Rates
Once again, rates have been looking towards the EU and that mess over there. Causing investors to purchase US Treasuries and US Mortgage Backed Securities.
Since the Fed's announcement 2 weeks ago, we have seen rates hold pretty steady with them going down by about .125 of a point.
But over the last 2 days, lenders have opened up the gate and now we are seeing Government Rates drop to unpredictable levels.
Rural Development rates today are at 2.875% for a 30 year fixed, purchase. YES that is a correct number 2.875% for a 30 year, (APR should be around 3.375%).
Conventional rates seem to be holding pretty stable at 3.25%, but I do have 1 lender quoting 3.125% today. And Idaho Housing is quoting 3.09% today. And once again, that is for a 30 YEAR FIXED MORTGAGE!!!!
With the Fed purchasing MBS and the EU in turmoil, we should see all rates into the low 3.00% range in the next 2-3 weeks. I belive most lenders are going to be hesitant in showing the 2's right away, they will pocket some of that profit.
GFee
Some of you have heard or read on the internet that Rates are going to go up on Monday due to a "GFEE" And this is kind of true.
Every so often the government, in this case the FHFA or the Federal Housing and Finance Authority, adds a artificial "TAX" onto loans. If it wasn't for them adding this Fee onto the interest rates, rates would actually be in the LOW 2%'s right now. But the government want to take advantage of low rates also.
So on Monday, most lenders will add .50 onto the Pricing of the loan, not to the rate. Overall on Government loans, this one cause them to increase. On Conventional Loans, it could cause about .125 increase.
But with rates dropping so fast right now, I feel that this will be temporary and rates will absorb this new "TAX" and come right back down.
Kuna Saved
RD, Yesterday, released a memo saying that they are not going to enforce the 2010 Census rules, for now. So that means that Kuna is off the chopping block and we can still do Rural Development Loans in that city. BUT ONLY UNTIL MARCH 27, 2013.
Pending any legislation action, Kuna could be thrown into chaos again.