Friday’s Rates for Leap Day

Today, negative economic news caused a significant sell off and traders “leaped” from stocks to the security of bonds, such as mortgage backed securities. Rates have improved by roughly an 0.125% since this morning. Mortgage rates remain highly volatile and (as always) I recommend locking over floating…especially as we get closer to the FOMC meeting on March 18, 2008. It’s highly anticipated that the Fed will once again cut rates; this is viewed as inflationary which tends to have a negative reaction to bonds (mortgage rates).

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” purchase with minimum credit scores of 680 with an 80% loan to value or lower, a loan amount of $400,000, and with reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below.

30 Year Fixed: 5.625%. (APR 5.769%)

30 Year Fixed with 10 Year Interest Only: 5.875% (APR 6.007%). Tip: Check out the 10/1 Interest Only ARM below if you are considering this product. Both of these programs offer fixed rates for 10 years–the 10/1 ARM offers a lower rate by a full half point.

10/1 ARM Interest Only: 5.250% (APR 6.308%).

10/1 ARM: 5.250% (APR 6.257%)

15 Year Fixed: 4.875%% (APR 5.107%).

7/1 ARM: 4.750% (APR 6.360%).

5/1 ARM: 4.625% (APR 6.652%).

FHA/VA 30 Year Fixed: 5.875%% (APR 6.404%). Payment per $1000 = $5.92. (not including FHA mortgage insurance).

JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).

30 Year Fixed: 6.625% (APR 6.781%)

10/1 ARM: 5.875% (APR 6.656%).

10/1 ARM Interest Only Payments: 6.625% (APR 7.164%).

7/1 ARM Interest Only Payments: 6.375% (APR 7.203%).

7/1 ARM: 5.250% (APR 6.606%).

Prime Rate (what HELOCs are based on): 6.00%

Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. These programs all have the same closing costs so you can see APR is not a valuable tool. If you were considering a conforming product that offered a 10 year fixed period with interest only payments and relied solely on APR, you would wind up choosing the mortgage with a higher note rate by 0.75%! This is $250 more per month on a $400,000 mortgage.

This is just a small sample available of rates and products. Rates are as of Friday, February 29, 2008 at 2:00 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. For your personal rate quote or for loan amounts over $650,000, please contact me.

Tags: ARM, conforming, FHA, fixed, interest-only, interest-rates, jumbo, Mortgage Rates, va

This entry was posted on Friday, February 29th, 2008 at 2:26 pm and is filed under Mortgage/Lending. You can follow any responses to this entry through the RSS 2.0 feed.