Weekly Mortgage Update

Inflation was back in the picture this week as the core the consumer price index came in at an annualized rate of 3.6%, which pushed rates up.  Remember, the people who lend their money to Fannie & Freddie need to adjust their rate of return for what inflation takes away.  So, when inflation goes up, rates go up to compensate. 

But then concerns over riots in Greece created a mild panic and money flowed from the Euro-zone to the US bond market (of which mortgages are a part).  And, as I said last week, if you are going to give me your money anyway so that it’s safe, I don’t have to pay you as much interest because you are going to buy my bonds regardless.  This caused rates to tick back down.  All in all, we ended up with basically no change in rates this week.

There was some good news on the housing front.  Housing starts and building permits came in above expectations showing a reversal of last month’s decline.  Foreclosures also surprised and are down from May of last year by 33%.   Could we ACTUALLY be seeing a recovery?  I think maybe.

This week Freddie Mac’s 30 yr. fixed rate survey stayed at 4.5%, depending on program, credit and points.

 

Ted Clay
Senior Loan Officer
Senior Loan Consultant

NMLSR # 217991
OK License # MLO01963
Office: 405-341-8644 x 102
Cell: 405-826-1320
Fax: 866-208-5309
tclay@wrstarkey.com
www.TedClay.com  

WR Starkey Mortgage, LLP NMLSR # 2146
10 E. Campbell
Edmond, OK 73034

Weekly Mortgage Update

It’s the flight to safety effect coming into play again this week as the S&P index has dropped approximately 10% and fears continue over Greek and  Portuguese debt.  The flight to safety occurs when investors become less concerned with a rate of return and more concerned with just keeping what they have.  The US bond market is the place to put your money if your goal is just to get it back.  US Treasuries and Mortgage Backed Securities are both large parts of that market.

The flight to safety is why we saw rates continue to drop this week.  Think of it this way, if you’re going to give me your money anyway, I don’t have to pay you as high of an interest rate to entice you.  So, money flows in, I lower my rate, and money keeps flowing in…because I’m still the safest game in town.  The Treasury capitalized on this very fact this week and sold BILLIONS of dollars worth of treasuries.  Buyers are the beneficiaries! Rates have dropped a full 1/2 percent since February, allowing a buyer with a $200,000 loan to buy approximately $12,000 more home for the same monthly payment!  Houses YOU love just became MUCH more affordable.

Oklahoma Bond Authority reduced their rate this week to 5.25% with 3.5% Down Payment Assistance, and new income limits were increased by $1,200 per year, so the income limit for a 1 – 2 member household went from $59,400 to $60,600 in a non targeted area.

This week Freddie Mac’s 30 yr. fixed rate survey dropped to  4.49%, depending on program, credit and points.

 

Ted Clay
Senior Loan Officer
Senior Loan Consultant

NMLSR # 217991
OK License # MLO01963
Office: 405-341-8644 x 102
Cell: 405-826-1320
Fax: 866-208-5309
tclay@wrstarkey.com
www.TedClay.com

WR Starkey Mortgage, LLP NMLSR # 2146
10 E. Campbell
Edmond, OK 73034

 

Find out more on FHA raising the MIP

Did you know that FHA is raising the Mortgage Insurance Premium, MIP, on all loans filed after October 4th, 2010?

FHA will raise the MIP on all FHA case numbers assigned on or after October 4th.  This is a value added proposition for any one out there that is on the fence about buying a house.  The monthly MIP is going from .52 to .90.  This means a customers payment will be around $67.00 per month more on a $200,000 FHA loan after Oct. 4th.

If you want more information I have the mortgagee letter from HUD with all of the MIP changes, just email me or call me and I can send it to you!

myerst@kw.com or 405.474.4242

Rates as of yesterday on a 30 year fixed were 4.250% and a 5/1 fixed arm was 2.875%.


Shopping Interest Rates

If you are in the real estate market to buy or interested in refinancing your  home loan, shopping interest rates is very important. With rates as low as 4.25% lately, it is a great time to buy or even if you do not want to move, you may think about refinancing you home.  Everyone interested should start their interest rate search with the bank they usually do business with. From there, go talk to mortgage brokers and see who is willing to give you the best rate.  A quarter of a point could save you a lot of money over the term of a 15 or 30 year loan.  Just a little something to think about.

For more information, email me at myerst@kw.com.