Rates
Well, as the phrase goes, what goes up, must come down, and the opposite is true also, rates that have gone down, must go up.
Once again this week, we have seen rates increase, Conventional 30 year fixed have floated to the high 3’s, and we could see FHA rates make the jump from the low 3’s to the mid 3’s by end of next week.
So why so much chaos, well in 1 word, it is the Economy.
Just today we say January unemployment numbers add 157K jobs, but what was really surprising was the revisions of previous months:
November revised from 167,000 to 247,000
December revised from 155,000 to 196,000
Those revisions are extremely important, because it will take about 250,000 jobs per month growth to start making a significant dent in the unemployment rates.
Also U of Michigan consumer sentiment jumped from 7.13 to 73.8, highest since last fall.
ISM manufacturing index, register in at 53.1, little lower but still in the positive.
Weekly jobless claims, still high, but slowly ticking down, 368,000 last week.
Personal income, expected to be up .7% was actually up 2.6%
Personal Spending up 0.2%.
So you can see by the chart, that early in the week, rates again rose, and over the last 3 days, they tried to make a comeback, but just hasn’t happened.
As long as we continue to get good economic news, rates will continue to increase, we are recommending LOCKING rates as soon as you are able to.
The wild cards in here are the Debt Ceiling and Fiscal Cliff 2.0 which will be in March, if there isn’t a solution, it could drive us back into a recession, thus rates would fall.
FHA news, Changing again.
Well FHA again has changed their program. These changes will go into affect April 1st, 2013.
So a person needs to get their FHA case number BEFORE March 29th, that is the Friday before April 1st. If a borrower gets their FHA case number on or After April 1st, here is what they get to look forward to:
1-Monthly Mortgage Insurance will go up from 1.25% to 1.35%
2-The Big DADDY, is so long as the borrower is in the FHA mortgage, they will ALWAYS have to keep the monthly mortgage insurance, for LIFE.
While currently, a borrower has the potential of removing the MI after 5 years.
3-Borrower with FICO scores under 620 will have to be more scrutinized and underwriting standards have become harder.
4-If you have a Foreclosure, you have the potential of getting a FHA mortgage after 3 years, but the underwriting standards will be tougher.
Basically FHA has said, if we are going to insure this loan, we want the borrower to always pay for the insurance, and FHA is not going to do the very low quality loans anymore.
Bad News but Good News for Boise
If you have heard the bad news, Boise is one of the worst places to buy a foreclosed property, because there are not many of them and the prices are higher.
So actually this is GREAT news, See the Article here it is a GREAT read!
Link to Article HERE!