Weekly Mortgage Report

Rates for the Week Ending April 24th, 2009*

30 Yr Fixed Conforming: 5.000% APR 5.089%

5 Yr ARM Conforming: 4.250% APR 4.320%

30 Yr Fixed Jumbo: 6.250% APR 6.320%

5 Yr ARM Jumbo: 4.875% APR 4.945%

Prime Rate is at 3.250%

Mortgage News Last week, like the 3 weeks prior, mortgage markets were all over the place from day-to-day. But, also like the 3 weeks prior, when the week ended Friday, rates were right back where they started from Monday. For the 4th straight week, mortgage rates started and ended the week essentially unchanged. Whether or not this is good news depends on your perspective. For active home buyers who have yet to find the “right home”, long-term flatness like this is terrific. While interest rates stay even, buyer purchasing power holds flat and pre-approval letters stay valid. For buyers under contract or homeowners looking to refinance, though, the market’s pattern is a little more rough. Although rates are holding steady week-to-week, the day-to-day action is quite different. Bond markets are volatile and rate swings of a quarter-percent in a day have been common. How good of a rate you get depends on day on which you shop. This complicates the process of “locking a rate” and makes it very hard for people trying to time a market bottom. This week, though, the market may finally make a run and break its range. Aside from it being an unusually data-heavy week, the Federal Reserve meets Tuesday and Wednesday to discuss monetary policy. The data combined with the Fedspeak may push the markets one way or the other towards economic optimism or pessimism for the latter half of 2009. Lately, it’s been a combination of the two — a “cautious optimism” — and that’s a big reason why mortgage rates have held in a tight range for so long. Understand, though, that when mortgage rates finally do move, they’re going to move in a big way. So, if you’re among the crowd looking for lower rates, the best possible outcomes you can hope for this week are: Weak consumer confidence data (Tuesday, Friday) Weak consumer spending data (Thursday) Falling “cost of living” calculations (Thursday) Fed concerns about deflation and/or recession (Wednesday) Any of these four events would likely temper hope for a quick economic revival, sending mortgage rates lower. On the other hand, if confidence or spending is strong, or the Fed has no regard for deflation or recession, expect mortgage rates to rise.

Information Courtesy of Guaranteed Rate

Weekly Mortgage Report

Rates for the Week Ending March 6th, 2009*   30 Yr Fixed Conforming:     5.250%     APR 5.320% 5 Yr ARM Conforming:       4.750%     APR 4.820%  30 Yr Fixed Jumbo:          8.000%     APR  8.070%  5 Yr ARM Jumbo:             5.250%     APR  5.370%    Prime Rate is at 3.250%   Mortgage News Mortgage markets improved last week with investors’ renewed aversion to risk.  To the benefit of home buyers, as major stock indices touch 12-year lows, investors are moving investible cash to the bond market.   For only second time this year, mortgage rates ended the week lower than where they opened. Some of the bigger stories that caused mortgage rates to fall last week included: Unemployment reaching 8.1 percent nationwide The Fed reducing its economic outlook for 2009 Investor concerns for blue chip General Electric In addition, US Bank and Wells Fargo cut dividends by roughly 85 percent each.  Both banks are considered well-run and positioned their respective cuts as a way to bolster balance sheets.  Markets took it as a negative instead.   This week, there isn’t much economic news upon which to trade, save for Thursday Retail Sales data.  Therefore, markets will look for other clues about the future of the U.S. economy.   Tuesday, Fed Chairman Ben Bernanke has a scheduled speech on financial reform and then Thursday Congress takes up mark-to-market accounting.  It sounds like a dry topic, but mark-to-market is the accounting rule that makes banks take losses on assets they’ve yet to sell.   Some experts think mark-to-market accounting makes the financial system appear weaker than it is so this is why Congress is starting a debate.    If mark-to-market rules are loosened, it would likely spell good news for the stock market and bad news for mortgage rates.  In effect, money would flow in the opposite direction as it did last week.   For now, though, mortgage rates are low. If you’re currently floating a mortgage rate with your lender, consider locking in. If there’s even a whisper that mark-to-market accounting rules will change near-term, mortgage rates should rise.   Please email kjpremier@atproperties.com at anytime for more up-to-date real estate information and assistance.     *Rate Assumptions: These rates are posted for informational purposes only. They are meant to provide a gauge of where the market was at in the previous week and are not necessarily reflective of where rates are at currently. The rates were based on a 30 day rate lock. Conforming loan rates covered loans below $417,000 and above $300,000. Rates for loans below $300,000 may have been higher. Jumbo loan rates covered loans equal to or greater than $417,000 and below $650,000. Rates for loans above $650,000 may have been higher. These rates had assumed standard lender fees of $995 and no points. APR is not shown because this is not an advertisement but an article on the state of rates at the end of this week.

Report Courtesy of Guaranteed Rate

FHA: Down Payment Calculation and Loan Limits

In July 2008, Congress passed the Housing and Economic Recovery Act, a broad-based housing legislation, heralded as the most sweeping housing reform since the “New Deal”. The Act included changes in conforming and FHA loan limits and a comprehensive modernization plan for FHA.

Because of the changes introduced through the Housing and Economic Recovery Act of 2008, when originating an FHA loan, there will be a change in the down-payment requirement effective 1/1/2009.  

  All Case numbers assiged before 1/1/2009 will fall under the current guidelines for down-payment (97.15% in most states).  If the FHA case number is assiged on 1/1/2009 or later, the purchase loan will require a mandatory 3.50% down-payment amount.

Loan Limits are based on Funding date so all FHA loans funding on 1/1/2009 or later are subject to the new FHA loan limits.

KJ Premier Real estate Services Prides itself on keeping up with the most current information when it comes to buying and selling Realestate.  We have alligned ourselves with a few of the top Mortgage Brokers in the Chicagoland area that can help you through the buying process.  Please feel free to contact us at kjpremier@atproperties.com so that we can put you in contact with a mortgage broker that fits your needs.