There’s a bit of strangeness afoot in all of the news that’s making its way to our feeds. On one hand, we’re told increasing mortgage rates are pushing mortgage applications down, and on the other we’re told the housing market is improving. So what’s going on?

As with most things, we’re going to have to take a look at the bigger picture to get a good idea of where the current market really is.

The State Of Mortgage Originations

The Mortgage Bankers Association released its weekly application survey recently and it’s findings we’re not so appealing. Mortgage applications were down 56% from a year go. The reason for this has a lot to do with refinances. Since mortgage rates have ever so slightly risen compared to last year, refinances have fallen to levels not seen since 2008. This, coupled with the fact that the purchase index is also down 14% year over year, is enough to get pessimistic naysayers all riled up.

Home Sales Increased by 8% in February

And they increased by 7% in January, and 5% in December of 2013. That’s a steady increase of sales, yet the purchase index has been steadily declining. One theory on why this might be is due to cash only home sales. But then again, cash sales declined down to 38% in December of 2013.

In sum, although purchase applications are down, more homes are being sold and a proportionate amount of those are being financed. Loans may be low on a historical scale, but the market definitely seems to be putting one foot in front of the other and marching out of the slump it’s been in for the past 5 years.

Nice newsletter. Good article. Good information. Thank you. Carol

For conventional financing, borrowers with scores at 740 or anywhere above generally receive the same loan pricing (rate and cost). That being said, the better your credit the higher your chances of receiving loan approval with high debt to income (up to 50%) or high loan to value (up to 95%) which can be a major benefit when applying for a new loan. For Jumbo financing, borrowers with credit scores above 800 are generally rewarded with both better pricing and easier guidelines. There are no situations where better credit is a negative when obtaining new financing so we should all continue to strive to reach and then stay in the 800’s.

What are the advantages of a score over 800

Thank you Mike for this information. As a residential realtor the information that you provide is crucial to a successful transaction for my clients. You are indeed a pleasure to recommend to all of my clients. You are so professional, thorough, conscientious and pleasant to work with. !!

Hi Dane! Wanted to make sure I'm clear on this. Am I right in saying that on whichever remodel is done you still take a loss rather than an increase in value - the ROI will never exceed 100% of cost?