FHA Loan Rates Moving Higher

Filed under FHA Interest Rate by on December 24, 2009 at 4:09 am {no comments}

have been under pretty heavy selling pressure for the past month.  What this has done is drive the benchmark 30 year fixed rate up to about 5% today.

What we’re looking at is the graph of the Fannie Mae 4.5% bond, but the Ginnie Mae’s that drive the have followed the same path.  This is the price of the bond, the rate moves in the opposite direction.  So, in this graph, red is bad for and green is good.

It’s very clear that this month has been dominated by bad movement in terms of mortgage rates.

The 2010 FHA mortgage rate predictions point towards a continued trend towards higher rates.  I’ve seen argument for rates ranging from 5.5% to 6.5%.  The case being made for the 6.5% folks is technically sound reasoning, but I think it presses the edge of the high side.  Similarly, that 5.5% guess is probably low.  These estimates foreast the rising anywhere from .5% to 1.5%.  It is probably safe to split the difference and become prepared for a 6% rate environment and about a 1% increase from today’s levels.

What does that mean for a home buyer?  Get moving and get moving quickly.  The home supply is rapidly selling off.  That, more than any other single factor, influences home prices.

They’re not getting cheaper.  If home prices are going to be the same or higher and mortgage rates are going to be higher, possibly much higher, the housing payment for the exact same home could be 10% higher by March.

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FHA Interest Rates Back to 5%

Filed under FHA Interest Rate by on December 16, 2009 at 11:21 am {no comments}

It’s been an interesting week for the rates.

We’ve had every piece of bad news that mortgages could hear:

  1. The economy is rebounding.  We’re seeing expansion in nearly every key metric.
  2. Housing is on a roll.  This also has negative signals for the FHA .
  3. Inflation is starting to creep up.  Inflation equals higher rates.

Still, after all of this bad news and after losing 11 of the last 15 trading sessions, the FHA mortgage rate is still at 5%.  That’s surprisingly great news.

We’re still looking at an odd scenario where the rate is 5% for rates at 5% as well.  That conventional rate requires a 740 FICO for the best rate.  For a buyer with a 700 FICO score, it is actually cheaper to get the FHA loan.  That’s significantly different than just a few years ago.

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FHA Interest Rates Recovering

Filed under FHA Interest Rate by on December 9, 2009 at 10:50 am {no comments}

It’s been a crazy few weeks with charging all the way to all-time lows and then suffering a pretty ugly sell-off last week.

The rate has shown surprising resilience and has now fought back since Monday to get back below 5%.

For who have a seller credit of closing costs to help reduce their down payment, the current discount rates for don’t look too bad.

We’ve been seeing home buyers with 2 points to spare secure rates into the mid-4%’s.  It’s a crazy market and is incredible at these rates.

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FHA Loan Rates Improving Today

Filed under FHA Interest Rate by on December 7, 2009 at 11:02 am {no comments}

Last week saw rates take a bruising after chasing all-time lows right near Thanksgiving.  The was pushed higher, but still opens this week under 5%.

It is hard to keep in context how low are.  We went up .25% and are still below 5%.  That’s great news today.  It’s scary news into the future.

The economic data continues to point towards a slowly rising economy with sporadic pockets of bad news.   Every time that the Federal Reserve says “inflation,” rates go up .125%.

Today’s mortgage rates still sit more than 1% away from their ‘normal’ levels.  If you are looking at refinancing an , this is a great time for it.  If you are looking at buying a home, today’s make it much more affordable than it would be in a year.

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Switching to 4.0% Coupon

Filed under FHA Interest Rate by on December 1, 2009 at 8:12 am {no comments}

This is great news.  When we look at , we track a GNMA mortgage bond.

Recently, we’ve been using the 4.5% coupon.  With rates dropping so rapidly, we’re switching over to the 4.0% coupon as that is more closely related to the security that lenders are using to set .

Mortgage bonds are flat to open today.  It could get a little dicey as fears over the Dubai debacle are subsiding.  With the high quantity of securities bought during this recent flight to safety, we could have a situation where the could correct pretty quickly.

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FHA Interest Rates Almost 2 Points Lower

Filed under FHA Interest Rate by on November 30, 2009 at 12:37 pm {no comments}

It’s been an incredible month for the .

Today, we’re looking at the 4.75% 30 Year Fixed Rate.

On October 16th, the discount points required to buy the loan down to 4.75% was 1.82%.

As of today, it’s…..0.000%.

This is a staggering 182 basis point run in just 45 days.  On an average loan of $250,000, this is a whopping $4,550 in reduced closing costs to end up with the same low rate of 4.75%.

We’re currently at the best rates of all time.  Even one year ago when conforming rates dropped, the comparisons were not this even.  We’re now only seeing a spread of .125% between the two rates and the comparisons increasingly favor FHA when either of two conditions is true:

  • Credit score is below 720
  • Down Payment is less than 10%

Under either scenario, you’re looking at sub-5% rates but long-term savings typically lean towards the .

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FHA Interest Rates Open Below 5%

Filed under FHA Interest Rate, FHA Loan Rate by on November 23, 2009 at 12:07 pm {no comments}

Another interest week as have a lot of information—in a very compressed holiday week.

  • Today:  Existing Home Sales, Up 10%+.  Homes are selling!!
  • Tuesday:  Consumer Confidence, Home Price Index, Fed Minutes
  • Wednesday:  New Home Sales, Personal Income and Outlays

The events that would cause the to go up are more likely than the events that would cause mortgage rates to go down.

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FHA vs. Conventional 700 & 680 FICO

Filed under FHA Interest Rate, FHA vs Conventional by on November 17, 2009 at 11:51 am {no comments}

The Rates continue to trade within just a narrow margin relative to conforming.  With credit scores driving the conventional mortgage rate and the associated PMI, here’s a comparison of how the FHA vs. Conventional dynamic changes based on credit score.

Today’s example uses a $300,000 home at 5% down.  The FHA mortgage rate won’t change, nor will the monthly mortgage insurance.   Here’s a look at the data:

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FHA Interest Rates Continue Trend

Filed under FHA Interest Rate, FHA Mortgage Refinance by on November 16, 2009 at 6:50 pm {no comments}

Last week brought a third-consecutive week of rate improvement.  On the heels of a dismal University of Michigan Consumer Sentiment report on Friday, rates followed through and finished off the week strong.

We go into this week with a few key readings, namely, the CPI and PPI.

Current Status: Inflation Low. Rates Low.

If that current status shows inflation is heating up, rates will jump.

This week also welcomes the new FHA Streamline Refinance changes and that brings on a new world to the .  The new FHA loan requirements on the refinance are essentially “normal” on the “streamline” refinance.

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FHA Loan Rates Below 5%

Filed under FHA Interest Rate by on November 13, 2009 at 10:58 am {no comments}

The continues to trend lower.   plunged through the 5% mark and are sitting at their best levels, in the FHA products, in quite some time.

The much-loved FHA Streamline Refinance program has big changes coming next week.  Beginning November 17, FHA Streamline Refinance applicants will need to evidence:

  • Income
  • Verification of Employment prior to close
  • Assets to cover the cash-to-close.

Further, the FHA is limited loan-to-values to 97.75% for homeowners that want to “roll closing costs” into their mortgage.

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