Mortgage markets worsened last week, moving U.S. mortgage rates higher on the whole.

Like prior weeks, market action was sharp. Rates climbed 0.25 percentage points Wednesday afternoon, which shocked thousands of unprepared mortgage rate shoppers. Markets made small improvements over the remainder of the week, but couldn't undo the damage. 

Mortgage rates have been volatile since last quarter. So, what can buyers and refinancing households expect to see this week. What will mortgage rates do next?

Freddie Mac : 30-Year Fixed Rate At 4.22%

According to government-backed Freddie Mac, last week, the average 30-year fixed rate mortgage rate slipped 13 basis points to 4.22% nationwide; with the rate available to prime borrowers willing to pay 0.7 discount points at closing.

0.7 discount points carries a cost equal to 0.7% of your loan size.

A borrower in Boston, Massachusetts, therefore, whose loan size is equal to the local Freddie Mac mortgage loan limit of $417,000 would pay $2,919 at closing in order to lock a 4.22% mortgage rate. A borrower in Orange County, California with a loan size at the local limit of $625,500 would pay $4,379. 

Borrowers opting out of discount points will pay slightly higher rates.

Freddie Mac reported rates for 15-year fixed rate mortgages lower, too. The group's survey of more than 100 mortgage lenders showed the average 15-year fixed rate mortgage rate down eight basis points to 3.27% nationwide.

Like its 30-year counterpart, the 15-year rate requires 0.7 points to be paid at closing.

There is now a 0.95 percentage point difference between the published rates of a 30-year and 15-year fixed rate mortgage -- among the largest spreads in recorded mortgage history. Borrowers using a 15-year mortgage now pay close to 70% less to own their own home than via a 30-year loan.

Read more: http://themortgagereports.com/14022/mortgage-rate-analysis-and-prediction-how-will-u-s-mortgage-rates-move-this-week
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WJBK) - January 2014 is bringing some significant changes to the housing industry.

Here today to tell us what's going on and how these changes are going to impact homebuyers is Hale Walker, the co-founder and senior vice president of Port Huron-based Michigan Mutual, Inc.

1. What are the looming changes that could impact the mortgage environment?

    The Consumer Financial Protection Bureau (CFPB), the regulatory agency that was established in 2010 by the Dodd-Frank Act after the housing crisis, is implementing new rules on January 10, 2014 that are designed to protect homebuyers from risky mortgages and ensure they are getting the best, most fair mortgage loans.
    While these changes overall are a huge step in the right direction, there will be some shifts on the horizon for both lenders and homebuyers.

2. The new rules:

    The major new regulation is the Qualified Mortgage rule.
    In order for Freddie Mac or Fannie Mae to purchase the mortgage from a bank or lender, it must be a Qualified Mortgage.
    In order to be deemed a Qualified Mortgage, the loan has to meet a rigorous set of standards set forth by the Bureau, and must not include risky or harmful features that have been built into loans in years past.
        There will be no excessive upfront points and fees during the processing and closing time periods.
        For most loans, the points and fees charged will not be allowed to exceed 3% of the total loan amount.
        There will also be no toxic loan features, such as interest-only payments, no balloon loans and no terms greater than 30 years.
    This is all designed to protect the homebuyer and ensure they are getting safe, responsible and transparent mortgage loans.

3. Lenders will also need to take a close look at a homebuyer's ability to repay the mortgage loan.

    Under homebuyer to determine whether the loan they are applying for is the right fit for them. These include:
        Income and assets
        Employment history
        Credit history
        Debt obligations, including things like alimony or child support if applicable.
    These are all standard items that lenders have already been closely examining, but there is a new part of this rule that will change the process and impact what loans homebuyers qualify for.
        Debt-to-income ratio, the amount of money you make each month in relation to the amount of debts you must pay off each month, will pay a large role in the process.
            Under the new rule, a homebuyer's total debt cannot exceed 43% of their total income.
            This is designed to prevent homebuyers from taking on mortgage loans they cannot afford.

4. What does this all mean for consumers?

    It's going to have a major impact on homebuyers.
    For some income brackets, or for those with unstable employment history, qualifying for a mortgage may become a little trickier in 2014.
    This is why homebuyers should seek out a certified, trusted mortgage partner to help navigate them through the process. It will be something that individuals will need to be educated about to ensure they are making the right decision for their goals.
        Lenders have been preparing for these new rules for nearly a year, and are well-versed in all of the complexities, and what it takes to help homebuyers qualify for the loan they want and get them into their dream home.
        A great mortgage partner will work with you to get your records in order and get you the best loan possible.

Source: http://www.myfoxdetroit.com/story/23996900/money-monday-new-tough-rules-for-mortgages-begin-in-jan-2014
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Rich homebuyers can now get mortgages cheaper than pretty much everyone else.

In an unusual twist, lenders are offering rates on jumbo mortgages that are more than a quarter of a percentage point lower than those on the conforming loans backed by Fannie Mae and Freddie Mac. The government-run agencies require conforming loans to be below $417,000, unless they are for homes in high-cost areas like New York or Los Angeles,where the limit is $625,500.

Jumbo loans exceed those dollar limits and, historically, banks charge higher rates on them -- about 0.25 percentage points more -- than they do for conforming loans, according to the Mortgage Bankers Association. But over the past couple of months, the tables have turned.

This week, Wells Fargo (WFC, Fortune 500) advertised a 30-year jumbo mortgage at a rate of 4.125%, significantly lower than the 4.5% rate it is offering for a 30-year, fixed-rate conforming loan. US Bank (USB, Fortune 500) is offering a jumbo for 3.875% this week compared with 4.25% for a conforming loan. And Chase's (JPM, Fortune 500) jumbos have been running a quarter of a percentage point below conventional mortgages, as have TD Bank's (TD).

"Never in my memory have jumbos been such a bargain," said Peter Grabel, a loan officer at Luxury Mortgage Corp. in Stamford, Ct., with 13 years on the job.

One big reason jumbo rates are so low is because lenders want to attract wealthy clients and hang on to them, said Malcolm Hollensteiner, head of consumer lending for TD Bank. Once clients sign up for a mortgage, the bank can "cross sell them other products, like brokerage services," he said.

That works especially well in these days of strict underwriting standards, according to Keith Gumbinger, a mortgage expert with HSH.com.

"Borrowers have to open up their whole financial picture to lenders," he said. "They can see where there's value, which they might be able to sell against."

Once a wealthy client takes out one of these low-rate loans, they are likely to stick around. "With rates as low as they are, borrowers are never going to refinance the loans. Those affluent clients will stay on the bank's books forever," said Gumbinger.

Jumbo loans have also gotten comparatively cheaper. As the Federal Housing Finance Agency (FHFA), which regulates Fannie and Freddie, seeks to boost the two agencies' reserves against losses from mortgage defaults, it has raised fees and other costs for borrowers, according to Terry Francisco, a Bank of America spokesman.

Since Fannie and Freddie don't back jumbo mortgages, those fees don't apply and therefore aren't passed on to borrowers. 

Read More: http://money.cnn.com/2013/11/12/real_estate/jumbo-mortgages/
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CHARLOTTE, N.C. --

Banks like Wells Fargo and Bank of America announced new loan structures that will allow a buyer to purchase a home with as little as 5 percent down.

The announcement came on the same day new housing numbers were released that showed the smallest gains in home prices since January; in Charlotte, house prices only rose 7.1 percent.

Experts say the combination of new loan structures and stabilizing home prices are good for buyers and sellers alike.

"We are still seeing price increases but not increasing so high as to take away that buyers' buying power," said home builder Bill Saint.

A former CPA, Saint builds custom homes and works with consumers on both sides of the buying and selling processes.

Saint said while the new loan terms will be attractive to buyers, they still must qualify under stringent restrictions that are far different than those before the housing market collapsed.

"The banks are doing the due diligence on that individual...if you've gone through the re-fi process or a new loan process, you realize it has to be a real loan," Saint said.

Experts predict the rise in housing prices will continue to decline when the October numbers are released.

Source:  http://www.wsoctv.com/news/news/local/banks-announce-new-loan-structure-home-buyers/nbjB9/


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NEW YORK (TheStreet) -- To get the lowest mortgage rate available, just how good does your credit score have to be?

Try 740 and above out of a possible 850. Unfortunately, that figure, from a study by mortgage-info firm Zillow.com (Z_), relegates a lot of would-be borrowers to the sidelines. Zillow says just 40.3% of Americans have such enviable scores. The industry has tightened up -- in 2010, bottom-rate loans required a score of 720, a threshold met by 47% of potential applicants.

Even worse, Zillow figures three in 10 Americans, those with credit scores of 620 or below, are unlikely to qualify for any mortgage at all. Zillow drew these conclusions by looking at 13 million loan quotes and more than 225,000 requests for home-purchase loans on its Mortgage Marketplace in September. The results were compared with a similar study three years earlier.

Despite improvements in the housing market, falling delinquency and foreclosure rates, slightly lower unemployment and other signs of economic improvement, that 30% rejection rate is unchanged since September 2010. Even a high down payment of 15% to 25% won't get these folks a loan.

Getting a less-than-rock-bottom rate can cost you serious money in the long run. In September, applicants with scores of 740 and above got rates averaging 4.42% for conventional 30-year fixed-rate loans. Scores from 620 to 639 qualified applicants for rates averaging 5.09%. There were so few loans approved for applicants below 620 that a meaningful average could not be calculated.

At 4.42%, a $200,000 30-year fixed-rate loan would cost $1,004 a month, with interesting totaling $161,397 over 30 years. At 5.09%, the payment would be $1,085, with total interest at $190,482.

"Your credit score is the single most important factor in determining your mortgage interest rate and monthly payment," said Erin Lantz, director of mortgages at Zillow. "To avoid any surprises when buying a home, check your credit score and report at least six months before you intend to buy to see if there are any costly inaccuracies, pay down high-balance lines of credit and make sure your bills are always paid on time."

After doing, all that, try to save more every month to make a bigger down payment. The smaller your loan compared with the home's value, the better your chances of approval. Of course, you can look for a less expensive home as well.

But what if you can get approval, but for now would be stuck with a higher rate? Would it make sense to postpone your purchase or refinance until you can nudge your credit score higher?

That could be risky. It would be annoying to pay 5% instead of 4.5%, but if you wait six months or a year you might find that those bottom-level rates have gone up. You might end up paying 5% or more even with a score over 740.

No one knows for sure, but most experts agree rates will drift up. They're already up quite substantially since spring, when you could get a 30-year fixed loan for 3.5%.

Also, home prices will probably continue to rise, though perhaps not as fast as during the past year or so. So even if waiting did get you a lower rate than you'd pay today, that saving might be wiped out by a higher purchase price.

Source: http://www.thestreet.com/story/12067136/1/only-40-of-americans-can-get-the-good-mortgages.html
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