Connecticut Financing Update and Today's Mortgage Rates 3/30/12

Mortgages Rates broke a sideways streak to move lower yesterday, but are right back to their 'sideways ways' today!  This keeps the Conventional 30yr Fixed Best-Execution Rate at 4.0%, although 3.875% quotes are viable, even if they don't necessarily constitute the most efficient combination of closing costs and payment for most scenarios.

This raises an interesting point regarding "efficiency."  What is the "most efficient combination" of closing costs and payment?  Ultimately that will depend on several factors that can vary between scenarios and even between lenders.  There's always a COST associated with moving to a lower interest rate, and although rates move in linear 0.125% increments among most lenders, the COSTS to move between those rates can vary greatly.  
Right now, it's relatively cheap to go from 4.25% to 4.125% or from 4.125% to 4.0%, but costs increase sharply for the next eighth of a point lower.  That's why we note 4.0% as the most efficient combination, even if 3.875% is doable.  Above all though,  we'd continue to advocate that you assess multiple options to see which fit best for your own sense of efficiency. 

 
Despite recent improvements and today's sideways move, the current market dynamics underlying mortgages suggest a broader range of 3.875%-4.25%.  This range has persisted since August, and we tend to feel more defensive when rate offerings are nearer the lower end of any range of rates, especially one that has lasted this long.  

In other words, we're in favor of assessing your options based on this one moment in time to avoid the risk of being lulled into a false sense of security by recent improvements and stability.   We're not totally convinced the sense of security would indeed be "false," but the pace of economic events does increase noticeably into the end of the week, providing more opportunities for volatile market movements to have an effect on mortgage rates.

Today's BEST-EXECUTION Rates

30-year fixed 4.00% APR-4.050% 0 points

20 year fixed-4.00% APR-4.036% 0 points

15 year fixed-3.375% APR-3.458% 0 points

10 year fixed-3.250% APR-3.342% 0 points

5/1 ARM-3.125% APR-3.419% 0 points

7/1 ARM-3.250% APR-3.489% 0 points

FHA

30 year fixed-3.875% APR-3.934% 0 points

15 year fixed-3.125% APR-3.230% 0 points

Jumbo- over $576,000 (Fairfield County)

30 year fixed-4.125% APR 4.240% 0 points

15 year fixed-3.500% APR 3.574% 0 points

5/1 ARM-3.250% APR 3.540% 0 points

7/1 ARM-3.625% APR 3.940% 0 points

Pat Leary is  a mortgage banker with over 12 years experience as a lending specialist in Connecticut. Her passion is to guide her clients through the mortgage process. Pat takes pride on providing great customer service, through communication, trust and integrity, and strives to offer the best mortgage products and service in the industry. We're confident that you will receive the personal attention that you deserve. As a leading Mortgage Banker in Connecticut, Pat  is responsible for structuring your financing with the expertise to answer any questions you may have on rates, fees and products.

Pat Leary

NMLS #99279
Atlantic Home Loans
830 Post Road East

Westport CT 06880
203-645-1037 cell
203-691-9788 ext 226
1-203-413-5647 fax

And a note From Judy: If you have a question about buying or selling Real Estate in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

Connecticut Financing Update and Today's Mortgage Rates 3/23/12

Mortgages Rates continued pushing into their highest levels of the year today after yet another volatile session for bond markets.  Most lenders initial rate sheets were slightly improved from yesterday earlier this morning, but market movements during the course of the day prompted widespread repricing.  By the end of the day, it's questionable to continue thinking about Best-Execution in terms of 4.0-4.125% and more appropriate to shift that range from 4.125% to 4.25%.  That said, the combination of rate and fee at 4.0% is still competitive at many lenders, but it's doubtful that many could offer 4.0% without some lender-related closing costs.

This is now the largest magnitude move higher in mortgage rates since October 2011.  But things are potentially more painful this time due to extended period of flat, low rates, which makes the current movement much more abrupt with respect to recent norms.  Things really have changed overnight.  

Compounding the pain is the fact that markets pulled back from ugly level quickly enough last time, and sufficient economic risk remained for us to hold out more optimism for a return of "high 3's in the intermediate to near term future."  This time around, trends are suggesting it would take a longer time to get back down to those rates, if it is indeed in the cards.

Are rates on a one-way trip higher?  Despite the ugliness of the past few sessions, we still can't be sure about that.  Underlying bond markets are approaching some levels that many market participants are looking to for support.  Markets again today operated close to those levels without making a definitive gesture back towards recent, lower rates.  Despite the higher rates today, in terms of those market levels, the Mortgage-Backed Securities (MBS) that most directly influence mortgage rates, ended the day in similar territory to yesterday.  Although the absence of weaker MBS and Treasury levels is a good thing, it's not the sort of thing that it makes sense to plan on.  We continue to expect things to be volatile, and ultimately, volatility can cause rates to move higher even if the day-over-day changes in bond market metrics are not.

Today's BEST-EXECUTION Rates

30-year fixed 4.00% APR-4.050% 0 points

20 year fixed-4.00% APR-4.036% 0 points

15 year fixed-3.375% APR-3.458% 0 points

10 year fixed-3.250% APR-3.342% 0 points

5/1 ARM-3.125% APR-3.419% 0 points

7/1 ARM-3.250% APR-3.489% 0 points

FHA

30 year fixed-3.875% APR-3.934% 0 points

15 year fixed-3.125% APR-3.230% 0 points

Jumbo- over $576,000 (Fairfield County)

30 year fixed-4.125% APR 4.240% 0 points

15 year fixed-3.500% APR 3.574% 0 points

5/1 ARM-3.250% APR 3.540% 0 points

7/1 ARM-3.625% APR 3.940% 0 points

Pat Leary is  a mortgage banker with over 12 years experience as a lending specialist in Connecticut. Her passion is to guide her clients through the mortgage process. Pat takes pride on providing great customer service, through communication, trust and integrity, and strives to offer the best mortgage products and service in the industry. We're confident that you will receive the personal attention that you deserve. As a leading Mortgage Banker in Connecticut, Pat  is responsible for structuring your financing with the expertise to answer any questions you may have on rates, fees and products.

Pat Leary

NMLS #99279
Atlantic Home Loans
830 Post Road East

Westport CT 06880
203-645-1037 cell
203-691-9788 ext 226
1-203-413-5647 fax

And a note From Judy: If you have a question about buying or selling Real Estate in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

 

Connecticut Financing Update and Today's Mortgage Rates 3/16/12

Despite the uneventful start to the week yesterday, Mortgages Rates are sharply higher today, rapidly re-introducing 4.0% as the more prevalent Best-Execution rate.  Yesterday, 3.875% was the clear choice for Best-Ex.  Movement between the two has been seen more frequently as rates in general have spent more time hovering in a narrow range between 3.875 and 4.0% on average so far in 2012.  (read more about Best-Execution calculations).

Bond markets began the day in negative territory and continued to weaken until experiencing their worst losses after the FOMC Announcement (Fed Rate Decision).  Although the FOMC Announcement these days is less about "finding out" what the Fed Funds Rate will be (since they've said it will be low through late 2014), they're still one of the most important market movers for Bond Markets, of which MBS (the Mortgage-Backed-Securities that most directly influence mortgage rates) are a part.  

So even though the Fed isn't moving their lending rate, markets still gather clues or direct information as to what their policy changes will be.  Some commentary has suggested that it was once again the ABSENCE of any hints of further quantitative easing that ultimately hurt rates today.  We're skeptical about such an easy answer and see the underlying cause as a sort of perfect storm of events.

Greece just got their bailout approved.  Overnight markets got much better than expected data out of Europe.  Retail Sales were slightly stronger than expected this morning and revised stronger in the previous month.  The FOMC Announcement used slightly more positive verbiage to refer to economic growth.  All of these things are economically positive, and what's good for the economy is generally bad for rates.  

Combine that with the fact that--for lack of a better way to describe it--the trading levels in bond markets were susceptible to this correction by the time this morning's weakness made it's way onto the charts and the post-FOMC weakness seemed almost like a natural move.  What we mean by this is that once fundamental forces in the market caused rates to move higher earlier in the day, there was sort of a logical amount of "room to run" to around 2.13 in 10yr yields. 

Granted, 10yr yields are not what mortgage rates are based on, but their movements tend to correlate much more frequently than they digress.  10yr weakness led the charge today, and mortgage rates followed, albeit in much gentler fashion.  

Rates are either on the verge of moving sharply higher, or they're soon to correct decidedly back into a 3.875% Best-Execution zone.  The frustrating part is that they might look like they're moving higher at first only to bounce back a few weeks later.  If you weren't already locked and have been waiting to do so, rates are STILL close enough to historic lows that floating doesn't make much sense tonight.  Given how close markets have been pushed to the edge of recent ranges, we'll have a much better sense of how the recent range is faring by tomorrow afternoon.

 Today's Mortgage Rates

30-year fixed-3.875% APR-3.924% 0 points

20 year fixed-3.625 APR-3.692% 0 points

15 year fixed-3.250% APR-3.333% 0 points

10 year fixed-3.00% APR-3.123% 0 points

5/1 ARM-2.625% APR-3.091% 0 points

7/1 ARM-2.875% APR-3.127% 0 points

FHA

30 year fixed-3.750% APR-4.659% 0 points

15 year fixed-2.875% APR-3.319% 0 points

Jumbo- over $576,000 (Fairfield County)

30 year fixed-4.000% APR 4.117% 0 points

15 year fixed-3.500% APR 3.574% 0 points

5/1 ARM-3.125% APR 3.419% 0 points

7/1 ARM-3.500% APR 3.818% 0 points

30-year fixed-3.875% APR-3.924% 0 points

20 year fixed-3.625 APR-3.692% 0 points

15 year fixed-3.250% APR-3.333% 0 points

10 year fixed-3.00% APR-3.123% 0 points

5/1 ARM-2.625% APR-3.091% 0 points

7/1 ARM-2.875% APR-3.127% 0 points

 

Pat Leary is  a mortgage banker with over 12 years experience as a lending specialist in Connecticut. Her passion is to guide her clients through the mortgage process. Pat takes pride on providing great customer service, through communication, trust and integrity, and strives to offer the best mortgage products and service in the industry. We're confident that you will receive the personal attention that you deserve. As a leading Mortgage Banker in Connecticut, Pat  is responsible for structuring your financing with the expertise to answer any questions you may have on rates, fees and products.

Pat Leary

NMLS #99279
Atlantic Home Loans
830 Post Road East

Westport CT 06880
203-645-1037 cell
203-691-9788 ext 226
1-203-413-5647 fax

Connecticut Financing Update and Today's Mortgage Rates 3/2/12

In a move to increase their financial standing (and get the FHA back into required capital requirements), on Monday, HUD announced their anticipated increases in the premiums they charge borrowers. Simply stated, the cost of borrowing is going up.

As an insurance company, HUD charges two types of premiums on the FHA mortgages:

• The UFMIP (Up Front Mortgage Insurance Premium) will be raised effective April 1, 2012 from its current 1% to 1.75%. One advantage to the UFMIP is the fact that it is typically built into the loan amount and does not require additional cash outlay at closing. However, the increase in loan amount does impact monthly payment and cash flow.
• The MMIP (Monthly Mortgage Insurance Premium) will be raised 10 basis points on April 1, 2012 to cover requirements of the payroll tax extension approved last year. This is a direct increase of 10 basis points in the borrower’s mortgage payment, and has the effect of a 10 basis point increase in interest rates. Loans over $625,000 will be bumped 35 basis points from today’s levels effective June 1, 2012.

This means on a loan amount of $300,000, we will see an increased payment of $36.41. We know that home buyers buy homes comparing what their monthly payment will be after they close. This hike in payment is equivalent to borrowing an extra $7,000. The result is that buyers are going to have to pay more or they will have to offer less to the seller to obtain the mortgage payment that they will feel comfortable with.

My advice is that sellers should price correctly and get into contract in March. Buyers need to get off of the fence and buy now. There is also a rumor that FHA will lower the allowable seller paid concessions from 6% to 3%.

Today's Mortgage Rates

30-year fixed-3.875% APR-3.924% 0 points

20 year fixed-3.750% APR-3.818% 0 points

15 year fixed-3.250% APR-3.333% 0 points

10 year fixed-2.875% APR-2.995% 0 points

5/1 ARM-2.500% APR-2.660% 0 points

7/1 ARM-2.750% APR-2.860% 0 points

FHA

30 year fixed-3.750% APR-4.659% 0 points

15 year fixed-2.875% APR-3.319% 0 points

Jumbo- over $576,000 (Fairfield County)

30 year fixed-4.500% APR 4.547% 0 points

15 year fixed-4.125% APR 4.218% 0 points

5/1 ARM-3.375% APR 3.419% 0 points

7/1 ARM-3.750% APR 3.818% 0 points

Pat Leary is  a mortgage banker with over 12 years experience as a lending specialist in Connecticut. Her passion is to guide her clients through the mortgage process. Pat takes pride on providing great customer service, through communication, trust and integrity, and strives to offer the best mortgage products and service in the industry. We're confident that you will receive the personal attention that you deserve. As a leading Mortgage Banker in Connecticut, Pat  is responsible for structuring your financing with the expertise to answer any questions you may have on rates, fees and products.

Pat Leary

NMLS #99279
Atlantic Home Loans
2751 Dixwell Avenue
Hamden,CT. 06518
203-645-1037 cell
203-691-9788 ext 226
1-203-413-5647 fax

 

Mortgage Fees are Increasing for Closings After April 1, 2012

Another good reason to close on your new  home before April 1, 2012.

Congress voted in December of last year to increase the guarantee fee charged by Fannie Mae and Freddie Mac, and premiums for mortgage insurance that are charged by the FHA for new mortgage loans.

The amount of the increase that begins April 1, 2012 is equal to 0.1 of 1 percent, (10 basis points) and is approximately $10 per month for each $100,000 of the loan.

Lenders may choose to either raise rates slightly to cover this additional cost, or charge higher fees. Banks and mortgage lenders will need to implement these fees sooner for new loans, so that they are being  incorporated into loans closing on and after the deadline.

IMPORTANT: If you are in the midst of a mortgage application, go through the fine print. ASK your attorney to review it as well. This fee may be in your loan package even if you are closing prior to April 1, and NOW is the time to get it removed.

For example, if you are getting a loan of $350,000 that is amortized over  30 years, this new fee translates to $12,600 that you should not have to pay.

And a note From Judy: If you have a question about buying or selling a home in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.