Rates for Friday Afternoon
Rhonda Porter on 10 17, 2008
It’s really interesting pricing rates these days. I used to be able to use one lenders rates and compare to a pricing engine I use to make sure the rate was correct. With how volatile the markets are, I have to check several lenders to try to find the rate I would quote based on the criteria I’ve described below. For a 30 year fixed conforming mortgage, there’s an easy 0.25% difference in rate with the various banks/lenders our company works with. Some lenders are changing rates more often than others and rates rise much quicker than they fall. Even though we have fewer options (wholesale) to chose from, I thankful to have them.
Pricing rates from Friday to Friday is not showing you an accurate picture of just how much rates change during the week. Things are not as calm as they might appear. 
Just this week, on Twitter, I’ve quoted anywhere from 6.125 – 6.625% for a 30 year fixed with priced with 1 point (apr 6.282-6.894%).
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied with a mid-low credit score of 720-739, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000. This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with no prepayment penalties on any of the rates quoted below.
30 Year Fixed @ 1 Pt: 6.125% (APR 6.564%) 
0.125% to rate since last Friday’s post.
30 Year Fixed with 10 Year Interest Only @ 1 Pt: 7.125% (APR 7.282%) unchanged
15 Year Fixed @ 1 Pt: 5.875% (APR 6.133%) unchanged
5/1 ARM – LIBOR @ 1 Pt: 6.000% (APR 7.200%) unchanged
Conforming-Jumbo Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 – $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $650,000 and a $520,000 loan amount.
30 Year Fixed @ 1 Pt: 6.500% (APR 6.653%) unchanged
5/1 LIBOR @ 1 Pt: 6.375% (APR 7.164%) 0.5%
FHA. Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.
30 Year Fixed @ 1 Pt: 6.500% (APR 7.191%) 0.125% to rate
FHA-Jumbo. Pricing based on loan amounts from $362,791 – $567,500 for King, Snohomish and Pierce Counties.
30 Year Fixed @ 1 Pt: 6.750% (APR 7.191%) 0.5% to rate
VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.
30 Year Fixed @ 1 Pt: 6.625% (APR 6.750%) unchanged
Prime Rate (what HELOCs are based on): 4.500% unchanged. Note: the next scheduled FOMC meeting is October 28-29, 2008.
This is just a small sample available of rates and products. Rates are as of Friday, October 17, 2008 at 12:30 p.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate.
About the Author: Rhonda Porter
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17 Responses to “Rates for Friday Afternoon”
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So when mortgage rates go over 10%, will you still be posting these?
What’s the point really?
synthetik, why wouldn’t I? Of course I’ll keep posting rates. The point is to show the trend in which rates are going.
synthetik, rates are actually slightly improved or unchanged from last week.
“What’s the point really?”
I originally asked Rhonda to post rates on Friday so that people buying houses over the weekend would know what the rates are and what their payment would be. Many had pre-approval letters that were weeks and months old.
Since there is no rate cap in the Finance Contingency (see Joe Sixpack post) if the agent doesn’t know that rates moved, and the buyer doesn’t know that rates moved, people would be committing to a higher payment than they intended.
It provided a bit of a safeguard, not much, but a bit.
True, Ardell, YOU’re the reason why I’m posting rates on the internet.
At the time, I was a bit hesitant because of all of the factors to consider when pricing a rate and how often rates change. If a new rate sheets are in effect the moment after I hit “publish”, I’ll look great compared to other LO’s if someone is using the post to shop rates…and the reverse is true. I can post rates and then have them improve moments later, making me look “out of market”.
Posting rates, in my opinion, is mostly to show trends. And as I mentioned at the beginning of the post, with the spread with what all the banks are offering, it’s very interesting quoting rates.
Keep up the good work, Rhonda.
Synthetik,
Why the heck would you complain about people being able to see rates every Friday? I really like it, and I’m sure others do too.
How can that possibly bother you? Why are you always so mean?
The rate on my first house was 11 something (FHA) back in the late 80s.
Rhonda,
Did you purchase your first house as a one income or two income household?
Ardell, two tiny incomes. I was 22 years old and a “title technician” paid peanuts. My son’s Dad was working at Safeway (he wasn’t a checker yet).
Rhonda, do you think a young couple with similar jobs could buy the same place in N Tacoma today? How about 1 year ago today?
Cautious Buyer, I was just looking up that property last night. Looks like we actually bought it in August 1988. I was 21, not 22! Let me do some reasearch and find out what those jobs now pay and what that home is now “valued” at.
We did sell it one year later. In 89, prices were going up quickly and we sold the home for quite a bit more than what we paid for it.
Rhonda,
If you shoot me the address, I’ll do the valuation of what it would sell for at peak pricing and today. Two separate valuations. Then you do what the income is and what they qualify for, not 60% backend
, and we’ll have the answer.
Ardell, that’s perfect! I’ll shoot you an email right now.
I tried running comps on line (via the title company) but these days, it’s not always such an easy task to come up with a value you can feel strong about (as a lender).
I found a historical affordability graph online.
http://seattlebubble.com/blog/2008/02/28/king-county-affordability-1950-2007/
According to this affordability dropped through the floor in the late 70s as interest rates spiked. When rates dropped in the 80s, prices spiked, so affordability never recovered.
So I would expect using front end ratio, or mortgage payment/income, people would be able to afford roughly the same place, but using loan=3 x income+20% down people would afford a lot less, because the prices are higher, but monthly payments the same due to low interest rates.
Someone who bought in the 70s or 80s and sold in the 90s would benefit from high interest/low prices when they bought, and high prices/low interest when they sold, meaning a lot of equity. If someone bought at high prices/low interest now, and later there was high interest/low prices, they would lose money off it (and may not be able to move if they were underwater).
But why wouldn’t prices have dropped when rates jumped in the 70s, but they spiked a few years after rates dropped. Was it just the easy financing?
What changed between affordability around 200 from 1950 to 1975 and around 100 from 1975 to 2003, to 75 now?
“But why wouldn’t prices have dropped when rates jumped in the 70s,”
I would think because incomes were jumping by almost the same degree. Also it was during the time when people accepted needing two incomes per household. I remember two years back to back of double digit raises. My income increased by 35% in a 13 month period via two annual raises of 12% and 13%. Also, when I got married, because of my high salary, it was not deemed acceptable for me to quit my job and stay home with the kids the way it would have been back when I made under $10,000 a year.
So even though interest rates were high, home prices were supported by income increases and the shift from one income to two income households.
[...] Buyer” asks this question on my post the other day when I referenced that my first house had a rate of 11% during the [...]