“Percentage” is an interesting word. Sometimes two totally different things can carry the same percentage, i.e. the number of people you’d like to hear sing karaoke is probably about the same percentage of people you’d like to see on a nude beach. And then sometimes the word can be used to shame people, like when I asked my math teacher what he thought the percentage was that I would pass his class. “As your math teacher I’m smart enough to know you won’t understand if I try to explain to you about negative percentages, but just know your chances are below zero percent.” And sometimes the word doesn’t even make sense – especially when you’re talking about the APR – annual percentage rate. More about APR in today’s interest rate update below. In the meantime, life is a highway that runs right through the middle of this blog…
Highway Quote of the Day: “There was a reason why there was only a single stairway to heaven, but an entire highway to hell.” – Sherrilyn Kenyon
This Week in Economic History: It was on September 14th, 1966 the Senate adopted legislation to raise the country’s minimum wage to (drumroll………….) $1.40. Had minimum wage kept pace with productivity it would be $18.42 today instead of $7.25. More minimum wage facts here.
Wuss’up This Week: Every day reports about our economy are released into the wild, and it’s these reports that can sway interest rates in either direction. Today we’ve got the Capacity Utilization report, tomorrow Jobless Claims, and the U of Michigan Consumer Sentiment report on Friday. Should these reports come in better than expected you’ll see rates tick up, and vice versa if the numbers disappoint.
Interest Rate Update: A little Mortgage 101 before we get into today’s rates. Usually, once a week a client will ask me the rate, and then they’ll ask me the APR. This drives me nuts because the APR is not what your monthly mortgage payment is based on, and it’s also not a rate that totally falls on the lender – especially with purchases since the seller’s attorney (*in Illinois) picks the title company which carries a TON of fees that are factored into the APR. In a nutshell, the APR is figured by taking all of the fees in a transaction, rolling them into the loan amount, and then divided out over 30 years (if the loan is for 30 years). Dumb, right? It gets dumber: Sometimes on ARM loans, the APR will be LOWER than the actual rate because the math formula used for ARMs estimates the rate dropping at some point. Bottom line is that on a fixed product you just want the APR to be as close as possible to the actual rate. If a bank/broker is charging points and a lot of fees you’ll see a higher APR than you would if you hired yours truly. Okay, let’s talk about rates – today’s 30yr fixed conforming rate (*any loan that’s $548k or less) is in the high-2s/low-3s, same for jumbo 30yr fixed (*over $548k). 15yr fixed conforming rates remain in the low-to-mid 2s, and don’t forget about ARMs – especially Jumbo ARMs which can be found in the low-2s. As usual, rates will vary based on if it’s a purchase or refinance, type of home, equity in the home, your credit score, and if you still use 90s slang terms.
Don’t Forget to Remember: Any purchase or refinance loan that closes with me I will waive $575 of the lender fees! Grab yourself a cup of instant karma and pass my info along to any friends, family, coworkers, or people that covered up scars with tattoos that can use this gift.
Highway Quote of the Day 2: “At what age do you think it’s appropriate to tell a highway it’s adopted?” – Zach Galifianakis
Timeout for Trivia: Congrats to those who guessed Pink last week. Want to be entered into a drawing to win a Queen Elizabeth Glass Ornament? Simply email me the answer to this week’s Who Am I? question. Good luck: “It was on this date in 1995 my movie was released and it became the highest-grossing movie of the year, but not worth losing your head over, y’know? I’ve made other movies, usually cast as a villain – like a superhero movie in 2006, or even my 2008 movie whose title is fourteen more than the ’95 flick. I’ve won a couple of Academy Awards which you would think could keep me in Hollywood’s good graces, but allegations of sexual harassment made my career fall like my, uh, political drama.”
