September 1, 2010 (FreeRateUpdate.com) – Homeowners are finding it particularly difficult these days to sell their homes. According to the National Association of Realtors, demand for single family residences has dropped to a 15-year low. Home purchases fell 12 percent in June. In July, they more than doubled the previous month by plunging 27 percent. It is reported that 1 in 5 homeowners is behind in his or her payment. As if the news weren’t bad enough, foreclosures are expected to rise severely this year and next. With these disheartening statistics, homeowners are not left with many options. Fortunately, however, refinancing current mortgage loans is one option, and a viable one at that. Moreover, various government programs are making refinances possible, even for underwater mortgages, and borrowers do not have to have an FHA-insured loan to qualify.

Low mortgage rates are definitely strong factors that fuel the refinancing boom. Conforming rates, as of this writing, are 4.125 percent, which is slightly higher than last week’s record low of 4.00 percent, with 0.7 to 1 point origination. As mortgage loan officer Jason Paul from AmCap Mortgage observed, “[We are] absolutely seeing a significant rise in applications for refinances because mortgage rates are so low.” The Mortgage Banks Association reported that refinance applications increased by 17 percent and caused a surge of 13 percent in overall mortgage applications.

Last year, the Obama Administration released a new program, the Home Affordable Refinance Program (HARP,) to help homeowners refinance their mortgage loans. This program allows homeowners who owe more on their house than its current value to refinance into better loan terms. The program does not reduce principal amount owed. However, it does permit homeowners to take advantage of ultra low mortgage rates. HARP is also beneficial for interest-only borrowers, adjustable rate mortgage borrowers, and balloon payment borrowers because it allows them to reduce the amount of interest they would pay over the life of the loan.

To be eligible, the residence must be owner-occupied and the homeowner must be current on his or her mortgage payments. This means that he or she has not missed any payments, does not have more than one 30-day late in the past 12 months. If the loan was originated in less than 12 months, then the homeowner should have never missed a payment. The amounts owed on the mortgage should not exceed 125 percent of the current market value of the property. For example, if a home appraises for $200,000 but the homeowner owes $275,000, then he would not qualify for HARP. However, if he owes less than $250,000, he does qualify. The loan must be owned or guaranteed by one of the GSEs, Fannie Mae or Freddie Mac. The homeowner must also have the reasonable means to afford the new mortgage payment (i.e. steady income.) The program is set to expire June 10, 2011.

The U.S. Department of Housing and Urban Development (HUD) just announced that it is expanding its refinance program. Starting September 7th, 2010, the Federal Housing Administration, which is regulated by HUD, will offer non-FHA borrowers who are underwater on their loans and current on payments the opportunity to refinance into an FHA Short Refinance option. In order for prospective borrowers to qualify, lenders must agree to write off at least 10 percent of the unpaid principal of the mortgage, which should bring the borrower’s combined loan-to-value ratio less than 115 percent. Borrowers must meet standard FHA underwriting requirements, occupy the property as a primary residence, and their credit score must be equal to or better than 500. This is exciting news especially for homeowners who are denied a loan modification through their banks. Interested borrowers typically foresee financial hardship, primarily due to loss of income, and would greatly benefit from an FHA Short Refinance.

FHA Commissioner, David Stevens, believes the new program is a much needed “lifeline” for American families. Although the success of the FHA Short Refinance has yet to materialize, many have high hopes because it gives borrowers and lenders another weapon to battle negative equity in the current flagging housing market.

September 1, 2010 (FreeRateUpdate.com) – Conforming Jumbo Mortgage Refinance Hot, Interest Rates Low
While mortgage rates continue at record low levels, overall volume of refinances have continued to increase throughout the nation. Borrowers are continuing to refinance their existing mortgages in an effort to free up some needed cash and, at the same time, reduce their debt. Since the inclusion of certain jumbo loans into the conforming loan arena back in 2008, conforming jumbo mortgage refinances have been hot while interest rates remain low.

Back in 2008, the Economic Stimulus Act increased the loan limits for conforming mortgages backed by Fannie Mae and Freddie Mac. These loan limits vary by geographic area. The normal conforming loan limit for single family housing is $417,000 with the limit in high cost areas at $729,750. The normal loan limit for Alaska, Guam, Hawaii and the U.S. Virgin Islands is $625,500 with the high limit in those areas at $938,250. With this increase in limit, many borrowers, who could not refinance, have found this expansion of loan limits to be a tremendous opportunity. Even though these conforming jumbo loans must comply with the underwriting rules set by Fannie Mae and Freddie Mac, which include credit and income requirements, they are still considered to be a low risk product and carry lower mortgage interest rates than regular jumbo loans.

As with all loan types, conforming jumbo mortgage refinances have their guidelines. Cash out refinance is not permitted as only enough cash to pay for closing cost, with a limit of $2,000, is allowed. Also, payoff of home equity debt cannot be included in the refinance. As for LTV for refinances, the first mortgage cannot exceed a loan to value of 75% and the combined LTV with a second mortgage (home equity loan) cannot exceed 95% of the appraised value. For refinances of second homes and investment properties, the allowed LTV is 60%. The debt to income ratio limit for all is 45%. With LTVs 80% and higher, borrowers will required to pay private mortgage insurance and the minimum credit score allowed is 700. Lower LTVs allow a credit score as low as 660. Borrowers need to be aware that these are fully documented loans and any late mortgage payments within the previous 12 months will disqualify them.

Since these conforming jumbo mortgages are available until December 31, 2010 and interest rates are historically low, borrowers are taking advantage of this last minute opportunity and refinancing their higher rate mortgages. As rates continue to remain steady or even decline further, refinancing will continue to strengthen. Each time the interest rate goes lower, a refinancing opportunity opens up for another group of borrowers as these high limit conforming loans cover a large part of the housing market. As conforming jumbo mortgage refinances continue to be a hot product in market and interest rates remain low, the record low interest rates may be the only part of the economy that is stable.

August 31, 2010 (FreeRateUpdate.com) – Homeowners are finding it particularly difficult these days to sell their homes. According to the National Association of Realtors, demand for single family residences has dropped to a 15-year low. Home purchases fell 12 percent in June. In July, they more than doubled the previous month by plunging 27 percent. It is reported that 1 in 5 homeowners is behind in his or her payment. As if the news weren’t bad enough, foreclosures are expected to rise severely this year and next. With these disheartening statistics, homeowners are not left with many options. Fortunately, however, refinancing current mortgage loans is one option, and a viable one at that. Moreover, various government programs are making refinances possible, even for underwater mortgages, and borrowers do not have to have an FHA-insured loan to qualify.

Low mortgage rates are definitely strong factors that fuel the refinancing boom. Conforming rates, as of this writing, are 4.125 percent, which is slightly higher than last week’s record low of 4.00 percent, with 0.7 to 1 point origination. As mortgage loan officer Jason Paul from AmCap Mortgage observed, “[We are] absolutely seeing a significant rise in applications for refinances because mortgage rates are so low.” The Mortgage Banks Association reported that refinance applications increased by 17 percent and caused a surge of 13 percent in overall mortgage applications.

Last year, the Obama Administration released a new program, the Home Affordable Refinance Program (HARP,) to help homeowners refinance their mortgage loans. This program allows homeowners who owe more on their house than its current value to refinance into better loan terms. The program does not reduce principal amount owed. However, it does permit homeowners to take advantage of ultra low mortgage rates. HARP is also beneficial for interest-only borrowers, adjustable rate mortgage borrowers, and balloon payment borrowers because it allows them to reduce the amount of interest they would pay over the life of the loan.

To be eligible, the residence must be owner-occupied and the homeowner must be current on his or her mortgage payments. This means that he or she has not missed any payments, does not have more than one 30-day late in the past 12 months. If the loan was originated in less than 12 months, then the homeowner should have never missed a payment. The amounts owed on the mortgage should not exceed 125 percent of the current market value of the property. For example, if a home appraises for $200,000 but the homeowner owes $275,000, then he would not qualify for HARP. However, if he owes less than $250,000, he does qualify. The loan must be owned or guaranteed by one of the GSEs, Fannie Mae or Freddie Mac. The homeowner must also have the reasonable means to afford the new mortgage payment (i.e. steady income.) The program is set to expire June 10, 2011.

The U.S. Department of Housing and Urban Development (HUD) just announced that it is expanding its refinance program. Starting September 7th, 2010, the Federal Housing Administration, which is regulated by HUD, will offer non-FHA borrowers who are underwater on their loans and current on payments the opportunity to refinance into an FHA Short Refinance option. In order for prospective borrowers to qualify, lenders must agree to write off at least 10 percent of the unpaid principal of the mortgage, which should bring the borrower’s combined loan-to-value ratio less than 115 percent. Borrowers must meet standard FHA underwriting requirements, occupy the property as a primary residence, and their credit score must be equal to or better than 500. This is exciting news especially for homeowners who are denied a loan modification through their banks. Interested borrowers typically foresee financial hardship, primarily due to loss of income, and would greatly benefit from an FHA Short Refinance.

FHA Commissioner, David Stevens, believes the new program is a much needed “lifeline” for American families. Although the success of the FHA Short Refinance has yet to materialize, many have high hopes because it gives borrowers and lenders another weapon to battle negative equity in the current flagging housing market.

August 31, 2010 (FreeRateUpdate.com) – Mortgage interest rates firmed up today thanks to gains in mortgage-backed securities prices. MBS prices, which drive mortgage rates in the opposite direction were up +9/32 (FNMA 30-yr 4.0 at 103.17).

Current 30-year fixed mortgage rates remain at 4.125% for well-qualified borrowers paying about 1 point origination. Today’s 15-year fixed mortgage interest rate remains at 3.625%.

Today’s FHA mortgage rates maintained levels similar to current conforming interest rates.

Jumbo mortgage rates are holding at record lows. Today’s jumbo 30-year fixed loan rate is 5.125%

Wells Fargo recently lowered their advertised 30-year fixed-rate to 4.375% with an APR of 4.559%.

To display current mortgage rates on your website or blog use our free mortgage rates widget.

August 31, 2010 (FreeRateUpdate.com) – Mortgage rates have continued to remain low throughout the summer months. With the 30 year fixed rate at 4.125% and the 15 year fixed rate at 3.625%, one would expect that potential home borrowers would be waiting in line at banks to secure their mortgage. This is not the case today as mortgage rates are not moving the housing market in the direction that it should be going under normal circumstances.

There are several factors that can be blamed for the continued depressed housing market. Without knowing which way housing prices will go, buyers are not looking at purchasing a home as a way to make money and to secure their financial future. As housing prices continue to fall, it will take many years before a buyer will see any equity in their home. Many buyers are still waiting to see if housing prices continue to drop at which point there may only be foreclosures and short sales available.

Mortgage Rates Not Moving Housing Market

With existing home sales the worst that has been seen in 15 years but refinancing on the increase, it is evident that consumers are more interested today in reducing their current debt. Many are beginning to live within their means and saving money instead. The enticement of lower mortgage rates may not move the housing market until jobs are created and consumers begin to have confidence in the economic outlook.

August 28, 2010 (FreeRateUpdate.com) – Current 30-year fixed mortgage interest rates were up slightly Friday, off record lows, and at 4.125% for well-qualified borrowers who pay 1 point origination. 15-year fixed mortgage rates were also up a tad and at 3.625%.

Current 30-year fixed FHA loan rates, which are driven by the same bonds as conforming mortgage interest rates, are also up an 1/8 to 4.125%. Despite FHA mortgage rates being very similar to conforming loan rates, closing costs and APR are higher because of MI and other FHA fees charged only on FHA loans.

Current jumbo mortgage rates are also up a tad and today’s jumbo 30-year fixed loan rate is 5.125%.

Current Wells Fargo mortgage rates are unchanged. Today’s Wells Fargo 30-year fixed interest rate is down 1/8 from last week and at 4.375% with an APR of 4.559 according to their website.

A gloomy outlook for the global economy has continued to hurt stocks, helping mortgage-backed securities prices, which drive mortgage rates in the opposite direction.

August 27, 2010 (FreeRateUpdate.com) – Earlier this month, the Senate approved legislation that allows the Federal Home Administration (FHA) to increase the monthly mortgage insurance premiums charged to its borrowers. The law is not intended to affect existing loans guaranteed by FHA. Currently backing 30% of all home mortgages, FHA is finding that they must raise borrowers’ costs in order to successfully continue running their program of guaranteeing home loans. For anyone anticipating an FHA loan, it is time to get your low FHA loan rate now, since FHA closing costs will soon be rising.

FHA mortgages are the most popular option for first time home buyers. Beginning October 4th, the FHA monthly mortgage insurance premium will be changing. Currently at .55%, it will be increasing to .85% for a mortgage with a loan to value up to and including 95% and up to .90% for a mortgage with a loan to value above 95%. Approved legislation leaves a lot of room in that it allows FHA the ability to raise the MIP as much as 1.55% in the future. With this increase, FHA has stated that they will be dropping the upfront mortgage insurance premium from 2.25% to 1.00% of the loan amount. This upfront premium can still be rolled into the mortgage amount. On a $100,000 mortgage, this increase in monthly MIP translates to an increase of approximately $22.45 added to a borrower’s monthly mortgage payment depending on the LTV of the loan.

In order to improve the quality of it’s insurance portfolio, FHA has proposed several other changes to it’s program although an effective date has not been announced. These proposals include reducing seller concessions to 3% from the current 6%. Sellers currently are allowed to kick in 6% of the price of the home for closing costs. FHA is proposing this change in order to eliminate sellers from raising the price of their homes to cover these costs. This change would have its greatest impact on builders of entry level homes who rely heavily on seller concessions. Without the current full seller concessions, a buyer will need 6.5% down payment for an FHA loan.

Another proposed change is to require higher down payments for lower credit score borrowers. FHA has long been known for not considering credit scores when approving a loan. The new proposal will required that credit scores below 580 will require a minimum down payment of 10% with 500 being the minimum acceptable credit score. This proposed change may not have a big impact since many lenders will not consider any type of loan with a credit score below 620.

The FHA loan rate is currently very low at 4%. For borrower’s who are looking to purchase a home, it is time to put this into action considering the amount of time it will take to document, underwrite and close the loan. Those with FHA case numbers prior to October 4th will not be affected by the increase in the monthly mortgage insurance premium. With no one knowing if and when rates will go higher, now is the best time to get your low FHA loan rate before FHA closing costs rise early October.

August 26, 2010 (FreeRateUpdate.com) – Interest rates between high balance jumbo mortgage loans and conforming mortgage loans continue to narrow. As of this writing, the rate on a 30 year fixed conforming mortgage loan is 4.00% with 0.7 to 1.0 point origination. The rate on jumbo mortgages is 5.00% with similar origination fees. Jumbo loans include loan amounts exceeding $417,000 for a majority of the continental U.S. Super jumbo loans are typically between $1 million and $10 million in loan amount.

In the past, high balance jumbo rates far exceeded those of conforming loans due to the higher risk involved. Now, however, recent development in the mortgage market has prompted banks to offer these loans at more affordable rates.

First, the Federal Housing Administration is tightening up lending standards. The FHA Commissioner, David Stevens, reported that the FHA will decrease its astounding 25 percent market share by making it more difficult for borrowers to qualify for FHA-insured loans. Therefore, the FHA has reduced allotted seller concessions, increased down payment requirements, and increased mortgage insurance premiums. Adding insult to injury, the FHA capital reserves dunked to an all time low of only half a percent. Congress mandates that the FHA maintain at least 2 percent capital reserves. There is much incentive for this government agency to hold liquid assets for fear of liquidation itself.

Secondly, the two GSEs, Fannie Mae and Freddie Mac, recently implored the U.S. Treasury Department for another bailout, which tips total taxpayer assistance to nearly $150 billion. Second quarter losses are abound as Freddie reports a net loss of $6 billion and Fannie a $3.1 billion loss. They request $1.8 and $1.5 billion, respectively, and, unlike AIG who plans to repay nearly 40 percent of its bailout by year-end, neither GSE proposes a repayment plan. Freddie commented, “…the company does not expect to earn profits in excess of its annual dividend obligation to Treasury for the indefinite future.” The additional bailout hedges against a wave of anticipated foreclosures in 2010 and 2011 caused by sub-prime loan resets.

The rising tide of bad loans is not only reasonable to assume, but some economists also believe it is imminent. An estimated 15 million U.S. mortgages are underwater, that is nearly 1 in 5 home mortgages, and negative equity amounts to nearly $800 billion. The GSEs are investigating delinquent loans for any signs of violations of the representations and warranties, such as fabrications made by borrowers or lenders, undisclosed debt, or faulty appraisals. Freddie Mac promises to take tough action against any banks that refuse to buyback these loans. During the first quarter, Freddie received $2.7 billion for buybacks. However, as of June, there are $5.6 billion repurchase requests that have not been satisfied. The Federal Housing Finance Agency, which regulates Fannie and Freddie, helps the GSEs get aggressive as it offers full-fledged support to collect repayment on defective loans. The FHFA subpoenaed 64 mortgage-backed security issuers, which guarantee against mortgage default, for potential loan buybacks. The added pressure on mortgage lenders forces homeowners into delinquency and, subsequently, foreclosure.

Another reason the spread between high balance jumbos and conforming mortgages rate is narrowing is that the bond market is strengthening. At the peak of the mortgage crisis in 2008, the spread was 170 basis points (a basis point is 1/100th of a percentage.) Today, the difference is about 40 basis points. When the market had gone haywire, the difference was very steep. In more-or-less “normal” economic circumstances, the spread is about 20 basis points.

Although, jumbo mortgage rates are faring well, super jumbo mortgages remain huge risks for lenders. Super jumbo loans are considered loan amounts between $1 million and $10 million, but there is no cap to the loan amount. Super jumbo loan amounts between $1 million and $2 million usually see rates about half a percentage higher than jumbo mortgage rates. However, any loan amount above $2 million experiences rates of 2 percent or more than jumbos. The lack of liquidity on these loans makes them extremely risky for lenders. Super jumbos are also very tough to sell. Constraints on the secondary market would cause lenders to retain and service super jumbos using their existing capital. Therefore, lenders are reluctant to originate these loans to begin with and aspire to make it difficult for borrowers to qualify for these loans by charging higher interest rates, reducing the LTV requirement, and increasing the level of income documentation.

The fact is, banks are incentivized to offer high balance jumbo mortgage loans at lower rates in order to stay in business. The FHA is making it more difficult for borrowers to obtain loans while simultaneously freeing up market share. The GSEs are asking for additional taxpayer dollars while expecting near term year-over-year losses. Fannie and Freddie threaten banks to repurchase shoddy loans while a flood of foreclosures is expected by year-end. Not to mention the financial reform bill that disseminates financial institutions deemed too risky. It’s sink or swim for lenders.

August 26, 2010 (FreeRateUpdate.com) – Current mortgage rates are at a standstill thanks to wavering mortgage-backed securities prices. MBS prices drive mortgage rates in the opposite direction and are up +5/32 today.

Current 30-year fixed mortgage rates remain at 4% and 15-year fixed mortgage rates today are at 3.5% for well-qualified consumers with a 20% down payment paying 1 point origination, considered standard. These interest rates are verified by FreeRateUpdate.com research of over 2 dozen wholesale lenders’ mortgage interest rate sheets.

Today’s FHA mortgage rates are unchanged matching conforming mortgage interest rates. Today’s FHA 30-year fixed loan rate is 4%; however, MI and other FHA fees make closing costs on an FHA loan at 4% higher than that of a conforming mortgage with the same note rate and origination fee.

Jumbo mortgage rates today are also unchanged. Today’s jumbo 30-year fixed loan rate is 5%.

Jumbo mortgage rates, conforming mortgage interest rates, and FHA loan rates are all at all time record lows.

To display current mortgage rates on your website or blog use our mortgage rates widget, which is free.