Refinance Rates May Uptrend Soon
Now that headlines out of Europe have calmed down, the focus has been on the economy here in the U.S. Although there are some mixed signals coming out of data reports, investor confidence is evident in the direction that markets are moving. Investors are turning to risky assets that offer dividends which has sent the S&P to a four year high. All mortgage rates, including bank mortgage refinance rates are at risk of increasing now that the economy is showing some signs of improvement. It has been tough week for MBS prices that have been falling and, ultimately, sent mortgage rates higher by Thursday. Freerateupdate.com’s survey of wholesale and direct lenders shows that while most mortgage rates rose .125%, 30 year fixed mortgage rates increased .250% and are at 3.750%. 15 year fixed mortgage rates are at 3.000% and 5/1 adjustable mortgage rates are at 2.375%. With good qualifications and acceptable credit, these are the lowest mortgage rates available with 0.7 to 1% origination fee. These bank mortgage refinance rates increased just a few days ahead of the start of the Harp 2.0 refinancing program which is open to underwater borrowers who have mortgages owned by Fannie Mae and Freddie Mac. Since this program is a regular refinance with special guidelines, borrowers should research for the lowest mortgage rates available in order to recognize the most savings possible.
Also increasing .125%, FHA 30 year fixed mortgage rates are at 3.375%, FHA 15 year fixed mortgage rates are at 2.875% and FHA 5/1 adjustable mortgage rates are at 2.875%. FHA mortgage rates are not risk based according to credit scores which makes them more appealing to borrowers who do not have perfect credit. FHA’s streamline refinance program with no cash out now has a new incentive. The upfront and annual mortgage insurance premiums will be lower starting in June, 2012. This program is a quick and easy refinance for FHA borrowers that does not require an appraisal or other verifications, but still offers the same low FHA bank mortgage refinance rates. Any upfront mortgage insurance premium, whether for a purchase loan or refinance, will make FHA closing costs (APR) higher, but FHA allows these costs to be included in the mortgage.
Jumbo 30 year fixed mortgage rates increased again by .125% and are now at 4.625%. Jumbo 15 year fixed mortgage rates are at 3.375% and jumbo 5/1 adjustable mortgage rates are at 2.500%. Borrowers are required to have excellent credit in order to obtain these lowest jumbo mortgage rates with 0.7 to 1% origination fee. Jumbo mortgages are a smaller market and are not government insured or sold to Fannie Mae or Freddie Mac. Most often, jumbo mortgages are held by the lender within their portfolio which is why they tend to have stricter guidelines.
MBS prices were lower this past week after Greece received final approval for a second bailout from Euro zone finance ministers. Mortgage rates move in the opposite direction of MBS prices. Reports showed that retail sales rose in February, import prices increased, February PPI and Core PPI both rose while jobless claims dropped to 351,000. All of these reports are pointing to an improvement with the economy and has increased investor optimism. In the meantime, the price of gas has brought a drop to consumer confidence for this month. Last week’s Fed meeting indicated a somewhat more positive outlook of the recovery which is drawing investors away from bonds.