401: May Mortgage Rate Update with Investment Counselor Adam

·20 min·2 clips

Adam explains why today's mortgage rates are still historically low despite recent increases from COVID-era lows.

The episode begins with the host welcoming Adam, an investment counselor, to provide a mortgage rate update. Adam notes that while rates have increased from the lows seen during the pandemic, they are still historically good, comparing them to pre-COVID levels. He attributes recent rate rises to factors like stimulus packages, high stock market demand, and new guidance from Fannie Mae and Freddie Mac. Specifically, Fannie and Freddie have implemented a 7% cap on investment property and second home loan production, which Adam believes is a temporary 52-week measure. The conversation shifts to concrete numbers, with Adam detailing rates for a $200,000 property: 4.75% with no points or as low as 3.875% with two points paid. He advises that paying points can be valuable if the break-even period is around three years, saving money long-term. Adam also discusses down payment strategies, explaining how investors can put 15% down with PMI and later remove it through an appraisal if property appreciation increases equity. He shares that his company's application volume remains steady despite rate changes, crediting team execution and competitive rates. The episode concludes with Adam warning about appraisal challenges in competitive markets and the host thanking him for the insights.

As heard by us

A practical comparison of mortgage points versus a larger down payment.

Mortgage rates get translated into the more useful question of cash at closing. The host and Adam, a lender, work through a $200,000 purchase with 20% down, comparing a 4.75% rate with no points against paying a little over two points to get near 3.875%, with the possibility of…

Read the full review in PlayNext →

Why you'd press play

Want a sharp mortgage-math moment where $3,000 in points may work harder than another $10,000 down?

Read the full recommendation in PlayNext →

Listen to the show on

Apple Podcasts Spotify

Play clips from this episode More from American Monetary Association