Good News on the Home Buying Front
Pending Home Sales came in far above forecasts, rising for a third straight month, with home affordability levels the second highest level ever on record. Buyers should be acting while rates are still low and affordability is still high! This report shows that many buyers are indeed acting now.
If you have been sitting on the sidelines, get in the game. Rates have crept up slightly over the past week, but still remain at historic levels. Inventory is clearly starting to absorb, and the incentives are everywhere. From First Time Home Buyer tax credits to Worry Free Mortgage offers there isn’t a reason to wait!
This data provided in part by Barry Habib, CEO Mortgage Market Guide and financial contributor to CNBC, NBC, CNN and Fox News.
Thursday, June 4, 2009
Friday, May 29, 2009
Heads up! Mortgage rates rise nearly .500%
Since last Thursday mortgage rates have climbed nearly .500% with the majority of the upward trend occurring between Tuesday and today.
So why are rates climbing while the Federal Reserve is actively buying mortgage bonds in an effort to keep mortgage rates low??
The driving influence of this change is the US Treasury who began selling mass amounts of new Treasury Notes this week. On Tuesday, they auctioned 40 Billion in 2 Yr notes, on Wednesday, 35 Billion in 5 year notes, and today 26 Billion in 7 year notes…..all to finance the government spending needed for the stimulus packages.
While the Federal Reserve was buying 1-2 Billion per day in mortgage backed securities in an attempt to raise demand (higher demand and prices for bonds drives mortgage rates down), the Treasury auctioned 101 billion in notes in over a 3 day period, weakening the demand for Mortgage bonds.
For any of you who are familiar with my updates, you know that mortgage rates will change whenever the price of mortgage bonds changes more than 16 basis points up or down on any given day. The market has changed over 360 basis points since last Thursday….hence the .500% jump in rates.
We may see rates settle back down after the auctions end this week. Whether we regain the entire .500% we lost will remain to be seen given that this is just the first in a series of Treasury note auctions with the next one upcoming the 2nd week in June.
So….what do we need to do for buyers who needed a rate in 4’s. Remember that on most loan programs 1 discount point will buy the interest rate down .250% for the life of the loan.
Call me for details.
So why are rates climbing while the Federal Reserve is actively buying mortgage bonds in an effort to keep mortgage rates low??
The driving influence of this change is the US Treasury who began selling mass amounts of new Treasury Notes this week. On Tuesday, they auctioned 40 Billion in 2 Yr notes, on Wednesday, 35 Billion in 5 year notes, and today 26 Billion in 7 year notes…..all to finance the government spending needed for the stimulus packages.
While the Federal Reserve was buying 1-2 Billion per day in mortgage backed securities in an attempt to raise demand (higher demand and prices for bonds drives mortgage rates down), the Treasury auctioned 101 billion in notes in over a 3 day period, weakening the demand for Mortgage bonds.
For any of you who are familiar with my updates, you know that mortgage rates will change whenever the price of mortgage bonds changes more than 16 basis points up or down on any given day. The market has changed over 360 basis points since last Thursday….hence the .500% jump in rates.
We may see rates settle back down after the auctions end this week. Whether we regain the entire .500% we lost will remain to be seen given that this is just the first in a series of Treasury note auctions with the next one upcoming the 2nd week in June.
So….what do we need to do for buyers who needed a rate in 4’s. Remember that on most loan programs 1 discount point will buy the interest rate down .250% for the life of the loan.
Call me for details.
Wednesday, May 20, 2009
Can the $8000 tax credit be used as a down payment????
Can the $8,000 tax credit to be used as a down payment???
Early last week Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development said that FHA is going to permit its lenders to allow homebuyers to use the $8,000 tax credit as a down payment. FHA also issued Mortgagee letter 2009-15 regarding this subject.
But not so fast…..shortly thereafter Mortgagee Letter 2009-15 was removed from HUD’s website.
There are two key questions surrounding this issue. First, will HUD re-post the 2009-15 Mortgagee letter outlining the guidelines for this, and second will lenders accept loans under these new guidelines. Both of these questions remain unanswered at this time.
We have seen several cases where lenders adopt underwriting guidelines that are more conservative than what HUD allows. For example HUD allows credit scores as low as 580 while most lenders now have a 620 minimum score. We also know that HUD used to allow sellers to pay the buyers down payment via the Nehemiah or AmeriDream programs and these loans had nearly three times the default rates as compared with loans where the buyer paid their own down payment. For these reasons there is much uncertainty as to when or if both HUD and the lenders will allow the tax credit to be used for a down payment.
What is certain is that we’ll keep you up to date as more facts are known.
Early last week Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development said that FHA is going to permit its lenders to allow homebuyers to use the $8,000 tax credit as a down payment. FHA also issued Mortgagee letter 2009-15 regarding this subject.
But not so fast…..shortly thereafter Mortgagee Letter 2009-15 was removed from HUD’s website.
There are two key questions surrounding this issue. First, will HUD re-post the 2009-15 Mortgagee letter outlining the guidelines for this, and second will lenders accept loans under these new guidelines. Both of these questions remain unanswered at this time.
We have seen several cases where lenders adopt underwriting guidelines that are more conservative than what HUD allows. For example HUD allows credit scores as low as 580 while most lenders now have a 620 minimum score. We also know that HUD used to allow sellers to pay the buyers down payment via the Nehemiah or AmeriDream programs and these loans had nearly three times the default rates as compared with loans where the buyer paid their own down payment. For these reasons there is much uncertainty as to when or if both HUD and the lenders will allow the tax credit to be used for a down payment.
What is certain is that we’ll keep you up to date as more facts are known.
Friday, January 23, 2009
Where are Mortgage Rates Headed?
Through January 21 of this year, The Federal Reserve has purchased $52.6 Billon in Mortgage Backed Securities (MBS) from Fannie/Freddie Mac. This represents approximately 10% of the $500 Billion dollar commitment by the Fed to buy MBS and lower interest rates.
This action by the Federal Reserve, was in direct response to surplus inventory of MBS in the market after the sharp increase in mortgage default rates. This package, in conjunction with tightened lending practices should help stabilize our overall mortgage and housing industry.
Mortgage Rates remain attractive but volatile as liquidity, economic stimulus recovery, and inflation all dance.
What to Watch
Economic recovery could force government liquidity programs to subside. Reduction in market liquidity could drive rates back up to hedge against inflation.
Rates are attractive now, but as we draw close to June, oil prices are likely to rise in anticipation of increased consumption. The economic stimulus packages will hopefully have spurred consumer spending and the $500B commitment to purchase MBS will be complete.
Best Projection
These factors will put terms like inflation back into our headlines and it will be a matter of time before rates hike again. If you have a plan or thought of finding a an aggressively low rate mortgage loan, inside the next 90 days would be your safest bet.
Through January 21 of this year, The Federal Reserve has purchased $52.6 Billon in Mortgage Backed Securities (MBS) from Fannie/Freddie Mac. This represents approximately 10% of the $500 Billion dollar commitment by the Fed to buy MBS and lower interest rates.
This action by the Federal Reserve, was in direct response to surplus inventory of MBS in the market after the sharp increase in mortgage default rates. This package, in conjunction with tightened lending practices should help stabilize our overall mortgage and housing industry.
Mortgage Rates remain attractive but volatile as liquidity, economic stimulus recovery, and inflation all dance.
What to Watch
Economic recovery could force government liquidity programs to subside. Reduction in market liquidity could drive rates back up to hedge against inflation.
Rates are attractive now, but as we draw close to June, oil prices are likely to rise in anticipation of increased consumption. The economic stimulus packages will hopefully have spurred consumer spending and the $500B commitment to purchase MBS will be complete.
Best Projection
These factors will put terms like inflation back into our headlines and it will be a matter of time before rates hike again. If you have a plan or thought of finding a an aggressively low rate mortgage loan, inside the next 90 days would be your safest bet.
Monday, January 12, 2009
Industry's Best Jumbo Mortgages
Jumbo Loans AND Great Rates..not usually in the same sentence.
If you’ve checked your local bank for a Jumbo Mortgage, you’ve likely heard quotes in the range of 6.75% to 7.00%. Jumbo mortgages (those with loan values over $417K) still carry premiums as Wall Street remains nervous about buying Jumbo Mortgage Backed Securities.
We offer a select group of Jumbo Loans from banks that specialize in Jumbo loan products. How about a 7/1 Jumbo up to $1.5M at 5.625% (5.167% APR) or a 10/1 Jumbo at 5.625% to $2M (4.884% APR)
Looking for a fixed rate? They are out there as well! 30 year fixed rate jumbos up to $600K at 5.75% (5.865% APR).
There are loans available in all categories from Jumbo to FHA. Call or email us to learn more.
(These rates are available as of 1-12-09 and fluctuate hourly. Please contact our office for a custom quote.)
If you’ve checked your local bank for a Jumbo Mortgage, you’ve likely heard quotes in the range of 6.75% to 7.00%. Jumbo mortgages (those with loan values over $417K) still carry premiums as Wall Street remains nervous about buying Jumbo Mortgage Backed Securities.
We offer a select group of Jumbo Loans from banks that specialize in Jumbo loan products. How about a 7/1 Jumbo up to $1.5M at 5.625% (5.167% APR) or a 10/1 Jumbo at 5.625% to $2M (4.884% APR)
Looking for a fixed rate? They are out there as well! 30 year fixed rate jumbos up to $600K at 5.75% (5.865% APR).
There are loans available in all categories from Jumbo to FHA. Call or email us to learn more.
(These rates are available as of 1-12-09 and fluctuate hourly. Please contact our office for a custom quote.)
Wednesday, December 10, 2008
4.5% Mortgage Rates
4.500% Mortgage Rates
Mortgage rates are hovering near 5.00%. These are the lowest conforming fixed-rate mortgages we have seen since 2003. Economic weakness and recent actions by the Fed and the Treasury are driving these rate declines.
The Fed and the Treasury are looking at additional programs to boost the economy. On December 3, the Treasury confirmed that it is considering a plan which would offer below
market mortgage rates for select loans used to PURCHASE homes. The lower rates would NOT be available for refinancing loans. At this point, it is unclear if, when, or in what form this latest idea will be acted upon. As we have seen recently, most notably with the $700 Billion TARP Rescue Plan, government programs often change significantly before their implementation.
My Advice - Take the amazing rates paired with lower housing prices and maximize your investment opportunity in your primary residence or investment real estate.
Mortgage rates are hovering near 5.00%. These are the lowest conforming fixed-rate mortgages we have seen since 2003. Economic weakness and recent actions by the Fed and the Treasury are driving these rate declines.
The Fed and the Treasury are looking at additional programs to boost the economy. On December 3, the Treasury confirmed that it is considering a plan which would offer below
market mortgage rates for select loans used to PURCHASE homes. The lower rates would NOT be available for refinancing loans. At this point, it is unclear if, when, or in what form this latest idea will be acted upon. As we have seen recently, most notably with the $700 Billion TARP Rescue Plan, government programs often change significantly before their implementation.
My Advice - Take the amazing rates paired with lower housing prices and maximize your investment opportunity in your primary residence or investment real estate.
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