FHA wants your money!

Be on the look out for FHA, as they are trying to raise the monthly mortgage insurance premium (MIP) from .55% to .85%.
Reading in my posts below you will see that they are already raising the upfront MIP from 1.75% to 2.25%.
Check back here, as I will let you know if this gets passed.

Rates back to all time low!

Mortgage rates improved today to 4.75% for a no point 30 year fixed conforming loan. This is the lowest in at least the last 315 years, except for when it was at this level earlier this year. If you missed it then, you’re lucky, you get another chance. Call me today!

Good Loans Gone Bad

Over 13% of houses with mortgages are late on payments, or in foreclosure. That’s 1 in 8 homes and the highest percentage ever recorded by the MBA (Mortgage Bankers Association).
The frightening part is that Prime borrowers are now a large part of the crisis. I’m sure you’ve heard and even said that sub prime loans were at the start of all this. Then perhaps it was all of the people who put no money down or had interest only, or adjustable loans. Now, even those who were A paper clients with boiler plate loans are in trouble.
Whether unemployment be the main reason, or not, Prime borrowers are now 1 out of 3 foreclosures. Another factor, besides unemployment, are those who are just tired of paying for a house that will take years to recover to the point of owing what the house is worth.

Unemployment up

Today the unemployment rate is at it’s highest since 1983, sitting at 9.5%. The US has now seen the biggest drop in jobs since post World War 2, with about 6.5 million jobs lost since the recession began in December 2007.

This is not all doom and gloom as this should help mortgage rates improve along with the fact that the Dollar is getting stronger and oil prices are going down again. Oil prices going down pressures the entire stock market to sell off, and we know from earlier posts that when stocks sell off, that money usually ends up in bonds. This also helps rates improve.
With that said, where the bond market is today, the last time it sat here it reversed for the worse. Since rates are tied to the bond market, we certainly hope this doesn’t happen again. With the markets closing early today and closed tomorrow, a sell off would not be uncommon. You can see why it is impossible to know what rates will do, so many factors involved.

Watch for my next post about the FHA 203K laon for rehabing or repairing your home, or a home you want to buy.

Matt Steinmetz