Mortgage Rates: Consumer Sentiment Disappoints But Keeps Mortgage Rates Low

By: | January 18th, 2013

The Thomson Reuters/University of Michigan’s preliminary January reading of consumer sentiment disappointed investors which helped MBS move higher and is keeping mortgage rates low. The index came in at 71.3, down from 72.9 in December, and is the lowest since December of 2011. Economists had forecast a rise to 75. Consumer sentiment is a measure of consumer reactions to their personal finance, buying and business. The drop is being attributed to the fiscal cliff negotiations.

Current 30 year fixed mortgage interest rates are as low as 3.125%, 15 year fixed mortgage rates are as low as 2.375% and 5/1 ARM loan rates are as low as 2.375%. Obtaining low mortgage rates requires that borrowers have a history of good credit. Loan approval is based on many factors which is why borrowers must document employment, income and assets. Lenders will then examine and verify this information. Appraisals are necessary and become an important part of the loan process. In many cases, lenders will request additional information or documents after examining the file. The loan decision must be supported by the documentation that appears in the loan package. Refinancing is easier for underwater borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. These borrowers can use the HARP refinance program which does not require extensive information or an appraisal, in most cases, since loan to value caps have been eliminated. Restrictions vary from lender to lender which means borrowers, if denied, must shop around. This can easily be done by submitting the online form which does not require a social security number. The online process, which can be used for HARP loans or any other type of mortgage program, is quick and will return a response almost immediately.

Today’s FHA 30 year fixed mortgage rates are as low as 3.250%, FHA 15 year fixed mortgage interest rates are as low as 2.750% and FHA 5/1 ARM loan rates are as low as 2.250%. FHA mortgages are especially popular with first time home buyers who often combine them with housing grants or loans. Even gifts that meet FHA approval can be used to help with the low down payment requirements and the costs of the loan. Seller concessions up to 6% are often utilized to help pay the higher FHA closing costs (APR) which is due to the upfront mortgage insurance premium and other FHA fees. With record low FHA mortgage rates available, homeowners have been refinancing through the FHA streamline refinance which does not require an appraisal or any other documentation when there is no cash taken out. The FHA streamline also offers reduced upfront and annual mortgage insurance premiums for loans that were endorsed prior to June 1, 2009. For more information about the FHA streamline and other FHA loan programs, the online form can be submitted and will return a response almost instantly.

Current jumbo 30 year fixed mortgage interest rates are as low as 3.375%, jumbo 15 year fixed mortgage rates are as low as 2.700% and jumbo 5/1 ARM loan rates are as low as 2.375%. Low jumbo mortgage rates are available for borrowers who have a history of excellent credit. Strong qualifications are required for employment, income and assets, all of which will go through lender verification. While jumbo loan guidelines tend to be strict, lenders can be flexible since these loans are usually held within their portfolio. Jumbo interest rates are competitive and may require that borrowers shop around. An easy way to start is by submitting the online form which does not require a social security number or other detailed information.

MBS prices (mortgage backed securities) are up +9/32 (FNMA 30 yr 3.0 at 104.07) which is higher than earlier levels. MBS prices affect mortgage rates which move in the opposite direction. There is no additional economic data scheduled to be released today. Markets are quiet as investors continue to look at end of year 2012 earnings. surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at about a 1 point origination fee.


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"I was looking at a 4.375% with Wells Fargo, my local bank, before stumbling upon via a google search. They hooked me up with a longstanding savings and loan bank of which I closed on a 30 year fixed rate of 3.75% with. I'd recommend anybody looking at refinancing or buying a home give free rate a shot."

-Joe Klien, Detroit, MI