by Ed Ferrara

Realty Times – Mortgage Rates: Lingering Low Mortgage Rates Remain a Great Deal.

Although mortgage rates have remained steady for several weeks, economic stress here in the U.S. and abroad in Europe is putting enough pressure on investors who are seeking safety and driving MBS prices higher.’s daily survey of wholesale and direct lenders show that, except for jumbo 30 year fixed mortgage rates, all other mortgage rates have remained stable for the past week. Current 30 year fixed mortgage rates are at 4.250%, 15 year fixed mortgage rates are at 3.500% and 5/1 adjustable mortgage rates are at 2.750%. While good credit is necessary to receive these low mortgage rates with 0.7 to 1% origination fee, verification of information and applicable documentation is also necessary to receive lender approval. Lingering low mortgage rates remain a great deal for borrowers who can meet these qualifications.

FHA continues to be the leader for lending these days with its low down payment requirements and easier credit qualifying. Remaining steady over the week, FHA 30 year fixed mortgage rates are at 4.250%, FHA 15 year fixed mortgage rates are at 3.750% and FHA 5/1 adjustable mortgage rates are at 3.000%. FHA provides mortgage insurance on loans and is the largest mortgage insurer in the world. Although FHA mortgages may require more documentation, FHA policy is consumer friendly by allowing gifts and housing grants to be combined with FHA mortgage loans. Although FHA closing costs (APR) tend to be higher because of the upfront mortgage insurance premium and other FHA fees, the benefits of FHA mortgages cannot be obtained with other loans.

Jumbo 30 year fixed mortgage rates fluctuated this past week and currently are at 5.000%. Jumbo 15 year fixed mortgage rates are at 4.500% and jumbo 5/1 adjustable mortgage rates are at 3.625%. Jumbo mortgages are not government insured and tend to be considered risky. For that reason, borrowers must have excellent credit and the necessary documentation to obtain these low jumbo mortgage rates with 0.7 to 1% origination point. The market for jumbo mortgage loans is not currently over stressed since the temporary increase to conforming loan limits. This may change come October if the conforming loan limit is dropped to the original limits, which may cause an overload to the jumbo mortgage market.

MBS prices (mortgage backed securities), which move mortgage rates in the opposite direction, have continued to be unpredictable this week. Early last week, it looked as though mortgage rates might increase when it was reported that weekly unemployment claims were down. Stocks rallied and MBS prices sunk. When the month of June jobs data was reported as weak and below expectations, MBS markets rallied, stock prices fell and it appeared as though mortgage rates were coming down. After weekend reports of the European debt crisis continuing, this time with Spain and Italy, investors again turned to safety bringing MBS prices up again. Combined with the uncertainty of an agreement for the U.S. debt ceiling, this week might just be the week that mortgage rates drop further. surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.

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