Greetings,
Average Mortgage Rate Up .05% for the Week
The average 30 year mortgage rate rose to 4.81% from 4.76% last week. The 15 year average went to 4.04% from 3.97%. The 5/1 ARM average was 3.62%, from 3.57%. Average rates contained .70 discount points. Mortgage bonds gave ground to a stronger stock market this week while uncertainty over Japan and the Middle East continue to effect daily trading. Next week the government will be selling Treasury securities and on Friday the jobs report will be released. Expectations are for 190,000 jobs created and unemployment to remain at 9%. My market programs are recommending that clients who are able to lock-in these low interest rates not risk floating for lower terms. Activity at my office suggests the local purchase market is heating up. Incentives for buyers to act now are: low rates, upcoming FHA changes, loan amount reduction in the fall for jumbo conforming loans, and lower home prices. Incentives for sellers are lower inventory of local homes for sale and great affordability for perspective buyers.
Points of Interest
This week several mortgage investors announced they will accept FHA “flips” (sales under 90 days of seller ownership) with over a 20% increase in market price over sellers original price. There may need to be 2 appraisals to justify the increase. This is great news since it was difficult to work with a “flip” through FHA since most prices exceeded the 20% cap. Presidential Bank Mortgage also has conventional options for “flips”.
When a seller rent back is called for in a contract, the maximum days allowed for most loan programs is 60 days.
Presidential Bank Mortgage now offers financed PMI insurance. The maximum loan to value of the loan with financed PMI insurance is 95%. Many of my PMI buyers are taking advantage of attractive single premium rates. These are paid like mortgage points and eliminate the monthly premium in the payment. Terms are as low as 1.95% on a 95% loan and 1.25% on a 90% loan for owner occupied. PMI is also available on second homes and investment properties to 90%.
Keep you snow shovels handy, March is going out like a lion. I am available by cell phone and email and I always take care of your referrals!
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John Melnick II
Senior Loan Officer
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