developments follow a short period of stagnation where volatility in the secondary mortgage market kept us on edge, but never really amounted to much on rate sheets. Loan pricing has drifted mostly sideways since setting new YTD lows on June 8th. And even though we didn't have far to travel, we're back to those lows again. And maybe even teetering on lower lows....

SEE A CHART OF NEW YTD RATE LOWS

CURRENT MARKET: The "Best Execution" conventional 30-year fixed mortgage rate is 4.50%. Some lenders may be quoting 4.375%, but that offer is aggressive and will likely carry increased closing costs in the form of origination fees.  These costs could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to breakeven on the extra upfront costs.  On FHA/VA 30 year fixed "Best Execution"  is 4.25%.  15 year fixed conventional loans are best priced at 3.75%. Five year ARMs are best priced at 3.125% but the ARM market is more stratified and there is more variation in what will be "Best-Execution" depending on your individual scenario. 

PREVIOUS GUIDANCE:   This is as good as it's been all year. Since the middle of November really.  If you're on a short lock/float timeline (15 days), now is a good time to considering locking. While a few sessions of continued loan pricing rallies could lead to a lower overall note rate offer, we've been here before (recently) and failed to see investors commit to a sustained rally in the bond market. Our long-term outlook still supports the case for lower rates though, however until we see investors display a commitment to rally, we will be reluctant to advise floating in the short-term, especially with volatility only 2-days behind us.

CURRENT GUIDANCE:  As volatility continues in the secondary market, we remind rate watchers that lenders are known to price loans from a defensive stance when the broader bond market is in limbo. It might seem safer to float when lenders are defensive by default,  especially if you're able to act quickly and are somewhat flexible with respect to the risk of slightly higher closing costs, but floating is really best reserved for those operating on a longer-term timeline. This creates a buffer to allow for corrections when/if the market moves in an unfavorable direction. While a few sessions of continued loan pricing rallies could lead to a lower overall note rate offer, we've been here before (as recently as Friday) and failed to see investors commit to a sustained rally in the bond market (today).

THE WEEK AHEAD:  Indecisive Attitudes Dictate Short-Term Directionality. Greece Headlines, Treasury Auctions  and the End of QEII. Read more about indecisive attitudes HERE.

----------------------------

"Best Execution" is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

Important Mortgage Rate Disclaimer: The "Best Execution" loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process

We're back to and maybe even setting new year-to-date mortgage rate lows right now.

These positive developments follow a short period of stagnation where volatility in the secondary mortgage market kept us on edge, but never really amounted to much on rate sheets. Loan pricing drifted mostly sideways since setting new YTD lows on June 8th. And even though we didn't have far to travel, we're back to those lows again. And maybe even teetering on lower lows....

In the chart of Consumer Rate Quotes below, if the line is moving up, closing costs are rising.  If the line is moving lower, costs are getting cheaper. Sideways mortgage rate behavior followed by an abrupt drop followed by another spell of mostly sideways activity can be seen when looking closely. This spell of sideways activity has taken place near the most aggressive rate quotes of the year. Today is just as good a day as June 8th to lock. That is unless you're waiting for 4.25% (still).

See the RED CIRCLES.BEST LEVELS SINCE THE MIDDLE OF NOVEMBER.

The chart above compares the average origination costs (as a percentage of loan amount) for several available mortgage note rates as quoted by the five major lenders. Each line represents a different 30 year fixed mortgage note rate.  The numbers on the right vertical axis are the origination closing costs, as a percentage of your loan amount, that a borrower would be required to pay in order to close on that note rate. If the note rate graph line is below the 0.00% marker, the consumer may potentially receive closing cost help from their lender in the form of a lender credits. If the note rate line is above the 0.00% marker, the consumer should expect to pay additional points at the closing table to cover permanent buydown costs and origination fees. PLEASE SEE OUR MORTGAGE RATE DISCLAIMER BELOW

CURRENT MARKET: The "Best Execution" conventional 30-year fixed mortgage rate is 4.50%. Some lenders may be quoting 4.375%, but that offer is aggressive and will likely carry increased closing costs in the form of origination fees.  These costs could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to breakeven on the extra upfront costs.  On FHA/VA 30 year fixed "Best Execution"  is 4.25%.  15 year fixed conventional loans are best priced at 3.75%. Five year ARMs are best priced at 3.125% but the ARM market is more stratified and there is more variation in what will be "Best-Execution" depending on your individual scenario. 

PREVIOUS GUIDANCE:  As volatility continues in the secondary market, it's becoming apparent that lenders are pricing loans from a defensive stance.  Lenders are waiting for the secondary market to commit to a directional trend.  With today's high-risk event over, it might seem safer to float if lenders are pricing defensively by default.  And in fact, if you're able to act quickly and are somewhat flexible with respect to the risk of slightly higher closing costs, that can be a valid strategy here, but floating is best reserved for the longer term and most flexible scenarios here.  While there is potential upside even for short term outlooks, it's not likely to ratchet the Best-Execution rate down another 1/8th of a percent quickly enough to be worth the risk.

CURRENT GUIDANCE:  This is as good as it's been all year. Since the middle of November really.  If you're on a short lock/float timeline (15 days), now is a good time to considering locking. While a few sessions of continued loan pricing rallies could lead to a lower overall note rate offer, we've been here before (recently) and failed to see investors commit to a sustained rally in the bond market. Our long-term outlook still supports the case for lower rates though, however until we see investors display a commitment to rally, we will be reluctant to advise floating in the short-term, especially with volatility only 2-days behind us.

A PEEK AT THE WEEK AHEAD: The week begins at a brisk pace with Personal Income and Spending right off the bat at 830 on Monday morning  Soon after we'll be preparing for the week's Treasury auction cycle, starting early this time with $35bn 2s at 1pm. 5’s and 7’s arrive in a similarly early fashion, on Tuesday and Wednesday. While the auction cycle will certainly be one of the week’s focal points, there’s an interesting twist to the calendar of events ahead.... Thursday is the last day of the month, the quarter, the half, and of QE2. Adding a few layers of complexity to that situation will be a diverse line-up of Fed Speakers not to mention the ongoing potential for tapebomb news headlines. Otherwise there’s nothing earth-shattering on the data docket, we get Consumer Confidence, Pending Home Sales, Chicago PMI, Consumer Sentiment and the ISM Manufacturing Index, just to name a few. We look most forward to seeing Consumer Confidence and ISM as these are early indicators of June data to come. Regarding the markets, investors haven't been displaying much directional commitment lately. With benchmark 10-year yields rallying to new YTD lows today (which mortgages did not keep up with), we'll be looking for a confirmation rally early and often next week.

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

----------------------------

"Best Execution" is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

Important Mortgage Rate Disclaimer: The "Best Execution" loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process

After tearing down "The Wall" last Friday, the mortgage rate rally stalled and went sideways this week.

We'd describe this pause as mortgage rates taking a "breather" in the wake of a 2-month rally.  If you're looking for a deeper explanation, read THIS POST on "auction concessions". The sideways shuffle seen over the past five days serves as a reminder of the threats faced by home loan borrowers when floating a loan on a short-term timeline. The market doesn't always act the way you'd expect it to and rallies don't last forever, investors always end up finding a way to question positive progress, and that generally leads to an unfriendly directional reaction.

Sideways mortgage rate behavior followed by an abrupt drop followed by another spell of mostly sideways movement is apparent in the updated chart of Consumer Rate Quotes below. If the line is moving up, origination costs are rising.  If the line is moving lower, costs are getting cheaper. The rapid decline in costs which occurred last Wednesday was the second stage of "The Wall" coming down. Last Friday "The Wall" completely crumbled. And then Consumer Rate Quotes barely budged this week. Still, mortgage rates haven't been this aggressive since November....

The chart above compares the average origination costs (as a percentage of loan amount) for several available mortgage note rates as quoted by the five major lenders. Each line represents a different 30 year fixed mortgage note rate.  The numbers on the right vertical axis are the origination closing costs, as a percentage of your loan amount, that a borrower would be required to pay in order to close on that note rate. If the note rate graph line is below the 0.00% marker, the consumer may potentially receive closing cost help from their lender in the form of a lender credits. If the note rate line is above the 0.00% marker, the consumer should expect to pay additional points at the closing table to cover permanent buydown costs and origination fees. PLEASE SEE OUR MORTGAGE RATE DISCLAIMER BELOW

CURRENT MARKET: The "Best Execution" conventional 30-year fixed mortgage rate is 4.50%. Aggressive 4.375% quotes are still being reported but will  involve increased closing costs in the form of origination fees.  This could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to breakeven on the extra upfront costs.  On FHA/VA 30 year fixed "Best Execution"  is 4.25%.  15 year fixed conventional loans are best priced at 3.75%. Five year ARMs are best priced at 3.125% but the ARM market is more stratified and there is more variation in what will be "Best-Execution" depending on your individual scenario. 

GUIDANCE:   With  "The Wall" now torn down a path has been paved for mortgage rates to continue on the path toward more improvements. An extended rally will not come without setbacks though. Short-term corrections are to be expected along the way.  That means borrowers working on a shorter lock/float timeline should remain defensive. That point was proven this week. Your main goal is to protect new, lower rate quotes from short-term market fluctuations.  The overall bullish trend is still very much in tact though.  Intermediate to longer-term scenarios are more than justified in floating.

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might ot rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

----------------------------

"Best Execution" is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

Important Mortgage Rate Disclaimer: The "Best Execution" loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process.

We are witnessing the second stage of a significant shift lower in home loan borrowing costs. While these secondary signs are encouraging, they are just another step in what might evolve into a sustained rally in the bond market. That second step toward toppling "The Wall" took place today as Best Execution mortgage rates benefited from continued fears that the economy is not recovering at the pace previously thought. READ MORE

UPDATED CURRENT MARKET: The "Best Execution" conventional 30-year fixed mortgage rate has fallen yet again.  This time from 4.625% to 4.50%.  In some cases, 4.375% can make sense, but will involve increased closing costs.  This could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to breakeven on the extra upfront costs.  On FHA/VA 30 year fixed "Best Execution" had been between 4.375% and 4.25%.  Today's improvements put the focus solidly on 4.25%.  15 year fixed conventional loans are now best priced at 3.75%. Five year ARMs are best priced at 3.125% but the ARM market is more stratified and there is more variation in what will be "Best-Execution" depending on your individual scenario. 

PREVIOUS GUIDANCE:  The tone has been generally positive for mortgage rates since April 11^th.  We continue to entertain that it could generally stay that way for even longer, clearly justifying longer term floating strategies.  However, further positive progress can be slow and short term corrections are to be expected.  That means borrowers who are working on a shorter lock/float timeline should remain defensive of new, lower "Best Execution" Mortgage Rate quotes. Your main goal is to protect a lower rate offer from short-term market fluctuations, especially with the high risk event on the horizon in the form of this Friday's Employment Situation Report.  This is the sort of report than can either confirm the recent break lower in borrowing costs, or send them right back to other side of the fence.

CURRENT GUIDANCE: It might seem like it's time to consider "The Wall" as being completely destroyed at this point. Yes, "The Wall" is indeed teetering in its most precarious position this year.  Borrowing costs are certainly low enough to justify that, but the most important confirmation can only be granted by Friday's high-risk event: The Employment Situation Report.  If that data confirms the slower than expected recovery message that has fueled the two-month bond market rally, new improvements will be much less tenuous.  We'd remain defensive even as rates progress lower, preferring the "sure thing" of the best rates of the year today versus the risk of losing them tomorrow.  That assumes either that your time frame is limited or that rates won't recover from any set-backs on the horizon.  Longer term and more flexible scenarios are still justified in floating.

 What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

----------------------------

"Best Execution" is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

Important Mortgage Rate Disclaimer: The "Best Execution" loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process.

Although borrowing costs rose today, the newly updated Best-Execution mortgage rate offering we discussed yesterday remains unchanged.  Unfortunately, the instances of lenders offering these more aggressive "Current Market" quotes are fewer and farther between. 

In short, the wall blocking mortgage rates from continued positive progress began to crack yesterday. Today's price action added a few globs of spackle to those cracks in attempt to keep the wall standing.

CURRENT MARKET: The "Best Execution" conventional 30-year fixed mortgage rate is in a state of flux between 4.75% and 4.625%. Some lenders are already quoting C30 loans at 4.625% with no origination points.  If you are looking to move down from there or merely between the two, you'll be assessing the trade-offs between higher closing costs and lower monthly payments.  This could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to breakeven on the extra upfront costs.  On FHA/VA 30 year fixed "Best Execution" is also a moving target roughly centered on 4.375% with adjacent rates being logical in some scenarios. 4.50% is a no-brainer for everyone on FHA 30yr loans though.  15 year fixed conventional loans are best priced at 3.875%. Five year ARMs are best priced at 3.25% but the ARM market is more stratified and there is more variation in what will be "Best-Execution" depending on your individual scenario. 

PREVIOUS GUIDANCE:  It seems like only yesterday when we said "we'd want to wait until that wall is broken before departing from our defensive stance."  Well, that was yesterday! And here we are with the proverbial "wall" looking very close to tumbling.  If conditions don't deteriorate tomorrow, our stance becomes a bit less defensive, although we'd continue to caution shorter term scenarios that even an ongoing positive trend is susceptible to periodic pull-backs. The possibility for an intermediate to longer term rates rally remains on the table.

CURRENT GUIDANCE:   First of all, the possibility of an intermediate to longer term rates rally remains on the table for yet another day.  So for all the flexible or aggressive long term scenario people in the audience, you're excused for the day.  As for everyone else, loan pricing deteriorated today, leaving us feeling defensive about recent improvements in the short-run. You should be too.  We saw a good example today of the sorts of pull-backs that can come even in the midst of a predominantly bullish run in mortgage rates.  As we've said in the past, if you're seeing the lower of the two Best-Ex quotes mentioned in the Current Market section, the goal is to KEEP that rate rather than floating for the possibility of slightly lower closing costs.

 What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

----------------------------

*"Best Execution" is the most efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

Important Mortgage Rate Disclaimer: The "Best Execution" loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process.