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 3.625% (APR 3.789%), 15 year fixed mortgage interest rates are as low as 2.875% (APR 3.313%) and 5/1 adjustable mortgage rates are as low as 2.375% (APR 2.662%). Obtaining low rates is possible for borrowers who have good credit and the qualifications that lenders require for approval.
The Mortgage Bankers Association released the Mortgage Credit Availability Index (MCAI) which shows an increase to 109.8 in June from 108.9 in May indicating a slight ease on credit. The MCAI uses several different eligibility factors including credit score, the type of loan, the loan to value, etc. In another report, the MBAA Market Composite Index, a measure of mortgage application activity, dropped 4% on a seasonally adjusted basis for the week ending July 5th. However, HARP refinance applications continue to move ahead and rose to 35% from 34% during the prior week. HARP, the Home Affordable Refinance Program, will remain available to homeowners who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009 until the end of 2015.
Current FHA 30 year fixed mortgage rates are as low as 3.750% (APR 4.092%), FHA 15 year fixed rates are as low as 2.875% (APR 3.689%) and FHA 5/1 adjustable mortgage rates are as low as 2.625% (APR 2.956%). FHA mortgages are widely used by first time home buyers, especially those who are purchasing new homes. According to the MBA's Builder Application Survey, FHA mortgages attributed to 17.4% of loan applications for new homes during the month of June, 2013. Since FHA allows gifts from family, friends and employers to be used when purchasing a home, many first time home buyers are able to attain homeownership with very little funds from their own savings.
While FHA closing costs (APR) remain high because of the upfront mortgage insurance premium and other FHA fees, buyers can still use up to 6% seller concessions for this purpose. FHA refinancing includes the FHA streamline refinance with no cash out which does not require any documentation or an appraisal. Until the end of 2013, the streamline is also offering reduced upfront and annual fees for borrowers who have loans that were endorsed prior to June 1, 2009.
Jumbo 30 year fixed mortgage rates are as low as 4.125% (APR 4.278%), jumbo 15 year fixed rates are as low as 3.250% (APR 3.543%) and jumbo 5/1 adjustable mortgage rates are as low as 3.000% (APR 3.099%). Low jumbo rates are available for borrowers who have excellent credit.
Qualifying according to lender guidelines is also required, however, guidelines may differ from lender to lender since these are non-conforming loans. Jumbo loan volume continues to increase as rates remain low and affordable. According to Inside Mortgage Finance, jumbo originations saw a rise from last year of 15% to $54 billion during the first quarter of 2013.
Mortgage rates are affected by MBS prices (mortgage backed securities) and move in the opposite direction. While the June jobs report hurt MBS, they recovered this past week bringing some stabilization to mortgage rates. Core PPI inflation was 1.7% higher than one year ago. Jobless claims for the week ending July 5th increased to 360,000 which was above expectations.
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