Piggy Back Loans & Your Mortgage Rates for Jan. 31st

mortgage rates

Myth Buster of the week:  When you have less than 20% down you HAVE to pay PMI. NOT true. When you have 10% down, you can borrow the difference (the other 10%) from the bank. We work with a couple of banks who will give you the difference needed for 20% down and have include it as another loan on the home. They call this a piggy back loan or an 80-10-10.

Economic news: This week the Fed decided to cut back their QE3 program another $10 billion. This did not affect the markets too much.  However, in the future, when combined with good economic news rates could jump up. In the meantime the economic news wasn’t good in the employment department. A bigger number of people filed for unemployment than the experts expected giving the markets cause to doubt whether we are seeing early signs of economic recovery. Some loan programs benefited by up to a .25% drop in rate.


Your buyer’s interest rates can be locked in over the weekend, so if you have a client who is close to having an accepted offer and is nervous about rates we can lock that interest rate in. Remember, we also have the float down: if rates improve more than .25% after lock-in and after full approval, 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 and VA.

** Conforming means loans under $417,000. Conventional means Fannie Mae and Freddie Mac.

*** A no cost loan is where the bank credits you money to cover the third party costs such as title, escrow, notary, and recording fees.

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.