Of these applications, the Refinance Index was up 1.3% and the seasonally adjusted Purchase Index increased 3.4%, with the majority applying for conforming (conventional) mortgages. FreeRateUpdate.com's survey of wholesale and direct lenders shows that conforming 30 year fixed mortgage rates dropped .125% and are now at 3.625%. Current 15 year fixed mortgage rates are at 3.000% and 5/1 adjustable mortgage rates are at 2.375%, all available with 0.7 to 1% origination fee to borrowers with good credit.
As mortgage rates have continued at record lows, 95% of borrowers who refinance have chosen fixed rate mortgages, according to Freddie Mac. Of these, 31% have replaced their 30 year mortgage with a 20 year term or less and 66% have chosen a mortgage refinance with the same term. The expanded Harp is well underway and is drawing the attention of many underwater borrowers who want to refinance to better mortgage terms.
Many are finding that an online inquiry is the quickest way to learn if they are eligible for Harp 2.0 or possibly another program. Some who were originally turned down have actually been approved by another lender after inquiring online. Potential home buyers may be finding that housing prices are stabilizing which is due to declining inventory and improved sales, according to the National Association of Realtors.
Last week, Fannie Mae released the National Housing Survey for April showing that consumers are more optimistic regarding the direction of home prices which is good news for home sellers. On the other hand, those who wish to purchase a home need to start seriously thinking about making a decision while home prices and mortgage rates are still low.
On Friday, President Obama proposed making mortgage refinancing available to everyone and has urged citizens to push their representatives to pass this legislation. In a plea to Congress, Obama wants to include all lenders in Harp incentives, offer streamlined refinancing to all non-GSE and non-FHA borrowers and to cut closing costs for underwater borrowers who refinance to lower monthly payments or apply the savings to rebuild equity in their homes. This could possibly be the Harp 3.0 that everyone has been waiting for since January if it gets passed by Congress.
Business for government insured FHA mortgages has decreased slightly since the increase in the upfront and annual mortgage insurance premiums in April. Current FHA 30 year fixed mortgage rates are at 3.375%, FHA 15 year fixed mortgage rates are at 2.875% and FHA 5/1 adjustable mortgage rates are at 2.875%. With the current upfront MIP at 1.75% for all FHA mortgages, the FHA closing costs (APR) which include other FHA fees are higher than conforming mortgages, but these are usually added to the mortgage amount. Existing FHA borrowers were put on hold for FHA refinances until June when the FHA streamline refinance with no cash out is re-released with lower upfront and annual mortgage insurance premiums. This is just another incentive to bring in existing FHA borrowers to refinance to lower FHA mortgage rates.
Jumbo mortgages continue to be a tighter market as lenders reduce their exposure to high risk loans. Nevertheless, current jumbo mortgage rates remain at all time lows for borrowers who are qualified. Current jumbo 30 year fixed mortgage rates dropped .125% last week and are at 4.125%. Jumbo 15 year fixed mortgage rates are at 3.375% and jumbo 5/1 adjustable mortgage rates are at 2.500%. Borrowers who have excellent credit and can meet lender guidelines can obtain these lowest jumbo mortgage rates with 0.7 to 1% origination fee. Jumbo mortgages, which are not government insured or sold to Fannie Mae or Freddie Mac, are necessary for financing above the conforming and FHA loan limits.
Although there were no significant rallies over the week, MBS prices did have an influence as can be seen with the decrease in 30 year fixed mortgage rates. Mortgage rates move in the opposite direction of MBS prices. Data released shows that in April Consumer Sentiment increased, Core PPI increased, PPI Inflation decreased and Import Prices dropped in March. According to the Labor Department, Jobless Claims were down 1,000 from the previous week which is considered a sign of improvement. Fed Chief Bernanke stated last week that although banks are stronger, they continue to be strict which is making mortgage lending sluggish. Europe is again having a strong influence on markets which will help keep mortgage rates at record lows.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.
Copyright© 2013 Realty Times®. All Rights Reserved
Copyright ©2013Realty Times®. All Rights Reserved