Estimated mortgage rates for the week of November 17, 2009
30 yr conforming 5.750 - 5.875
30 yr jumbo 6.25% to a $600k
7/1 ARM 5.625 - 5.750 Conforming and jumbo
OR State Bond 6.250 FHA and conforming
OR VA 5.875 + 1.00/5.750 + 1.50
As you can see, rates are holding steady. We have seen rates come down a little over the last few days. Loans are still being made. In fact, the service levels are some of the best we have seen in a long time. We were able to close a transaction - from start to finish - in 6 working days. Considering that the last day was to have the deeds record, we really did it in five days!
News in our industry has been centered on borrowers' qualification standards, in particular, debt-to-income ratios and paperwork requirements. We are all aware that stated income loans are a thing of the past. However, both Fannie and Freddie have allowed us to use limited documentation for many of our better qualified borrowers. Looks like that is changing. Both agencies have announced elimination of reduced/minimal documentation and verbal verification of employment. Standard documentation will apply come the middle of December. This shouldn't have much of an impact for most of us. Many lenders have already moved in this direction and many loan originators (myself included) have already been requesting full documentation of income and assets.
The reduction in debt-to-income ratios will cause more concern, however. Freddie is implementing a maximum of 45% debt-to-income ratio (there is no word from Fannie or FHA as of this writing). Combined with more stringent documentation requirements, we can see that some borrowers won't be able to qualify for a loan that, just a month or two ago, they would have easily qualified. Not to be repetitive but we are back to the old days...again. I remember working with many clients over a three or six month period - even longer in some cases - to get them to be in a position to qualify for a loan. Helping clients make a budget, figuring out ways for them to pay off debts - and the right debts, trying to them to save money....these are things we all used to do. Personally, I enjoy assisting people in managing their personal finances. It does take more time but, thankfully, that is something that we have plenty of.
Have a great week!
Bob Chiodo, CFP
Equity Home Mortgage, LLC
12550 SW 68th Parkway
Portland, OR 97223
(503)670-7393
fax: (503)670-7062
*Rates quoted are for the use of Realtors and others in the real estate/financial service industries. They are not meant to be a quote for an individual situation. Rates change daily and those above are only listed to assist market participants by keeping them informed of current interest rates. Credit scores, down payment, and other risk related issues may change the rate. Quotes are usually shown for a 30 day lock period and a 1% origination or discount fee (1.75% for the Oregon Bond).
