Mortgage Rates as low as 2.3% 2.7 APR FIXED

Builder confidence improved during May as low interest rates remain intact leading to an increase of consumer interest in new homes. The National Association of Home Builders/Wells Fargo builder confidence index rose to 44 for the first time in five months. The limited inventory of homes for sale, improving job market and affordable rates are attracting potential new home buyers which is a major benefit for builders. The outlook amongst builders for sales during the next six months increased to its highest level in more than six years.

The Mortgage Bankers Association’s Market Composite Index showed that applications for week ending May 10th fell by 7.3% on a seasonally adjusted basis. The Refinance Index dropped 8% and the seasonally adjusted Purchase Index decreased 4%. The refinance share of all mortgage application activity remained at 76%.

Current conforming 30 year fixed mortgage rates are as low as 3.250%, 15 year fixed mortgage interest rates are as low as 2.375% and 5/1 ARM loan rates are as low as 2.250%. Having good credit is necessary in order for borrowers to obtain low rates that are offered by lenders. Conventional mortgages require that borrowers submit documentation for employment, income and assets, all of which will be verified by the lender. For both home purchase loans and regular refinances, an appraisal for the interior and exterior of the home is necessary to determine loan to value ratios. Many homeowners may still be eligible for the HARP refinance program which does not require an appraisal or other detailed documentation. HARP loans, which are available until the end of 2015, do not have loan to value caps so that even extremely underwater borrowers can refinance to a better mortgage. Borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009 are eligible for HARP refinances. As low rates continue, any type of refinance can save a homeowner a substantial amount of money each month. For information about refinancing, home purchase loans or HARP, the online form is available for submission and will return a response almost instantly.

Today’s FHA 30 year fixed mortgage interest rates are as low as 3.000%, FHA 15 year fixed rates are as low as 3.000% and FHA 5/1 ARM loan rates are as low as 2.750%. FHA mortgages are available so that consumers in any income range can attain homeownership. There are several different types of mortgage products offered through FHA including 203K rehab loans, energy efficient loans, condo loans, manufactured housing loans, and several others. In addition, FHA offers fixed rate and adjustable rate mortgages. Borrowers do need to know that FHA closing costs (APR) are high because of the upfront mortgage insurance premium and other FHA fees, but these are often paid with allowable seller concessions up to 6%. FHA’s refinance program, the FHA streamline refinance, is popular because it does not require an appraisal or any other documentation as long as there is no cash taken out. However, the streamline does require that the borrower have a good history of on-time mortgage payments. Until the end of 2013, the FHA streamline is offering reduced upfront and annual mortgage insurance premiums for loans that were endorsed prior to June 1, 2009. This is being done to encourage homeowners to move to a better mortgage with a low rate that is available in today’s market. The online form is available for information about any type of FHA mortgage through FHA approved lenders. When submitting this form, a response will be returned almost immediately.

Current jumbo 30 year fixed interest rates are as low as 3.500%, jumbo 15 year fixed mortgage rates are as low as 2.750% and jumbo 5/1 ARM loan rates are as low as 2.375%. Jumbo loans are for a larger amount of financing and require that borrowers have excellent credit in order to receive low jumbo rates. These loans typically require full documentation and verification. Substantial assets are necessary in order to fund the larger down payment and additional months of reserves that are usually required. Since guidelines and rates can differ from lender to lender, borrowers should shop around for the deal that matches their expectations. For convenience, this can be done by submitting the online form which does not require the input of a social security number.

MBS prices (mortgage backed securities) are up +6/32 (FNMA 30 yr 3.0 at 102.22 ) which is lower than earlier prices. MBS prices affect mortgage rates which move in the opposite direction. Industrial Production for April fell 0.5% and was below expectations. The Empire State Index dropped to -1.4 and was also below consensus. PPI for April dropped 0.7% and shows that inflation remains at low levels. Core PPI rose 0.1%. In other business news, Europe is falling back into a recession.

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