Home affordability plummeted in fourth quarter

🏦 1. Fed Rate vs. Market Rates When the Federal Reserve cuts rates, it lowers the federal funds rate — the rate banks charge each other for overnight loans. That directly affects: Credit cards Auto loans Home equity lines of credit (HELOCs) These tend to move quickly with Fed changes. 🏠 2. Mortgage Rates Mortgage rates are not directly set by the Fed — they’re more closely tied to the 10-year Treasury yield, which moves based on investor expectations for: Future inflation Economic growth Fed policy in the future So, when the Fed signals a rate cut or actually cuts, Treasury yields often fall in anticipation, which can lead to lower mortgage rates — if investors believe inflation is under control and the economy is cooling. However: If markets think the Fed cut too early or inflation might return, yields can actually rise, keeping mortgage rates higher. So, mortgage rates don’t always fall right after a Fed cut. 📉 In short: Fed cuts → short-term rates (credit cards, HELOCs) usually fall fast. Mortgage rates → might fall if inflation expectations drop and bond yields decline — but not guaranteed. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329 

🟩 1. FHA Streamline Refinance Purpose: Simplify refinancing for homeowners who already have an FHA loan — lowering their rate or switching from an ARM to a fixed rate with minimal paperwork and cost. Key Features: No income verification usually required No appraisal required in most cases (uses the original home value) Limited credit check — just to confirm good payment history Must benefit financially (lower rate, lower payment, or move to a more stable loan) Basic Rules: You must already have an FHA-insured loan No late payments in the past 12 months At least 6 months must have passed since your current FHA loan was opened The refinance must result in a “net tangible benefit” — meaning it improves your financial situation Appraisal Waiver: Most FHA Streamlines don’t require an appraisal at all — it’s based on the original value when the loan was made. 👉 So, the loan amount can’t exceed your current unpaid principal balance plus upfront MIP (mortgage insurance premium). 🟦 2. VA Streamline Refinance (IRRRL) (IRRRL = Interest Rate Reduction Refinance Loan) Purpose: For veterans, service members, or eligible spouses who already have a VA loan, this program allows them to lower their rate quickly and cheaply. Key Features: No appraisal required (uses prior VA loan value) No income or employment verification Limited or no out-of-pocket costs (can roll costs into new loan) No cash-out allowed — it’s only to reduce the rate or switch from ARM to fixed Basic Rules: Must have an existing VA-backed loan Must show a net tangible benefit (like lowering monthly payment or rate) Must be current on mortgage payments Appraisal Waiver: VA Streamlines typically waive the appraisal entirely, meaning your home value isn’t rechecked. This makes the process much faster and easier. 🟨 3. The “90% Appraisal Waiver” Explained This term often shows up when: A lender chooses to order an appraisal, but wants to use an automated value system (AVM) or When the lender uses an appraisal waiver (like through FHA/VA automated systems) up to 90% of the home’s current estimated value. In practice: It means the lender or agency allows the loan amount to be up to 90% of the home’s estimated value without a full appraisal. It’s a type of limited-value check — often used when rates are being lowered and no cash-out is being taken. It helps borrowers avoid delays and costs tied to a new appraisal. Example: If your home’s estimated value (per AVM or prior appraisal) is $400,000, a 90% waiver means your loan can go up to $360,000 without needing a new appraisal. ✅ Summary Com  tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329