Friday’s Mortgage Rates…Trending Lower
Rhonda Porter on 07 16, 2010
Mortgage rates continue to trend to record lows on the heals of negative economic news. Consumer Sentiment came in much worse than expected at 66.5 and CPI (an indicator of inflation) was reported this morning at 0.1% as expected. The DOW is down about 200 as I write this post.
It’s interesting pricing rates right now as the banks have a huge spread as if they’re all taking turns “buying” the market. This is where correspondent lenders (CLAs) and mortgage brokers have an advantage over going to one source (bank or credit union) as they can shop several banks/lenders. We are experiencing “lifetime low” mortgage rates and if you’re not considering buying, please do check with a local mortgage originator to see if you can reduce your monthly payment–create your own financial stimulus. I’m surprised how many home owners don’t realize they qualify for programs like HARP. Consumers who are purchasing a home should verify with their lender that they will prioritze their purchase transaction over a refinance transaction as every aspect of the industry may be inundated with a “refi boom”.
Please remember that there are several factors that impact the pricing of mortgage rates including credit scores, loan amounts, loan to value/home equity, if you have taxes and insurance included in your mortgage payment, lock periods and whether or not you’re paying any points.
Rates posted below are based on a rate lock commitment period with a closing date after August 6, 2010 and no later than August 23, 2010. Lock commitment periods before August 6, 2010 or earlier may cost less and after August 23, 2010 may cost more by rate or fee. Rates that are record lows based on what I’ve quoted at Rain City Guide are bold.
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 740 or higher, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000 single family dwelling (non condo). This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 30 day closing with no prepayment penalties on any of the rates quoted below.
30 Year Fixed with 1 points 4.1250% (APR* 4.272%). 
0.125 in rate as posted last week.
15 Year Fixed @ 0.5% Pt: 3.750% (APR 3.931%). 0.5% in fee
10/1 ARM** 1 yr. LIBOR 5/2/5 CAPS and2.25 margin w/1 Pt: 3.625% (APR 5.287%). 0.125 in rate. Note: if this rate was adjusting today, it would be based on margin plus 1 yr. LIBOR (currently 1.127): 2.25 + 1.127 = 3.337% rounded up to 3.375%. The highest the rate could be at the first adjustment period in 10 years is 8.625% and the lowest is 2.25%.
7/1 ARM 1 yr. LIBOR 5/2/5 CAPS and 2.25 margin w/1 Pt: 3.375% (APR 5.727%). Same. Note: if this rate was adjusting today, it would be based on margin plus LIBOR: 2.25 + 1.127 = 3.337% rounded up to 3.375%. The highest the rate could be at the first adjustment period in 7 years is 8.375% and the lowest is 2.25%.
5/1 ARM 1 yr. LIBOR 5/2/5 CAPS and 2.25 margin with 1 Point: 3.000% (APR 6.072%). Same. Note: if this rate was adjusting today, it would be based on margin plus LIBOR: 2.25 + 1.127 = 3.337% rounded up to 3.375%. The highest the rate could be at the first adjustment period in 5 years is 8.000% and the lowest is 2.25%.
Conforming High Balance Rates. Pricing is based on the same conforming 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 $625,000 and a $500,000 loan amount.
30 Year Fixed with 0.5 pt: 4.375% (APR 4.473%). 0.5 in fee
Jumbo/Non-Conforming. Loan amounts up to 1 million for ARMs and 1.5 million for the 30 year fixed. The quotes below are based on 740 or higher credit scores with 80% loan to value with a loan amount of $700,000.
30 Year Fixed at 1 point: 5.250% (APR 5.385%). Same.
7/1 ARM 1 yr. LIBOR 5/2/5 CAPS ~ 2.25 margin @ 1 Pt: 4.250% (APR 6.120%). Same. Note: if this rate was adjusting today, it would be based on margin plus LIBOR: 2.25 + 1.127 = 3.337% rounded up to 3.375%. The highest the rate could be at the first adjustment period in 7 years is 9.250% and the lowest is 2.25%.
5/1 ARM 1 yr. LIBOR 5/2/5 CAPS ~ 2.25 margin @ 1 Pt: 3.875% (APR 6.372%). Same. Note: if this rate was adjusting today, it would be based on margin plus LIBOR: 2.25 + 1.146 = 1.127 = 3.337% rounded up to 3.375%. The highest the rate could be at the first adjustment period in 5 years is 8.875% and the lowest is 2.25%.
FHA. Pricing based on credit score of 660 or better and loan amounts up to $417,000 for FHA in King, Snohomish and Pierce Counties. The scenario below is based on a sales price of $400,000 with 3.5% down payment. (620-659 FHA loans are available “at this moment” with slightly higher pricing).
30 Year Fixed @ 1 Pt: 4.250% (APR 4.927%). 0.125 in rate
FHA-Jumbo/High Balance. Pricing based on loan amounts from $417,001 – $567,500 for King, Snohomish and Pierce Counties with a 660 or higher mid-credit score. This scenario is based on a sales price of $585,000 with 5% down payment.
30 Year Fixed with 1 pt: 4.250% (APR 4.879). 0.125 in rate
VA. Pricing based on credit scores of 660 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available. Based on a sales price of $400,000 with 0 down payment.
30 Year Fixed with 1 Pt: 4.250% (APR 4.520%). 0.125 in rate
Prime Rate (what HELOCs are based on): 3.25%
This is just a small sample available of rates and products. This is not a guarantee nor is it a commitment of interest rate.
Rates are as of July 16, 2010 at 9:30 a.m. and may change at any time. Available programs and/or underwriting guidelines may change at anytime as well. Mortgage rates continue to swing just as much as the stock market is. Remember, as soon as I publish this post, rates may have changed–in this current climate we are averaging two rate sheets (rate changes) per day. I’ve noticed that banks/lenders have less of a trigger finger with issuing rates. To see what I’m quoting “live”, you can follow me on Twitter (you can “un-follow” anytime).
For purposes of this post: “1 point” is 1% of the loan amount and would be reflected on the Adjusted Origination Charges on Page 2 of the 2010 GFE. *APR = Annual Percentage Rate
**ARM = Adjustable Rate Mortgage. With adjustable rate mortgages, your rate may increase (or decrease) after the initial fixed period is over.
NOTE: Rhonda Porter and Mortgage Master Service Corporation are not affiliated with any real estate brokerages.
About the Author: Rhonda Porter
- Author's website: http://www.mortgageporter.com
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Refinancing is definitely the word of the day. But for those who can REALLY afford to invest/buy additional, I’d suggest doing so: remarkably low rates, a huge inventory which is being driven down by distressed properties, and motivated sellers result in buying opportunities of a lifetime.
I just graduated college, and I will be buying a home in a few years. I just began working on my savings, and I am kicking myself for not having enough for a home down payment right now.
Eli, do you work for the company you used as a link on your comment?
Yep! I’m interning for them part-time before I head back to school. I was checking the web information on Real Estate and I found your blog. I bookmarked you, even though some of your stuff is over my head.
I agree with you Alex… those who can invest/buy now, DEFINITELY should.
Thanks Rhonda!
Mitch
There’s less argument for refinancing–as long as you plan on keeping your home–with rates as low as they are, people are breaking even on their cost pretty quickly. I’ll be posting rates here tomorrow…as usual!