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Mortgage Market Update

click for larger imageThe rate markets are under pressure again this morning. The recent spike in interest rates adds more confirmation to our forecasts that the lows in the interest rates markets are now in place and rates are unlikely to fall to new lows. The recent stampede to the safety of US treasuries became excessive; the run down in rates was mostly in treasuries but mortgage rates benefited as the outlook for the US economy hit new lows in July and August. A lot of concern the US economy would double dip and fall back into text book recession sent investors, both domestic and foreign, to the safety of bonds.  There just isn't much room left for improvement, but a lot of room for rate to go up.  I would Strongly advise capitalzing while you can.

Want to know more on how the Mortgage Market directly effects mortgage rates or need an explanation of the candlestick chart above? Send us an email and we'll gladly provide an in depth article.  Realtors, ask about a detailed presentation on the Mortgage Market at your next office meeting.

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Tuesday
Dec082009

Upcoming FHA Changes - Is Now the Right Time to Buy?

DateTuesday, December 8, 2009 at 8:25AM

The FHA’s mortgage insurance reserves fell to the lowest level in history last fiscal year and the government said more steps are needed to shore up the agency that guarantees one of every five single-family loans.   In El Paso it is the most commonly used loan program for home buyers.  The benefits include a low down payment of 3.5% of the sales price, flexible guidelines, low interest rates and low private mortgage insurance.

Now, with the FHA’s reserves well below the level required by law, the agency is looking to restore those reserves.  Unfortunately that is bad news for many potential home buyers and the overall housing market.   Suspected changes include raising the amount of required down payment from the current 3.5% to 5%.  The agency may also lower the amount of allowed closing contributions from the seller, currently at 6% of the sales price to 3% which would also increase the amount of closing costs passed directly to the buyer.  An increase in the funding fee and FHA mortgage insurance rates has also been discussed.

Everything we see at this point is further limiting borrowers from being approved.  If a potential homebuyer has been “sitting on the fence” waiting for the right time to buy a home (unless they are buying with cash), now is the time!

AuthorPamela Crim | Comments Off |
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