With the Federal Reserve decision to keep their monetary policy in place, mortgage ratesremained flat over the past week. This prompted mortgage activity which was was evident in the mortgage application volume which increased 5.5% on a seasonally adjusted basis for the week ending September 20, according to the Mortgage Bankers Association.
According to the most recent survey of wholesale and direct lenders performed by FreeRateUpdate.com, current conforming 30 year fixed mortgage rates are as low as 3.750% (APR 4.005%); 15 year fixed mortgage interest rates are as low as 2.750% (APR 3.223%) and 5/1 adjustable mortgage rates are as low as 2.250% (APR 2.733%). Even though credit is tight, borrowers who have good scores and meet qualifying guidelines can still obtain low rates.
The National Association of Realtors reported that pending home sales were down 1.6% in August, but was still up 5.8% above the level reached during the same month last year. Refinances continue to bounce back as mortgage rates have declined from recent highs. According to the Mortgage Bankers Association, the Refinance Index increased 5% for the week ending September 20th and remained unchanged at 61% of total mortgage application activity. HARP loanapplications continue to be strong and rose to 41% which is the highest since the MBA began keeping track of this type of mortgage in 2012.
Current FHA 30 year fixed mortgage rates are as low as 3.750% (APR 4.037%); FHA 15 year fixed rates are as low as 2.750% (APR 3.479%) and FHA 5/1 adjustable mortgage rates are as low as 2.500% (APR 2.892%). FHA loansare very popular with first time home buyers who often need the lower down payment requirement to qualify. Although the government share of home purchase applications dropped to 28.4% for the week of September 20th, according to the Mortgage Bankers Association, it remains close to activity in June which was 28.2%.
Even though FHA loans have high closing costs (APR) because of the upfront mortgage insurance premium and other FHA fees, borrowers can often use seller concessions to help pay these expenses. One of the many benefits of FHA mortgages is being able to refinance without a credit history or an appraisal through the FHA streamline refinance. Until December 31, 2013, the streamline is offering existing homeowners (loans endorsed prior to June 1, 2009) the chance to refinance with drastically reduced upfront and annual mortgage insurance premiums.
Jumbo 30 year fixed mortgage rates are as low as 3.875% (APR 4.092%), jumbo 15 year fixed rates are as low as 3.000% (APR 3.068%) and jumbo 5/1 adjustable mortgage rates are as low as 2.375% (APR 2.639%). Borrowers must have excellent credit in order to receive low jumbo rates. It has become the perfect time for high end borrowers to obtain jumbo loans as rates have been close to conventional loan rate levels. Business may even improve further prior to year end as the inception of the qualified mortgage rules comes into effect during January 2014.
MBS prices (mortgage backed securities) fluctuate daily and move mortgage rates in the opposite direction. Jobless claims fell to 305,000 which was below expectations and close to a six year low. The second quarter GDP came in unchanged at 2.5%.
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