Ben Eisen

speaker

1,467 appearances 35 recordings 1 series first heard Jul 2017 last heard Nov 2024

Ben Eisen’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Looking to Refinance? You May Not Get the Lowest Mortgage Rates · 19 Aug 2020 podcast

As rates have hit record lows, tons and tons of people have just matched

been calling up their mortgage lenders and trying to refi. matched

So there's just an overabundance of that business, and there's comparatively less demand for purchase mortgages at the moment. matched

So you see lenders sort of prioritizing those purchase mortgages, and as a result, the rates have slipped a little bit lower. matched

Well, I think what's new here is that just the tremendous demand that you've seen for the refis, which means that there's just so much demand for refis that really lenders are kind of maxed out. matched

So what you have here is this prioritization is kind of taking place on a more exaggerated scale. matched

Sure. matched

So this is really what has driven this gap wider between purchase and refi rates, specifically over the last couple of days. matched

What happens is Fannie and Freddie are government-sponsored enterprises and they don't make loans, but they buy them from lenders and they package them up and they sell them to investors and they charge a fee to do that. matched

That fee varies based on the different types of loans that people make. matched

There's a lot that goes into it. matched

But what they basically did is they tacked on an additional fee for specifically refinance mortgages. matched

And that's something that's kind of causing shockwaves throughout the mortgage industry right now. matched

You have refis just kind of costing more as a result of that. matched

Lenders basically have to pay more to Fannie and Freddie on a refi, and therefore they pass that extra cost on to the borrower. matched

And that's translating to a higher refi rate at the moment. matched

It's a bit complicated, but the fee is 0.5 percentage point on a loan. matched

But what that actually translates out to on sort of a 30-year fixed rate mortgage is lenders say it's about an eighth of a percentage point higher on your mortgage rate. matched

So if you last week were being offered a 3% mortgage rate, this week you might get a 3.125% mortgage rate. matched

So this is actually something that a lot of people aren't clear on right now. matched

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