Greetings,
Average Weekly Mortgage Rates are up slightly once again
According to the weekly Freddie Mac survey, the average 30 year mortgage rose to 4.91% from 4.87%. The 15 year average went up to 4.13% from 4.10%. The 5/1 ARM average rose to 3.78%, from 3.72%. Average rates contained .70 discount points. The good news is that while rates have risen the last four weeks, the average is still below 5%. This keeps home affordability at an attractive level as the spring home buying season heats up.
Points of Interest
Purposed legislation for Qualified Residential Mortgages (QRM) would limit classified loans to 80% of value or less and set the maximum qualification ratios at 28/36. It would also require mortgage investors to retain a 5% stake in the mortgage investment. Loans through FHA, VA, Fannie Mac and Freddie Mac would be exempt. Lobbying in opposition to the legislation sites rates would rise 1-3% and many prospective buyers would not have the savings to buy a home. Also there are concerns that investors would opt to invest in government sponsored mortgages to avoid the cost of the 5% risk retention. Non agency loans are typically called non-conforming and may be higher loan amounts, interest only payment, adjustable features or serve borrowers and properties that are not agency eligible.
On Monday 4/18 the annual FHA mortgage insurance premium (paid monthly in the PITI) goes up .25% for all loan types. This works out to over a $50 increase in the payment for loan amounts over $250,000. FHA still offers the low 3.5% down payment and other lending flexibilities not found in agency conventional loans. For buyers with stronger qualifications, opting to put down at least 5% for a conventional loan will be less expensive.
Mortgage security investors are seeing more conventional loans securitized through Fannie Mae then Freddie Mac. In the last year Freddie Mac has tightened guidelines on property value (requiring appraisal desk reviews in cases its automated value engine does not show results) and condominiums. Loan officers feel that FNMA is more flexible in many cases and opt for that agencies programs. Freddie Mac does currently allow automated underwriting approvals to a 50% debt ratio where most Fannie Mae investors cap the debt ratio at 45%.
Financial regulations now require every mortgage loan officer to be registered with the nationwide mortgage licensing system and registry (NMLS). Loan officers must provide personal information, answer questions on conviction of financial crimes and be fingerprinted. This is to prevent the hiring and employment of loan officers with a financial criminal history and aid identification and prosecution of financial crimes.
Keep the umbrella handy this weekend. 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
11320 Random Hills Rd. Ste 100
Fairfax, VA 22030
703-460-5510-O
703-303-6434-C
703-277-2882-F
www.MelnickMortgage.com apply online
Presidential Mortgage is local loan service nationwide.
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