Well you never like to start an article with “an I told you so” but I feel that this week it is important to do just that. People that were “floating” their loan last week saw the rates rise about .25% from the five months lows we had the previous week. It is always tempting to try and get something better but in this market you need to analyze what you can get and if it is good you need to take it! We had several “good news” economic reports last week that drove the price of Mortgage Back Securities lower, thus forcing the banks to raise the rates a bit to compensate. Remember a stronger economy means that we are able to handle higher rates so those two entities tend to work against each other.
Today will not really have any major news in it that will shift the rates one way or the other, but our fearless Fed Chairman Ben Bernanke will be giving a speech later in CA that will get several peoples attention. It is amazing how much power there is in this mans words. We will wait to hear any indication that the Fed will either begin to raise the Federal Rate or hold steady.
Third, I have been reminding readers of the expiration date of the First Time Home Buyer Tax Credit. The American Recovery and Reinvestment Act of 2009 authorizes an up to $8000 tax credit to any first time home buyer that closes a loan on or before November 30th on a primary residence. To qualify you must not have owned a home in the prior 3 years and must make less than $75,000 if filing single or $150,000 for a married couple filing jointly. The amount of the credit is reduced if your income is higher and completely goes away if your income exceeds $95,000 if single and $170,000 if married filing jointly. Currently the credit is being extended for veterans of our armed forces who have served overseas for at least 90 days during 2009. Check out the IRS website for more information and the appropriate forms that must be completed to get the credit. To receive the tax credit you can either amend your 2008 returns or wait until you file your returns next year.
My review of several other mortgage professionals indicates that the par 30 year conventional mortgage rate remains in the 4.875% to 5.125% range for well-qualified consumers. I like this rates being published cause as you can see my rates at the bottom of the range! To get a par interest rate you must have a credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination fee. You can elect to pay less in fees and secure a higher interest rate, as every lender has a creative way of packaging your closing costs. It is important to know that there are always closing costs in a loan it only differs how you pay them which is why a trusted mortgage professional is worth their weight in gold!