After rising steadily for the last 3 weeks mortgage rates fell back down this week. The 30 year rate fell from 5.03 to 4.98. The 15 year rate fell from 4.46 to 4.40. The 5 and 1 year arm fell from 4.42 to 4.35 and 4.57 to 4.47 respectively. This looks like more of a hiccup as mortgage rates steadily start there rise. At this point the overwhelming consensus is that mortgage rates are going to rise in the next six months. But the lowered rates do provide an opportunity for potential homeowners to lock in rates at sub 5.00 rates. Below are rates from the weeks from October 8, 2009 to November 5, 2009.
Nov 05, 2009
30-yr 4.98 15-yr 4.40 5-yr ARM 4.35 1-yr ARM 4.47
Oct 29, 2009
30-yr 5.03 15-yr 4.46 5-yr ARM 4.42 1-yr ARM 4.57
Oct 22, 2009
30-yr 5.00 15-yr 4.43 5-yr ARM 4.40 1-yr ARM 4.54
Oct 15, 2009
30-yr 4.92 15-yr 4.37 5-yr ARM 4.38 1-yr ARM 4.60
Oct 08, 2009
30-yr 4.87 15-yr 4.33 5-yr ARM 4.35 1-yr ARM 4.53
Apr 16, 2009
30-yr 4.54 15-yr 4.93 5-yr ARM 4.83 1-yr ARM 4.82
As has been the case for several months the interest rate to watch is the 30 year rate. When rates are low (and the expectation is that they are going to rise) there is no real reason to look at short term ARMS.
In addition to looking at rates we also calculated the mortgage payments for a 200k loan based on today's rates.
Nov 05
30-yr $1071.19
15-yr $1519.78
5-yr ARM $995.62
1-yr ARM $1009.8
Oct 22
30-yr $1073.64
15-yr $1522.84
5-yr ARM $1001.52
1-yr ARM $1018.12
Apr 09
30-yr $1015.74
15-yr $1573.26
5-yr ARM $1043.29
1-yr ARM $1057.8
This show how little rates have moved in the last two weeks. For a 30 year loan on a 200k mortgage the payment is $2.45 less a month for a decrease of about 1/5 of 1 percent
So what is our advice? First I would avoid anything but a 30 year mortgage. Their is simply too much of a chance of higher rates. Second I would start looking for a mortgage earlier in the process instead of later. Basically their are too many issues with lending right now and it's a good idea to find out any issues to get a loan earlier in the process. Second it's a good to check into the 7,500 tax credit. The new program has expanded the eligibility so if you didn't qualify for the 8,000 tax credit you might qualify for the new one.
Ki works, and lives, in Austin, Texas. His website arranges details on the Austin Tx real estate market. It also has graphs of mortgage rate trends and a few free mortgage widgets.
hml investments - Los Angeles, CA
I wanted to share some more information.
Fannie Mae and Freddie Mac make it harder for home buyers and real estate investors with mortgages on Condos. It's hard to really understand why these giants corporations are tightening their regulations while the government is trying to fix the economy. If you're a condo home buyer or a condo home seller you should read this article because it might change the way your realtor presents your property.
These days most real estate purchases are done by real estate investors. This is a great time for all investors to put the money they've saved in the past years in real estate, but purchasing condos is a little different animal I guess unless if you will purchase the property cash. Condos are a little different than single family residents by all means, also by the way they've getting financed by banks or the government.
Fannie Mae and Freddie Mac have said in march that they will no longer guarantee mortgages on condos in buildings where fewer than 70 percent of the units have been sold. They've created controversy, this may drive the condos market down because they are one of the main investors in America to land money on real estate. I'm thinking how the first 70% of condos will sale if home buyers and/or real estate investors can't get a loan to purchase them.
While I'm thinking about Fannie Mae and Freddie Mac's new regulations and thinking about the real estate market and the economy crisis in the world I discovered another new reason why Fannie Mae and Freddie Mac will not land money to new home owners: "delinquency in home owner association dues. I really don't know why it's so important that while a home buyer with a great credit comes to purchase a condo in a building that other homeowners weren't responsible enough to pay the Home owner association dues will not qualify for a mortgage.
Fannie Mae and Freddie Mac said they will not guarantee mortgages to condo buyers if 15% of the homeowners in the building are delinquent on the homeowner association dues.
That's what I wanted to talk about today just to give you readers some general information about the market.
Good Luck.
Dec 24, 2009 09:12 AM
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