WASHINGTON, D.C. (December 2, 2009) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 27, 2009, which was a shortened week due to the Thanksgiving holiday. The Market Composite Index, a measure of mortgage loan application volume, increased 2.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 29.3 percent compared with the previous week. The Refinance Index increased 1.7 percent from the previous week and the seasonally adjusted Purchase Index increased 4.1 percent from one week earlier. These results include an adjustment to account for the Thanksgiving holiday. The unadjusted Purchase Index decreased 30.4 percent compared with the previous week and was 34.9 percent lower than the same week one year ago.
The four week moving average for the seasonally adjusted Market Index is up 0.2 percent. The four week moving average is down 2.0 percent for the seasonally adjusted Purchase Index, while this average is up 1.5 percent for the Refinance Index.
The refinance share of mortgage activity increased to 72.1 percent of total applications from 71.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.8 percent from 5.3 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.79 percent from 4.82 percent, with points decreasing to 1.00 from 1.19 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest 30-year fixed-rate observed in the survey since the week ending May 15, 2009.
Whew, my rates just beat the average! To see my posted rates or apply online for financing Click Here
Showing posts with label rates. Show all posts
Showing posts with label rates. Show all posts
Thursday, December 3, 2009
Monday, November 30, 2009
Time to Refinance ARMS
Thousands of Homeowners in our area still have Adjustable Rate Mortgages. Over the past two years I have often wondered why many people are keeping their ARM instead of refinancing to a fixed rate.
One of the reasons may be because their payments have decreased. There are many indexes but the two most common around here are the CMT and LIBOR. The math can be a little complicated but the historical figures are easy to document. The 1-year CMT index usually has a margin of 2.75 and caps of either 5 or 6 above the start rate. If your start rate was 5% then you are a happy camper because the current index of .37 plus 2.75 equals just a little over 3%. But do not forget, the maximum rate is either 10% or 11% over the life of the loan!!
The one-year CMT index has only been below one percent 11 months out of the past 20 years!!! Another way of saying it, 95.5% of the time over the last 20 years the index has been above 1%.
Just for kicks, I averaged this index for the month of January over the last 20 years and the result is 4.34%. If we add 2.75% (the margin) to that average it is over 7%. The conventional 15 year fixed rate is currently lower than the 4.34% average index (not including the margin) for the previous 20 Januarys.
It is fun riding the rate down on an ARM, but when rates rise, so does the index and that makes it hard to switch to a fixed rate. If you have an ARM and plan on keeping your home more than another five years, there is a very high probability it will cost an arm and a leg if you do not switch now while rates are low.
One of the reasons may be because their payments have decreased. There are many indexes but the two most common around here are the CMT and LIBOR. The math can be a little complicated but the historical figures are easy to document. The 1-year CMT index usually has a margin of 2.75 and caps of either 5 or 6 above the start rate. If your start rate was 5% then you are a happy camper because the current index of .37 plus 2.75 equals just a little over 3%. But do not forget, the maximum rate is either 10% or 11% over the life of the loan!!
The one-year CMT index has only been below one percent 11 months out of the past 20 years!!! Another way of saying it, 95.5% of the time over the last 20 years the index has been above 1%.
Just for kicks, I averaged this index for the month of January over the last 20 years and the result is 4.34%. If we add 2.75% (the margin) to that average it is over 7%. The conventional 15 year fixed rate is currently lower than the 4.34% average index (not including the margin) for the previous 20 Januarys.
It is fun riding the rate down on an ARM, but when rates rise, so does the index and that makes it hard to switch to a fixed rate. If you have an ARM and plan on keeping your home more than another five years, there is a very high probability it will cost an arm and a leg if you do not switch now while rates are low.
Wednesday, November 18, 2009
There Is Good News If You Look
There is so much negative in the headlines today that it may not be easy to find something good, but it is there if you search hard enough. Rates for example, I just posted some of the lowest rates in my career on my application web site: http://centurymortgageco.lendingstation.com/products.aspx
Folks, those are fixed rates! But some of them have points, you say!!! And we all know the late night real estate gurus tell us not to pay points. For years I have suggested that homebuyers can control the payment by how they manage the transaction from the beginning. What happens if you negotiate and have the seller pay the points on your behalf? Then it is possible to receive the new tax credit if you qualify and an additional tax deduction.
http://www.irs.gov/taxtopics/tc504.html
We are seeing the beginning of the influx of people because of the new jobs at Fort Knox, this can only be a plus for the entire region.
My company is having a bumper year; in fact a few weeks ago we surpassed the largest annual volume in the company’s history with two months to go. Rates are only partially responsible. Our staff has expanded while competitors have laid off personnel. There really is good news if you look for it.
Folks, those are fixed rates! But some of them have points, you say!!! And we all know the late night real estate gurus tell us not to pay points. For years I have suggested that homebuyers can control the payment by how they manage the transaction from the beginning. What happens if you negotiate and have the seller pay the points on your behalf? Then it is possible to receive the new tax credit if you qualify and an additional tax deduction.
http://www.irs.gov/taxtopics/tc504.html
We are seeing the beginning of the influx of people because of the new jobs at Fort Knox, this can only be a plus for the entire region.
My company is having a bumper year; in fact a few weeks ago we surpassed the largest annual volume in the company’s history with two months to go. Rates are only partially responsible. Our staff has expanded while competitors have laid off personnel. There really is good news if you look for it.
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