Low Mortgage Rates Remain Stable
It has been a volatile week with the stock market rising rapidly on Wednesday after renewed hope for the world economy surfaced. It was reported that major central banks came together to add liquidity to the global financial system in an effort to help the Euro zone crisis. On the other hand, mixed economic reports continue to draw concern which helped keep low mortgage rates stable. Freerateupdate.com's survey of wholesale and direct lenders show that 30 year fixed mortgage rates are at 3.7500%, 15 year fixed mortgage rates are at 3.125% and 5/1 adjustable mortgage rates are at 2.500%. With home prices dropping lower than expected in September according to S&P Case-Shiller Indices, it is a good time for borrowers to purchase an affordable home. Many are already doing this which is evidenced by the National Association of Realtors' report that pending home sales for October increased by 10%. Numerous borrowers are in a good position to become homeowners at this time since they have improved their credit ratings over the past several years. With good credit, borrowers can obtain these low mortgage rates with 0.7 to 1% origination fee. Stable employment and assets for reserves are also necessary in order to receive lender approval.
With FHA fixed mortgage rates lower than conforming fixed mortgage rates, many borrowers have chosen popular FHA mortgages. FHA 30 year fixed mortgage rates are at 3.500%, FHA 15 year fixed mortgage rates are at 3.000% and FHA 5/1 adjustable mortgage rates are at 3.000%. FHA mortgages are known for having easier credit qualifying and will accept a down payment of 3.5% with credit scores down to 580. Credit scores between 500 and 580 require a 10% down payment. Other buyer incentives for FHA mortgages include the acceptance of gifts that meet approval and the use of housing grants or loans, all of which assist with making the down payment more affordable. FHA closing costs (APR) are higher because of the upfront mortgage insurance premium and various FHA fees, but FHA allows seller concessions up to 3% to help cover these costs.
Jumbo mortgage rates have been steady and favorably low making financing more affordable for high end borrowers. Jumbo 30 year fixed mortgage rates are at 4.250%, jumbo 15 year fixed mortgage rates 4.375% and jumbo 5/1 adjustable mortgage rates are at 3.250%. In order to receive these low jumbo mortgage rates with 0.7 to 1%, borrowers must have excellent credit. Jumbo mortgages have stricter guidelines because they are not government insured. They are considered private mortgages and are most often held within a lender's portfolio. For this reason, borrowers must have enough assets for reserves which could be as high as 6 to 12 months after the down payment costs. Each lender has their own guidelines and details for jumbo mortgages.
MBS prices, which move mortgage rates in the opposite direction, have had a volatile week as investors felt somewhat confident and turned to stocks. Consumer Confidence came in higher and jobs increased with 120,000 jobs added in November. The unemployment rate is now 8.6%, down from 9%. Mortgage applications fell for the week ending November 25th which may have been due to the Thanksgiving Holiday. Investors are still concerned about what is going on in Europe and what the outcome will be. There is renewed hope as European leaders continue to meet in order to negotiate a substantial agreement prior to the European Summit which is scheduled for December 9th.
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 a standard .07 to 1% point origination fee.
Written by Ed Ferrara for www.RealtyTimes.com Copyright © 2011 Realty Times All Rights Reserved.
