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Home Loan Rates Rising

One of the things most consumers haven’t come to grips with is that interest rates in the United States are finally going up. According to Zillow, the fixed interest rates fixed for thirty-years jumped to 4.45% from 4.37% a week earlier. The real estate marketing company reported higher home loan interest rates for five of the last six weeks.  Erin Lantz, director of Zillow said, “Home mortgage rates were essentially unchanged last week because of mixed economic data and low trading levels associated with the shortened holiday work week.”  The report also indicated that the interest rate on home mortgages fixed for fifteen-years is presently at 3.41%, up from 3.34% a week earlier. The interest rate for a 5-1 variable-rate mortgage is 3.14%, above last week’s 3.12%. A 5-1 ARM offers an intro interest rate that works for the first five years of the amortization schedule and then has the potential to adjust each year. The most popular mortgage products remain the government, Fannie Mae and Freddie Mac loan programs.

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Rates Rise Slightly for Refinancing and Home Buying

Home loan and mortgage refinance rates rose slightly last week and many lenders are hopeful that rates will see a positive bounce in the weeks to come. Interest rates rose slightly, with the average rate on 30-year fixed-rate mortgages climbing for a fourth straight week, according to Freddie Mac’s weekly survey of mortgage rates. The volume on cash out loans rose as well.

The 30-year fixed-rate loan averaged 4.91% in the week ended Thursday, up slightly from the prior week’s 4.87% but down from 5.07% a year earlier. Mortgage rates generally track U.S. bond yields, which move inversely to Treasury prices. Mortgage rates have climbed this year after slumping most of last year when prices rallied on economic uncertainty.

The FHA rates remain as low as conventional rates. The VA rates dipped below conventional rates this week on 30-year fixed rate terms.

15-year rates for fixed-rate home loans averaged 4.13% in the latest week, up from 4.1% in the previous week but down from 4.4% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages were 3.78%, up from the prior week’s 3.72% but down from 4.08% a year earlier. One-year Treasury-indexed ARMs were 3.25%, up from 3.22% but down from 4.13%, respectively.

To obtain the rates, the 15-year fixed-rate mortgages required payment of an average 0.7 point and the others required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest

Interest Rates on Mortgage Loans Decline Again

Once again, mortgage rates fall again and continued their streak of record breaking interest rates. The fixed 30-year loan fell to 4.55 percent and the 15 year declined to 3.91 percent. The Mortgage Bankers Association posted their weekly application survey and it shows that some folks are taking advantage of record-low mortgage rates.

The mortgage data report underlined the fact that most of the activity is coming from refinancing rather than home buying. The MBA survey showed a 4.5 percent increase in the overall number of home mortgage applications, and a 5.7 percent increase in the number of people who applied to refinance. So that means that mortgage refinancing represented 82 percent of all loan applications. It was notable that bad credit home equity credit line applications declined nearly 5 percent and fixed home equity rate loan application volume dropped over 2%.

Mortgage Interest Rates Hit Record Lows

Mortgage Interest Rates Hit Record Lows

Freddie Mac announced the lowest mortgage interest rates since 1971, yet the demand for new home loans remained weak. US mortgage loans did inch up last week but even with record low mortgage rates new home-buyers were not impressed. Lending companies have been taken back by the lack of interest from loan applicants. Mortgage industry insiders insist that the unemployment and tighter home loan guidelines are driving away the growth of home-ownership. .

Home purchase and mortgage refinancing applications rose by less than 1% in the first week of August, even as 30-year mortgage interest rates fell to 4.57%, the lowest in 20 years of record keeping by the Mortgage Bankers Association.

Lowest Mortgage Rates Seen by Freddie Mac

Freddie Mac announced another record today for the lowest interest rates since they began recording mortgage interest rates in 1971. The 30-year fixed rate mortgage reported averages of 4.69% for the week ending June 24th. Fifteen-year fixed mortgage rates fell to a 4.13% average which was also slightly lower than the previous week. VA mortgage remain appealing to military vets because the record low VA rates are still available as well. If you already have a VA loan but need a lower interest rate, consider the VA streamline.

New and existing home sales showed declines in May, Nothaft pointed out. “Existing sales fell 2.2%, compared to the market consensus forecast of a 6% gain, based on figures published by the National Association of Realtors. Sales of new homes fell 32.7% to an annualized rate of 300,000 units, which was the largest monthly drop and slowest pace since records began in 1963, according to the Census Bureau,” he said.

Thirty Year Mortgage Rates Drop to 4.79%

Borrowers across the nation are lining up for home refinancing offers as mortgage interest rates drop once again. The current mortgage rates remain low as the 30-year fixed-rate mortgage average rose slightly to 4.79% with an average 0.8 point for the week ended June 3, according to the buyer of home mortgage loans. In the prior week, the average rate was 4.78%, the lowest since early December. The year-ago average for the thirty-year home loan stood at 5.29%. “The economy grew at a slower rate than originally reported in the first three months of the year … which suggests inflation will remain tame in the near term,” Freddie Mac chief economist Frank Nothaft said, referring to revised data on U.S. gross domestic product. See full story on first-quarter GDP revision pegging growth at 3.0% pace. “As a result, home loan rates held at historic levels this week,” he said in a statement. Underscoring this, interest rates on fifteen-year fixed-rate mortgages reached a new record low, averaging 4.2% — the lowest level since Freddie Mac began tracking the mortgage rates back in 1991 — down from 4.21% in the prior week.

One-year Treasury-indexed adjustable-rate mortgages averaged 3.95%, unchanged from the prior week, and the lowest level since May 2004. The 1-year ARM averaged 4.81% a year ago. The 5-year Treasury-indexed hybrid ARM averaged 3.94%, down from 3.97% in the prior week. A year ago, the 5-year ARM averaged 4.85%.

To obtain the rates, the 30-year fixed-rate mortgage required a payment of an average of 0.8 point. The other mortgages required a payment of an average 0.7 point. A point is 1% of the mortgage amount, charged as prepaid interest.

Online Loan Shoppers See Lower Mortgage Rates

CBS News reported that the Greek debt crisis led to an unexpected drop in fixed mortgage rates. The Royal Bank, along with all of the other four big banks, dropped the popular five-year fixed closed mortgage 0.15 percentage points to 6.10% on Tuesday. Most banks also dropped the benchmark rate for their discounted five-year mortgage by a similar amount to 4.70%. Some online and smaller mortgage lenders offer no cost refinance loans. This is good news for online home loan shoppers who’ve experienced higher fixed mortgage rates that have risen over 1% in the last month. Many banks followed with reported lower mortgage rates for home buying in the US and Canada. Longer-term fixed interest mortgage rates typically follow longer-term bond yields. The Greek debt crisis put a stop to rising bond yields as traders moved money out of risky assets. “Both treasuries and Government of Canada bonds have recently benefited from lower mortgage interest rates in the Unites States.” Many mortgage loan experts say the lower interest rates are just temporary and note that bond yields are already edging higher as the EU’s bailout package eases Greek default concerns. Adjustable rate mortgage loans are tied to the overnight lending rate. That mortgage interest rate has been at a rock-bottom 0.25% for over a year.

Mortgage Rates Inch Up

Mortgage interest rates continue to teeter the monumental 5% mark and the demand for mortgage refinancing continues to rise. One problem for most loan applicants is that they do not qualify because conventional and FHA mortgage guidelines have tightened to the point that only a small percentage of borrowers qualify for home refinancing or new home loans. The financial crisis and Great Recession have their roots in the housing bust. When it comes, a lasting recovery will be evident in a housing rebound. Unfortunately, housing appears to be weakening anew.

Housing figures released last week show that after four months of gains, home prices flattened in October. At that time, low current mortgage rates courtesy of the Federal Reserve and a home buyer’s tax credit (courtesy of Congress) were fueling sales. That should have propped up prices. But it was not enough to overcome the drag created by a glut of 3.2 million new and existing unsold single-family homes — about a seven-month supply.

The situation, we fear, will only get worse in months to come. Rates already are starting to rise as lenders brace for the Fed to curtail support for mortgage lending as early as the end of March. The home buyer’s tax credit is scheduled to expire at the end of April. And a new flood of foreclosed homes is ready to hit the market. It is increasingly clear that the Obama administration’s anti-foreclosure effort which pressed mortgage lenders to reduce interest rates — isn’t doing nearly enough. High unemployment rates also mean that many borrowers who did qualify for aid have been unable to keep up with even reduced monthly payments.

Federal Reserve Hints that Mortgage Rates Will Remain Low

The Federal Reserve is expected to leave mortgage interest rates at a record low this week, aiming to entice homeowners and businesses to borrow and spend and bolster the economic and housing recovery. The big question is whether Chairman Ben Bernanke and his colleagues will give hints about when they will reverse course and start boosting rates. A decision to raise interest rates is still months away. But plans for reeling in the unprecedented amount of money the Fed has plowed into the economy is likely to dominate its private discussions Tuesday and Wednesday. The Fed is expected to announce its policy decisions on Wednesday afternoon.

The current mortgage rates remain at record lows. Borrowers can find mortgage loans as low as 4.375% for 15-year fixed terms. Home loan applicants can find 30-year fixed mortgage rates as low as 4.625%, so the era of low mortgage rates continues. The central bank faces a high-stakes challenge: If it removes the stimulus too soon, it could short-circuit the recovery. But if it moves too late, it could unleash inflation or new speculative asset bubbles. Each scenario could feed a fresh economic crisis. Bernanke, who’s seeking a second term as Fed chief, has made clear his No. 1 task is sustaining the fragile recovery. Last week, he and other Fed officials signaled they are in no rush to start raising rates. At the same time, Bernanke has sought to assure skeptical lawmakers and investors that when the time is right, he’s prepared to sop up all the money.

Some encouraging signs for the economy have emerged lately. The nation’s unemployment rate dipped to 10% in November, from 10.2% in October. And layoffs have slowed. Employers cut just 11,000 jobs last month, the best showing since the recession started two years ago. Still, the Federal Reserve predicts unemployment will remain high because companies won’t ramp up hiring until they feel confident the recovery will last. Mortgage refinancing application volumes remain high and most lenders are reporting a 6 to 8 weeks turn-time for closing loans.

Consumers did show a greater appetite to spend in October and November. But high unemployment and hard-to-get credit are likely to restrain shoppers during the rest of the holiday season and into next year. “The economy isn’t on solid footing yet,” said Chris Rupkey, an economist at the Bank of Tokyo-Mitsubishi. “So it’s best for the Fed to keep with the script of low interest rates.” The economy finally returned to growth in the third quarter, after four straight losing quarters. And all signs suggest it picked up speed in the current final quarter of this year. But analysts worry that the economy could weaken next year as government supports fade.

Last week, Bernanke warned that the economy confronts “formidable headwinds.” They include a weak job market, cautious consumers and tight credit. Against that backdrop, the Fed is all but certain to keep the target range for its bank lending rate at zero to 0.25 %, where it’s stood since last December. The Fed also is likely to retain a pledge first made in March to hold rates at such levels for “an extended period.” The central bank also isn’t expected to make any major changes to a program, set to expire in March, to help further drive down mortgage rates. In response, commercial banks’ prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will remain about 3.25 %. That’s its lowest point in decades.

Ultra-low mortgage interest rates are good for borrowers who can get a loan and are willing to take on more debt. But those same low rates hurt savers. They’re especially hard on people living on fixed incomes who are earning measly returns on savings accounts and certificates of deposit. Tight credit is clobbering small businesses, normally an engine of job creation during economic recoveries. That’s crimping their ability to hire and expand. Many small businesses rely on smaller banks for credit. But troubled commercial real estate loans are concentrated at those banks. That’s hobbled the flow of credit. At a White House meeting Monday, President Barack Obama urged top bankers to increase lending to small businesses. Afterward, some banks pledged to do so. Article was written by By JEANNINE AVERSA.

Current Mortgage Rates Remain Low

MBA reported the current mortgage interest rates for thirty-year fixed-rate home loans fell to 5.01 last week from 5.04%.   These low mortgage rates have spurred a refinancing frenzy across the country.

But that number remains more than the national average of 4.95%, according to the real estate Web site. According to Zillow. New York and Illinois had the highest rates at 5.15% and 5.1%, respectively. Colorado, Virginia and Washington had the lowest at 4.9%.

National mortgage rates declined as well. The 15-year fixed mortgages fell to 4.37% from 4.39% and 5-1 adjustable rate mortgage loans dropped to 3.83% from 3.85 the previous week. The volume of mortgage loan applications also fell to 12,696 from 13,081. Last week’s tally included 52% refinance loans, 46% purchase loans and 2% for home equity.

Will Mortgage Rates Remain Low in 2010?

The Fed’s Federal Open Market Committee announced that they were leaving mortgage rates unchanged.  However, what wasn’t reported by main stream news organizations is the real story. According to the statement released by the Federal Reserve, in an effort to “provide support to mortgage loan and housing markets” they will “purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt.”  Additionally, “they expect to gradually slow the pace of these purchases in order to promote a smooth transition. So just what does this mean for mortgage interest rates?  “In short - They are going to go up.  It’s simple supply and demand,” says Scott Messina, publisher of Mortgage Market Live.  “Just how fast remains to be seen, it really all depends on how fast the Fed turns off the spigot.”

2009 began with low mortgage rates in an effort to stimulate housing and the economy at large, the Federal Reserve began buying bad credit mortgage debt.  Without this “help” from the Fed, mortgage rates would have been forced higher to attract more investors.  Instead the Fed has been quietly buying this oversupply to keep interest rates artificially low. “The problem of course, is once this helping hand is pulled back, rates have nowhere to go but up.” added Messina.  “The saving grace is that mortgage rates will likely be very volatile for the next several months. Originators should always remember that volatility can equal opportunity.” “If you’ve watched mortgage rates over the last several weeks, there has been at least one day each week that was preferable for rates. Loan officers that knew which day to lock in their customers loans have saved their customers, on average over a quarter of a percent in rate.”

Rates and Mortgage Loan Applications Rise

Usually when rates rise, mortgage loan volumes drop, but this week, loan application rose even after the spike in mortgage rates. MBA reported that Mortgage interest rates on thirty-year fixed rate home loans rose slightly to 5.24% last week, from 5.15% in the previous week, but still below 5.38% of two weeks ago, according to the Mortgage Bankers Association’s weekly survey of mortgage applications. The mortgage refinance index rose by 12.7% last week from the previous week, the third gain in four weeks, and total mortgage application volume is up 34% from the same time last year on an un-adjusted basis. While low by historical standards, rates haven’t dropped below the magic 5% threshold that they crossed as recently as May.

The index that measures new home purchases rose by 1% on solid demand for government loans, the fourth straight weekly gain. Refinance activity accounted for 56.5% of all home loan applications. Meanwhile, more borrowers appear to be turning to adjustable-rate mortgage loans. ARMs accounted for 6.5% of all mortgage originations last week, up from lows of 3% when mortgage rates dropped below 5% in April and May.

Why Mortgage Rates Are Rising

The spread between the 2 year and 10 year treasury yields continues to widen.    Federal Reserve policies largely control the direction of shorter-dated notes, while the overall bond market and investors largely determine the direction of longer-dated bonds.

The difference between short and long-term bonds is called the ‘yield spread’ and it is a measure of varied expectations.  This yield spread chart clearly shows that what the Fed policies are doing is largely different than the overall expectations from the bond market.  This is one reason why interest rates on certain types of home loans such as refinance mortgages, purchase and equity loans have risen lately even as the Fed keeps its target interest rate at 0-0.25%.   The bond market is seeing the future differently than the Federal Reserve.

Mortgage Interest Rates Rise

Mortgage rates on 30-year home loans rose last week and were poised to go higher as investors demanded higher rates for long-term government debt, which is closely tied to FHA mortgage rates.

Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages rose to 4.91 percent from an average of 4.82 percent the previous week. Rates in Freddie Mac’s survey have been below 5 percent for more than two months. If they rise higher, that will diminish the appeal of refinancing for many borrowers.

The yield on the Treasury’s 10-year note - a key benchmark for home mortgages and other kinds of loans - reached its highest level since November earlier this month. The worry is that rising bond yields could drive mortgage rates higher and also increase the cost of borrowing for businesses. That could short-circuit the nation’s efforts to emerge from a deep recession and the worst housing crisis in decades.

The average rate on a 15-year fixed-rate mortgage rose to 4.53 percent last week from 4.5 percent the previous week, according to Freddie Mac.

Interest rates on five-year adjustable-rate mortgages inched up to 4.82 percent from 4.79 percent while rates on one-year adjustable-rate mortgages fell to 4.69 percent from 4.82 percent.

The mortgage rates do not include points. The nationwide fee averaged 0.7 of a point last week for 30-year and 15-year mortgages, and 0.6 of a point for five-year and one-year adjustable rate loans.

 

Mortgage Loan Applications Increased as Interest Rates Rose

Bloomberg reported this week that mortgage loan applications in the U.S. gained last week, helped by affordable mortgage rates that enticed homeowners to seek mortgage refinancing. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan rose 2.3% to 915.9 in the week ended May 15th, from 895.6 the week before. The group’s refinancing gauge increased 4.5%. The average rate on a thirty-year fixed mortgage loans fell for the second straight week and was near the record low reached at the end of March.

Lower borrowing costs, supported by an increase in Federal Reserve purchases of longer-term securities, and reduced prices are boosting mortgage rates for home refinancing and purchases of homes and may help settle the slumping housing market. “The broader housing market certainly looks to be stabilizing,” Zach Pandl, an economist at Nomura Securities International Inc. in New York, said before the report. “Home loan applications responded very well to the Fed’s purchases of Treasuries and mortgage-backed securities.” The mortgage bankers Association reported that their mortgage refinancing gauge rose to 4,794.4, from 4,588.6 the previous week. The purchase index fell 4.4% to 254 last week, from 265.7 the week before. The share of applicants seeking to refinance loans rose to 73.6% of total applications last week from 71.9%.

Mortgage Interest Rates Dropping

With the government committed to buying troubled mortgage assets, lenders and banks are more comfortable extending credit with low rate home mortgages. FHA loan rates and interest rates for new home financing continue to see lending reports indicating the lowest rates in fifty years.


Will Mortgage Interest Rates Drop Further?

CBS News contributor Ray Martin discusses mortgage interest rates, loss mitigation and he addresses other financial questions about the stimulus package and the housing industry.

Treasury Secretary Tim Geithner said in a press conference “Just as this administration has intensified our efforts to help American homeowners, those who would seek to prey on the most vulnerable are intensifying their tactics as well, often through mortgage relief scams and foreclosure prevention companies,” at an announcement in Washington. “These are predatory home mortgage schemes designed to steal Americans of their savings and potentially their homes.”

Mortgage Rates Decline as Refinance Applications Rise

Low mortgage rates continue to stimulate refinancing activity and the Obama administration hopes to encourage more first time buyers to seek financing to jump-start the struggling housing markets. Mortgage refinance applications jumped last week, as low mortgage interest rates fueled the increased refinance activity. The Mortgage Bankers Association said Wednesday its weekly application index climbed 21.2 % for the week ended March 13.

KMG Publisher, Jason Cardiff told Mortgage Related News that he anticipates that the FHA mortgage rates could decline to 4.5% or even 4.25%. Cardiff said, “Obama is serious about reviving the cash flow for homeowners on Main St. and the Federal Reserve made another move to pump more blood back into the housing sector.”

The index was 876.9, up from 723.4 a week earlier, the trade group said. Almost 73% of mortgage applications came from borrowers seeking to mortgage refinance loans at reduced interest rates, not home buyers. The lending survey provides a snapshot of mortgage lending activity involving mortgage bankers, commercial banks and thrifts. It covers about half of all new residential home loans made each week. An index value of 100 is equal to the application volume on March 16, 1990, the first week the association tracked it.

Mortgage Interest Rates Drop

Mortgage interest rates dropped based on news that the Federal Reserve has bought a total of $217 billion in securities that were mortgage backed, according to market researcher Wrightson ICAP . The Federal Reserve in New York jumped into that market and started buying debt sold off by the big mortgage finance companies that included Fannie Mae, in January.

The Federal Reserve in New York jumped into that market and started buying debt sold off by the big mortgage finance companies that included Fannie Mae, in January.  It also started buying the mortgage-backed securities bundled by the agencies.

Both steps positioned the Fed as buyer in secondary mortgage markets that had seized up but are vital to enabling lenders to make new home loans. Mortgage lenders sell many of their loans to institutional investors, and higher rates charged by these investors to hold pooled bad credit mortgages make it harder for originators to offer lower rates on new mortgage loans. Conventional and FHA mortgage rates were both slightly lower than the previous week.

In a sign that the purchases are driving down rates and encouraging private investors to also step in, the gap’s dropped in just a few months between Treasuries and the interest rates that the agencies and mortgage-backed securities have to carry to make them attractive. Yields on mortgage-backed debt dropped to 0.87 of a percentage point more than Treasuries, down from 1.90 points in December, and are near the lowest seen since late in 2007, according to a Merrill Lynch index. Request mortgage rate updates for home financing with Fannie Mae, Freddie Mac and FHA interest rate updates online.

Mortgage Rates Holding Steady

The 30-year fixed rate rests at 5.41% as President Obama unveils foreclosure prevention program.

o Current Mortgage Rates

o 30 yr fixed mortgage5.17%

o 15 yr fixed mortgage4.78%

o 30 yr fixed jumbo mortgage6.92%

o 5/1 ARM 4.80%

o 5/1 jumbo ARM 5.33%

Mortgage rates remained flat last week, as President Obama unveiled a $75 billion plan to help prevent foreclosures. The average 30-year fixed mortgage stayed constant at 5.41% for the week ended March 4, according to Bankrate.com.

The average jumbo 30-year fixed rate reached the lowest level in nearly two years, slipping to 6.77% from 6.87%. The average 15-year fixed rate mortgage ticked up to 4.94% from 4.93%.

Adjustable rate home loans fell, with the 1-year ARM pulling back to 5.43 from 5.58%; the 5/1 adjustable-rate mortgage decreasing to 5.39% from 5.40%.

Mortgage rates are continuing their sideways movement, though they may tilt higher as long-term concern grows regarding how the government will manage its growing budget deficit, according to Weiss Research analyst Mike Larson. “Mortgage interest rates are moving sideways with an upward bias. There are some concerns for how we’ll pay for the stimulus and everything else. And despite the dismal economic news the market is getting, there’s some concern about supply overshadowing that, and that’s impacting bond prices,” Larson said.

President Obama’s $75 billion foreclosure prevention program went into effect Wednesday. The Homeowner Affordability and Stability Plan will help more homeowners refinance into new, low-interest rates and it provides incentives to mortgage lenders and servicing companies to restructure mortgage balances and renegotiate mortgage rates.

Borrowers Reject Adjustable Rate Mortgage Loans

American homeowners have lost their appetite for once appealing adjustable rate mortgages. A quarterly report from Freddie Mac indicated that 97% of prime borrowers who refinanced adjustable rate mortgages last quarter chose fixed rate mortgage loans. In addition, 99.7% of homeowners who refinanced fixed-rate home loans last quarter chose fixed-rate mortgages again.

The number of homeowners choosing adjustable rate refinancing was significantly lower than the third quarter. “The very low interest rates for fixed-rate loans compared with ARM mortgage rates in the fourth quarter, combined with worries that rates may rise in the future when the economic recession ends, enticed refinancing borrowers to seek the security of long-term fixed-rate mortgages,” said Freddie Mac chief economist Frank Nothaft in a statement. “When borrowers can lock in a rate of 5% or less for 15 years or longer, it’s hard to find a reason not to take it.”

During the fourth quarter, initial interest rates on hybrid adjustable-rate mortgages were close to, or above mortgage interest rates on 15-year and 30-year fixed rate home mortgages. Last week, Freddie Mac reported the average 30 year fixed-rate mortgage had dropped to 5.04 %, down one full percentage point from where thirty-year mortgage loans were a year ago.

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