Estimated rates for the week of April 6, 2009
30 yr conforming 4.625
30 yr jumbo 5.750 (to $600,000)
7/1 ARM 4.875 (conforming and jumbo)
VA/FHA 5.000
Rates are still great. Anything that starts with a four in it is fine with me! You may notice that I have removed the Oregon State Bond loan and the Oregon Veterans Loan from the rates. The Bond program has stopped taking new applications. They mentioned in an email to us that, if they went to the market to borrow more money to lend, the rates would have to be higher than the current conventional rates. Rightfully so, they didn't see much of a point in it. Although the Oregon Veteran loan has funds available, their rates are higher than the current VA rates. And since the Oregon program requires mortgage insurance as opposed to the Federal VA's funding fee, I thought it better just to list an estimate for current FHA/VA rates.
Looks like the Making Home Affordable program is just starting to get underway. This will allow a borrower to refinance an existing loan that is owned by Fannie Mae or Freddie Mac to a lower rate even if the equity position has decreased. For the most part, the costs are the same as a regular refinance but there is a lot more flexibility. For instance, if a borrower originally put 20% down but now find themselves over 80%, the new refinance will not need to have mortgage insurance. Each agency has their own rules. To find out if the loan is owned by Fannie or Freddie you can use the following web sites:
http://loanlookup.fanniemae.com/loanlookup/
https://ww3.freddiemac.com/corporate/
Most originators can refinance a Fannie Mae owned loan. The Freddie Mac owned loans need to go back through the mortgage servicer. However, brokers may be allowed to broker those loans back to that servicer. Since my company has a relationship with Wells Fargo, I can send both the Fannie and Freddie refinances to Wells.
I have said many times before that there is money out there to lend. But there are still some underwriting changes occurring. Debt-to-income ratios are tightening up. On loans over 80% of value, we are seeing the mortgage insurance companies and the lenders reduce the maximum debt ratio to 41-45%. For most of our clients, this doesn't hurt at all. The vast majority of people I do business with actually qualify for a lot more than they can afford. There are those special circumstances, however, that the lower debt ratios will hurt.
One quick reminder about FHA reverse mortgages. The loan limits have been temporarily increased to $625,500. This will allow those in the higher priced homes to tap more of their equity than current limits.
To end today's report, take a look at the following paragraph. Through the course of a week I receive and read a lot of different analyst's reports. This paragraph comes from Sigma Research, it's the Shirmeyer Rate Market Report (sigmaresearch@earthlink.net). There is a very wide consensus within the market that rates will have to increase. Pay particular attention to the last sentence....and get the word out, especially to the first time buyers.
"Today estimates from UBS, one of the 16 primary dealers, said over the coming month, the government will auction 10 securities and raise roughly $215B, more than net Treasury borrowing for all of the 2007 fiscal year. Just in the past two weeks, including the 2 auctions coming in the next two days, Treasury will have sold a total of $192B in notes---not including issues with terms less than 2 yrs. A massive hurdle for longer term rates to overcome, and likely will keep interest rates from declining much. And that isn't the end; the longer the US economy is in recession the more Treasury will borrow. Looking way out (after this recession bottoms) interest rates are going to climb rapidly as the deficits amount to unimaginable % of GDP. Now is the time to buy a home or secure long term debt rates."
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 will change the rate. Quotes are usually shown for a 30 day lock period and a 1% origination or discount fee.
