What does AI have to do with your mortgage?

Hi everyone,

You don't have to own a technology stock for worries about AI to matter to your mortgage.

Last week, mortgage rates improved even as new inflation numbers gave borrowers something to worry about. Mortgage News Daily's Matthew Graham pointed to concerns about technology companies and AI spending as part of the explanation.

That sounds like an odd connection. Here's how it works.

When investors get nervous about stocks, some may move money into bonds. More demand for bonds can help bring borrowing costs down. That was one explanation Graham offered for Wednesday's turnaround: mortgage pricing worsened early in the day, then improved as bonds recovered during a stock selloff. It isn't a rule that stocks and mortgage rates always move together.

Inflation was still a concern. September consumer prices rose 0.6% from August, compared with a 0.4% increase the month before. Gasoline accounted for more than half of September's increase.

So there were competing pressures: higher inflation on one side, worries about what was happening in the stock market on the other. By Friday, mortgage rates had improved substantially for the week, despite a small increase that day.

Freddie Mac's October 15 weekly average for a 30-year fixed mortgage was 7.40%, unchanged. That survey covered October 8–14, so it didn't capture the full week's later changes. It's a national benchmark, not a quote for your loan today.

If you're buying or considering a refinance, I'd use this as a reason to update your numbers—not to assume rates will keep falling. One headline rarely tells the whole story.

There were 1.60 million existing homes for sale nationally at the end of September, 4.6% more than a year earlier. Completed sales rose 1.5% from August but remained 2.2% below last September.

More inventory is useful context. It doesn't tell you whether the particular home you like is overpriced—or whether a seller will negotiate.

I'd ask your agent to show you the competing homes, recent sales and how long similar listings have been sitting. Those comparisons are more useful for your offer than a national headline. If you're selling, use the same exercise to see what buyers are comparing your home against.

If you're paying monthly private mortgage insurance, or PMI, it may be worth checking whether you can remove it while keeping your loan. This is different from FHA mortgage insurance, which follows different rules.

For many covered mortgages, you can request cancellation when your balance is scheduled to reach 80% of the home's original value, or sooner if extra principal payments get you there. That generally means the lower of the purchase price or original appraisal—not today's online estimate. For a refinanced loan, the relevant original value is the appraisal at refinancing.

It isn't automatic at 80%. A written request, good payment history, current payments, no junior liens and evidence the property hasn't lost value can matter. Ask your servicer—the company collecting your payments—for its requirements before paying for an appraisal.

October 19–25; all times Eastern.

Not sure whether that mortgage-insurance charge is PMI or something different? Reply with your question, and I can help you understand what to ask your servicer.

Jessica Eiroa
Mortgage Loan Officer | NMLS #1380149
Five Star Mortgage | Company NMLS #1756744
702-285-0633
[email protected]
eiroahomeloans.com

Educational Disclaimer:
This newsletter is for educational and informational purposes only and is not a commitment to lend. Mortgage rates, programs, terms and availability are subject to change and borrower qualification. This information is not intended as tax, legal or financial advice.

Five Star Mortgage
2629 W. Horizon Ridge Pkwy Suite 140
Henderson, NV 89052