Rates
Rates have been pretty flat for the most part over the last 2 weeks in Idaho, with most conventional hovering in the mid 3’s and government in the low 3’s.
Today we had the Federal Reserve speak, indicating that they are really going to look at the next unemployment report, which will come out on September 2nd for guidance on rate increases.
The talking heads feel that if we get a similar report or better report than we have seen over the last few months, the Fed is likely to increase rates in September by a minimum of .25, we do say a minimum, because we could see a surprise of .375.
The Fed will also have opportunity to increase rates in November as well, which I feel they could, depending upon what the markets do after a September increase.
Overall, the Fed needs to increase rates, the US economy is due for another recession, and unless the Fed has rates up, there is really nothing they can do to resolved the economy if the US does go into a recession.
So does this mean rates are going to start rising, maybe not. Keep in mind that when the Fed raised rates in December of 2015, mortgage rates actually dropped. There is quite a bit of other factors, here in the US and overseas that can keep mortgage rates low. Eventually rates will tick over that 4% mark, but based on recent economic news from overseas, and Oil hanging around the $50 mark, it is going to be a slow process.
Lock them, rates are at nice levels, no real pressure for them to go lower at this time.
Rural Development
Finally, some good news out of RD that will GREATLY affect Idaho, after years of hiking their Mortgage Insurance rates, they are finally going to drop them!!
Beginning October 1st, the upfront MI is going to go from 2.75% to 1.00%, AWESOME! And the monthly MI is going to go from .55% down to .35%, below is a charge on how this will affect a home buyer. (Rates and amounts purly estimates)
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Old Rates
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New Rates
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Loan Amount
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$120,000
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$120,000
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Downpayment ZERO
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ZIP
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ZILCH
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Upfront Mortgage Insurance
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$3300.00
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$1200.00
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Loan amount
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$123,300
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$121,200
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Interest Rate
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3.25%
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3.25%
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P & I Payment
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$536.61
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$527.47
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Mortgage Insurance
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$56.51
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$35.37
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Estimated Hazard insurance
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$30.00
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$30.00
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Estimated Taxes
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$90.00
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$90.00
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Total Payment
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$713.12
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$682.84
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Savings
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$30.28
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This will allow more people to qualify for a home and/or qualify for a larger payment. Loan will have to close in October, and loan CAN NOT be underwriter or get RD Conditional Commitment until after 10/1/2016.
I have not seen or heard if there is a grandfather clause, so I am guessing there is not.
NEW Loan application!
Well the government did it again, they “improved” the loan application, (insert sarcasm here). Atleast they gave us a 1 to think about it….
Beginning 1/1/2018, there will be a new loan application, instead of the typical 4 page 1003 application, which had both borrower and co-borrower on it, the government has expanded it to 8 pages, EACH.
Yep, new application for a married couple will now be 16 pages long.
I have set up a link here so you can look through it, talk about requesting a heck of a lot more info!
Link to new 1003 Here