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Tag: home loans

  • Falling Mortgage Rates Set To Boost Home Sales By More Than 200,0000

    Falling Mortgage Rates Set To Boost Home Sales By More Than 200,0000

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    The decline in mortgage rates over the last month likely will boost U.S. home sales by more than 200,000 as cheaper financing results in more people qualifying for loans, according to Lawerence Yun, chief economist of the National Association of Realtors.

    “Each half a percentage point drop in mortgage rates results is an additional 200,000 home sales, and likely even more,” said Yun. “Since more people will qualify for mortgages, it leads to more sales.”

    The average U.S. rate for a 30-year fixed home loan dropped to 6.28% last week from 6.73% in March’s first week, according to Freddie Mac. That decline in the cost of financing reduces monthly payments, meaning more buyers will pass the debt-to-income test lenders use to qualify applications.

    “Lower mortgage rates open the gate – not for everyone, but for people who were on the margins,” Yun said.

    Mortgage rates likely will remain near
    near
     the current level in the short term and decline further in the coming months, Yun said. The average U.S. rate for a 30-year fixed mortgage probably will be 6.3% in the second quarter and 5.9% in the third quarter, he said.

    About 40% of U.S. home sales go under contract in the April to June period, according to data from NAR. Those sales typically close about two months later, with the buyers moving in the summer months.

    “We’re smack dab in the peak of the spring home-buying season right now,” said Bill Banfield, executive vice president of capital markets for Rocket Mortgage. “People want to get into a home and settle their families before the new school year starts.”

    Mortgage rates hit 20-year highs at the end of October and again in early November, according to Freddie Mac data, after inflation spooked investors and the Federal Reserve ended a bond-buying program aimed at supporting the economy during the worst of the pandemic.

    Rates remained near those peaks until last month’s failure of Silicon Valley Bank, the 16th-largest U.S. commercial bank by assets, and Signature Bank, a smaller bank based in New York that catered to cryptocurrency investors.

    That financial instability sent Wall Street investors scurrying for the perceived safety of the bonds markets. The increase in competition for fixed assets sent the average yield on 10-year Treasuries, a benchmark for mortgage rates, to a seven-month low last week, according to data from Intercontinental Exchange.

    “Whenever there is unrest in the markets, mortgage rates tend to drop – especially with the Federal Reserve committed to fighting inflation,” said John Hardesty, general manager of the mortgage division at Argyle, a payroll data verification platform used by lenders. “We’re seeing some settling in mortgage rates, and it’s the perfect time for that.”

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    Kathleen Howley, Senior Contributor

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  • SBI Festive Offer: Discounts on home loans to end soon; rates as low as 8.40%

    SBI Festive Offer: Discounts on home loans to end soon; rates as low as 8.40%

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    The festive season home loan offer from State Bank of India (SBI) will expire in less than two months. The festive offer which started on October 4 is set to end on January 31, 2023. SBI is offering discounts in the range of 15 to 30 basis points as part of this offer.

    The interest rates on home loans are as low as 8.40 per cent. Additionally, the bank has waived processing fees for both regular and top-up home loans. Notably, the rates for SBI’s home loans vary from borrower to borrower depending on their CIBIL score.

    Three types of loans are being offered by SBI. Check it out:

    Regular Home Loans

    According to SBI’s website, the lender is offering a 15 basis point discount to borrowers with credit scores greater or equal to 800 to 8.40 per cent under the festive offer, compared to the general rate of 8.55 per cent. While the interest rate is 8.40 per cent as opposed to 8.65 per cent, the bank is offering a 25 basis point discount on credit scores between 750 and 799. For CIBIL scores between 700 and 749, a 20 basis point discount is offered, lowering the interest rate on home loans from 8.75 per cent to 8.55 per cent.

    The floor rate, or 8.40 per cent, is 15 basis points less than the EBR. EBR is currently 8.55 per cent.

    For borrowers with credit scores below 700, the interest rate on home loans remains the same. The rate is still 8.85 per cent for CIBIL scores between 650 and 699, 9.05 per cent for CIBIL scores between 550 and 649, and 8.75 per cent for NTC/NO CIBIL/-1.

    According to SBI, the discounted rates include a 5 bps discount for female borrowers and a 5 bps discount for those who have salary accounts for Privilege, Shaurya, and Apon Ghar. Additionally, the previously charged premium of 10 bps for loans up to 30 lacs with LTV > 80 per cent & = 90 per cent will continue.

    Top-Up Home Loans

    SBI is offering a 15 basis point discount on credit scores between 700 and 800.

    SBI’s rate is 8.80 per cent on credit scores greater than or equal to 800, down from the standard 8.95 per cent, while rates are 8.90 per cent on scores between 750 and 799 and 9 per cent on scores between 700 and 749.

    The rates remain at 9.25 per cent for those with a CIBIL score of 650 to 699, 9.55 per cent for those with a score of 550 to 649, and 9.15 per cent for those with a score of NTC/NO CIBIL/-1.

    Loans Against Property

    The bank offers the highest concession on home loans against property on certain credit scores, at 30 basis points. Borrowers with credit scores above or equal to 800 will pay an interest rate of 10 per cent instead of the standard 10.30 per cent, while those with scores between 750 and 799 will pay a rate of 10.10 per cent instead of the standard 10.40 per cent, and those with scores between 700 and 749 will pay a rate of 10.20 per cent instead of the standard 10.50 per cent.

    The other rates remain the same as they were above. The bank continues to charge a rate of 10.60 per cent for scores between 650 and 699, 10.70 per cent for scores between 550 and 649, and 10.505 for NTC/NO CIBIL/-1.

    Additionally, SBI stated that no other concessions would be valid during the campaign.

    Regarding processing fees, SBI has waived all fees for both regular and top-up home loans during the holiday campaign. SBI, however, has imposed a flat processing fee of Rs 10,000 plus any applicable GST for home loans secured by real estate.

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