Alabama Mortgage Rates
Alabama Mortgage Rates: Mortgage Rates in Alabama Are Finally Stable Following Recent Increases
January 28, 2011 (FreeRateUpdate.com) – Due to pessimistic views of home construction in Alabama and dips in mortgage backed securities prices, mortgage rates increased last week. This week, however, mortgage rates in Alabama have remained relatively stable. Investor speculation with regards to re-pricing could cause another increase in mortgage rates in Alabama in the near future. A 30-year fixed rate conforming mortgage in Alabama has a mortgage rate of 4.625 percent. A 15-year fixed rate conforming mortgage has a rate of 3.875 percent. An Alabama 5/1 adjustable rate mortgage has a mortgage rate of 3.125 percent. Well-qualified Alabama borrowers are able to obtain a mortgage loan at these favorable mortgage rates with only 0.7 to 1.0 origination points.
The FHA mortgage rates had increased slightly as well but, similar to conforming mortgage rates, they are currently unchanged. The FHA mortgage rate is 4.500 percent for an Alabama 30-year fixed rate FHA mortgage loan. The FHA mortgage rate is 4.000 percent for an Alabama 15-year fixed rate FHA mortgage. An FHA 5/1 adjustable rate mortgage loan is currently at 3.125 percent, which increased 0.125 percent over last week’s mortgage rate. Despite recent increases in the Alabama FHA mortgage rates, an FHA mortgage loan remains a popular lending option amongst Alabama borrowers. FHA loans have more favorable loan terms than conforming mortgage loans. Nevertheless, it is important to remember that FHA-insured mortgage loans have higher closing costs and additional expenses. Additional fees that the Federal Housing Administration charges to Alabama borrowers include upfront mortgage insurance premiums, annual mortgage insurance premiums, additional residential appraisals, and so on.
Well-qualified borrowers in Alabama have a strong credit history with minimal missed and/or late payments. Typical credit score requirements of at least 580 (sometimes upwards of 620) and very reliable income sources, such as steady job with either consistent salary or increasing, and enough financial reserves to cover a down payment of a minimum of 10 percent, which is usually verified by bank statements provided by prospective Alabama borrowers. The Federal Housing Administration is historically known to have more lax qualifications. Due to recent economic circumstances, however, the Federal Housing Administration has restricted underwriting standards and to qualify for an FHA mortgage more closely resembles the standards of conforming mortgage loans.
Jumbo mortgage rates in Alabama have likewise remained unchanged compared to last week’s jumbo mortgage rates. A 30-year Alabama jumbo mortgage has a mortgage rate of 5.125 percent. A 15-year Alabama jumbo mortgage has a mortgage rate of 4.750 percent. For a Alabama 5/1 adjustable rate jumbo mortgage, the jumbo mortgage rate is 3.875 percent, which is unchanged as well. For a single family residence, the national conforming loan limit is $417,000 in most of the continental U.S and $729,750 for “high-cost” areas, such as Washington D.C. and New York. For a majority of the counties in Alabama the conforming loan limit is $417,000.
As aforementioned, home construction has declined throughout the state of Alabama. Last week the mortgage market experienced an increase in mortgage rates as a result. Homebuilders, subsequently, have a negative outlook of the recent future of home construction. Also, mortgage backed securities and mortgage rates have an inverse relationship, which means they move in opposing directions. So, if prices of mortgage backed securities decrease, then Alabama mortgage rates increase. Hence, as MBS prices dipped a bit today due to investors’ speculation regarding the Fed’s meeting, Alabama mortgage rates are not expected to decrease in the near future.
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FHA Mortgage 101
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- Conventional vs. FHA mortgage, the difference
- Conventional vs. FHA mortgage, the difference
- Conventional vs. FHA mortgage, the difference
- Conventional vs. FHA mortgage, the difference
- Conventional vs. FHA mortgage, the difference
- Conventional vs. FHA mortgage, the difference
- Conventional vs. FHA mortgage, the difference
- Conventional vs. FHA mortgage, the difference
- Conventional vs. FHA mortgage, the difference