One phrase has summed up the mortgage world since March: “record low rates.” Lenders have seen their pipelines swell to levels never seen before and things do not seem to be slowing down. Rates for conforming loans have been held low by the government’s intervention in purchasing mortgage-backed securities to aid in market liquidity. Meanwhile in the Jumbo markets, rates have ticked down and offerings below 3% are widespread.
With tremendous growth, also comes significant growing pains. Most mortgage companies have hired on additional staff to help, but there is still a shortage of qualified workers. This has led to slower than normal turnaround times for refinances, but purchase loans are still prioritized. One area that has seen added stress for this change in demand is the appraisal world. Costs for appraisals have increased due to demand and appraiser workload is at record levels. This is one item to be cognizant of if you are going through the mortgage process.
The Federal Reserve has indicated they have no intention of raising their short-term lending rates, and mortgage rates have remained low and stable, if not decreasing for the last few months. If you are looking to purchase a home, the timing is great for affordability and savings. If you are in the refinance market, take advantage now but be patient with your lender.
As tempting as another refinance may seem with dropping rates, be sure to compare costs and the time to recover those costs. Many lenders online will advertise no lender fee, but then charge discount points for a low rate. At the end of the day a fee is a fee, so caveat emptor.
Put simply, the consumer is in the best position they could ever ask for right now and a phone call with a mortgage lender is always your best bet. 2021 will most likely be another year of growth here in Santa Barbara County, as demand has not slowed to own a piece of our paradise.