7 Disturbing Trends in Mortgage Rate News

mortgage rates trends

By Mark Polman

The housing market in America has been tipped upside down because of uncertain economic times and trouble in the mortgage markets. Mortgage rates news is not encouraging and trends are not behaving the way the professionals predicted and while they are at their lowest rates since the 1950s, nobody is buying anything. Why? The answer partially lies in these seven disturbing mortgage trends.

1. Mortgage rates are going?

The Federal Reserve plowed billions of dollars into mortgage backed securities which drove interest rates down. That spending binge ended in April and virtually every mortgage expert expected the rates to rise in the Spring and Summer of 2010 however the rates have stabilized and show no signs of increasing. The reason most offered to explain this is that demand for mortgages is low because of the uncertain economy.

2. Is demand low or are we all just too poor

With the average existing mortgage at 5.9% and new mortgages going for 4.75% it would seem like people would be scrambling to refinance their home to get a lower monthly payment. In normal times they would but these are not normal times. The housing market has taken a huge hit thanks to the enormous number of bank owned sales that has driven the value of most properties down. Today it is not uncommon to find a homeowner, even a long term homeowner, whose mortgage is greater than the value of his home. No equity means no refinancing.

3. HARP program a complete flop

The federal government presented the Homeowners Affordable Refinance Plan that was designed to make it possible for homeowners to get refinancing even if they were upside down on their mortgage. The administration predicted this plan would help refinance 2 million homes in 18 months. Unfortunately, this is not a mandated program and banks, even the ones who got all the TARP money don't have to participate. Eleven months into the program fewer than 300,000 refinance loans have been approved.

4. FHA tightens up requirements

Typically conventional loans will allow the seller to help the buyer out by taking back up to 3% of the sales price. The FHA had a more liberal allowance of 6% and that's what made their loans so attractive. Unfortunately the FHA has decided to conform with the other lenders and limit that assistance to 3% knocking even more people out of the house buying market.

5. Jumbo loans now more available

While banks are tightening requirements for conventional loans they are easing requirements for jumbo loans. Where before banks required a 25% down on a jumbo, lenders have relaxed that threshold to 20%. So if you are wealthy you can get a loan for your mansion for less down than you could before.

6. Does SAFE really make us safe

Firmly slamming the barn door after the cow had already left, the federal government came up with the SAFE Mortgage License Act as a way to insure that lenders and brokers understood the market place and to protect consumers from the sharks that swim in the mortgage waters. However it appears that this act does not apply to everyone. If you are a lending company or a broker you need to pass a test. If you work for a bank you don't.

7. FHA still the most attractive new home mortgage

While most of the concerns are about refinancing, those that qualify for a new home mortgage but are short on the down payment will find the FHA loan very attractive. Without doubt, the down payment requirement of just 3.5% of the sale price is the lowest a consumer can find anywhere.

On the one hand if you have great credit and a bunch of cash this is a fantastic time to take advantage of super values in the housing market. On the other hand, if your upside down don't expect to get right side up anytime soon. Mortgage rate trends are now totally unpredictable and will remain so until this economic crisis is over.

Mark Polman, business management expert keeps a close eye on the housing market and agrees that mortgage rates news indicates that rates are unpredictable right now. That doesn't mean there aren't mortgage bargains still available and he recommends you visit Mortgage Canada Rates to find them.

Article Source: http://EzineArticles.com/?expert=Mark_Polman

mortgage rates trends

How to Understand Mortgage Rates

mortgage rates trends

By kp1832000

When searching for a mortgage, mortgage loan rates are normally the deciding factor when it comes to choosing a lender or bank. Whether your interested in home mortgage refinancing, home equity loans, or initial home loans, your mortgage rates are what dictate your monthly payments. Finding the lowest fixed interest rate is the name of the game. Mortgage rates are influenced by many factors but most notably the 10 year treasury bond. Here are a few tips to help you better understand mortgage rates and why they move.

- mortgage rates trends

Instructions

1. Understand the factors that determine mortgage rates. Although there are a number of elements that effect mortgage rates, the 10 year treasury bond or Intermediate Term Bond is agreeably the biggest indicator in determining the movement of mortgage rates. The treasury bonds are 10 years In length. Being one of the closest contracts to a typical 30-year mortgage, the 10 year treasury bond makes a great comparison

- mortgage rates trends

2. Know the causes and effects of inflation. Inflation in our economy has a strong influence on mortgage rates. When economists predict inflation, mortgage rates tend to go up. But when the threat of inflation isn't there, mortgage rates tend to fall. Many people monitor mortgage rates in the hope of taking advantage of refinancing their mortgage at a lower rate.

- mortgage rates trends

3. Be aware of what's going on in the news. Good or bad overall economic news has a huge effect on mortgage lenders rates. Economic turmoil can cause mortgage lenders to lose faith in home owners and borrowers ability to repay their mortgages. If the economy is bad people start to lose their jobs and other means of income which results in more defaulted loans. Thus leading to high loan modification applicants that can also bring mortgage rates up.

- mortgage rates trends

4. Pay attention to economic data reports. Reports like the Consumer Price Index(CPI), Jobless Claims Report, Gross Domestic Product(GDP), and Home Sales reports. All of these reports measure economic data and are a great ways to predict the rise and fall of mortgage rates. The more you know about mortgage rates and what moves them the more options you will have. For instance if you think mortgage rates are going to fall over the next few years, an adjustable rate mortgage (ARM)-that gives you the current mortgage rates- might help you save money. Adjustable rate mortgages are high risk though. Having an expert knowledge of mortgage rates and trends are a must. Avoid bad credit mortgages as the rates are normally high. Sometimes renting is the better short term option.

- mortgage rates trends

Resource

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- mortgage rates trends

mortgage rates trends