Mortgage update

Estimated rates for the 1st week of 2009…and they are good!

 

30 yr conforming                              4.50 – 4.75

30 yr jumbo                                      5.750 to $600k

7/1 ARM                                          5.00 – 5.25 Conventional and Jumbo

OR State Bond                                 4.50  Conventional or FHA

OR VA                                            5.875 with 1.0/5.75 w/1.50

 

 

To start the year off right, we are seeing interest rates hold in the 4.50 to 5.00 range. With the economy in the slumps and rising unemployment we could see these rates stay put for quite some time. But with that said, our government needs to continue to borrow a tremendous amount of money (‘09 projected budget deficit is $1.2 trillion!) to fund the various stimulus packages. This will cause a major headwind to rates coming down any further and it could push them back up very quickly. Anything under five percent is great so clients should be taking advantage of these rates now. Besides, has anyone ever been able to time the market?

 

Not  a whole lot of new stuff to report over the holidays but the New Year’s anticipated changes are here. The conforming loan amount is, for the most part, still $417,000. FHA’s new guidelines are also now effective. The down payment has increased by a .50%  – we now need 3.5% down. On cash-out refinances over 85% we now require two appraisals. VA loans and the USDA Rural product are still going strong at the 100% level. Interestingly enough, the State VA program is still stuck with the higher rates.

 

FHA’s new policy on reverse mortgages for purchase transactions is also out now. This is great news and could be of great benefit to some of our more senior clients.

 

The Home Valuation Code of Conduct (HVCC) guidelines are starting to roll-out. This is causing a major change in the way we handle the appraisal aspect of our business. A few large lenders are already requiring that we order the appraisal through a 3rd party vendor. Loan officers and processors soon won’t be able to order the appraisal and won’t be able to talk to the appraisers. More on this later.

 

By now, everyone knows that refinance activity has exploded. It’s going to be great for many people’s personal budget. Be aware that it is taking a lot longer to get transactions closed.  Many of the lenders that we use are taking close to 30 days just to get the loan underwritten and to loan docs. Some of those purchase transactions won’t be able to get done in 30 days. So plan ahead.  I still have the ability to get a transaction done in a little over a week or so, assuming that all is in order.

 

I wish you all a very safe, healthy, and Happy New Year.  

 

 

Bob Chiodo, CFP

Equity Home Mortgage, LLC