Weekly Mortgage Update From Tom Balk: Mortgage Rates are Taking a Jump

Mortgage Rates took a big jump last week. The Jobs Report last Friday capped off the 5th consecutive day of selloff in the Mortgage Bond Arena. Job Losses came in at 247K rather than the expected loss of 328K. To many investors, this was a strong signal that that economy has turned the corner and Stocks, not mortgage Bonds, are the place to be in the near future.

Only time will tell whether this is where mortgage rates strongly head toward 6.0% or rally (and rates go back down) based on a stock market pullback (stocks have gone up 50% since the lows of March 2009). Monday AM is showing stocks lower and correspondingly, mortgage rates are down a bit from last Friday.

If you get an offer on a listing and the interest rate shown is in the low 5’s, you may want to counter it at 5.875%. AND be very careful as to whether the prospective buyer can still qualify for the loan amount due to this jump in rates.

4.875% at No points, 5 year Interest Only to $417K

I have been asked ‘Who/What is Mortgage California?’. We are a subsidiary of PHH Corporation; the 8th largest mortgage originator in the US. We are originating $2.5 BILLION in mortgage loans every month, so we are big, stable and we are good at what we do. Unlike some other lenders we have never run out of funds to fund loans.

Remember that FHA loans are now available up to $729,750 with a down payment of only 3.5% (the lowest downpayment available in the market). Keep this in mind as Open House visitors ask about possibilities.

These quoted rates are for Full Doc Purchase transactions with either no prepay penalties or a 1 year penalty and good credit. Rate ranges are shown when LTV and/or credit scores and/or loan size affects the rates offered; I hope this makes sense because rates at 900K are different form 700K and also from 1.1M:

• 4.875% at No points, 5 year Interest Only to $417K
• 80% to $2M – 6.0% at no points 10/1
• 10 year (then ARM) Jumbo- 5.5% at 1.0 Point
• 5 year (then ARM) Interest Only Jumbo-5.625 % at no points
• 30 year Conforming-Jumbo fixed 5.625% at 1 point (Up to $729,750)
• 30 year Conforming fixed 5.375% at 1 point (Up to $417,000)
• 30 year Conforming fixed 5.625% at No points (Up to $417,000)

As always, email tom@afirealestate.com to continue the discussion. We look forward to hearing from you.