Mortgage Center | CompareYourLoans

Fixed- Rate Mortgages:

Avg. Conventional 30-Year: 6.73%
Fees and Points: 0.6

Avg. Conventional 15-Year: 6.39%
Fees and Points: 0.6

5/1 – Year Adjustable Rates:

1st Commitment Rate: 6.33%
Fees and Points: 0.6
Margin: 2.75

1 – Year Adjustable Rate:

1st Commitment Rate: 5.63%
Fees and Points: 0.4
Margin: 2.72

Source: Freddie Mac

Fixed Rate Mortgages

Average Conventional 30-Year Rate: 6.21%
Fees and Points: 0.2%

Average Conventional 15-Year Rate: 5.91%
Fees and Points: 0.3%

5/1-Year Adjustable Rate

1 st Commitment Rate: 6%
Fees and Points: 0.3%
Margin: 2.78

One-Year Adjustable Rate

1 st Commitment Rate: 5.45%
Fees and Points: 0.6%
Margin: 2.74

Market Brief:

1 st quarter GDP growth was lower than the master of the market universe thought. Amazing! 1.3 percent growth. 1% of growth was lost due to shrinking of the housing market. Consumer spending was lame and the price in consumer goods did not move much, but HEY! Gas shot off like a rocket and whether this was caused by refinery problems or because of the underlying risk in the oil markets is smoky at best. And remember, that oil is infused into thousands of products from plastic to food, therefore affecting the prices of many consumer products.

What’s happening in mortgages ?

Refinancing applications were 53% of mortgage applications during December 2006.

Refinancing applications were 42% of mortgage applications during April, 2007.

According to Freddie Mac a majority of refinancing involved homeowners extracting equity from their homes.

Here are the average interest rates in the Northeast

Fixed Rate Mortgages

Average Conventional 30-year Commitment Rate – 6.19%

Fees and Points – 0.2%

Average Conventional 15 – year Commitment Rate – 5.95%

Fees and Points – 0.2

5/1 – Year Adjustable – Rate Mortgages

First Commitment Rate – 5.91%

Fees and Points – 0.3

Margin – 2.76

One – Year Adjustable Rate Mortgages

First Commitment Rate – 5.50%

Fees and Points – 0.6

Margin – 2.75

Source: Freddie Mac

The mortgage market interest rate have trickled up a bit due to a strong showing in the employment are. Plenty of people are refinancing there homes into a fixed rate payment plan, out of the adjustable rate plans they were currently experiencing.

Here are the average interest rates in the West:

Fixed Rate Mortgages

Average Conventional 30-Year Commitment Rate – 6.18%
Fees and Points – 0.6%

Average Conventional 15-Year Commitment Rate – 5.86%
Fees and Points – 0.7%

5/1 – Year Adjustable-Rate Mortgages

First Commitment Rate – 5.90%
Fees and Points – 0.7%
Margin – 2.74%

One-Year Adjustable-Rate Mortgages

First Commitment Rate – 5.40%
Fees and Points – 0.7%
Margin – 2.74%

Source: Freddie Mac

Fixed Rate Mortgages

Avg. Conventional 30-Year Commitment Rate – 6.16%
Fees and Points – 0.4

Avg. Conventional 15-Year Commitment Rate – 5.89%
Fees and Points – 0.5

5/1 – Year Adjustable-Rate Mortgages

First Commitment Rate – 5.93%
Fees and Points – 0.7
Margin – 2.76

1- Year Adjustable- Rate Mortgage

First Commitment Rate – 5.31%
Fees and Points – 0.5
Margin – 2.88

Source: Freddie Mac

Mortgage Rates are remaining low across the country. Let’s give you the average rates according to Freddie Mac.

Rates for the Southwest :

30-year fixed-rate mortgage – averaged 6.12%

15-year fixed-rate mortgage – averaged 5.85%

5-year Treasury-Indexed Hybrid adjustable-rate mortgage – averaged 5.89%

1-year Treasury-Indexed adjustable-rate mortgage – 5.47%

Rates for the Overall US:

30-year fixed-rate mortgage – averaged 6.17%

15-year fixed-rate mortgage – averaged 5.87%

5-year Treasury-Indexed Hybrid adjustable-rate mortgage – averaged 5.92%

1-year Treasury-Indexed adjustable-rate mortgage – 5.44%

Frank Nothaft, vice president and chief economist, of Freddie Mac said, “Mortgage rates have remained within a narrow band of 0.1 percentage points over every week in March and that the relative stability is due to mixed economic data releases as to how strong the economy is and whether future inflation will recede.”

1. Disclosures – Check Out
1. Truth and Lending Act - http://www.smartagreements.com/bltopics/Bltopi41.html
2. The annual percentage rate and how much it will cost you over time
2. The “Load”
1. The load or fee that you will be paying for the loan is sometime hard to understand, so make sure you get completely clear about what the “load” entails before moving forward with the loan.
3. Variable Rates 
1. They are extremely, actually impossible to predict with any consistent accuracy. Ask your mortgage lender, “How high can the interest rate go on my loan?” Make sure you are clear about the answer before proceeding with the loan. This is super important, because if the interest rate environment starts to increase, you need to look at how your payment will be affected to determine if you can afford the increase in the monthly payment.
4. Mortgage Lenders
1. Obviously, the mortgage lender wants to close the loan, so they can be paid. This is normal and justified for a good service that benefits us all. However, if the mortgage lender does not answer your questions and/or seems hesitant around disclosing information about your loan, then it is probably best to go somewhere else.
5. Refinancing
1. When you apply for a refinance loan the mortgage lender is required to give you the Truth and Lending disclosure on the same day as the closing! Make sure you ask for it beforehand, so you have time to go over it in detail and do not feel the pressure of the other people waiting before you sign it.

3 Problems that need Fixing:

1. Mortgage Loan forms are complicated – they need to be streamlined!
1. This will take quite a while and might even require a new law.
2. Financial literacy needs expanding! – One more reason to come to Compareyourloans.com! J
3. Sub-prime loans are complicated – It is hard to shop for a product that you do not understand. Please check out the “Mortgage Preparation and Process” link located under “Useful Tools” and under the “Reference Guide” on the Compareyourloans.com website.

All the Best,

Philippe Volo

CompareYourLoans Contributing Editor

Out in the mortgage marketplace we definitely have a problem with the sub-prime mortgage market. Presently and on the near horizon, the projection of home foreclosures is growing and will probably continue to grow. This is not a good thing for anyone! Not the home owner! Not the Mortgage Lender! And not the Insurance Company that owns the sub-prime mortgage back traunch!

Mortgage lenders definitely do not what to take over your home due to the non-payment of your mortgage. Why! They are not in the business of owning real-estate and definitely do not want to own any real-estate in a flat to down market. Therefore, mortgage lenders want you to call them, so they can help you reorganize you current loan or get you a new one that will allow you to continue to make payments on your home.

Lenders are motivated to help you in a marketplace sure as this. The banks are putting pressure on them to make sure that the mortgage owner will have every opportunity to reorganize their loan or get a new one flushed out.

Homeowners need to seek a lower rate and/or switch to an interest only loan for the near term. They have plenty of opportunity for new loan terms in the mortgage market-place, just make sure that the new loan does not increase the amount you owe with each new payment.

More on this tomorrow.

Best,

James Nexus
CompareYourLoans Contributing Editor

Having equity in your home is a wonderful thing! Taking out Equity in your home to spend on a fancy car or the latest fashion trend is not something you should do. In fact, in today’s real-estate market, the only reason that I believe you should take equity out of your home is to use it on paying down higher interest debt or to use the money to improve your home’s resale value.

Examples:

Let’s say your home is currently valued at $300,000 yet you bought it at $200,000. You put $20,000 down and took out a loan for remainder: $180,000. You have been in the home for 3 years and paid down $40,000 of the $180,000, so you are NOW in the home for $140,000.

Equity in the home: $300,000 (appraised value) - $140,000 = $160,000 equity in the home.

Ok. Hypothetically you have $20,000 in credit card debt that you are paying 9.9% on.

After taking a hard look at your home, you think that it would improve the value of your home to update the kitchen – projected costs = $30,000, which adds a projected resell value to the home of $50,000.

A $50,000 home equity loan will have an interest rate of 7%. Taking out a home equity loans in this situation will save you roughly 2.9% (depended payoff timeframe) on the $20,000 and give you an added competitive boost on selling your home, not only at a better price but for the intangible value of a more enjoyable kitchen – causing you to cook more, which actually saves you more money in the long run.

This above example is a great way to use the built up home equity in your home.

Buying a car (depreciating asset) or trendy clothes (big time depreciating asset) is not a good way to spend the money – makes you feel good for a few minutes or days but then you need to buy something else to get that fuzzy, peachy feeling. An ongoing, pointless cycle!

Please spend the money you take out for a home equity loan wisely.

All the Best,

James Nexus
CompareYourLoans Contributing Editor

A what’s it is worth, opinion piece

Alright, the east coast new-home sales mortgage market is down around 26.8%. What should you do? If, anything?

Play it smart

Are you desperate to buy a home? Mortgage interest rates are still low, so if you have good credit and a good job with a reasonable amount of money for a down-payment, then go ahead and buy. However, look at neighborhoods that are on the edge of becoming something sweet in the future and for home sellers that are desperate to sell and get on with their lives. The power is in the buyers hands right now, so us it, not brutally but effectively as the current real estate market is positioned for.

Shop around for your mortgage

If you have good credit, a good job and some money for a down-payment then you are a perfect customer for a great mortgage. Shop around; look at 3 to 4 different mortgage offers and pick the deal that best fits your needs.

Define your mortgage needs

Some questions to ask yourself:

• Do I want a Fixed or Variable rate mortgage?
• Variable rates might be less in the short term but if inflation ramps up then the Fed might raise the basic interest rate which will probably affect the interest rate on your variable mortgage.
• Should I plop down a large, 20% down-payment?
• Pay down your higher interest debt first
• Keep some cash on hand
• Then, plop down the down-payment that you feel comfortable with

Well, that’s it for now. There will be more to come, later.

All the Best,

Philippe Volo
CompareYourLoans Contributing Editor