It was a mixed week for investors who dealt with corporate earnings here in the U.S. and more disappointing news coming from Europe. Many corporate earnings were better than expected and had investors optimistic, as least for a little while. Euro zone troubles are continuing to help low mortgage rates remain firm as more countries in Europe are having difficulty with austerity plans. Freerateupdate.com's survey of wholesale and direct lenders shows that all mortgage rates were unchanged over the week even after stocks rose for several days on earning's reports.
Current 30 year fixed mortgage rates are at 3.750%, 15 year fixed mortgage rates are at 3.000% and 5/1 adjustable mortgage rates are at 2.375%. For these low mortgage rates, which are available with 0.7 to 1% origination fee, borrowers must have a history of good credit. According to the U.S. Census Bureau and the Department of Housing and Urban Development, Housing Starts for the month of March dropped 5.8 percent from February, but Building Permits increased 4.5 percent and are at the highest level since September, 2008. Existing Home Sales were down in March 2.6 percent lower than February according to the National Association of Realtors.
On the positive side, this number was still 5.2 percent higher than a year ago. The Refinance Index rose by 13.5 percent for the week ending April 13th according to the Mortgage Banker's Association. Most of these refinances, 32 percent, were for the Harp 2.0 refinance program which is turning out to be probably the most successful program introduced so far. With Harp 2.0, many borrowers who are underwater can refinance without the need of an appraisal and very little documentation. Since this program has become very competitive with lenders, borrowers are urged to compare several mortgage rates that are available to them in their area. Doing this online provides borrowers and easy and efficient way to do this at their convenience any time day or night.
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%. The increase in the FHA mortgage upfront and annual mortgage insurance premiums may be having some impact on home purchases, at least for awhile. The effects of these increases usually last for just a short time until consumers are used to the changes. Still, having lower down payment requirements than conforming mortgages, first time home buyers will continue to use FHA mortgages for financing. Even though the upfront mortgage insurance premium and other FHA fees make FHA closing costs higher than conforming mortgages, FHA allows these costs to be added to the loan amount in most circumstances. Coming July, the FHA streamine refinance will be available for existing FHA borrowers with reduced upfront and annual premiums which will, undoubtedly, bring another wave of refinances.
Jumbo mortgage rates all remained the same this week. Current jumbo 30 year fixed mortgage rates are at 4.250%, jumbo 15 year fixed mortgage rates are at 3.375% and jumbo 5/1 adjustable mortgage rates are at 2.500%. These are the lowest jumbo mortgage rates available with 0.7 to 1% origination fee for borrowers who have excellent credit and qualifications. Jumbo mortgages are needed for financing above the conforming and FHA loan limits and, since FHA increased the mortgage premiums, more borrowers who meet the qualifications will be looking for regular jumbo mortgages. Full documentation for employment, income and assets is required as lenders are very careful with approvals for these loans because they are not government insured or sold to Fannie Mae or Freddie Mac.
MBS prices (mortgage backed securities) did not move too much this week. Mortgage rates are affected by MBS prices but move in the opposite direction. Mixed reports came out this week with The Philly Fed Index falling and the Index of Leading Indicators rising. IBM and Intel earnings were not as impressive as what investors expected. Stocks increased for several days, but Euro zone problems are still driving markets. German business confidence rose in April while Spanish bond yields have been both up and down over the week. Further issues include austerity plans in Holland which collapsed. In France, the Presidential election is causing a stir with the French opposition candidate who is not an austerity supporter, Francois Hollande, moving to the second round. In China, manufacturing activity continued to contract in April. With a global economy, investors will continue to watch these developments closely.
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.