Today I’m here with Mike Mancuso, president of First State Bank and we’ve been partnering with them for about a decade now! Today we’re going to talk about loan rates.
Lisa: First of all, what are rates at?
Mike: Interest rates are pretty favorable right now, believe it or not. There has been a little bit of a Trump bump since he was elected. Regardless of what you think about him politically, the business community thinks it’s going to be favorable to have him as president. What is good for the economy is not necessarily bad for interest rates. However, the jury is out. He’s got a lot of plans but he’s having a lot of resistance getting those put together, so the Trump Bump bubble is running out of steam. However, interest rates are still favorable, they are around 4% on a 30 year conventional loan, they’re up from the all time lows, so all in all they are still pretty good.
Lisa: Good good! Something that not a lot of people know about loan rates is that they can change hour to hour, not even just day to day.
Mike: Exactly, there has been times, not recently, but there has been times were we’ll get 3 or 4 increases or decreases in a day if the markets are really swing wildly. If you are going to shop lenders you should shop lenders within a couple hour window. Because beyond that, you aren’t getting a fair comparison. One of the best ways to do that is ask them to send you an estimate with an APR on it, that takes into consideration not only the rate, but any prepared financing charge the lenders charge along with that rate. And that’s going to give you a fair comparison from lender A, B, or C.
Lisa: Good to know! Tell me about what you’r hearing from home buyers.
Mike: The biggest challenge for the first time home buyer is still cash to close, believe it or not. If you are a veteran of course you can get a loan with no down payments. FHA has a 3.5% down program most people can swing that, with a conventional loan you can get as little as 3% loan down payment. In Omaha, its normally around 7%.
There are programs available for the first time home buyers, like the NIFA program. Nebraska Investment Financing Authority for first time home buyers who make under a certain income limit. And they have home buyer assist program where you can borrow the down payment, still have to come up with $1,000 but most people can scratch up $1,000 to get started.
Now if you’re dealing with the 2nd or 3d time step up buyer, they’ve built up pretty good equity in a house that they are selling it becomes a conventional loan. A lot of those folks are getting 20% down, they’re borrowing less they don’t have mortgage insurance so all in all the economic picture is a little bit better for those folks.
Lisa: We’re seeing sellers come to the table with a lot more equity than in years past! What do you see in the upcoming months or this year for mortgage rates?
Mike: If you asked me in January I would have said 4 or 5% but I don’t see that right now. The jury is out right now, theres a pretty good chance that the Fed will increase again in May, but that’s already baked in the cake. Our interest rates aren’t predicated what’s happening today in the market but what will happening 60 or 90 days from now, it’s already baked in we don’t think it’ll do anything to rates. Now it is really going to be on what the economics numbers say post May on whether or not rates will continue to go up. And that will be based on Trump’s health care plan, which didn’t get passed, if he can reconfigure that and get it passed and if they can build on that with a new budget theres some tax cuts that are within the plan, it really depends on how that materializes on what we’ll see.
Lisa: So I asked Mike what his favorite quote is and I think often it’s a reflection of who they are and his quote is “Do unto others as you would have done to you.”
Thank you so much for reading, we’ll catch you next time.