Mortgage Rates: Improved Housing Markets Grow While Mortgage Rates Remain Low

The number of improved housing markets continues to grow while, at the same time, mortgage rates remain low. According to the National Association of Home Builders/First American Improving Markets Index (IMI), the number of metropolitan areas rose for the fifth straight month in January. The IMI rose from 201 markets in December to 242 in January. The IMI is a record of metro areas where there has been improvement in housing permits, employment and home prices for a period of at least six consecutive months. For those interested in purchasing homes, this is also a positive sign of improving economic factors that in different areas across the entire country. Current 30 year fixed mortgage interest rates are as low as 3.125%, 15 year fixed mortgage rates are as low as 2.375% and 5/1 ARM loan rates are as low as 2.375%. When looking for low mortgage rates, it is important that borrowers have a record of good credit. Lenders will also require documents to prove employment, income and assets. Assets are necessary as evidence of enough funds for the closing, as well as, reserves required for loan approval. At any time during the loan process, borrowers may be requested to submit additional information in order to clarify something found upon examination. These are normal procedures when purchasing a home or refinancing with conventional loans. The HARP program, a temporary non-traditional refinance, does not require as much information or an appraisal in most cases. HARP mortgages are available for underwater borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. The updated HARP program, called HARP 2.0, has eliminated loan to value caps so that all underwater homeowners could have a chance at refinancing to low mortgage rates or shorter term loans. HARP can be obtained through any lender making it easier for homeowners to find one that will work with them. Submitting the online form can make this process simple and will return a response almost instantly. Through this submission, borrowers can obtain information about any type of mortgage or refinance, including HARP refis. Today’s FHA 30 year fixed mortgage rates are as low as 3.000%, FHA 15 year fixed mortgage interest rates are as low as 2.750% and FHA 5/1 loan rates are as low as 2.500%. Home buyers often use FHA loans because they offer one of the lowest down payments available in the mortgage industry. The credit guidelines for FHA are also flexible so that even borrowers who do not have perfect credit can become homeowners. FHA also offers several types of mortgages, the use of gift funds and housing grants or loans, all of which can make the mortgage process more affordable. While FHA closing costs (APR) are high due to the upfront mortgage insurance premium and other FHA fees, FHA does allow seller concessions up to 6% to be used for this purpose. In some cases and according to FHA guidelines, closing costs can often be added to the mortgage amount. After having the FHA for a period of time, FHA offers the FHA streamline refinance with no cash out. This streamline program does not require an appraisal, a credit history or other documentation, although lender overlays may vary. Until the end of 2013, homeowners who have loans that were FHA endorsed prior to June 1, 2009 can use the FHA streamline to refinance and will receive drastically reduced fees for the upfront and annual mortgage premiums. All FHA loans, including the FHA streamline refinance, can be obtained by any FHA approved lender.