DreamTeam-Jo Cel Perez & Hector Gamez

Mortgage Rates Decline

According to Freddie Mac on Thursday, the 30 year fixed rate dropped from an average of 4.78% to 4.71% from last week. This is the lowest since Freddie Mac compiled data since 1971. Rates have been low all year because of the Fed’s purchase of mortgage-back securities, which in end in the Sping of 2010. This is helping to push mortgage applications which increased 2.1% during the Thanksgiving week stated the Mortgage Bankers Association. But while rates are low, there are still tight credit standards which may hinder buyers qualifying for the lowest rates.  Most buyers will need 20% down, and a high credit scrore in order to qualify. But the push has helped drive more than 4 percent in purchase applications and nearly 2 percent increase in applications to refinance existing loans.

More Cash Required for an FHA loan

The Federal Housing Administration officials are proposing policy changes for FHA-insured mortgage borrowers to help the agency increase its federally mandated funding requirements. Higher credit scores and an increase in the current minimum down payment may be what buyers across America will have to have an order to qualify for and FHA loan. This proposed change is due to increasing financial issues FHA has been facing, which has increased it’s exposure and led to more delinquencies. The Obama Administration may try to propose other ways of increasing closing costs instead of increasing the minimum down payment, such as increasing mortgage insurance premimums or raising minimum credit score requirements so that the change would only effect the lower scoring borrowers. This will make it harder for some but will also reduce the risk of FHA having financial difficulites. FHA’s traditional role was to help American’s reach their dream of homeownership. The details of the change aren’t expected to be final until next month.

According to the Mortgage Bankers Association, the number of Mortgage applications recieved fell last week, falling 12.3 percent compared to last week.

Most of the decline was in refinances, which fell 16.2 percent and the purchase index declined 4.8 percent. Except for 15-year rates, mortgage rates were down slightly:

• 30-year fixed-rate mortgages decreased to 5.04 percent from 5.07 percent.
• 15-year fixed-rate mortgages increased to 4.53 percent from 4.51 percent.
• 1-year ARMs decreased to 6.79 percent from 6.86 percent.

Applications for mortgage loans slowed down with the summer ending. Adding to this slow down is potential first-time home-buyers wondering if they’ll be able to close fast enough receive the federal home ownership tax credit, which expires Dec. 1, 2009.

According to the Mortgage Bankers Association index, applications declined 8.6 percent last week on a seasonally adjusted basis. The index declined 18.3 percent compared with the previous week and fell 18.7 percent compared with the same week a year ago when the Labor Day holiday fell nearly a week earlier.

Mortgage interest rates were as follows:

• 30-year fixed-rate mortgages increased to 5.08 percent from 5.02 percent.
• 15-year fixed-rate mortgages decreased to 4.41 percent from 4.45 percent.
• 1-year ARMs decreased to 6.61 percent from 6.69 percent.

Here’s a bit of good news from the Mortgage Bankers Association. They have reported that last week there was a slight increase in the amount of mortgage applications received by 11%. According to the report, application submitted for refinancing has gone up to 15%, while loan applications for home purchases has gone up to 6.7%. Now despite all of this good news, rising unemployment and the continued global economic issues, will more than likely keep the housing industry on a slow rebound.