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Vaultedge Newsletter - Biggest one-week jump for mortgage rates; homeowners in shock!

Vaultedge Newsletter - Biggest one-week jump for mortgage rates; homeowners in shock!
By Sanat from Vaultedge • Issue #44 • View online
Woke up to a coffee-spilling kind of news. This week, mortgage rates had their biggest one-week jump in decades. According to data released by Freddie Mac the 30-year fixed-rate mortgage now stands at 5.78 percent, a level not seen since 2008. What it means in simple terms for first-time homeowners is that- let’s say on a $400,000 loan, a 30-year, fixed-rate mortgage at a 3% interest rate would cost homebuyers approximately $1,686 a month, excluding taxes and other fees. That equates to $607,110 in total (with $207,110 in interest). In the current scenario, at 6% that same mortgage would cost approximately $2,398 a month ($863,353 in total with $463,353 interest), a 42% increase in overall monthly repayments compared to the lower rate.
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How many of you have heard of Stambovsky v. Ackley? Commonly known as Ghostbusters Ruling. No, it’s got nothing to do with Dan Akroyd, Sigourney Weaver, or even Bill Murray. But does deal with ghosts. The Connecticut State Legislature enacted a law requiring owners to tell potential buyers if ghosts were present in the home before selling it. Some states have a long list of stigmas that must be reported to potential buyers. They range from murders and suicide to sex crimes and drug activity. I am sure my friends in the real estate world will be familiar with this. Some houses are never off the market because some Earl or Lady has decided to make the place their permanent abode or maybe they just like the décor. This however isn’t the case with real estate constructions. No one is getting spooked by spirits but only the economy, contracts or lack of regulatory checks to be blamed.
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The Dow Jones Industrial Average had another rough day. Investors weren’t fleeing bonds at the first sign of trouble—they were shoving fixed-income assets overboard as well. The yield on the benchmark 10-year Treasury reached a new 52-week high of 3.33% briefly before simmering down ever so slightly. The reason behind the stock market carnage: inflation fears, with $5.05-a-gallon (on average) gasoline prices playing a starring role.
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 Last week an old colleague of mine, who is a Freelancing Consultant approached a fairly decent bank for a loan. He had seen a property somewhere in Beaumont (didn’t share the details) and wanted to own it before fall. Turns out, since he got into the self-employment zone, his income was obviously staggered and fairly erratic. So, the bank asked him to patiently wait for the approval as the calculation (along with several others) was taking a bit of time. Before the bank came back, the Beaumont property was spoken for. If only the bank had what we had! I am not talking about million dollars (that the bank had many times over) but a fantastic tool that can help mortgage lenders and servicers with complex income calculations for self-employed and W2 borrowers. Vaultedge Income Analyzer is built on AI and algorithms, with the human-in-the-loop can analyze complicated income data in a short span of time. This makes the loan processing activity less tedious and overwhelming. Using this tool, the loan officer dealing with my friend could have gotten back to my friend within hours.
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This Sunday is Father’s Day. Extremely important day for me and my twins. The only day when they listen to me! Being a father has taught me more about myself than anything. For instance how to handle constructive criticism. In that spirit of sharing feedback, we would love to know what you think about our newsletter. Do drop in a line.
Happy reading!

What the Fed’s interest rate hike means for mortgages - The Washington Post
Why Real Estate Construction Contract Disputes Are Reaching New Heights - MBA Newslink
Housing Beat: Mortgage Rates Soar While Housing Starts Drop
A Buyer’s Market for Mortgage Companies?
Bonds No Longer a Safe Haven? 10-Year Treasury Tops 3.33%
            To the first superhero in every child's life...Happy Father's Day!  (Image courtesy: Indian Express)
To the first superhero in every child's life...Happy Father's Day! (Image courtesy: Indian Express)
Did you enjoy this issue?
Sanat from Vaultedge

We write about the future of mortgages, real estate and automation.

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