In a recent article, Mortgage Refinancing Buzz compares conventional and FHA refinancing in a side by side analysis. The mortgage advisor notes that both types of refinance loans have their pros and cons so it all comes down to selecting a refinance program that best meets you individual needs. In 2010 there were many revisions to underwriting criteria for conventional and FHA loan requirements. MRB recommends finding out what your loan qualifications are with a mortgage lender you trust.
A conventional refinance loan is a traditional mortgage used to refinance an existing mortgage that stays within the conforming loan limits of $417,000. FHA streamline refinance allows FHA customers to refinance anytime the market rate drops into a position that would save them money. During turbulent the FHA refinance loan provides some assurances that if the rates drop, the FHA borrower can reap the benefits.
The Lead Planet published a press release Friday discussing the state of the mortgage lead market. The mortgage lead generation company, released their 2 cents on buying leads and partnering with the right lead company. They recommend that lead buyers focus on building a relationship with a lead company that doesn’t sell their leads too many times. The Lead Planet also stresses the importance of purchasing leads from a direct lead source. (a company that generates their own online mortgage leads, rather than buying leads sold to them from a lead broker)
Just a few days ago Freddie Mac published a report indicating that home loan applications had reached a 13-year low. Is this a true indication of the demand for home financing or the reality of the lending guidelines and underwriting for mortgage loans has tightened to the point that most borrowers already know they do not qualify?
The Lead Planet reminds us that there are enough challenges in this mortgage market just finding loan applicants who even qualify. Conventional, VA and FHA mortgage lending guidelines have all implemented stiffer requirements for home buying and mortgage refinancing. Read the original article at the Lead Planet Blog >Mortgage Lead Buying Secrets or call the lead support team at 619-600-5720.
Mortgage rates fell to 2010 lows but did come under a small amount of upward pressure late in the day as the stock market rallied into the close. As the prices of mortgage backed securities fell, many mortgage lenders saw pricing get worse, but the higher lending costs that were passed on to borrowers were not big. Mortgage refinance rates continued to hold at the best levels of 2010.
Reports from competitive mortgage professionals indicate mortgage lender rate sheets to be about the same as yesterday. The 30 year conventional rate mortgage remains in the 4.75% to 5.00% range for well qualified consumers. There are still FHA lenders offering 4.625% as par. To secure a par interest rate on a conventional mortgage you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point home mortgage.
If you are not planning on keeping your house for more than 5 years, you should consider a no cost mortgage. In many cases, in a no cost refinance, you will be forced to accept a higher mortgage rate which pays the lender enough money that they can afford to pay the closing costs for you. On a no cost mortgage, you are still paying the costs, just paying them in the form of higher interest charges. We recommend anticipating that a no cost loan to offer a rate of around 5.375% for a 30 year fixed.
A thirty-year California mortgage loan with a fixed interest rate, including lending fees, averaged 4.96%, the lowest level since week ended March 12th. California rates were still higher the 4.76% last year and the all-time low of 4.6%. The demand for refinancing in California rose but the home loan applications declined statewide as the federal home buyer tax credits expired. The 100% VA loan remained the best bet for homeowners looking to buy a home with no money down. However VA eligibility is required for the California VA loan.
On average, homes sold last month in the Southern California area were on the market for 122 days before their sales closed. That’s four days longer than in March. Also this week, the National Association of Realtors reported. Freddie Mac reported last week yesterday that California mortgage rates had fallen to their lowest rates of the year. Thousands of borrowers rushed online to shop California mortgage loans after hearing the interest rates were so low for mortgage refinancing.
Freddie Mac announced today that the current mortgage interest rates are the lowest they have been in 2010. The Wall Street Journal reported that home builder stocks rallied in early trading follow a reported spike in mortgage loan applications last week as homeowners take advantage of some of the lowest home mortgage rates since March.
The Mortgage Bankers Association’s seasonally adjusted index of home loan applications, which includes both purchase mortgage and refinance loans, rose 3.9% for the week ended May 7th. The four-week moving average of mortgage applications, which removes some of the volatility of weekly changes, was up 4.4%. Mortgage refinancing led the way; the MBA’s seasonally adjusted index of home refinance applications rose 14.8%. A 30-year fixed-rate mortgage, including lending fees, averaged 4.96%, the lowest level since week ended March 12th. Refinance rates were still higher the 4.76% last year and the all-time low of 4.6%. The demand for mortgage loans for buying new homes dropped following the expiration of the heavily publicized federal home buyer tax credits.
Fannie Mae announced that it will tighten lending requirements for its interest-only loans and adjustable rate mortgage loans. If a borrower wants an interest only mortgage through Fannie Mae, for example, he or she will have to make down payments of 30% of the sale price. For ARM’s, Fannie will only buy those underwritten to ensure that borrowers could still afford payments even if their interest rates reset to the higher of either one of the home loan’s initial interest rate plus two percentage points or 2) the maximum the interest rate the loan can rise to, known in the industry as the cap rate. As an example, for a home mortgage loan with a beginning rate of 5% and a cap rate of 6% borrowers would have to demonstrate they could still keep up payments even if the mortgage rate rose to 7%. If the cap rate is 8%, borrowers would have to be able to afford an 8% mortgage. For an ARM with a fixed period (ie. 5/1 ARM) any initial period with 5 years or less qualify at greater of note rate +2% or fully indexed rate, and interest only mortgage loans will have a maximum LTV 70% and a minimum FICO of 720 with 24 months minimum reserves. Balloon Loans, unless they receive special approval, are going away entirely with Fannie.
