Nice article by Ed Ferrara
Mortgage Rates Remain Low After Mixed Housing
by Ed Ferrara
|With the summer season now over, mortgage
rates continue to remain low after mixed housing reports for the month of
August. Data showed that consumers are still carefully looking at their options
before committing to purchasing a home. While existing home sales surged, new
home sales fell to a six month low in August as reported by the Commerce
Choosing an existing low priced home and combining it with historical low
mortgage rates is the current path that consumers are choosing.
Freerateupdate.com’s daily survey of wholesale and direct lenders show that low
mortgage rates have remained steady for the past week. Current 30 year fixed
mortgage rates are at 3.875%, 15 year fixed mortgage rates are at 3.250% and
5/1 adjustable mortgage rates are at 2.625%.
For borrowers who have maintained good credit and also have verifiable
income, these are the lowest mortgage rates available with 0.7 to 1% origination
fee. It is obvious that the housing market is still suffering, but many
consumers are finding that there are deals worth pursuing. With mortgage rates
so low, many borrowers are also realizing that they can afford a shorter term
mortgage loan that will end up saving a lot of money on the overall interest.
Many consumers don’t qualify for conforming mortgage loans, but they can
qualify for FHA
mortgage loans. With easier credit qualifying and a low down payment of
3.5%, FHA has been keeping quite busy. FHA 30 year fixed mortgage rates are at
3.750%, FHA 15 year fixed mortgage rates are at 3.500% and FHA 5/1 adjustable
mortgage rates are at 2.750%.
Even though FHA tends to have higher closing costs (APR) due to various FHA
fees and the upfront mortgage insurance premium, FHA allows consumers to use
verified gifts from family, friends and employers. Housing grants and bonds are
also allowed to reduce the overall transaction costs. All in all, FHA has been
working hard to keep the housing market moving along by continuing to promote
consumer friendly homeownership.
The jumbo mortgage market continues to offer high end borrowers low jumbo
mortgage rates as well. Current jumbo 30
year fixed mortgage rates are at 4.500%, jumbo 15 year fixed mortgage rates
are at 4.375% and jumbo 5/1 adjustable mortgage rates are at 3.250%. Stricter
guidelines are generally used by lenders for jumbo mortgage loans since they are
not government insured. With excellent credit, these are the lowest jumbo
mortgage rates available to borrowers with 0.7 to 1% origination point.
Borrowers must also be ready to provide any documentation required by the lender
to receive approval.
While the stock market is recovering some of its losses from last week, it is
still too early in the week to tell which way things will go. Last week’s Fed
announcement that they will replace short term bonds with long term Treasuries
was proof of the Feds concern for direction of the economy and made investors
nervous. MBS prices (mortgage backed securities) rose most of last week which is
keeping mortgage rates at their current low levels. Mortgage rates move in the
opposite direction of MBS prices. European debt is still a concern and continues
to be a major influence on markets around the world. Although mortgage rates may
fluctuate slightly, low mortgage rates should be staying around with the Feds
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 .07 to 1% point origination fee.
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