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Mortgage Rates: Low Mortgage Rates Bring On Increase in Existing Home Sales

By: | November 19th, 2012

Low mortgage rates are bringing on an increase in existing home sales as was shown today by the latest data released from the National Association of Realtors. Unexpectedly, existing homes sales rose 2.1% on a seasonally adjusted basis in October and was 10.9% higher than October 2011. From one year ago, single family homes increased 9.6% while condo and co-op sales rose 21.3%.

Also reported today, The National Association of Home Builder’s reported that builder confidence increased to the highest level since May of 2006 which represents the seventh consecutive month of gains. Today’s 30 year fixed mortgage interest rates are as low as 3.10%, 15 year fixed mortgage rates are as low as 2.375% and 5/1 ARM loan rates are as low as 2.250%. These low mortgage rates can be obtained by borrowers who have good credit and meet the qualifications necessary for approval. Conforming mortgages, also known as conventional loans, require full documentation for employment, income and assets which will allow the lender to examine and verify the information. After reviewing the loan file, lenders often request additional information in order to support what is already found in the loan file. Home purchase loans and traditional mortgage refinances must undergo processing and underwriting prior to receiving final approval. HARP 2.0 is a non-traditional mortgage refinance that is available for borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. This program does not require an appraisal or other documentation in most cases, although lender overlays and restrictions may make this necessary. Lender guidelines for HARP 2.0 can be different which is why denied borrowers often go on to receive approval from another lender. While HARP 2.0 is there to let eligible borrowers refinance to lower mortgage rates, it is required that borrowers have a good history of mortgage payments with no lates for the most recent six months. Borrowers can find more information on HARP 2.0, as well as lenders ready to assist, by submitting the online form which does not require a social security number. This process will return a response almost immediately.

Current FHA 30 year fixed mortgage rates are as low as 3.00%, FHA 15 year fixed mortgage interest rates are as low as 2.625% and FHA 5/1 ARM loan rates are as low as 2.250%. FHA loans have several different options in order to meet the needs of a wide variety of borrowers. The low down payment requirements of 3.5% is available for borrowers who have credit scores as low as 580. Borrowers can use approved gifts and housing grants or loans to help with expenses associated with the mortgage transaction. Since FHA closing costs (APR) are high because of the upfront mortgage insurance premium and other FHA fees, FHA allows these costs to be added to the mortgage amount in most cases. Seller concessions that are within FHA guidelines can also be used for this purpose. The FHA streamline refinance is a popular FHA benefit that allows borrowers to move to lower mortgage rates without the need of an appraisal or any other documentation. This program does not allow for cash out, but it also does not require an appraisal. Borrowers must have a clean mortgage payment record with no late payments made within the most recent twelve months. Until the end of 2013, FHA is offering borrowers who have FHA loans that were endorsed prior to June 1, 2009 the opportunity to refinance with drastically reduced upfront and annual mortgage insurance premiums. All eligible FHA borrowers can find out more information by submitting the online form that does not require detailed personal information or a social security number. FHA approved lenders are available through this process which will return a response almost instantly.

Today’s jumbo 30 year fixed mortgage interest rates are as low as 3.125%, jumbo 15 year fixed mortgage rates are as low as 2.625% and jumbo 5/1 ARM loan rates are as low as 2.250%. Jumbo mortgage guidelines require that borrowers have excellent credit in order to receive low jumbo mortgage rates. These loans do have stricter guidelines and require substantial assets in order to meet the larger down payments and additional months of reserves. Normally held within a lender’s portfolio, jumbo mortgage guidelines can be flexible depending on the qualifications of the borrower. While jumbo mortgages are considered risky, there can be very profitable for lenders who can be very competitive. In order to find low jumbo mortgage rates, borrowers must shop around since jumbo rates will vary. The online form is available for this purposed and, upon submission, borrowers will receive a response within minutes.

MBS prices (mortgage backed securities) are down -4/32 (FNMA 30 yr 3.0 at 104.30) which is close to early morning prices. MBS prices affect mortgage rates which move in the opposite direction. Besides the housing reports released, no other information is scheduled for today. Tomorrow, housing starts will be released.

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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