Buyers may find mortgages easier to get

NEW YORK – Feb. 25, 2015 – Good news for potential home shoppers: A Mortgage Bankers Association (MBA) index shows lender requirements for credit scores, downpayments, and other key mortgage terms are finally loosening up.

Some lenders even expanded the types of mortgages they offer. These moves come after years of tightening loan requirements in the aftermath of the housing crisis.

The newly released MBA index shows that recent improvements in lending are mostly tied to the government’s efforts to ease regulations and improve affordability in the housing market. For example, mortgage financing giant Fannie Mae is now allowing purchases of conventional mortgages that have downpayments as low as 3 percent; Freddie Mac is planning to do the same for mortgages closed on or after March 23.

Also, the Federal Housing Administration, which insures loans with downpayments as low as 3.5 percent, reduced its upfront mortgage insurance premiums last month, which is expanding eligibility for home purchases to thousands of potential home shoppers.

“Things are looking better for home buyers and refinancers,” not just in the loosening of underwriting requirements but also in the cost of credit, says Brad Blackwell, executive vice president of Wells Fargo Home Mortgage.

Blackwell says that Wells Fargo has gradually opened its credit box as the government took steps to clarify its lending policies and penalties against lenders for defaulting loans. That rule clarity has, in turn, helped lenders gain the confidence to expand lending to a broader range of borrowers, including those who may not have high credit scores or a sizable downpayment for a home purchase.

Wells Fargo says it also relaxed its policy on downpayment gifts to borrowers from relatives and friends. It previously required borrowers to contribute at least 5 percent of the total costs on a home purchase from their own finances in order to qualify for a conventional loan with a 5 percent or lower downpayment; however, the bank recently reduced that requirement to 3 percent and greater gift assistance.

Source: “Lenders Begin Easing Requirements to get a Mortgage,” The Los Angeles Times (Feb. 22, 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

Average rate on 30-year mortgage rises to 3.80%

Mortgage Rate Trend Index

Most mortgage experts (67%) think rates are done rising and will tick a bit lower over the short term; 25% foresee little change, and the remaining 8% predict another increase.

WASHINGTON (AP) – Feb. 27, 2015 – Average long-term U.S. mortgage rates have edged up for a third straight week while remaining near their historically low levels reached in May 2013.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage rose to 3.80 percent from 3.76 percent last week.

The rate for the 15-year loan, a popular choice for people who are refinancing, ticked up to 3.07 percent from 3.05 percent last week.

A year ago, the average 30-year mortgage stood at 4.37 percent and the 15-year mortgage at 3.39 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

In testimony before Congress this week, Fed Chair Janet Yellen made clear that the central bank isn’t ready yet to raise rates from record lows. The job market is still healing, and inflation is too low, she said. At the same time, Yellen signaled that the Fed is moving closer to a rate hike by sketching the steps it would take when it deemed the time was right.

A government report issued Wednesday showed that sales of new homes were basically flat in January, evidence that the relatively low mortgage rates and recent job gains have yet to spur the real estate market. Despite the increasingly favorable economy, home sales have been sluggish at the start of the year. Still, many analysts expect that the housing market will gather momentum with the start of the spring buying season.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.6 point, unchanged from last week. The fee for a 15-year mortgage also remained at 0.6 point.

The average rate on a five-year adjustable-rate mortgage rose to 2.99 percent from 2.97 percent. The fee was stable at 0.5 point.

For a one-year ARM, the average rate slipped to 2.44 percent from 2.45 percent. The fee remained at 0.4 point.

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CFPB: More than 50M have access to free credit score

WASHINGTON – Feb. 23, 2015 – According to the U.S. Consumer Financial Protection Bureau (CFPB), more than 50 million consumers now have free and regular access to their credit scores through their monthly credit card statements or online.

The CFPB also released a new consumer focus group study indicating that while consumers are accessing their credit scores and credit reports in a variety of ways, confusion about both persists.

“Consumers’ credit information is the foundation of their financial lives,” says CFPB Director Richard Cordray. “Once consumers see their credit scores, they can be motivated to learn more about their credit history, check their full credit report and take action to improve their financial lives.”

Consumer reporting companies collect information and create reports on consumers. Businesses, such as banks, use those reports’ credit scores to decide everything from consumer eligibility for a loan, to the interest rate that consumer will pay if approved.

One year after the CFPB launched a credit score initiative, more than a dozen major issuers are providing credit scores directly to consumers for free. Now, at least 50 million consumers have the opportunity to see their credit scores, and tens of millions more are expected to be added as more credit companies offer credit score info later this year.

While credit reports don’t usually list an actual score, U.S. residents already have access to a free report once per year. It can be requested online at annualcreditreport.com.

To better understand consumers’ perspectives on credit reports and scores, the CFPB recently conducted focus groups with consumers from diverse backgrounds across the country. The CFPB asked whether consumers checked their credit scores and reports, how they did it, and what motivated them to check it. Key takeaways from the research include:

  • Consumers access reports and scores multiple ways: Some consumers read their score on their credit card statement, or were able to review it through their credit card company. Others reported receiving their credit reports in other ways, such as a paid credit monitoring service, a free online service, as a result of a security breach or after being denied credit.
  • Consumer confusion around credit reports and scores persists: Some consumers were confused about how to check credit reports and scores, what information they include and how to improve them.
  • Consumers don’t understand how to improve credit histories: Consumers said they often don’t feel empowered to take action to improve their credit histories, and they rarely apply credit information in their daily lives, such as using their credit reports and scores to negotiate better credit terms.
  • Consumers engaged in the financial system check their credit reports regularly: Consumers who reported feeling financially savvy and knowledgeable about their credit files, credit terms and interest rates were more likely to say they check their reports regularly

More details about this research is on CFPB’s website.

The CFPB has also published a document for consumers called “Check Your Credit Report.”

© 2015 Florida Realtors®

Average 30-year mortgage rate rises to 3.76%

Mortgage Rate Trend Index

Almost half (46%) of the mortgage experts polled by Bankrate.com this week predict that rates will go higher over the short term. Only 23% expect a decline, while the remaining 31% expect little change.

WASHINGTON (AP) – Feb. 20, 2015 – Average long-term U.S. mortgage rates have risen for a second straight week yet remained near historically low levels.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage jumped to 3.76 percent from 3.69 percent last week. The average rate is still at its lowest level since May 2013.

The rate for the 15-year loan, a popular choice for people who are refinancing, increased to 3.05 percent from 2.99 percent last week.

A year ago, the average 30-year mortgage stood at 4.33 percent and the 15-year mortgage at 3.35 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

The recent rise in mortgage rates has come as bond yields have jumped from record low levels. Mortgage rates often follow the yield on the 10-year Treasury note, which has climbed back over 2 percent. Bond yields rise as prices fall.

The 10-year note traded at 2.08 percent Wednesday, up from 1.99 percent a week earlier. It traded at 2.09 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.6 point, unchanged from last week. The fee for a 15-year mortgage also remained at 0.6 point.

The average rate on a five-year adjustable-rate mortgage was unchanged at 2.97 percent. The fee was stable at 0.5 point.

For a one-year ARM, the average rate increased to 2.45 percent from 2.42 percent. The fee remained at 0.4 point.

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Average rate on 30-year mortgage falls to 3.59%

Mortgage Rate Trend Index

Most industry experts (46%) polled this week by Bankrate.com expect little rate changes over the short term, while 23% predict they’ll move higher and 31% foresee a decline.

WASHINGTON (AP) – Feb. 6, 2015 – Average long-term U.S. mortgage rates fell this week, resuming their downward trend of this year after rising slightly last week. Rates are near historically low levels.

Mortgage company Freddie Mac said Thursday that the nationwide average for a 30-year mortgage declined to 3.59 percent from 3.66 percent last week. The average rate is at its lowest level since May 2013.

The rate for the 15-year loan, a popular choice for people who are refinancing, eased to 2.92 percent from 2.98 percent last week.

A year ago, the average 30-year mortgage stood at 4.23 percent and the 15-year mortgage at 3.33 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

The Fed sent a message last week that it will be “patient” in raising interest rates from record lows despite the steadily brightening outlook for the economy. The central bank indicated that no rate hike is likely soon because inflation remains well below its target rate.

Real estate data released Tuesday showed that U.S. home prices rose at a modest pace in December, a sign that there are too few potential buyers to bid up prices.

Data provider CoreLogic said home values rose 5 percent in December from 12 months earlier. That was down from the 5.5 percent price gain recorded in November, and it’s much lower than the double-digit gains recorded last year. Those much larger increases in early 2014 priced many potential buyers out of the market.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.7 point, up from 0.6 point last week. The fee for a 15-year mortgage increased to 0.6 point from 0.5 point.

The average rate on a five-year adjustable-rate mortgage fell to 2.82 percent from 2.86 percent. The fee was unchanged at 0.4 point.

For a one-year ARM, the average rate ticked up to 2.39 percent from 2.38 percent. The fee remained at 0.4 point.

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Average rate on 30-year mortgage rises to 3.66%

Mortgage Rate Trend Index

Over the short term, rates will either stay the same (42%) or drop lower (42%) say most experts polled this week by Bankrate.com. Only 16% predict further increases.

WASHINGTON (AP) – Jan. 30, 2015 – Average long-term U.S. mortgage rates rose slightly this week after four straight weeks of declines, while remaining near historically low levels.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage edged up to 3.66 percent from 3.63 percent last week. The new average rate is still at its lowest level since May 2013.

The rate for the 15-year loan, a popular choice for people who are refinancing, increased to 2.98 percent from 2.93 percent last week.

A year ago, the average 30-year mortgage stood at 4.32 percent and the 15-year mortgage at 3.40 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

The Fed sent a message Wednesday, after its latest policy meeting, that it will be “patient” in raising interest rates from record lows despite the steadily brightening outlook for the economy. The central bank indicated that no rate hike is likely soon because inflation remains well below its target rate.

On Tuesday, the Commerce Department reported that sales of new U.S. homes accelerated strongly in December, a sign that home buying may improve this year after a lackluster 2014.

The growth last month pointed to rising sales in 2015, buoyed by the combination of sharply lower mortgage rates and strong hiring by businesses in recent months. Home prices are rising at a slower pace, improving affordability for would-be buyers.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.6 point, down from 0.7 point last week. The fee for a 15-year mortgage fell to 0.5 point from 0.6 point.

The average rate on a five-year adjustable-rate mortgage increased to 2.86 percent from 2.83 percent. The fee was unchanged at 0.4 point.

For a one-year ARM, the average rate ticked up to 2.38 percent from 2.37 percent. The fee remained at 0.4 point.

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Average rate on 30-year mortgage falls to 3.66% OMG

Mortgage Rate Trend Index

Rates aren’t done falling yet, say 64% of the industry experts polled this week by Bankrate.com. Only 7% predict an increase over the short term, and the remaining 29% foresee little movement one way or the other.

WASHINGTON (AP) – Jan. 16, 2015 – Average long-term U.S. mortgage rates fell for the third straight week, with the benchmark 30-year rate again marking its lowest level since May 2013. The average for a 15-year mortgage, a popular choice for people who are refinancing, dipped below 3 percent for the first time since then.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage slid to 3.66 percent this week from 3.73 percent last week. The rate for the 15-year loan declined to 2.98 percent from 3.05 percent last week.

The ongoing decline in rates lured a crop of prospective buyers, as applications for mortgages marked their biggest weekly gain last week in over six years. Applications jumped 49.1 percent, the biggest weekly increase since November 2008, according to the Mortgage Bankers Association.

A year ago, the 30-year mortgage stood at 4.41 percent and the 15-year mortgage at 3.45 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

The drop in mortgage rates has come as bond yields have hit record low levels. Mortgage rates often follow the yield on the 10-year Treasury note, which has fallen below 2 percent. Bond yields rise as prices fall.

Bond prices were an unexpected strong spot for the financial markets last year, reflecting concerns over global economic weakness.

The 10-year note traded at 1.84 percent Wednesday, down from 1.97 percent a week earlier. It traded at 1.82 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.6 point, unchanged from last week. The fee for a 15-year mortgage remained at 0.5 point.

The average rate on a five-year adjustable-rate mortgage fell to 2.90 percent from 2.98 percent. The fee declined to 0.4 point from 0.5 point.

For a one-year ARM, the average rate slipped to 2.37 percent from 2.39 percent. The fee held at 0.4 point.

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