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Market Rate updates

By admin | February 23, 2010

These rates do not reference a specific loan program; rather, they reflect general market conditions, which are subject to change at any time.

 Credit risk pricing and how it impacts your interest rate/discount points (cost to buy rate down):

Rates change daily – Mortgage loan interest rates and discount points are driven by the prices of Mortgage Backed Securities.

  • Credit (fico) Scores – Lenders look at your mid credit score (typically 3 credit bureaus) to determine you credit risk.  A+ credit would be 740 and above.  From there they are categorized in 20 point increments (720-739, 700-719, 680-699, 660-679, 640-659, 620-640, no fico)
  • Loan to value – Typically the lower the loan to value (LTV), the lower the risk.  Loan to values of 60% or less are considered the lowest risk
  • Transaction type – The risk level from low to high – Purchase, rate and term refinance, and cash-out refinance.
  • Transaction type continued – The risk level from the low to high – Primary residence, second home and investment property
  • Property type – Single family residence, PUD, condo then 2-4 unit properties.
  • Escrow account – If your LTV is 80% or lower, then you have the option to waive escrows (taxes and insurance included in monthly payment), but it can affect your discount points.

 

TERM

 Rate Range
Conforming 30 Year Fix Low 5  – Mid 5
Conforming 15 Year Fix Low 4 – High 4
 Conforming 3/1 Arm High 3’s
Conforming 7/1 Arm Low 4’s
Non-Conforming 30 Year Fix Mid 5 – Low 6
Non-Conforming 15 Year Fix Low 5 – High 5
Non-Conforming 5/1 Arm High 4 – mid 5
FHA 30 year fix Low 5 – Mid 5
FHA 5/1 Arm Low 4 to mid 4
VA 30 Year Fix Low 5 to mid 5
Rural Dev 30 year fix Low 5 to mid 5

  

THERE ARE NUMEROUS LOAN PRODUCTS AVAILABLE:

  Conforming – Loans designed for primary, second and investment properties.  There are restrictions in regards to loan amount (SFR is typically 417,000, but in some areas it may be higher).

Non-Conforming – .  Typical loan amounts above 417,000.00.

FHA- 30 year amortized loan.  3.5% down required by the borrower (can be gifted by an acceptable source).

VA- Guaranteed by the federal government based on the amount of entitlement to the veteran in conjunction with the loan amount.

Topics: Home mortgage |

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