Mortgage interest rates drop

Thursday September 20, 2012

 

Mortgage interest rates declined this week, returning to or beating previous record lows, according to Freddie Mac’s weekly survey. The average rate for a 30-year fixed-rate home loan matched its record low at 3.49 percent, with an average 0.6 point. Last week the average was 3.55 percent, and a year ago it was 4.09 percent.

The average 15-year fixed dropped to a record low at 2.77 percent with an average 0.6 percent, down from last week’s average of 3.55 percent. A year ago, the average was 3.29 percent.

Frank Nothaft, vice president and chief economist for Freddie Mac, said that in the United States, “existing home sales increased by 7.8 percent in August to its strongest pace since May 2010."

On the local front, August home sales leaped 12.2 percent compared to last August in Nassau and 12.9 percent compared to July 2012, according to the Multiple Listing Service of Long Island. Sales also increased in Suffolk, though less dramatically: August sales rose 1.8 percent compared to August 2011, and 7.8 compared to July 2012, MLSLI reports.

Mortgage Rates:

Low Mortgage Rates Unchanged Ahead of Key Housing Reports

September 24th, 2012

Low  mortgage rates remain unchanged ahead of key housing reports that will be released this week. New home sales data will be released on Wednesday and pending home sales on Thursday. Investors have turned their attention back on Europe today as progress remains slow and uncertainty continues to be an issue.

Current 30 year fixed mortgage rates are at 3.375%, 15 year fixed mortgage interest rates are at 2.750% and 5/1 ARM loan rates are at 2.125%. Borrowers must have good credit in order to obtain these low mortgage rates with 0.7 to 1% origination fee. Debt to income ratios are determined by examining the total allowable income and the debts, both of which require documentation and verification. Assets for the down payment, reserves and closing costs must also be available according to the guidelines. For home purchase loans and traditional mortgage refinances, all documents and an appraisal are necessary in order to approve the loan. HARP is a non-traditional refinance for borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. This program does not require an appraisal, in most cases, since loan to value caps were removed with the HARP 2.0 update. Although there is no maximum loan to value for HARP, the minimum LTV is 80%. HARP and other mortgage information can be obtained through the online form that does not require a social security number, but does respond almost instantly.

Today’s FHA 30 year fixed mortgage interest rates are at 3.125% and FHA 15 year fixed mortgage rates are at 2.625%. FHA 5/1 ARM loan rates are at 2.625%. First time home buyers are especially drawn to FHA loans because of the low down payment requirements and flexible credit qualifying guidelines. FHA has multiple mortgage programs available to fit the needs of a variety of borrowers. Even higher income borrowers can now use FHA in high cost areas where the loan limit can be up to $729,750. While FHA closing costs (APR) are high because of various FHA fees and the upfront mortgage insurance premium, these expenses can be added to the loan amount according to FHA guidelines. In many cases, seller concessions are also used to pay closing costs. FHA borrowers can benefit from the FHA streamline refinance which does not require any documentation or an appraisal. This program does not allow for cash out in order to be a quick and easy refinance. Until the end of 2013, the FHA streamline refinance has drastically reduced upfront and annual mortgage insurance premiums for borrowers who have loans that were endorsed prior to June 1, 2009. While some lenders are restricting this offer to their existing customers, there are still many FHA approved lenders who will assist all eligible borrowers. For more information about FHA mortgages, complete and submit the online form and receive a response within minutes.

Current jumbo 30 year fixed mortgage rates decreased by .125% and are now at 3.875%. Jumbo 15 year fixed mortgage interest rates are at 3.125% and jumbo 5/1 ARM loan rates are at 2.250%. Excellent credit is required in order to obtain these lowest mortgage rates with 0.7 to 1% origination point. Jumbo mortgages usually have stricter guidelines and require a substantial amount of cash in order to complete the transaction. Larger down payments and additional months of reserves are normally requested. Since lenders keep these loans within their portfolio, this is a very competitive market which offers borrowers some very good deals. Borrowers should shop around for the best jumbo mortgage rates available, as well as, the terms and conditions.

Current Wells Fargo California 30 year fixed mortgage interest rates are at 3.625% (3.799% APR).

MBS prices (mortgage backed securities) are up +12/32 (FNMA 30 year 3.0 at 105.15) which is higher than earlier morning prices. MBS prices affect mortgage rates which move in the opposite direction. There will be no economic data released today leaving investors to speculate on this week’s data, especially consumer confidence and consumer sentiment.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.