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Interest Rate Updates for Home Financing and Mortgage Refinance Rates
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November 2010
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FHA Loan Outlook for 2011

Few would argue the impact the FHA loan programs have had on the mortgage market in the last four years. With FHA rates at record lows, it’s logical to think that FHA loan originations would increase in 2011. However, a recent report revealed that HUD is forecasting that the Federal Housing Administration will endorse $288.7 billion of single-family FHA loans in fiscal year 2011, a 9.4% decline from FY 2010, which ended September 30. 

Low Rates and Mortgage Friendly Guidelines

Let’s be honest, low interest rates and mortgage friendly guidelines drive the housing market. Mortgage lenders and banks continue to ask borrowers for more loan documentation. The streamline refinance is the one exception for tighter guidelines. This unique refinance loan does not require income documentation and in some cases no appraisals.

Having record low mortgage rates with tight lending guidelines will not help the housing sector rebound. We have had record low rates for 3 straight years and the home sales remain sluggish. Historically low home loan rates are a crucial component of record affordability for home buyers, but lack of confidence in the market and fear of further price declines are challenges that are outweighing that factor, Credit Suisse analysts wrote Wednesday. Record low interest rates have dominated mortgage news for most of 2012. The fact is that lenders stopped approving bad credit equity loans. Many consumers are hoping that lenders ease some of the lending requirements in the year to come.

Existing home sales were down in all 50 states in the 3rd quarter with double-digit year-over-year declines in 47 states, the result of weakened demand after the homebuyer tax credit. In new construction, housing starts in October were at a seasonally adjusted annual rate of 519,000, down 1.9% from the October 2009 rate and 11.7% below September’s rate, the Census Bureau and Department of Housing and Urban Development reported Wednesday.

Tips for Refinancing into the Lowest Home Mortgage Rates

By now most homeowners realize that a mortgage refinance loans may be the best way to increase cash flow and reduce housing expenses. Just when it looked as if mortgage rates couldn’t fall any further, they did. Mortgage interest rates on 30-year fixed home loans hit an average of 4.25% in September, the lowest level since 1953, according to Freddie Mac, and are still hovering below 4.5%. Jumbo mortgage rates fell to 5.125% which is the lowest level for jumbo rates in years. Many consumers searching for a poor credit mortgage solution have been selecting the government loans because they are more flexible with credit guidelines. FHA mortgage rates fell to 4.125% in October which enabled thousands of borrowers to refinance their adjustable rate loans.

1. Maintain good credit scores. High ficos are needed to maximize the lowest possible rates.

2. Work with a trusted lender that offers competitive rates. Working with a shady lender offering lower rates will end up biting you.

3. Consider a variety of home loans in an effort to find a great rate mortgage that meets your needs.

15year interest rates are even more enticing at 3.75%. The most creditworthy borrowers may even find lower payments, with interest rates as much as quarter of a percentage point lower.

Credit Qulifications for Best Mortgage Refinance Rates

More than ever, credit has become the driving factor for borrowers to qualify for the best mortgage refinance rates.  Good credit borrowers are finally being rewards with mortgage refinance rates at their lowest point in 50-years. 

In today’s market, borrowers with high credit scores are eligible for conforming, jumbo and FHA rates below 4% with fixed rate mortgage refinancing terms. Qualifying for a low rate home refinance is no easy task as most mortgage lenders have significantly tightened their lending guidelines. With refinance rates this low, you can imagine that there is quite a frenzy of homeowners trying to lock into today’s record breaking rates. And unlike in late 2008, when rates started their plunge to historic lows, many home loan lenders say they are rushing to accommodate the influx in applications.