Mortgage Rates: Loan Rates Steady Ahead of Jobs Report; Claims Rise
By: Rosemary Rugnetta | January 31st, 2013
Loan rates are remaining steady ahead of the January jobs report which will be released tomorrow. According to the Labor Department, jobless claims rose by 38,000 to 368,000 for the week ending January 26th which was above expectations of 350,000. According to the Commerce Department, incomes rose 2.6% in December from November which was the biggest increase in eight years and due to end of year bonuses. Consumer spending rose 0.2%. The Bureau of Economic Statistics reported on Wednesday that personal incomes grew by 3.5% in 2012 as compared to 5.1% in 2011. The same trend was seen in consumer spending which rose 3.6% in 2012, but 5% in 2011.
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 scores are required in order to obtain low rates, as well as, the ability to receive approval according to guidelines. Lenders require that stable employment and income be documented, both of which will be verified. Proof of sufficient assets for the down payment and reserves must be shown. The loan file will be processed and underwritten before being given final approval for closing. During this process, lenders may request additional information from the borrower. For HARP refinances, the process is somewhat simpler because very little documentation is necessary and the loan does not require an appraisal in most cases. With HARP 2.0, loan to value caps were removed to make it easier for extremely underwater borrowers to refinance to a better mortgage. The HARP program, which is available for borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009, has been very popular with underwater borrowers. Unfortunately, some borrowers have been denied and are still looking for another lender to work with. For this reason, the online form is available for submission and will return a response almost instantly. Borrowers can get information about HARP loans, purchase mortgages and regular refinances through this simple inquiry.
FHA 5/1 ARM loan rates decreased by .250% and are now as low as 2.250%. Remaining the same, current FHA 30 year fixed mortgage interest rates are as low as 3.250% and FHA 15 year fixed mortgage rates are as low as 2.750%. FHA, although undergoing some recent changes, still offers home buyers multiple loan programs when purchasing a home. Home buyers also have options to use approved gifts and housing grants or loans, both of which will make the mortgage transaction more affordable. FHA loans also allow seller concessions up to 6% to help pay the higher FHA closing costs (APR) which are due to the upfront mortgage insurance premium and other FHA fees. The FHA streamline refinance with no cash out offers homeowners the chance to move to lower mortgage rates without the need of an appraisal, as well as, no credit history or other documentation. The streamline also offers drastically reduced upfront and annual mortgage insurance fees for borrowers who have loans that were endorsed prior to June 1, 2009. Some lenders may turn away FHA borrowers, however, borrowers can use any FHA approved lender for the streamline program. Shopping for FHA streamline and other FHA mortgage information can be done quickly by submitting the online form which does not require a social security number.
Decreasing by .250%, jumbo 30 year fixed rates are now as low as 3.250%. Increasing by .125%, jumbo 5/1 ARM loan rates are now as low as 2.500%. Still the same, jumbo 15 year fixed interest rates are as low as 2.700%. In order to receive low jumbo rates, borrowers must have excellent credit and strong qualifications. Lenders will verify employment, income and assets after receiving documentation from the borrower. Jumbo loans usually need larger down payments and additional months of reserves, but this depends on the lender’s guidelines which may vary. Since the jumbo market has become competitive, borrowers should shop around to compare offers. This can be done by submitting the online form which will return a response almost immediately.
MBS prices (mortgage backed securities) are up +2/32 (FNMA 30 yr 3.0 at 103.09) which is below earlier levels. MBS prices affect mortgage rates which move in the opposite direction. The December Core PCE price index remained unchanged from November which was below expectations. The Chicago PMI data to 55.6 which was much higher than expectations of 50.5.
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