Posted by John Martin on Tue, Dec 01, 2009 @ 09:43 AM
The mortgage lending guidelines will tighten once again on December 12, 2009 making it more difficult for some borrowers to obtain a purchase loan or refinance their existing mortgage.
Fannie Mae announced it will limit the maximum debt-to-income ratio to 45% of a borrower's gross income. Previously, a borrower could qualify up to 50-55% debt ratios. Fannie Mae did mention that they will consider debt-ratios up to 50% assuming the borrower can provide "strong compensating factors". This would include high credit scores, low loan-to-values (LTV's) and/or significant cash reserves.
In addition to debt ratios, Fannie Mae will also require a minimum credit score of 620, previously the minimum was 580. Fannie Mae believes raising the minimum credit scores and tightening the debt ratios will support prudent risk management and better ensure sustainable homeownership. One can argue that this is an effort to crackdown on the loose lending standards that led to the mortgage crisis that started in 2008. Industry professionals are concerned the new requirements may offset the initiatives introduced by the government to provide more liquidity in the secondary lending market.
Current mortgage rates are at an all-time low right now, so act now and avoid these stringent guidelines. Please call a HomeQuest Mortgage representative for more details at 866-839-1117.
Posted by Jason Evans on Mon, Dec 15, 2008 @ 08:42 AM
On Tuesday December 16
th the Federal Open Market Committee (FOMC or "The Fed") will release a statement after its scheduled meeting. Many economists are expecting the Prime rate to be lowered to 3.5% at this meeting. One important thing to remember is that a lower Prime rate does not translate into lower fixed mortgage rates. See our article from November 16
th http://www.hqworksforme.com/mortgage-blog/bid/6768/What-determines-mortgage-rates for more information on what determines mortgage rates.
There are a couple of other news items coming out this week that could have an impact on mortgage rates. The first piece of data will be released on Tuesday is the Consumer Price Index (CPI). The CPI will give investors an idea of what direction prices for goods and services in the economy are going. A higher than expected reading (more inflationary) will be bad for mortgage rates while a lower than expected number (less inflationary or even deflationary) could provide support.
On Thursday the Philadelphia Fed Index is released. This reports on the level of manufacturing activity in the Philadelphia region and is seen as a strong indicator for national manufacturing activities. If this number is worse than expected it should provide support to mortgage rates because generally a weak economy leads to increased investment in fixed income, like mortgage backed securities (MBS).
Current 30 year fixed mortgage rates remain at all time lows and depending on how things look this week in the economic reports, they could be sticking around into the new year.
Posted by Jason Evans on Tue, Dec 02, 2008 @ 04:41 PM
Current mortgage rates have remained near the lowest levels of the year so far this week . The spread of mortgage rates compared to the 10 year treasury is beginning to widen so that could be a sign that once the 10 year yield starts to increase, mortgage rates could follow very quickly. If there is a rate available now that you like, it would be a good move to lock in while it is available.
Some news coming out later this week that could have an impact on mortgage rates includes the unemployment rate which will be released on Friday.
For now mortgage rates in Massachusetts remain near all time lows. Rates in the rest of New England are also currently at the best levels of the year.
Posted by Jason Evans on Tue, Nov 25, 2008 @ 09:27 AM
The Federal Reserve announced a plan this morning to buy up to $500 billion in mortgage backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. The goal of this move by the Fed is to lower the cost of borrowing on mortgages to borrowers in an effort to support the slumping housing market. The announcement immediately caused a rally in the MBS markets resulting in lower mortgage interest rates across the country.
Current mortgage interest rates in Massachusetts also will be going down today making it a great opportunity for many borrowers to lock in a rate and refinance their home mortgages. Call HomeQuest at 508-839-1117 to see what rate can be locked in for you whether you are looking to refinance your mortgage or need a new mortgage to purchase a home.
Posted by Jason Evans on Mon, Nov 24, 2008 @ 04:47 PM
We will be starting to post an article as often as possible recapping what happened in the market for the current day and what impact it had on mortgage rates.
Today was a very big news day for the market at the start off what is normally a slow holiday week. Over the weekend the Treasury Department announced that it is bailing out Citigroup by investing $20 billion in the company in an effort to stabilize their balance sheets. The Treasury along with the FDIC is also guaranteeing against the "possibility of unusually large losses" for Citi on $306 billion worth of risky mortgage backed securities that they hold.
This bailout helped lead to a rally in the stock markets which many times results in a bad day for mortgage rates. While the yield on government bonds increased today as stocks also increased, the spread between Mortgage Backed Securities and comparable government bonds got tighter (good for rates) after reaching all time high levels last week (bad for rates). While the yield on bonds went up today, MBS was able to fight back and not lose much ground. One reason for this is that MBS investors see the government investing in mortgage securities as a good sign of support for future mortgage investments. What normally would have been a bad day for mortgage rates turned out to be not so bad.
The current mortgage rates held steady today on the 30 year fixed at 5.875% and the 15 year fixed at 5.50%, both with no points.
Since HomeQuest Mortgage is located in Massachusetts we will also be giving updates in our blog about what Massachusetts mortgage rates did for the day in addition to overall mortgage rates in New England. Today the mortgage rates in Massachusetts held steady at 5.875% on the 30 year fixed mortgage and 5.50% on the 15 year fixed mortgage.