It is almost 2012. This year has flown by. I am looking forward to Thanksgiving this Thursday and have a lot to be thankful for. I hope you do too.
Foreclosure auction sales in Colorado's 12 urban counties fell to a 42-month low in October, and new foreclosure filings also were down sharply, the state Division of Housing reported Wednesday.
The report says foreclosure filings in the 12 counties dropped 23.2 percent in October, to 2,350, from the same month of 2010, and also were down 3.3 percent from the previous month.
Foreclosure sales, meanwhile, were down 28.3 percent in October, to 938, from October 2010, and decreased 16.5 percent from September 2011.
"October's auction sales fell off more than expected, and it's pretty clear at this point that there's a well-established downward trend now in place," Division of Housing spokesman Ryan McMaken said. "We're cautiously optimistic that the trend will continue, but we're waiting to see how things look after homeowners begin to pay off holiday bills early next year."
In the city of Denver alone, foreclosure sales fell 41.6 percent, to 115, between October 2010 and October 2011. The greatest drop in auction sales in the 12 counties was in Adams County, down 60.8 percent, to 69.
Year to date through October, 2011 foreclosure filings were down 29.3 percent in the urban counties from the same period last year, and auction sales were down 22.6 percent, the report said.
The Metropolitan Foreclosure Report covers Denver County as well as Adams, Arapahoe, Boulder, Broomfield, Douglas, El Paso, Jefferson, Larimer, Mesa, Pueblo and Weld counties. Smaller counties are not included in the monthly totals.
Foreclosure filings are the first stage in the foreclosure process, which can either lead to a foreclosure sale of a property several months later or a homeowner avoiding a sale by settling with a lender.
Foreclosure sales figures include properties that revert to the lender as well as sales to a third party.
The state foreclosure data are mostly for homes, but include a small number of commercial properties and vacant land.
The Division of Housing posts foreclosure tallies for 12 urban counties once a month and for all Colorado counties quarterly.
In a separate Division of Housing report released Nov. 8, covering the entire state, officials said new foreclosure filings in Colorado fell 24.6 percent in the third quarter from the same period of 2010. Foreclosure auction sales also fell sharply between the two periods, by 29.8 percent, the earlier state report said.
Monday, November 21, 2011
Monday, November 7, 2011
What is happening with rates at this time?
Rates are still at historic lows. A 30-Year Fixed-Rate Mortgage Averages 4.00 Percent
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates declining sharply as investors rushed to U.S. Treasury bonds amid concerns over the European debt market. The 30-year fixed at 4.00 percent marks the second lowest reading since it hit a record 3.94 percent in the October 6, 2011 PMMS, the lowest in history.
30-year fixed-rate mortgage (FRM) averaged 4.00 percent with an average 0.7 point for the week ending November 3, 2011, down from last week when it averaged 4.10 percent. Last year at this time, the 30-year FRM averaged 4.24 percent.
15-year FRM this week averaged 3.31 percent with an average 0.7 point, down from last week when it averaged 3.38 percent. A year ago at this time, the 15-year FRM averaged 3.63 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.96 percent this week, with an average 0.6 point, down from last week when it averaged 3.08 percent. A year ago, the 5-year ARM averaged 3.39 percent.
1-year Treasury-indexed ARM averaged 2.88 percent this week with an average 0.6 point, down from last week when it averaged 2.90 percent. At this time last year, the 1-year ARM averaged 3.26 percent.
Frank Nothaft, vice president and chief economist at Freddie Mac, "Market concerns over the European debt market drew investors to U.S. Treasury securities, lowering bond yields and mortgage rates. Meanwhile, on the home front, the U.S. economy continued its gradual recovery. The Bureau of Economic Analysis reported the economy grew 2.5 percent in the third quarter, the strongest pace in a year, led by a surge in consumer expenditures. In addition, consumer spending rose 0.6 percent in September, nearly threefold that of August. Finally, consumer sentiment, as measured by the Thomson Reuters/University of Michigan index, rose for the second month in a row in October to its highest reading since July."
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates declining sharply as investors rushed to U.S. Treasury bonds amid concerns over the European debt market. The 30-year fixed at 4.00 percent marks the second lowest reading since it hit a record 3.94 percent in the October 6, 2011 PMMS, the lowest in history.
30-year fixed-rate mortgage (FRM) averaged 4.00 percent with an average 0.7 point for the week ending November 3, 2011, down from last week when it averaged 4.10 percent. Last year at this time, the 30-year FRM averaged 4.24 percent.
15-year FRM this week averaged 3.31 percent with an average 0.7 point, down from last week when it averaged 3.38 percent. A year ago at this time, the 15-year FRM averaged 3.63 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.96 percent this week, with an average 0.6 point, down from last week when it averaged 3.08 percent. A year ago, the 5-year ARM averaged 3.39 percent.
1-year Treasury-indexed ARM averaged 2.88 percent this week with an average 0.6 point, down from last week when it averaged 2.90 percent. At this time last year, the 1-year ARM averaged 3.26 percent.
Frank Nothaft, vice president and chief economist at Freddie Mac, "Market concerns over the European debt market drew investors to U.S. Treasury securities, lowering bond yields and mortgage rates. Meanwhile, on the home front, the U.S. economy continued its gradual recovery. The Bureau of Economic Analysis reported the economy grew 2.5 percent in the third quarter, the strongest pace in a year, led by a surge in consumer expenditures. In addition, consumer spending rose 0.6 percent in September, nearly threefold that of August. Finally, consumer sentiment, as measured by the Thomson Reuters/University of Michigan index, rose for the second month in a row in October to its highest reading since July."
Whater are 5 Great Things about Homeownership?
If you've been on the fence about homeownership, it could be the time to take a leap. With historically low rates and living in what I believe is one of the greatest cities in the country, below are five reasons they may help you get off the fence.
1. Equity. When you pay rent, you never see that money again. It is lining the landlord's pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today's market.
2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.
3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it's predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you'll need to pay for the gutters to be cleaned, and so on.
4. Ownership: Okay, this is a given. Homeownership means you "own" your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart's desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!
5. Great Deals: It's a great time to buy. Interest rates are at historic lows. We're talking 4.0 percent instead of 6.0 or higher. This means big savings for today's buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.
1. Equity. When you pay rent, you never see that money again. It is lining the landlord's pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today's market.
2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.
3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it's predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you'll need to pay for the gutters to be cleaned, and so on.
4. Ownership: Okay, this is a given. Homeownership means you "own" your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart's desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!
5. Great Deals: It's a great time to buy. Interest rates are at historic lows. We're talking 4.0 percent instead of 6.0 or higher. This means big savings for today's buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.
Tuesday, September 13, 2011
How is the Denver housing market at this time?
It seems many places I go, the conversation of real estate always comes up even before someone asks what I do for my profession. This past Sunday, I stopped by a ladies' tea for a women's community group I am in and one of the other members and I started talking about interest rates for mortgages. They are at historic lows at this time (3.75% for a 30 year fixed rate), and the woman I was speaking of said her and her husband's first interest rate on their home was 18%. Wow!
Lately I have been running into multiple offer situations, mostly I beleive due to the lower interest rates, people moving to Colorado all the time, and the lack of inventory that is in great condition.
Below is an excerpt from the Denver Post regarding what others are seeing in the market:
A lack of inventory — or, more precisely, "compelling" inventory, as some agents call it — has complicated homebuying for people and added yet another strain on a long-stressed housing market.
Homes in the $300,000-to- $600,000 range in Denver's older neighborhoods and places such as Highlands Ranch can move surprisingly fast.
When people have it overpriced or don't have it ready to go, it doesn't go.
The number of homes listed for sale in Denver is down by about half since the frenzy surrounding the April 2010 deadline for a homebuyer tax credit.
The inventory of homes available for sale in metro Denver in August was down 23 percent from August 2010, and down 5 percent from July, according to statistics compiled by independent real-estate analyst Gary Bauer.
There were 18,164 homes and condos listed for sale in metro Denver, compared with 23,615 in August 2010.
"This low inventory is surprising," said Bauer, who had expected inventory levels to hold around 24,000. "It will make the housing market that much more difficult to work in."
But so far, that doesn't appear to be happening, and Bauer doesn't expect it to, given the other pressures on the market. The median home price in metro Denver fell to $235,000 in August from $239,000 a year earlier.
The upper end of the market continues to struggle with too many homes and lengthy times on the market. But even the low end, once glutted with foreclosures and short sales, is starting to see inventory dry up.
Wes Schlapman, an associate agent with Home4You, said he has struggled to find foreclosures and bank-owned homes that will work for fix-and-flips.
He can sell the homes after he fixes them, but finding them has become the hard part.
Foreclosure filings are down sharply in Denver, and the homes that go to auction are only a fraction of that number.
That is just one of several reasons why the inventory of unsold homes is shrinking, Bauer said.
Many sellers are on strike, in that they don't have to sell and won't until prices improve. Other sellers might prefer to sell but owe more than their homes are worth and can't afford to bring money to the closing table.
Tight credit is another factor. Buyers have to put more money down to obtain a mortgage, and lenders are less likely to cover the costs of home improvements than in the past, putting turnkey properties in demand.
Lately I have been running into multiple offer situations, mostly I beleive due to the lower interest rates, people moving to Colorado all the time, and the lack of inventory that is in great condition.
Below is an excerpt from the Denver Post regarding what others are seeing in the market:
A lack of inventory — or, more precisely, "compelling" inventory, as some agents call it — has complicated homebuying for people and added yet another strain on a long-stressed housing market.
Homes in the $300,000-to- $600,000 range in Denver's older neighborhoods and places such as Highlands Ranch can move surprisingly fast.
When people have it overpriced or don't have it ready to go, it doesn't go.
The number of homes listed for sale in Denver is down by about half since the frenzy surrounding the April 2010 deadline for a homebuyer tax credit.
The inventory of homes available for sale in metro Denver in August was down 23 percent from August 2010, and down 5 percent from July, according to statistics compiled by independent real-estate analyst Gary Bauer.
There were 18,164 homes and condos listed for sale in metro Denver, compared with 23,615 in August 2010.
"This low inventory is surprising," said Bauer, who had expected inventory levels to hold around 24,000. "It will make the housing market that much more difficult to work in."
But so far, that doesn't appear to be happening, and Bauer doesn't expect it to, given the other pressures on the market. The median home price in metro Denver fell to $235,000 in August from $239,000 a year earlier.
The upper end of the market continues to struggle with too many homes and lengthy times on the market. But even the low end, once glutted with foreclosures and short sales, is starting to see inventory dry up.
Wes Schlapman, an associate agent with Home4You, said he has struggled to find foreclosures and bank-owned homes that will work for fix-and-flips.
He can sell the homes after he fixes them, but finding them has become the hard part.
Foreclosure filings are down sharply in Denver, and the homes that go to auction are only a fraction of that number.
That is just one of several reasons why the inventory of unsold homes is shrinking, Bauer said.
Many sellers are on strike, in that they don't have to sell and won't until prices improve. Other sellers might prefer to sell but owe more than their homes are worth and can't afford to bring money to the closing table.
Tight credit is another factor. Buyers have to put more money down to obtain a mortgage, and lenders are less likely to cover the costs of home improvements than in the past, putting turnkey properties in demand.
Monday, August 22, 2011
Rates? Lowest in 50 Years
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates, fixed and adjustable, reaching all-time record lows providing further incentive for those homeowners looking to refinance. The 30-year fixed averaged 4.15 percent, breaking the previous record low of 4.17 percent set November 11, 2010.
30-year fixed-rate mortgage (FRM) averaged 4.15 percent with an average 0.7 point for the week ending August 18, 2011, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.42 percent.
15-year FRM this week averaged 3.36 percent with an average 0.6 point, down from last week when it averaged 3.50 percent. A year ago at this time, the 15-year FRM averaged 3.90 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08 percent this week, with an average 0.5 point, down from last week when it averaged 3.13 percent. A year ago, the 5-year ARM averaged 3.56 percent.
1-year Treasury-indexed ARM averaged 2.86 percent this week with an average 0.6 point, down from last week when it averaged 2.89 percent. At this time last year, the 1-year ARM averaged 3.53 percent.
Frank Nothaft, vice president and chief economist, Freddie Mac, reports, "The Federal Reserve's policy statement last week and ongoing market concerns over the European debt market carried momentum into this week allowing all mortgage products in our survey to reach all-time record lows. For instance, 30-year fixed mortgage rates are now the lowest in over 50 years. In comparison, the Bureau of Economic Analysis estimated the average effective mortgage rate was about 5.3 percent on single-family loans outstanding during the second quarter of 2011."
"Not surprising, many homeowners took advantage of this low mortgage rate environment and have already refinanced their loans. The refinance share of applications averaged nearly 70 percent of all mortgage activity in the first half of this year, according to our survey. In addition, an increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter, according to Freddie Mac's Quarterly Product Transition Report."
30-year fixed-rate mortgage (FRM) averaged 4.15 percent with an average 0.7 point for the week ending August 18, 2011, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.42 percent.
15-year FRM this week averaged 3.36 percent with an average 0.6 point, down from last week when it averaged 3.50 percent. A year ago at this time, the 15-year FRM averaged 3.90 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08 percent this week, with an average 0.5 point, down from last week when it averaged 3.13 percent. A year ago, the 5-year ARM averaged 3.56 percent.
1-year Treasury-indexed ARM averaged 2.86 percent this week with an average 0.6 point, down from last week when it averaged 2.89 percent. At this time last year, the 1-year ARM averaged 3.53 percent.
Frank Nothaft, vice president and chief economist, Freddie Mac, reports, "The Federal Reserve's policy statement last week and ongoing market concerns over the European debt market carried momentum into this week allowing all mortgage products in our survey to reach all-time record lows. For instance, 30-year fixed mortgage rates are now the lowest in over 50 years. In comparison, the Bureau of Economic Analysis estimated the average effective mortgage rate was about 5.3 percent on single-family loans outstanding during the second quarter of 2011."
"Not surprising, many homeowners took advantage of this low mortgage rate environment and have already refinanced their loans. The refinance share of applications averaged nearly 70 percent of all mortgage activity in the first half of this year, according to our survey. In addition, an increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter, according to Freddie Mac's Quarterly Product Transition Report."
Wednesday, August 17, 2011
What are some good, inexpensive updates before listing your home?
Well, the nights are starting to get shorter and fall seems to be on it's way. I don't know about you, but I am not quite ready. We are lucky to have all four seasons here in Colorado, but something about the summer months makes things feel more carefree. Maybe it is thinking about having summer breaks while growing up.
There is no perfect formula for selling your home efficiently, but by following these five tips prior to listing you can increase your chances to close quickly at a higher price.
1.) Update your old garage door(s). Garage doors seem like a non-issue, but many times they make up a significant percentage of the front of a home. Because of this, they are one of the first things that buyers notice when they pull in the drive way. Replacing, or even just painting, these central fixtures will do wonders when it comes to instantly impressing perspective buyers and standing apart from your competition. The market has changed drastically since many of us purchased our homes here in town. I frequently hear buyers say that they have taken a house off their list because of the lack of curb appeal. This issue is especially important to people on busier streets, corner lots, or near a neighborhood eyesore.
2.) Replace old windows. Outdated windows age a home significantly, and you can often upgrade standard windows to vinyl for a reasonable $300 per window. The average home has 8 windows, so this upgrade doesn’t cost nearly as much as you might think and it will make a huge difference to the value perceived by prospective buyers. Key point to remember is that when buyers view a home they love, if they see it has older windows, they consider it a time consuming and costly headache. First time buyers have never replaced windows and often dramatically overestimate the cost to cure this issue. By replacing pre-listing you an actually save money. A well priced, move-in condition home will sell for far more than one with windows in need of repair.
3.) Assess your floors . If you have hardwood flooring, it’s worth the investment to have them refinished considering buyers put an extremely high value on them; you’ll get the most bang for your buck if they are refurbished. Carpets should be shampooed and replaced if they are stained or look worn. You don’t need to spend large amounts of money on the highest grade or most modern name but something inexpensive and neutral will certainly bring you a return on the investment. Even the smell of new carpet will make buyers set your home apart from the comparables.
4.) Paint the trim. If you can’t afford the daunting task of painting your entire house, painting just the trim will still make a big difference when it comes to curb appeal. Painting the whole house can be expensive, time consuming, and delayed by weather conditions; painting just the trim will give your home a fresher look. Interior trim is equally as important.
5.) Update fixtures. Keep an eye out for sales at home improvement stores and replace outdated lighting, plumbing and hardware fixtures. Simple replacing lighting fixtures and knobs in the bathroom or kitchen can update the entire look of the room. You can find many modern brand name fixtures online on contractor supply websites by just searching for terms like sale faucets, sale plumbing fixtures etc.
There is no perfect formula for selling your home efficiently, but by following these five tips prior to listing you can increase your chances to close quickly at a higher price.
1.) Update your old garage door(s). Garage doors seem like a non-issue, but many times they make up a significant percentage of the front of a home. Because of this, they are one of the first things that buyers notice when they pull in the drive way. Replacing, or even just painting, these central fixtures will do wonders when it comes to instantly impressing perspective buyers and standing apart from your competition. The market has changed drastically since many of us purchased our homes here in town. I frequently hear buyers say that they have taken a house off their list because of the lack of curb appeal. This issue is especially important to people on busier streets, corner lots, or near a neighborhood eyesore.
2.) Replace old windows. Outdated windows age a home significantly, and you can often upgrade standard windows to vinyl for a reasonable $300 per window. The average home has 8 windows, so this upgrade doesn’t cost nearly as much as you might think and it will make a huge difference to the value perceived by prospective buyers. Key point to remember is that when buyers view a home they love, if they see it has older windows, they consider it a time consuming and costly headache. First time buyers have never replaced windows and often dramatically overestimate the cost to cure this issue. By replacing pre-listing you an actually save money. A well priced, move-in condition home will sell for far more than one with windows in need of repair.
3.) Assess your floors . If you have hardwood flooring, it’s worth the investment to have them refinished considering buyers put an extremely high value on them; you’ll get the most bang for your buck if they are refurbished. Carpets should be shampooed and replaced if they are stained or look worn. You don’t need to spend large amounts of money on the highest grade or most modern name but something inexpensive and neutral will certainly bring you a return on the investment. Even the smell of new carpet will make buyers set your home apart from the comparables.
4.) Paint the trim. If you can’t afford the daunting task of painting your entire house, painting just the trim will still make a big difference when it comes to curb appeal. Painting the whole house can be expensive, time consuming, and delayed by weather conditions; painting just the trim will give your home a fresher look. Interior trim is equally as important.
5.) Update fixtures. Keep an eye out for sales at home improvement stores and replace outdated lighting, plumbing and hardware fixtures. Simple replacing lighting fixtures and knobs in the bathroom or kitchen can update the entire look of the room. You can find many modern brand name fixtures online on contractor supply websites by just searching for terms like sale faucets, sale plumbing fixtures etc.
Thursday, August 11, 2011
What is going on with rates at this time?
Things have been quite active this past week with the debt ceiling crisis coming to an end last Tuesday when an agreement was finally reached at the last minute. By the end of the week, Standard and Poor's went ahead and downgraded the U.S. credit rating. Although the stock market is dropping, low mortgage rates have survived both the debt crisis and U.S. downgrade.
Freerateupdate.com's daily survey of wholesale and direct lenders show that low mortgage rates have made it through these episodes and remain stable with only the jumbo 30 year fixed mortgage rate fluctuating by .125%. Remaining the same, 30 year fixed mortgage rates are at 4.125%, 15 year fixed mortgage rates are at 3.500% and 5/1 adjustable mortgage rates are at 2.750%. With good credit, borrowers can obtain these low mortgage rates with 0.7 to 1% origination fee. Currently, conforming mortgage rates are at the lowest levels of the year and remain a good opportunity for borrowers who receive lender approval.
By combining low FHA mortgage rates, that have remained steady, and low down payment requirements, borrowers can still attain affordable home ownership. Current FHA 30 year mortgage rates are at 4.000%, FHA 15 year mortgage rates are at 3.500% and FHA 5/1 adjustable mortgage rates are at 3.250%. FHA will accept gifts from family, employers and unions provided the necessary documentation is approved. Grants and loans issued by state, county and local housing initiatives are also combined with FHA mortgages in order to make the final transaction even more affordable. Although FHA closing costs (APR) tend to be higher because of various FHA fees and the upfront mortgage insurance premium, the benefits of FHA mortgages far outweigh these expenses.
Jumbo 30 year fixed mortgage rates are at 4.750%, which is up .125% from Wednesday. Remaining the same, jumbo 15 year fixed mortgage rates are at 4.375% and jumbo 5/1 adjustable mortgage rates are at 3.250%. Jumbo mortgage loans are not government insured and, therefore, are considered risky transactions. Because of this, borrowers must have excellent credit in order to obtain these low jumbo mortgage rates with 0.7 to 1% origination point. High end borrowers have benefited from affordable jumbo mortgage rates that have followed in the path of other mortgage rates by remaining competitive and low.
MBS prices (mortgage backed securities) were up most of the week, went down on Friday, and again are up this week. Mortgage rates change in the opposite direction of MBS prices. On the bright side, private sector jobs increased and mortgage applications were up as reported by the Mortgage Banker's Association. On the down side, factory orders decreased. Overall, investors are reacting to Friday's news that Standard and Poor's proceeded to downgrade the U.S. credit rating which turned out to be a boost for the bond market while, at the same time, tanking stocks. If investors continue to seek the safety of bonds, mortgage rates should remain low.
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