Current Mortgage Rates March 22, 2023

Quick update on where today’s current mortgage rates are for each loan program type:

• – Conventional (5% down): Starting in the mid-6s
• – FHA (3.5% down): Starting in the upper-5s
• – VA (0% down): Starting in the mid-5s
• – USDA (0% down): Starting in the upper-5s
• – Jumbo (20% down): Starting in the mid-6s
• – Non-QM (20% down): Generally speaking, starting in the 7s

(Note: The above rates for Conventional, FHA, VA and USDA are quoted without any points.  Jumbo and Non-QM normally require points.)

ARM Loan Options

I’m not aware of any great ARM (adjustable rate mortgage) loan options … at least not that mortgage “bankers” or mortgage “brokers” have access to.  That being said, I have heard a few of the banks (i.e. on the street corners) are offering some pretty good ARM loan options.  They can do this because these are “portfolio” loans, and are not being sold on the secondary market.  Generally speaking, though, these ARM loans are costly (i.e. come with points and fees), and are much tighter in their lending parameters.

Upfront Temporary Rate Buy-downs

One of the ways to offset today’s higher rates is to incorporate upfront temporary rate buy-downs.  (These need to be negotiated with and paid for by a Seller.) 
There are 4 options:

1. “3/2/1” … which means the rate is 3% less the first year, 2% less the second year, and 1% less the third year
2. “2/1” … which means the rate is 2% less the first year, and 1% less the second year
3. “1/1” … which means the rate is 1% less for the first two years (seems like this one should be called a “1/2”!)
4. “1/0” … which means the rate is 1% less the first year

Rate Expectations

We expect rates to start to come down in May.  And, hopefully, this will start a gradual reduction in rates over the next year or two.  Call me with any questions, or to discuss further.  Thanks!