This week’s update covers March inflation data, a stronger-than-expected jobs report, the latest on mortgage-backed securities, and a spotlight on a powerful but underused product — the first lien HELOC, also known as an offset mortgage.

Last Week in Review

We got a double dose of inflation data last week. March’s Consumer Price Index (CPI) showed overall prices up 0.9% for the month, largely driven by higher energy costs tied to the conflict with Iran. Core CPI — which excludes food and energy — was much more subdued: up 0.2% for the month and running at 2.6% annually, just slightly above the prior month.

February’s PCE (Personal Consumption Expenditures) index — the Fed’s preferred inflation measure — also showed broad-based price increases, a mild surprise given it reflects data from before the March oil spike.

On the jobs front, March payrolls came in well above forecasts: 178,000 jobs added versus the 60,000 expected. The unemployment rate edged down from 4.4% to 4.3%. Continuing claims remain elevated, suggesting some workers are exhausting benefits while still searching for full-time employment.

For housing, Cotality now projects home values will rise 4.7% over the next 12 months, up from their previous 4.4% forecast. On a $500,000 home, that’s approximately $25,000 in equity growth — a reminder of how real estate continues to build wealth steadily over time.

Current Mortgage Rates

According to the Optimal Blue index, the average 30-year fixed rate as of Friday, April 10th was 6.267% — a slight improvement week over week.

Keep in mind: this index reflects roughly 35% of mortgage transactions nationwide, specifically lenders who use the Optimal Blue platform. It’s a useful directional benchmark, but it’s not a rate you can lock in today. Your actual rate will vary based on your credit score, loan-to-value ratio, loan type, property type, and other factors.

If you would like current mortgage rates based on your personal scenario, I’m happy to help you!

Economic Calendar: Week of April 13

Next FOMC Rate Decision: April 29, 2026 — no change to the rate is expected.

The scheduled economic data this week will likely take a back seat to the bigger story: the ongoing conflict with Iran and its impact on oil prices. That geopolitical backdrop has been the primary driver of rate volatility lately and is worth keeping a close eye on.

MBS Update

As of 10 a.m. Pacific this Monday, mortgage-backed securities are flat. Oil prices are up sharply after weekend talks in Islamabad between the US and Iran failed to produce any progress. When oil spikes, inflation concerns rise — and that tends to put upward pressure on bond yields and, by extension, mortgage rates. We’re watching this closely. No dramatic moves in rates today, but the situation remains fluid.

Spotlight: The First Lien HELOC (Offset Mortgage)

A first lien HELOC — sometimes called an offset mortgage — is a product that links your home loan directly to a checking account. Every dollar sitting in that account offsets your loan balance for interest calculation purposes. The more you hold in your checking account, the less interest you’re accruing — every single day.

How the Sweep Feature Works

• At the end of each day, funds in your linked checking account are automatically swept against your loan balance
• When you need to spend money, the HELOC draws back into the account to cover it
• Your deposits do the heavy lifting — not a separate manual payment
• Unlike a traditional amortized mortgage, where the interest portion is fixed by the lender, you control how quickly you reduce the interest you pay

Who Is This a Good Fit For?

• Self-employed borrowers
• Retirees or those approaching retirement
• Any homeowner who wants more control over the interest they pay and wants flexible access to their home equity

I’ve put together an updated guide on this program. If you’d like to explore whether it could work for your situation, reach out.

Free Homebuyer Workshop — April 29th at Noon

Grab your lunch and a laptop — I’m hosting a free homebuyer workshop on Wednesday, April 29th at noon.

Topic: From Offer Accepted to Closing Day

We’ll walk through everything that happens after your offer is accepted — the closing timeline, the people involved, common mistakes to avoid, and what closing day actually looks like — all in 60 minutes, with time for live Q&A.

This is the final class in my Homebuyer Workshop Series and it’s completely free. If you’re thinking about buying a home in Washington State, I’d love to have you there.

Register here! 

Have questions about your mortgage situation? Whether you’re buying, refinancing, or just trying to figure out your options, I’d love to help. Visit me at mortgageporter.com or reach out directly — I’m always happy to talk through your scenario.

Rhonda Porter | Mortgage Advisor | NMLS 121324 | Licensed in Washington State

Some of my favorite weekends start with a ferry ride and no real agenda. This past weekend was one of them. The sun came out — that rare, luminous Pacific Northwest spring sun that makes you cancel everything — and my husband and I decided it was finally time to check something off my local wish list: the Bloedel Reserve on Bainbridge Island.

Your Offer Was Accepted — Now What?

Grab your lunch and your laptop — we’re wrapping up the Homebuyer Workshop Series with our final class, and it’s a big one.

Free Lunch & Learn

From Offer Accepted to Closing Day

Wednesday, April 29th
12:00 PM – 1:00 PM Pacific
Free Zoom Webinar — join from anywhere

Reserve Your Spot — It’s Free →

What We’ll Cover

• What to do (and what not to do) once you’re under contract
• How your lender can make your offer more competitive — before it’s even written
• The step-by-step mortgage process: escrow, appraisal, inspection, underwriting & title
• Who all the people are in your transaction and what each one does
• The Closing Disclosure, final walk-through & what closing day actually looks like
• What happens after closing — and how to start building equity right away

Live Q&A included
Bring your questions! We’ll save time at the end of every session so you can get answers directly from a senior mortgage adviser with over 25 years of experience.

The Final Class in the Series

Can’t make it live? Register anyway — all registered attendees receive the recording after the event. Previous workshops from the full series are also available on demand at mortgageporter.com/homebuyer-workshop-series.

Save Your Spot

Click Here to Register — It’s Free →

The Basic Concept

Mortgage rates aren’t priced in isolation. For any given loan scenario, lenders offer a range of rate-and-price combinations. You can choose a lower rate by paying discount points upfront, or accept a slightly higher rate in exchange for a rebate credit that offsets your closing costs. The choice is yours — and it’s worth thinking through carefully.

• Discount points are an upfront fee you pay to buy your interest rate down. One point equals 1% of the loan amount.
• Rebate credit (sometimes called lender credit) is money credited toward your closing costs in exchange for accepting a slightly higher rate.

Each 0.125% change in rate typically shifts the price by roughly 0.25%–0.50% of the loan amount, though this varies with market conditions.

A Simple Example

Say you’re borrowing $500,000. Here’s an example how different pricing options might look for the same loan on the same day:

The difference in monthly payment between 6.625% and 7.000% on a $500,000 loan is roughly $115/month. The difference in closing costs between those two options is $7,500. That’s the trade-off you’re evaluating.

The Break-Even Calculation

When you’re deciding whether to pay points, one number matters most: the break-even point. This is how long it takes for the monthly savings from a lower rate to recover the upfront cost of buying that rate down.

Break-even formula: Upfront cost ÷ Monthly savings = Months to break even

Using the example above: $2,500 ÷ $29/month ≈ 86 months (about 7 years). If you plan to stay in the home — and keep the loan — longer than 7 years, paying the point likely makes sense. If you expect to sell or refinance before then, the rebate option probably serves you better.

I have a Total Cost Analysis that compares scenarios side-by-side over various points of time to help you evaluate which scenario.

Which Option Makes Sense for You?

There’s no universal right answer. Here’s how to think through it:

Paying discount points tends to make sense when:

• You plan to stay in the home long-term
• You have sufficient cash reserves and won’t be depleting savings to cover the points
• You’re in a higher tax bracket and the additional mortgage interest deduction matters less than a lower rate
• Rates are unlikely to drop significantly in the near future (so a refinance isn’t on the horizon)

Rebate pricing tends to make sense when:

• You want to minimize cash out of pocket at closing
• You’re refinancing and want to break even quickly
• You expect to sell or refinance within a few years
• You’d rather keep cash liquid for home improvements, reserves, or investments

How This Appears on Your Loan Estimate

You’ll see this pricing reflected on your Loan Estimate in Section A (Origination Charges). Discount points appear as a cost; lender credits appear as a negative number — a reduction to your total closing costs. If you’re comparing quotes from multiple lenders, make sure you’re comparing the same rate at the same price, not just the rate alone.

One Important Note on Rebate Credits

Rebate credit can only be applied toward allowable closing costs, prepaid items, and reserves — it cannot be paid to you as cash at closing. If the credit exceeds your total closing costs, the excess is typically not applied to your down payment and may be reduced.

The Bottom Line

How your rate is priced is genuinely your choice, and it should be made based on your financial situation, how long you plan to stay in the home, and what matters more to you right now — a lower monthly payment or less cash out of pocket at closing. A good mortgage advisor will walk you through both scenarios with real numbers before you lock.

If you’re buying or refinancing a home in Washington State and want to see how the numbers work for your specific scenario, let’s talk.

These terms get used interchangeably, but they are not the same thing. The difference matters — especially in a competitive market where sellers are evaluating the strength of every offer on the table.

Here’s a simple breakdown of each level and what to look for.

Prequalified: The Starting Point

Getting prequalified is the first step in the mortgage process. At this stage, a loan originator collects basic information about your income, assets, and debts — often through a phone or online interview — to get a general picture of what you might qualify for.

Your credit may or may not be pulled at this point. The information you provide hasn’t been verified yet. No W-2s, no paystubs, no bank statements — just what you’ve told the lender.

A prequalification letter can be issued quickly and it does serve a purpose: it tells you roughly what price range to shop in and gives you a chance to evaluate the loan originator before you commit to working with them. But it is not a commitment to lend, and a seller’s agent knows that.

A prequalification letter is the minimum. In most situations, you’ll want to be fully preapproved before making an offer.

Preapproved: What It Actually Means

A true preapproval means you’ve provided all the supporting documentation to back up your application — and the lender has reviewed it.

To be considered preapproved, at minimum you should have:

• Completed a loan application
• Provided income documents, like W-2s, paystubs and possibly tax returns
• Supplied documents to show where your funds for closing are coming from, such as your bank statements or asset accounts.
• Had your credit report pulled and reviewed
• Had your loan scenario run through AUS (automated underwriting)
• Received “findings” from the AUS that detail what’s needed for final approval

Once all of that is in order, your loan originator prepares a preapproval letter that can be used when presenting an offer. A well-prepared preapproval letter should include the date, your name(s), the loan amount and sales price you’re approved for, the loan type (conventional, FHA, VA, etc.), confirmation that credit, income, and assets have been reviewed, and any conditions the approval is subject to — such as a satisfactory appraisal and clear title.

Note that a standard preapproval letter is typically prepared by the loan officer. It does not necessarily mean an underwriter has reviewed your file — though for more complex scenarios, that’s exactly what I do before issuing the letter.

If you haven’t provided your supporting documents to your loan originator, you’re prequalified — not preapproved.

Pre-Underwritten: The Strongest Approval

Being pre-underwritten means your full application and documentation have been reviewed and approved by a human underwriter before you’ve even found a home. This is the highest level of approval you can have going into a home search.

The pre-underwritten approval has largely replaced what used to be called a loan commitment letter, which served the same purpose — a lender committing to finance the loan based on the borrower’s file, subject only to property conditions.

Here’s a quick way to check where you stand: ask your loan originator for the underwriter’s name. If they say “Fannie Mae” or “Freddie Mac,” that’s the automated underwriting system — not a human underwriter. AUS approval is part of a standard preapproval, but it’s not the same as having your file reviewed by an actual underwriter.

Why does this matter? A pre-underwritten approval:

• Gives you and your agent real confidence in your buying power
• Can help your offer stand out over buyers who are only preapproved or prequalified
• Speeds up closing once you’re under contract, since much of the underwriting work is already done
• Catches potential issues early — before you’ve fallen in love with a house

Does Getting Preapproved Hurt Your Credit Score?

This is one of the most common questions I hear, and it’s a reasonable one. When a mortgage lender pulls your credit, it does create an inquiry that may temporarily lower your score by a few points. But a few things are worth knowing:

First, getting your credit pulled early is actually an advantage. If there’s anything on your report that needs to be addressed — a payment reported late, an old collection, a score that’s lower than you expected — you want to find that out now, not the week you’re trying to make an offer.

Second, mortgage rate shopping is treated differently than other types of credit inquiries. Multiple mortgage credit pulls within a short window are generally counted as a single inquiry for scoring purposes. So shopping lenders won’t compound the impact the way buying a car and applying for a credit card at the same time would.

Third, if you’re a few months away from buying, small steps can make a meaningful difference. Paying a credit card balance down below 30% of the credit limit, for example, can move your score more than you’d expect — and a better score can mean a better rate. Before making ANY changes to your credit, please check with your mortgage professional.

Bottom line: don’t let concern about a small credit score dip stop you from getting preapproved. Start the process early so there’s time to work through anything that needs attention.

What Can Change After You’re Preapproved?

A preapproval is not a guarantee. Several things can affect it between the time it’s issued and the time you close:

• Mortgage rates. Your preapproval is based on rates at the time it was prepared. Rates aren’t locked until you’re under contract. If rates rise dramatically before you find a home, your qualifying payment may change.
• Your financial picture. Any changes to your employment, income, debts, or assets can affect your approval. Don’t buy a car, change jobs, open new credit accounts, or make large undocumented cash deposits without talking to your loan originator first.
• Property-specific costs. Property taxes, homeowners insurance, and HOA dues are not known until you’ve identified a specific home. These all factor into your debt-to-income ratio and can affect how much you qualify for at a given payment.
• Mortgage insurance. For FHA, VA, and USDA loans, funding fees and mortgage insurance premiums are set by the program and can change over time.

This is why I often prepare updated preapproval letters for clients as they make offers on specific homes — to make sure the numbers reflect the actual property taxes and HOA for that property.

How Long Is a Preapproval Valid?

Most preapproval letters are valid for 90 days, which aligns with when lenders consider a credit report to be stale. Updating a preapproval is usually straightforward — in most cases it means refreshing the credit pull and providing updated paystubs and bank statements. If your situation hasn’t changed significantly, the process is quick.

Ready to Get Started?

I’ve been helping Washington State homebuyers get preapproved and into homes for over 25 years. Whether you’re a few months away from buying or ready to make an offer this week, let’s talk about where you stand and what the right next step looks like for you.

Let’s Talk