Orlando Mortgage Blog

The recent flight to safety with the EU saga ongoing has seen sizeable leaps downward in bond yields and therefore upward movement in Mortgage Backed Securities (MBS) which of course has improved mortgage rates to historic levels once again, but that's only .125% to .25% below where it has been in the last couple months as lenders are being dragged to the lower rate trough. With a national average Par rate that has been running of late at 4.625% to 4.875% (which typically includes one point depending on the lender that day) the question that should be in the mind of the rate floater, "How much lower will it go and what are the risks at this point of it moving higher?" I draw your attention to the last comment in the following report  .

Stocks and Bonds. Stocks then Bonds. Investors have been on a roller coaster in search for yield and rates have suffered for the last two days because of it. The national average Par rate will probably be up to 4.75% to 5.0.% now (which typically assumes a 1% point origination cost). That's 0.125% higher than a couple days ago. I draw your attention to this Mortgage Rate Watch article that states the "why" very simply. Read more...

 Update: Good news today...looks like lenders dropped it back to Wednesday's rate level today. If nothing else it keeps us awake every day. Ha, ha. Thanks to those that responded to us and jumped on a rate lock today. We appreciate your business.

Well the recent entries into my blog about rate upside risk for floaters saw a little support at midday with the bond market off by 37/32 and lender rate bumps moved points at noon up by about .50% point. That generally equated to .125% in rate increase at the moment today. So, the 4.75% zero point quote that was available this morning is now 4.875% on a 30 fixed for example and the payment on a $200,000 loan just moved up about $15.12 per month if you weren't locked yet. If you are even thinking about refinancing, a rate below 5% in the last 50 years is nothing short of a lifetime event. What can anyone who qualifies possibly be waiting on today?

Though many factors can have an impact on daily mortgage rates, a very simple method for keeping an eye on likely rate movement is the benchmark Treasury yield. The 10 year is the primary T-note that mortgage lenders monitor daily. As benchmark Treasury yields fall, prices of mortgage-backed securities move higher, which allows lenders to offer lower mortgage rates depending on the amount of the move. As Treasury yields rise, mortgage-backed security prices are led lower, which forces lenders to push mortgage rates higher depending on the amount of movement.

I tell all my customers to remember one thing: lenders tend to lower rates like a falling feather on a calm day and increase them like ballistic missles. "Float" with caution.

More reaction and concern to investors over European bank solvency has seen European market drops of 2% to 3% overnight, has DOW Futures down over 200 points before opening, oil down a couple dollars and the 10 year down to 3.09% at 7:30 AM before opening. Should see some rate early improvement on price in mortgages this AM.

Last Friday had the most influence on today's pricing model. Here's a little Tech rationale today:  Read on please.

The linked article may be a little technical for your taste but raises some good points for the decision bound. Good reading...

Go to HomePath.Com and take a look at what's out there that FNMA wants to get off their books. There were 1641 +/- homes for sale in the local six county area today. That's enough for Home Shoppers, Second Home buyers and Investors alike. You can be a site oldtimer in a matter of minutes. We'd love to assist in any way we can. Give us a call or email us. Our contact data can be seen by clicking the Contact us button throughout our site.

Good Luck!

Hay (sp), Floridians! Common sense and American ingenuity at it's best. I just loved this one and had to pass it on today. Hope it's not too simple for em. And I've got a yard full every week. Come by any time. Read on  

Fannie Mae’s HomePath® Mortgage Financing –

Available May 17

Effective Date Monday, May 17, 2010

Details

The HomePath Mortgage is available in all states – although standard limitations on property types will apply. Florida properties listed on the FNMA HomePath website are eligible for HomePath Mortgage financing through the program and we will have that financing available May 17, 2010.

Standard FNMA pricing and adjusters will apply, along with Fannie Mae’s Homepath Mortgage adjusters (Fannie Mae charges adjusters to all lenders). Look for HomePath Mortgage adjusters to be included in our rate sheet beginning on May 17.

Benefits

Up to 97% LTV financing is available for qualified eligible borrowers and property types on Primary Residences.

Up to 90% LTVs are available for Second Homes and Investment Properties.

Credit scores:

o 620 for up to 80% LTV

o 660 for 80.01 % to 97% LTV

Down payment sources may include: borrowers’ savings, a gift, a grant, a loan from a nonprofit organization (state or local government) or an employer. Flexible mortgage terms are available – including fixed-rate, ARMs or the interest-only

payment feature for qualifying loans

No appraisal fees because no appraisal is required – the sales price is used.

o Lender may not order, receive or review an appraisal

o Lender must not review any property-related inspections

No mortgage insurance (MI) is required regardless of LTV – although Fannie Mae-required

price adjusters will apply in lieu of MI for LTVs greater than 80%.

o Standard Escrow account requirements will apply

Availability HomePath Mortgage will be available for:

Purchase transactions – following the standard eligibility for the property types.

Fixed-rate and ARM transactions.

Loans with the interest-only payment feature while still available.

Owner-occupied, Second Homes or Investment Properties (loan-level price adjusters apply to Investment Properties).

Fannie Mae conducted a National Housing Survey and came up with some interesting results. Read the survey...

In a move to calm the turmoil the EU and ECB ante's up €750 bln ($955 bln). After closing it out in February, the U.S. Federal Reserve agreed to reopen swap lines with other Central Banks to ensure adequate access to U.S. dollars. It will remain open until January, 2011.

We don't need this much excitement and neither does Wall Street. Read on...

LOW I/O PAYMENTS and EASIER QUALIFYING are due to change folks!  This is worth saying again.

Example 1:  Say you need a $200,000 mortgage for 5 years...

• 30yr Fixed Rate @ 5.000% has a monthly P&I payment of $1,073.64
• 5/1 ARM Loan*  @ 3.875% has a monthly P&I payment of -    940.47

Amount saved each month for the initial 60 months (5yrs )             $   133.17

(An I/O** pmt with .5% pt is $687.50 saves $386.14 month)         x     60

You'd actually save this in total payment over 5 years                    $7,990.20

(An I/O** pmt with .5% pt saves $22,168.40 over 5 years)

Example 2:  Same $200,000 mortgage with a 10 year goal...

• 30yr Fixed Rate @ 5.000% has a monthly P&I payment of $ 1,073.64
• 10/1 ARM Loan* @ 4.500%  a monthly P&I payment of      $ 1,013.37

Amount saved each month for the initial 120 months (10yrs)           $      60.27

(An I/O** pmt with .5% pt is $750.00 saves $323.64 month)                 x   120

You'd actually save this in total payment over 10 years                  $ 7,232.40

(An I/O** pmt with .5% pt saves $38,836.80 over 10 years)

That's 5 to 10 years of lower and stable fixed payments without gimmicks of any kind. That's why standard Adjustable Rate Mortgages have been so useful for many of us for 30 plus years!