If the President's new refinancing options are eventually approved, there are plans that the refinancing will go through FHA. Right now, FHA 30 year fixed mortgage rates are at 3.250%, FHA 15 year fixed mortgage rates are at 2.750% and FHA 5/1 adjustable mortgage rates are at 2.750%. FHA mortgages draw many first time home buyers because of the low down payment requirements. Now, even higher income borrowers are using FHA since they have increased the FHA loan limit to $729,750 in higher cost areas. Continuing to promote affordable homeownership, FHA continues to accept lower credit scores which are used only to determine the amount of the down payment. Credit scores do not affect low FHA mortgage rates which are not risk based. Down payment assistance is encouraged with FHA mortgages which work well with housing grants and loans that are offered through state, county and local housing initiatives. The benefits offered with FHA mortgages far outweigh the higher FHA closing costs (APR) which are due to various FHA fees and the upfront mortgage insurance premium.

Jumbo mortgage rates have continued to remain consistent and in line with all other mortgage rates. Current jumbo 30 year fixed mortgage rates are at 4.125%, jumbo 15 year fixed mortgage rates are at 3.375% and jumbo 5/1 adjustable mortgage rates are at 2.500% which are available with 0.7 to 1% origination point to borrowers who have excellent credit. Although jumbo mortgages have stricter guidelines involving debt to income ratios, the requirements are very similar to conforming mortgages which require full documentation. Substantial assets and sufficient income are required because of the larger amount of money being financed. The integrity of the loan file is important to lenders because jumbo mortgages are considered private loans and increase their risk.

MBS prices did not fluctuate too much last week until Friday when investors turned to stocks when it was reported that the unemployment rate had dropped which was not expected. The Labor Department reported that non-farm payrolls increased 243,000. This was major news on Friday for the U.S. employment outlook which has, for the most part, been improving. Other reports showed that ISM Manufacturing for January was higher, Construction Spending for December was higher and Factory Orders increased in December. Although MBS prices fell on Friday, this did not hurt mortgage rates which remain at all time lows. Greece's debt problems are still overriding any positive economic data coming out of the U.S. since there is concern that a Greek default will affect worldwide global markets.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.



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