Realty Times - Mortgage Rates Remain Low After Mixed Housing Reports

September 28, 2011

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Mortgage Rates Remain Low After Mixed Housing Reports
by Ed Ferrara

With the summer season now over, mortgage rates continue to remain low after mixed housing reports for the month of August. Data showed that consumers are still carefully looking at their options before committing to purchasing a home. While existing home sales surged, new home sales fell to a six month low in August as reported by the Commerce Department.

Choosing an existing low priced home and combining it with historical low mortgage rates is the current path that consumers are choosing. Freerateupdate.com's daily survey of wholesale and direct lenders show that low mortgage rates have remained steady for the past week. Current 30 year fixed mortgage rates are at 3.875%, 15 year fixed mortgage rates are at 3.250% and 5/1 adjustable mortgage rates are at 2.625%.

For borrowers who have maintained good credit and also have verifiable income, these are the lowest mortgage rates available with 0.7 to 1% origination fee. It is obvious that the housing market is still suffering, but many consumers are finding that there are deals worth pursuing. With mortgage rates so low, many borrowers are also realizing that they can afford a shorter term mortgage loan that will end up saving a lot of money on the overall interest.

Many consumers don't qualify for conforming mortgage loans, but they can qualify for FHA mortgage loans. With easier credit qualifying and a low down payment of 3.5%, FHA has been keeping quite busy. FHA 30 year fixed mortgage rates are at 3.750%, FHA 15 year fixed mortgage rates are at 3.500% and FHA 5/1 adjustable mortgage rates are at 2.750%.

Even though FHA tends to have higher closing costs (APR) due to various FHA fees and the upfront mortgage insurance premium, FHA allows consumers to use verified gifts from family, friends and employers. Housing grants and bonds are also allowed to reduce the overall transaction costs. All in all, FHA has been working hard to keep the housing market moving along by continuing to promote consumer friendly homeownership.

The jumbo mortgage market continues to offer high end borrowers low jumbo mortgage rates as well. Current jumbo 30 year fixed mortgage rates are at 4.500%, jumbo 15 year fixed mortgage rates are at 4.375% and jumbo 5/1 adjustable mortgage rates are at 3.250%. Stricter guidelines are generally used by lenders for jumbo mortgage loans since they are not government insured. With excellent credit, these are the lowest jumbo mortgage rates available to borrowers with 0.7 to 1% origination point. Borrowers must also be ready to provide any documentation required by the lender to receive approval.

While the stock market is recovering some of its losses from last week, it is still too early in the week to tell which way things will go. Last week's Fed announcement that they will replace short term bonds with long term Treasuries was proof of the Feds concern for direction of the economy and made investors nervous. MBS prices (mortgage backed securities) rose most of last week which is keeping mortgage rates at their current low levels. Mortgage rates move in the opposite direction of MBS prices. European debt is still a concern and continues to be a major influence on markets around the world. Although mortgage rates may fluctuate slightly, low mortgage rates should be staying around with the Feds latest move.

Realty Times - Mortgage Rates Remain Low After Mixed Housing Reports