The Philly Pretzel

Mortgage bond prices rose last week helping mortgage interest rates improve slightly. We started the week on a positive note with rates falling amid tame inflation readings.

While there is growing and well-warranted concern that continuing to keep rates low will lead to inflation down the road…and remember, inflation is the arch enemy of bonds and home loan rates…it does appear that inflation is subdued at present. Last week’s reports showed that the Producer Price Index (PPI), which gauges inflation at the wholesale level, was reported well below expectations and at the largest monthly decline since July 2009. Meanwhile, the Consumer Price Index (CPI), which measures inflation at the consumer level, came in just below expectations for February.

Todays Mortgage Rates:

30 Yr Fixed – 4.75% (1 point) / 4.95% (0 points)

15 Yr Fixed – 4.25% (0 points) /

5 yr ARM – 3.5% (.5 point) / 3.75% (0 points)

7 yr ARM – 3.75% (.5 point) / 4% (0 points)

FHA 30 Yr Fixed – 4.75% (.25 point) / 4.875% (0 points)

FHA 5Yr ARM – 3.625% (1 point) / 4% (0 points)

Investment – 5.125% (.5 point) / 5.25% (0 points) 25% down payment required

*Rates are based on 80% loan to value unless noted and 720+ credit score (with the exception of FHA) *Income and Asset verification required and must meet DTI guidelines *This is not a commitment to lend and other conditions may apply

 
Technorati: philly mortgage, mortgage market, carina marchese, center city mortgage company

APPLY FOR A MORTGAGE ONLINE

Brought to you by our favorite mortgage broker:

Carina Marchese
Center City Mortgage
267.238.5785

email Carina for today’s rate

“IT AIN’T OVER TIL IT’S OVER.” Yogi Berra.

And whether you find those words deeply wise or simply puzzling…The Fed has told us repeatedly that their massive purchasing program of Mortgage Backed Securities is just about over – and this translates to home loan rates rising in the near future. As you can see in the chart below, the amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling, as the program is set to wrap up by March 31st, and are clearly trying to ration out the remaining portion. Last week, the Fed purchased $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment. So about 95% of the total has already been spent and has purchased about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen.

This is very important because as the Fed has less money to last through the remaining months of the program, their ability to keep home loan rates low via their purchasing power will wane. And those who can take advantage of currently low home loan rates do not wait, as the clock on these historically low rates is ticking.

Todays Mortgage Rates:

30 Yr Fixed – 4.75% (1 point) / 5% (0 points)

15 Yr Fixed – 4.25% (1 point) / 4.375% (0 points)

5 yr ARM – 3.625% (1 point) / 3.875% (0 points)

7 yr ARM – 3.875% (1 point) / 4.25% (0 points)

FHA 30 Yr Fixed – 4.75% (1 point) / 4.875% (0 points)

FHA 5Yr ARM – 3.875% (1 point) / 4.125% (0 points)

Investment – 5.3755% (0 point) / 5.5% (0 points) 25% down payment required

*Rates are based on 80% loan to value unless noted and 720+ credit score (with the exception of FHA) *Income and Asset verification required and must meet DTI guidelines *This is not a commitment to lend and other conditions may apply

Technorati: philly mortgage, mortgage market, carina marchese, center city mortgage company

APPLY FOR A MORTGAGE ONLINE

Brought to you by our favorite mortgage broker:

Carina Marchese
Center City Mortgage
267.238.5785

email Carina for today’s rate

If you are on the fence about whether to buy a home or not the new FHA changes that will be implemented this spring/summer may help you make up your mind.

If you have already decided to buy a home with a FHA loan now is the time to purchase before these changes go into effect. Remember you must be under contract by April 30th and settle by June 30th to also take advantage of the tax credit.

As banks have clamped down on mortgage lending, the FHA program has emerged as one of the few ways people can buy a home. A few years ago only 10% of home buyers utilized FHA insured  financing, today that number is 40%. Unfortunately out of a total of 5.8 million loans ($750 billion) that are insured by the FHA  more than half a million of the loans are seriously delinquent and heading toward foreclosure. In November the agency said its cash reserves had tumbled to  .53% of its insurance guarantees, well below the 2% ratio mandated by Congress and the 3% ratio it had last fall. The fund covers losses on the mortgages the agency insures.

The new standards are meant to shore up the agency’s finances. However the agency also wants to make sure that the new rules don’t disrupt the housing market and don’t hurt FHA’s ability to assist the underserved.

We think that the new standards are not unduly restrictive and the FHA is doing its best to protect the taxpayer and do the least harm to the credit supply.

These are the main changes that will affect FHA buyers.

** Upfront mortgage insurance premium (UFMIP) will increase to 2.25% up from 1.75%. Contrary to reports, FHA will continue to allow the financing of the UFMIP.

** Borrowers with credit score below 580 will need at least 10% down.

** Minimum down payment will remain 3.5% for all other borrowers.

** Seller concessions to the buyer (money that seller credits to buyer for closing costs) will be reduced to 3% from 6%.

Potentially Related Posts:
7 Facts About FHA Mortgages
What’s a Perfect Loan for a Philly 1st-Time Home Buyer
Applying for a FHA Loan

Technorati: fha loans, philly home buying, changes to fha loans, 1st time home buyers

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