Rates:
Well all I can say is ouch. After 3 really good weeks of rates going down, it took 1 day for rates to jump back up. And it all came down to employment.
Unemployment numbers came out today, estimates were for 153,000 increase. The actual number was +165,000. So they hit the expectation, and typically rates would not of jumped as much as they have today, but for the revision of March and February’s numbers.
March was revised from +88,000 to + 138,000
February was revised from +258,000 to +332,000
Huge, unexpected swings.
This one report is the more influential of all the economic reports, and such rocked the mortgage rate market, we will probably gain .125 of a point to day on rates.
Still, rates are in the 3’s, but it kind of put a small damper on the recent trend of rates declining.
The good news is probably on Monday, after they get the weekend to digest the economic news, rates will still be at 2013 lows. I suspect we will see some selling in the stock market on Monday.
I am still in the floating mood, but cautiously floating right now. If you are closing in the next 30 days, lock them, further out, maybe wait. Still time for the US government to mess up and bring rates back down.
Also, we have not heard too much out of the EU lately, so I suspect we will start getting some news about the PIIGS shortly, and more than likely bad news. Don’t know what the PIIGS are, refer back to previous blogs.
FHA deadline
The June 3rd deadline is FAST approaching, anyone borrower who gets their FHA case number after June 3rd will be blessed with FHA mortgage insurance FOREVER. Well as long as they have an FHA loan.
You do NOT need to close the loan before June 3rd, you just need an address, then have the case number pulled and that case number is good for 90 days.
FHA pretty much a dead loan
With the changed to FHA, increased MI and no longer removal of the FHA mortgage insurance.
The only reason to go with a FHA loan now is if a client does not qualify for a conventional loan, i.e. credit scores or high debt to income ratio. Below is a quick loan scenario showing IHA 97% loan with 3% downpayment assistance compared to a FHA loan with 3.5% downpayment assistance.
|
|
Conventional
|
FHA
|
|
|
Purchase Price
|
$100,000
|
$100,000
|
|
|
Down payment
|
$3000.00
|
$3500.00
|
|
|
Base Loan amount
|
$97,000
|
$96,500
|
|
|
Upfront MI
|
0.00
|
$1689.00
|
|
|
1st Loan amount
|
$97,000
|
$98,189
|
|
|
Rate as of today
|
3.43%
|
3.25%
|
Assuming good FICO
|
|
PI payment
|
$431.79
|
$427.32
|
|
|
Mortgage Insurance
|
$69.52
|
$110.46
|
|
|
PIMI payment
|
$501.31
|
$537.78
|
|
|
Not including taxes and insurance
|
So the moral of the story is, go conventional, cheaper up front PLUS you have the potential of removing that $69.52 MI payment after 24 months.
Gifts for downpayment and closing costs:
This is the 2nd most fraudulent item when the Department of Finance does audits. And there has been quite a few questions regarding this lately from RE agent and clients. So I set up a web page, specifically for this explaining Gifts and how they work.
GREAT resource for refer your clients to:
http://www.375loan.com/resources/gift_for_downpayment/