Low Mortgage Rates Sitting Still While Consumers Become Optimistic

Current low mortgage rates are sitting still today while reports that consumers are more optimistic about the economy were released today. According to the Conference Board, consumer confidence index rose in December to 64.5 which is the highest level since April. This jump was much more than anticipated.

Home prices fell in October according to the latest report from Standard & Poor’s/Case-Shiller index. For potential home buyers, there is still a lot opportunity to purchase an affordable home.

Today’s 30 year fixed mortgage interest rates are at 3.500%, 15 year fixed mortgage rates are at 2.875% and 5/1 ARM loan rates are at 2.250%. These low mortgage rates are available with 0.7 to 1% origination point to borrowers who have a history of good credit. Steady, long term employment is also necessary and will need to be verified.

Home buyers must be have enough documented assets to cover both the down payment for a home purchase and several months of reserves. There are many borrowers who have not yet refinanced and are able to receive these low mortgage rates. These borrowers should also look into refinancing with Harp 2.0 which will eliminate the need for an appraisal.

Current FHA 30 year fixed mortgage interest rates are at 3.250% and FHA 15 year fixed mortgage rates are at 2.750%. FHA 5/1 ARM loan rates are at 2.750%. FHA mortgages are often used by first time home buyers because of the low down payment requirements. With a credit score as low as 580, FHA requires a down payment of 3.5% and 10% with a score down to 500.

FHA also provides several options that borrowers can utilize in order to receive help with the necessary down payment. Gifts from family, friends and employers are accepted provided they can be documented according to FHA guidelines. Local and state housing initiative programs that offer housing grants and loans can also be used. FHA closing costs (APR) tend to be higher because FHA charges an upfront mortgage insurance premium and various other fees, but seller concessions can be used to help offset these costs.

Today’s jumbo 30 year fixed mortgage rates are at 4.250% and jumbo 15 year fixed mortgage interest rates are at 3.375%. Jumbo 5/1 ARM loan rates are at 2.500%. For well qualified borrowers, these are the lowest jumbo mortgage rates available with 0.7 to 1% origination fee. Since jumbo mortgages are not government insured, it is necessary for borrowers to have strong credit and stable employment in order to receive lender approval. Guidelines for jumbo mortgage is often stricter because lenders, who often retain jumbo mortgages within their portfolio, look to reduce as much risk as possible. Jumbo mortgages are usually full documentation loans.
Today’s Wells Fargo California 30 year fixed mortgage interest rates are at 4.000% (4.180% APR).

MBS prices (mortgage backed securities) are up +4/32 which is higher than earlier pricing of +1/32. Mortgage rates move in the opposite direction of MBS prices. There are no major movements going on today with markets which are generally slow during the week between holidays. Neither reports, housing prices and consumer confidence, had enough influence to produce a rally. Although housing prices were reported down again, this is not unusual for October when the real estate market slows down from the activity of the summer months.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee. By: Rosemary Rugnetta

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