December 10th Mortgage Info

With the Federal Open Market Committee (FOMC) expected to make its first interest rate hike in more than nine years next week, many people are anticipating a slight increase in mortgage rates. However, according to a recent Wall Street Journal article, while the idea of a rate increase caused panic in the past, this time around it shouldn’t take anyone by surprise.

The author of the article contends that housing fundamentals remain strong, and the real estate market is well positioned to withstand a rise in rates. For example, pending home sales, which are a leading indicator for the broader market, have been consistently higher year-over-year. In addition, the 30-year fixed-rate mortgage is the lowest it’s been since April, and job gains have been steady.

What’s more, the housing market has been bolstered by recent actions taken by Fannie Mae and Freddie Mac which cut downpayment standards, and by the Federal Housing Administration which reduced its premium for mortgage insurance.

Industry Trends:

WFS Jumbo rate – 5/5 ARM: 3.25%
Other WFS rates – Check with your GSM for current rates.
Refi Index – (+4.0%)
Purchase Index – (+0.04%)
NAHB Builder Confidence – 62 (-3 pt.)
Existing Home Sales – 5,360,000 (-3.4%)
New Home Sales – 495,000 (+10.7%)
Pending Home Sales – 107.7 (+0.2%)
Housing Starts – 1,060,000 (-11.00%)
Building Permits – 1,150,000 (+4.1%)

Featured Product: Enhanced “High Balance” Jumbo Product

Fannie Mae will release major enhancements to its high-balance jumbo loan product on Saturday, Dec. 12. The enhancements will provide wider eligibility guidelines and loan-to-value (LTV) parameters, such as allowing borrowers put down 5% rather than the current 10% on their LTV. Buyers of higher-priced homes can expect to see considerable improvement in borrower eligibility.

Small Print: For loan amounts up to $4 million, monthly mortgage payments quoted are to qualified buyers. As an example, a $500,000 conventional 5/5 ARM with a 30-year term at 3.00% with 0 points (A.P.R. 3.515%) and with financing fees of $2491.43 would mean 60 monthly principal and interest payments of $2108.03. Your interest rate will be based upon an Index equal to the average weekly yield on United States Treasury securities adjusted to a constant maturity of one year, as provided by the Federal Reserve Board, 45 days before each adjustment date as published in the Wall Street Journal plus a 2.00% margin. Your interest rate and payment can change every 5 years, beginning in the 61st month. At the first interest adjustment, your interest rate cannot increase or decrease by more than 2 percentage points. At each subsequent interest rate adjustment, your interest rate cannot increase or decrease more than 2 percentage points. Your interest rate cannot increase more than 5 percentage points over the term of the loan. These are your “caps”. At no time will the interest rate be less than the margin. Figures used herein are approximate and do not include property taxes, condo/association fees, or hazard insurance and the actual payments will be higher. Subject to underwriting (credit) approval. Consult with our licensed Gold Services Manager for terms and conditions. Available in all counties and all our licensed states. Primary and 2nd homes only. Closing costs may vary. Company NMLS # 2731. Mortgage Access Corp. d/b/a Weichert Financial Services. For additional disclaimer information, click here.