Friday’s Rates continuing up
Rhonda Porter on 06 8, 2007
What happened yesterday that caused me to issue an Alert to Lock? New Zealand raised their interest rates [photopress:MPj04331520000_1_.jpg,thumb,alignright]unexpectedly due to their improving economy and to hedge inflation causing quite a reaction from investors and significant increases to mortgage interest rates (bonds) throughout the day. Conforming rates are up 0.25% from last Friday’s rate quote.
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). Conforming rate quote below based on owner occupied with minimum credit scores of 680 with an 80% loan to value or lower. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below.
30 Year Fixed: 6.500% (APR 6.648%). Payment per $1000 = $6.32
30 Year Fixed with 10 Year Interest Only: 6.625% (APR 6.775%). Payment per $1000 = $5.52
40 Year Fixed: 6.625% (APR 6.775%). Payment per $1000 = $5.94
7/1 ARM: 6.125%% (APR 6.270% ). Payment per $1000 = $6.08
5/1 ARM: 6.000% (APR 6.144%). Payment per $1000 = $6.00
5/1 ARM with 10 Year Interest Only: 6.125% (APR 6.270%). Payment per $1000 = $5.10
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed: 6.500% (APR 6.653%). Payment per $1000 = $6.32
30 Year Fixed with interest only payments: 6.500% (APR 6.653% ). Payment per $1000 = $5.42
40 Year Fixed: 6.625% (APR 6.779%). Payment per $1000 = $5.94
5/1 ARM: 6.125% (APR 6.274%%). Payment per $1000 = $6.08
5/1 ARM with 10 Year interest only payments: 6.125% (APR 6.274%). Payment per $1000 = $5.10
Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. In fact, I would not shop by rates at all! All the estimates provided yesterday or the day before are null…why pick your mortgage professional based on something you don’t have (the rate), unless you’re prepared to lock at that moment.
This is just a small sample available of rates and products. For a specific strategy for your mortgage needs, contact a qualified Mortgage Professional.
Rates are as of 1:30 p.m. PST and may very well change throughout the day.
About the Author: Rhonda Porter
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4 Responses to “Friday’s Rates continuing up”
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Hi,
I am thinking about buying into Escala but how would I get financing to close a year or so from now? Can I lock in a rate on a contract to the condo? What kind of questions to I need to ask to get the best deal on a loan?
MJ,
locking beyond 60 -70 days typically requires an additional upfront lock fee (on top of the higher rate). I’m checking out a rate that shows the additional upfront lock fee at 1.625% for 360 days. This would be 1.625% on top of your origination/discount (if you have one). For example, if your loan amout is $400,000, the additional lock fee for 360 days would be $6,500 (plus discount/origination). It’s expensive. The lock fee is due at the time when you lock in the loan AND it’s non-refundable. So if you do not buy the home or if the rates improve, you’ve just lost a significant chunk of change.
You may be better off “floating” with so much time ahead of you. Rates may not be far from where they are today. The difference of 0.25% in rate on $400k loan is about $67 in the monthy payment.
And, you could always use the $6500 to go towards points when you’re a few months away from locking instead of plopping that money down now.
Sometimes on site lenders might offer locks this far out in advance without dinging you the upfront fee. This could be a time to consider one if you would like to lock in now. If they don’t offer it, then shop around.
Good luck!
Rhonda,
Thanks for the info. This is all so complicated, buying a condo that won’t be completed for several years. I need to give this serious consideration.
MJ
[...] During this week…mortgage rates were climbing. I was now suspicious that the internet lender never locked in Joe’s interest rate…they were gambling or it was a possible oversight. I asked Joe about this and he told me that he had requested a Rate Lock Confirmation several times and the lender NEVER provided one. [...]