As with all of you, I am getting ready for the 2010 hunting season to kick off!! I know it is extremely difficult to think about anything else than spending time in the woods this time of year, however, mortgage rates are truly at
ALL TIME lows! With the recent fluctuations in the stock market that affect our personal portfolios that none of us like to see nor want to know about, mortgage rates have been seeing great results in return! As the bond market has been acting as a safe place for investors to place their money for long term stabilization, it is driving mortgage rates down even further! The more money placed in bonds, the better rates will get! This dip in rates was not foreseen by anyone especially after the Fed stopped buying MBS (Mortgage Backed Securities) in April. As we are seeing great results with rates, they are still fluctuating daily… We have hit higher levels in the bond market than we did in the big refinance boom over a year and a half ago. If you are even remotely considering the thought of refinancing why not take a few minutes and see what your potential savings may be?!
There will be several changes coming in the next month to FHA loans. The upfront mortgage insurance that is collected with these loans will actually decrease to 1% from 2.25%. Yes that sounds like great news, however, the monthly mortgage insurance associated with these loans will increase to .90%. Even though the initial upfront premium that is collect will decrease, they are making up for it within your monthly payment…
What that means in numbers:
Now - $250,000 loan amount / current monthly mortgage insurance payment = $114.58
New - $250,000 loan amount / new monthly mortgage insurance payment = $187.50
That’s a difference of $72.92! That correlates to you as the consumer not being able to purchase a home at a higher value that you may have once qualified for as it will affect your debt to income ratios etc. Furthermore, if you have an FHA loan right now and you are thinking about doing a streamline refinance, I suggest you act NOW as when this change takes place, refinancing your current loan will not make sense.
With the ability to offer a 30 year fixed rate FHA loan at 4% (4.97% APR) there is no better time to purchase or refinance than right now! (Based on current market conditions as of August 30, 2010)
Also, if you are considering purchasing a new home but down payment is of concern, there are several programs out there that will help you with your down payment!
• The City of Tacoma has a down payment program that will assist you with a 3.5% down payment with 0% interest over the life of a 30 year loan!
• Pierce County has a down payment program within the same realm as the City of Tacoma.
• Most VA eligible borrowers are able to obtain a zero down home loan!
• USDA home loans allow for up to 102% financing in rural areas. USDA is waiting to sign off on funding at this moment; however lenders are still accepting loans based on certain criteria.
• Washington State House Key – this allows for numerous down payment programs across our state!
If you are considering selling your current home, I would try and hold on to your property as long as you can! As the market is still declining and foreclosures are popping up all over the place, home values are hard to obtain… I know that not all of this information is positive, but it is the truth with what is going on. Short sales and foreclosures force housing prices to drop, and until this market is cleaned up and new home starts are in motion values will continue to remain significantly lower than several years ago…
Mortgage rates are at 50 year lows! Don’t miss out while these opportunities last! With 10 year and 15 year fixed rates in the high 3’s to low 4’s and even 30 year fixed rates in the low 4’s now is the time to act! I am more than happy to discuss your scenario free of charge and see if now is a good time for you to refinance or not!I wish all of you the best of luck in the woods this fall!
Take care,
