July Mortgage Newsletter
Applications Increasing for Both Purchases and Refinances
Concern of an Economic slowdown continues to drive rates lower. Refinance applications are increasing
significantly. I am often asked how much of a decline in rates is required for it to make sense to refinance. This
depends upon what the cost is to refinance and how much you will be saving. For smaller loan amounts under
$200K, the rate should decline .75% or more. For larger loan amounts, .5% is enough. For some cases, we have
programs that will provide the lower rate and keep the same number of payments you have left. For example, if
you have had your loan for 2 years, we can provide a lower rate and give you a 28 year term.
Another consideration is to lower your term from 30 Years to 20 or even 15 years. You can save a significant
amount of interest lowering the term of your loan.
This is a great time to consolidate first and second mortgages or even refinance an ARM. Please don’t hesitate
to call me to discuss whether it makes sense for you to refinance.
Steep Decline in Mortgage Rates Last 6 months
Last month our rates dipped under 4% for the first time in over year. In December of 2018, we were
approaching 5%. Here is the decline in the 30 Year Fixed Rate the past few months:
Month Rate Decrease
Current 3.625% .25%
June 3.875% .125%
May 4.0% —
April 4.0% .25%
March 4.25% —
January and February 4.25% -.25%
Dec 2018 4.5% —
In the past 6 months or so, we have seen a decrease of over 1%. I don’t think anyone forecasted such a steep
decline in rates. Our 30 Year fixed rate was as low as 3.375% in June and 15 year fixed was at 2.875%. This is
very close to all time historical lows. Here is a listing of rates of several programs:
Conventional 30 Year Fixed 3.625%APR
Conventional 15 Year Fixed 3.0% APR
FHA 30 Year Fixed 3.0%
10 Year ARM 3.625%
7 Year ARM 3.625%
The 30 Year Fixed, 7 Year ARM and 10 Year ARM at the same rate. This is an anomaly and absolutely a great
time to get a 30 Year Fixed. The 15 year fixed is .625% less then a 30 Year Fixed. This is also an anomaly.
The New Jersey Association of Realtors recently published Real Estate market data through the end of May.
Here is some information regarding Central Jersey which is indicative of the overall activity of the state of NJ.
Data is available through 5 months of the year. Lets take a look at the median prices:
Median Prices YTD 2018 YTD 2019 %+/-
Single Family Homes $439,323 $428,250 -2.5
Condo/Townhouse $266,000 $265,000 -.04
Adult Community $449,000 $407,550 -9.2
The above figures are all based upon closed volume and most of these transactions went under contract prior to
the sharp decline in rates. We will see big changes in these numbers for July and August closings. Those
numbers will be available in the September and October Newsletter. By year end, the market will be balanced.
This is a great time for both Buyers and Sellers.
Vibha Singh
CEO
732-648-1754
NMLS ID 66034
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