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Mortgage Rates: Improving Markets Expand Across the Country

By: | February 6th, 2013

According to the National Association of Home Builders (NAHB) and First American Title Insurance’s Improving Markets Index (IMI) for February, improving markets have expanded across the country and now include every state. These markets are those that have shown six consecutive months of improvement from home prices provided by Freddie Mac, Bureau of Labor Statistics employment data and construction activity from Census Bureau building permit data. Expanding in February to include all fifty states and the District of Columbia, the IMI now includes a total of 259 metropolitan areas with the addition of 20 cities.

The Mortgage Bankers Association’s Weekly Mortgage Applications survey for the week ending February 1st shows that application volume rose 3.4% on a seasonally adjusted basis from the prior week. The Refinance Index increased 4% and the seasonally adjusted Purchase Index rose 2%. 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%. Good credit is required in order for borrowers to obtain low rates that are offered by lenders. Stable employment and income must be documented and will be verified for accuracy. Sufficient assets must be available to fund the down payment and closing costs. Any loan to value above 80% will require private mortgage insurance that is paid with the monthly mortgage payment. HARP refinances are available for homeowners who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. With a HARP loan, borrowers can refinance underwater mortgages often without the need of an appraisal since loan to value caps have been eliminated. The HARP refinance program is considered streamlined since documentation is kept to a minimum. Searching for a HARP lender can be time consuming, but can be easily done by submitting the online form which does not require a social security number.

Today’s FHA 30 year fixed mortgage interest rates are as low as 3.250%, FHA 15 year fixed mortgage rates are as low as 2.750% and FHA 5/1 ARM loan rates are as low as 2.250%. FHA mortgages have always been popular with home buyers because of the low down payment requirements. Many consumers choose to combine the FHA loan with housing grants or loans that are offered through states and counties. Others often use gifts from family, friends or employers that are approved through FHA guidelines. While FHA closing costs (APR) are high because of the upfront mortgage insurance premium and other FHA fees, seller concessions are acceptable up to 6%. Currently popular, the FHA streamline refinance offers existing homeowners a chance to refinance to lower FHA rates or terms without the need of an appraisal or other documentation. This is truly a streamlined process provided there is no cash taken out. Until the end of 2013, homeowners who have loans that were endorsed prior to June 1, 2009 can use the FHA streamline program and will receive drastically reduced upfront and annual mortgage insurance premiums. Borrowers can use any FHA approved lender for FHA mortgages. For this purpose, the online form is available for submission and will return a response almost immediately.

Current jumbo 30 year fixed mortgage rates are as low as 3.250%, jumbo 15 year fixed interest rates are as low as 2.700% and jumbo 5/1 ARM loan rates are as low as 2.500%. Excellent credit is necessary when borrowers want to received low jumbo rates. Full documentation for employment, income and assets will be required and verified by the lender. Substantial funds are needed to fund the larger down payment and additional months of reserves which are typically required with jumbo mortgages, although lender guidelines may differ. Since jumbo rates are competitive, borrowers should shop around and can easily do this by submitting the online form which will return a response almost instantly.

MBS prices (mortgage backed securities) are +5/32 (FNMA 30 yr 3.0 at 103.04) which is the same as earlier prices. MBS prices affect mortgage rates which move in the opposite direction. There is no economic data scheduled for release today. Market are fairly quiet; stocks are slightly down.

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 about a 1 point origination fee.

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