Mortgage Rates for Friday Afternoon
Compared to the past few weeks, this week seemed a little more calm with regards to mortgage interests rates. 30 year fixed hung around 5.875 – 6.00% based on what I quoted during this past week via Twitter using the conforming criteria below. Don’t let this lull you a false sense of being able to float your interest rates. I still highly recommend locking once you have a signed around purchase and sale agreement. A majority of lenders are offering free “float downs” once rates are locked due to this volatile market. If your loan originator does not offer a free float down, find one who will. The risk of floating your rate is still too high.
ALERT: if you are planning on closing a “jumbo conforming” mortgage by the end of the year, check in with your mortgage professional. Some lenders are beginning to either pull out of that market or repricing that segment in advance of new loan limits. It’s an odd limbo time for lenders as they try to wrap up the jumbo conforming market to be able to deliver the loans in time to Fannie or Freddie before the lower loan limits go into effect. No lender wants to have a loan over $506,000 $500,600(for our tri-county area) if Fannie and Freddie will no longer buy it.
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 720-739, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000. This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with no prepayment penalties on any of the rates quoted below.
30 Year Fixed @ 1 Pt: 5.875% (APR 6.029%)
30 Year Fixed with 10 Year Interest Only @ 1 Pt: 7.000% (APR 7.155%)
15 Year Fixed @ 1 Pt: 5.500% (APR 5.753%)
5/1 ARM – LIBOR @ 1 Pt: 5.500% (APR 7.000%)
Conforming-Jumbo Rates. Pricing is based on the same 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 $650,000 and a $520,000 loan amount.
30 Year Fixed @ 1 Pt: 6.000% (APR 6.147%) 
0.125% to rate
FHA. Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.
30 Year Fixed @ 1 Pt: 6.250% (APR 6.938%) 0.125% to rate
FHA-Jumbo. Pricing based on loan amounts from $362,791 – $567,500 for King, Snohomish and Pierce Counties.
30 Year Fixed @ 1 Pt: Pt: 6.625% (APR 7.310%)
VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.
30 Year Fixed @ 1 Pt: 6.375% (APR 6.497%)
Non-owner occupied/Investment Property. Pricing based on 25% down payment with a $400,000 sales price and credit scores between 720-739.
30 Year Fixed @ 1 Pt: 7.125% (APR 7.307%).
Prime Rate (what HELOCs are based on): 4.00%
12 Month LIBOR(what a majority of ARMs are based on): 2.75% per WSJ. 0.09% change compared to last Friday’s rate post.
This is just a small sample available of rates and products. Rates are as of Friday, November 14, 2008 at 1:00 p.m. and may change at any time. Available programs may change at anytime as well. Check out RCG’s new Mortgage Info page for live rate quotes via my Twitter feed.
This is not a guarantee nor is it a commitment of interest rate.
About the Author: Rhonda Porter
- Author's website: http://www.mortgageporter.com
- More posts by Rhonda Porter
- email the author
Here is the timeline for converting over to the new loan limits from one of the lenders I work with:
High Loan Limits Timeline
Agency High Loan Limits
November 13, 2008: Last day to lock Agency Jumbo
November 14, 2008: New High Balance Conforming available
December 13, 2008: DU® 7.1 supports new High Balance Conforming
December 15, 2008: Last day to purchase Agency Jumbo loans with no additional add-on
January 9, 2009: Last day to purchase Agency Jumbo with 2008 limits
FHA High Loan Limits
November 14, 2008: New 2009 FHA loan limits available
December 31, 2008: Last day to lock FHA Jumbo
December 31, 2008: Final approval date for 2008 limits
January 1, 2009: New LTV and down payment requirements effective with new case numbers
February 13, 2009: Last day to purchase FHA Jumbo with 2008 limits
Rhonda,
I have read 2009 limits are going down to $506,000, and I’ve also read $500,600. This is a small difference, but nonetheless, an ordinary guy like me gets confused pretty easily. Is there a typo somewhere, or are there two different numbers getting thrown at me? Is there a difference between FHA limits and Fannie/Freddie limits for conforming jumbos?
Also, in today’s blog over at Seattle Bubble, Dan Klusman of RightTimetoBuy.org states, “The current FHA loan limit is about to go down from $567,500 to $506,000 in our area and the required down payment is about to go up from 3% to 10%.”
Is this accurate? It’s the first time I have read about a “3% to 10%” increase.
Hi PeteG,
$506,000 is the new loan limit for both FHA and conventional for King, Pierce and Snohomish counties–I’ll double check my post because it’s very possible for me to have made a typo–especially since there’s no spell check for numbers and I was trying to get this info up quickly.
The FHA minimum required down payment is NOT 10%…it will be increasing from 3% to 3.5% effective January 1, 2009.
It all makes sense now. Thanks, Rhonda!
p.s. I alwayz have trubble with fast finters, to.
Ha! Lucky for me, Pete G, my typo appears to have been in this post. Thanks for catching it. I just popped over to Seattle Bubble to ask Dan Klusman where he’s getting 10% down for FHA.
Here’s the last mortgagee’s letter from HUD where it clearly states 3.5% is the minimum down effective January 1, 2009: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/08-23ml.pdf
Thanks again for bringing this to my attention! There are so many guideline changes out there, the last thing we need is mis-information.
Dan Klusman of RightTimetoBuy.org states, “The current FHA loan limit is about to go down from $567,500 to $506,000 in our area and the required down payment is about to go up from 3% to 10%.”
Dan also said “Some of your data-specific questions are better answered by other experts who are drenched in data every day.”
If you want a gut feeling, ask Dan. If you want data, go to a numbers guy. (or gal, as it may be)
rob-u-blind,
if someone’s not a numbers guy, then they shouldn’t quote numbers on a blog where people are relying on your information. The Tim at Seattle Bubble states he believes Dan K. meant conforming loans and not FHA.
I’m clarifying the info here because of Pete G trying to clarify what’s actual.
Here is the quote for SB that rob-u-blind and Pete G are referring to:
“Also, FHA loans have become a great opportunity for first time buyers. The current FHA loan limit is about to go down from $567,500 to $506,000 in our area and the required down payment is about to go up from 3% to 10%.”
FHA DOWN PAYMENTS ARE INCREASING TO 3.5% NOT 10%. This is either a typo, misunderstanding or someone is plain wrong. I have the guidelines from HUD at comment 5.
I feel strongly about getting the correct information “out there”.
Speaking of spreading rumors, didn’t I hear somewhere that conventional (PMI) was possibly increasing their percentage again?
Kary, you can count on it.
why are rates always quotes with 1 point. I normally hate paying points, so would love to hear your comments on when is it good to buy down with points and not.
I have lived in this house for 7 years and this is my 4th refi, so i have always been a NO points guys.
srini, I actually did a poll a while back and rates priced with 1 point barely “won”. At Mortgage Porter, I show rates without points. Rates at MP are posted on Friday mornings.
You’re being wise to not pay points if you’re refinancing as often as you have.
Srini,
It is a relatively recent change for lenders to quote with no or 1 point. When I started in real estate most buyers purchased with 3 points and most rates were quoted as 3 point loans. Makes me wonder when we go back to historical rate data, if the rates quoted as “lower” are 3 point loans.
Buying down the rate at time of purchase is a lot cheaper than paying the cost of 4 refis…no?
Typically (but not always) 1 point in fee equals 0.25% to rate.
It is funny how the different trends with pricing rates are. There was a time when people did pay extra points before realizing the true cost and how long it would take to break even.
Rhonda,
Seems to me that the cost of a refi is significant. Used to be a 1% spread equalled a need to refi. Rates haven’t moved that much in 4 years to have done 4 refis. Knowing Srini, I would think his cost to refi was nominal. But all too often people spend many thousands to refi, and do not pay attention because it is added to the note.
I’ve seen people do a cash out refi to get $15,000 in cash (old rules) and the refi cost them $20,000.
In all cases, isn’t buying down the rate by 1 point at time of purchase less costly over a 10 year timeframe than refinancing 4 or 5 times?
There are lots of tax differences as well regarding refi costs and discount points…but that is too complex a topic to deal with in a blog comment. One thing I will note is that if you have the seller buy down the rate, the buyer gets to deduct those points over the life of the loan, and not the seller. Check with your accountant (and many get this wrong so check for yourself as well). That tax law change was in 1994 or so, and I don’t believe has been changed since.
Ardell, the cost for refinancing are very similiar to the cost of buying a home when you factor in title, escrow, appraisal, etc. But if someone can reduce their rate and do a “no cost refi” (meaning the cost are built into the rate or paid w/YSP or “on the backend”) then it makes sense to refi.
There were times in recent years (following 9/11) when rates where dropping that people were wanting to refi over and over again just to try to have “the lowest” rate. Sometimes people become too focused on rate and they lose site of “common sense”.
There’s no real easy answer to your question about which is more or less costly without having specifics. If the refi was “no cost” then it’s probably a good deal. If they’re paying no points but still have closing costs, then it depends on the rate. Rates are always a moving target.
“There were times in recent years (following 9/11) when rates where dropping…”
I expect that to happen again if politicians are serious about propping up home prices, as they did after 911.
Let’s hope that if this happens, it is used to stablize home prices and not artificially inflate them.
I still think it’s the stated income and no income verified loans that inflated home prices…plus the addition of buyers who were given the opportunity to purchase a home who may not have had that chance (w/their current financial picture) via subprime.
You are right about my refi’s. Initially when i bought my house it was just post 9/11 at almost 5.5% , and then for every .75% drop I would refi(with no closing cost..I know it was rolled into the loan) and finally settled in at 3.75 % on a 5/1 arm(I wish i was smart enought to lock in a 30 yr then). Finally the ARM expired and I had to refi this time, and this time I paid all the fees and closing cost, struggled hard to make a decission if I should buy down with points, but stayed away.
I wish they cut again but I doubt the rates will fall much as there are not many lenders left to lend.
Srini, rates falling doesn’t have anything to do with how many lenders there are to lend. If banks become nationalized, then that could impact rates. We’ll have to wait and see.
Playing the refi game is all about being ready to lock. When rates were at their lowest (low 5’s for a 30) I was working with people who just “sat on the fence” thinking rates would dip into the 4s. They missed out.
With a refi market, a LO has to prioritize their business. We know who’s purely shopping for rate quotes, who is wants to lock at a specific rate and who is serious about refinancing.
With fewer loan originators (and there will continue to be less and less of us) IF a refi market happens again, consumers better be ready to lock/commit if they’re indeed interested in refinancing.
I just hope that they dont create another bubble by all this throwing the kitchen sink at the economy. I know there will be another bubble that will be created, but the million dollar question is “where”.
srini, my thinking is that they are purposefully trying to create inflation. Either that or they’re actively fighting deflation. But inflation both causes and solves a lot of problems. Maybe right now they consider the trade-offs not so bad?
Tomorrow should be very interesting for mortgage interest rates between the CPI and FOMC minutes. Stay tuned!
The DOW closed down 443 at 7553 today. Let’s hope 7500 is “the bottom”.