Interest Rates Increase & Your Friday Rate Sheet

Interest Rates for 11.8.13

The good and the bad news this week: Good news brought bad news today in the form of higher rates.

Despite the government shut down of 16 days, the economy grew by 2.8% in the third quarter.

With that news, rates went up .125%-.25% depending on the loan program. So yes, we are glad more people are getting jobs, but we’re not happy about the effect on fixed rates.

However, more consumers kept their money than spent it (consumer spending did not increase), so the damage wasn’t as bad as it could have been. Let’s see what the holidays bring.

Bad News: The government announced new regulations that start January 10, 2014. So you may have noticed that many lenders are starting to scale back their flexibility.

Such things as debt ratios must be under 43% no exceptions. Hybrid loans, like the 7-year fixed that used to qualify at the start rate, now qualifies at the fully indexed rate. This isn’t a problem now but will be in the future.

No cost loans under $100,000 are probably gone. The positive news is that the late fee on Fannie and Freddie backed loans is going from 5% to 4%, and payoff fees will no longer be allowed. Small pluses  I’ll take it.

Good news in refis: Did you know that HARP (Home Affordable Refinance Program) loans no longer go away when the loan is bought, but when the note date is due. So if you know someone with no equity or very little equity, or someone with VERY high debt ratios, please have them call me, I may be able to help.

About Your Friday Rate Sheet

If you have a client who is close to having an offer accepted and is nervous about rates, don’t worry because interest rates can be locked in over the weekend.

Remember we also have the float down: if rates improve more than .25% after lock-in the client gets the lower rate.

All rates are quoted at a 45 day lock in and assume a 720 credit score with 20% down except for FHA.

1 point is 1% of the loan.

Programs quoted as having 1 point also have the option of 0 points and the option of the 0 cost loan.

Jumbo loans are loans that have a loan amount of $625,501 and above on conventional programs.

Conventional is also known as Fannie Mae and Freddie Mac financing.