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Mortgage Rates & Trends: Mortgage Blog

New Jersey Mortgage Rates and Outlook

By Michael Kraus on February 26, 2010

Like most states, New Jersey did not come out of the economic turmoil of the last three years unscathed. Despite low mortgage rates in New Jersey, overall median home values fell 12.4% across New Jersey over the last three years. Foreclosure rates rose and houses languished on the market.

The New Jersey housing market can be divided into two segments: North Jersey which includes part of the New York City Metro Area, and the central and southern portions of the state which include part of the Greater Philadelphia Metro Area.

In juxtaposition to most other parts of the country, 2009 was not a terrible year for the housing market in South/Central New Jersey. Home sales were stable, and while house prices fell, the losses were in single digits. The amount of time it took to sell a house remained approximately the same. The market actually grew slightly in the second half of the year.

In contrast, home values in Northern New Jersey took a beating, falling 5.5% in the fourth quarter of 2009 alone. The median home value is now $434,000, off more than $100,000 from 2006 peak prices. Proximity to New York City has hurt North Jersey more than other portions of the state because the run-up in home values was more exacerbated during the bubble years and the market is slower to correct. Homes on the lower end of the pricing spectrum are selling relatively quickly, suggesting that cheaper houses are now properly valued.

There are several drivers behind the improving market, among them are low current mortgage rates, government programs such as the first time home buyer tax credit, reduced home prices, and increased housing demand. It is difficult to predict what will happen in New Jersey once government support is removed from the housing market. At the very least the Federal Reserve pledged to keep interest rates low in the near term until the economy exhibits more stability. Most analysts agree that in order for a sustained recovery to occur, unemployment must decrease so that consumers feel more confident purchasing a home.

new-jersey-housing-market

Despite the challenging market New Jersey real estate remains a superb long-term investment. New Jersey real estate has been an exceptional long-term investment. Despite the set-backs of the last three years, New Jersey home values increased 6% over the last five years according to the Federal Housing Finance Agency. The median home price has risen 129% since the agency started keeping statistics in 1991. Total Mortgage Services offers some of the most competitive mortgage rates in New Jersey:

Loan Type	Rate	APR
New Jersey 30 Year Fixed Conventional Mortgage	4.5%	4.710%
New Jersey 15 Year Fixed Conventional Mortgage	4.0%	4.363%
New Jersey 30 Year Fixed FHA Mortgage	4.500%	5.422%
New Jersey 30 Year Fixed Jumbo Mortgage	5.750%	5.969%
New Jersey 15 Year Fixed Jumbo Mortgage	4.0%	4.352%
New Jersey 5/1 ARM Conforming Mortgage	3.00%	3.269%
New Jersey 5/1 ARM Jumbo Mortgage	3.625%	3.305%

* All rates shown are for 30 day rate locks. Longer locks available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 2 points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants and are subject to mortgage approval. All rates are subject to change without notice. All rates assume a credit score of 740+ and are subject to change. Rates are quoted from Totalmortgage.com as of 3PM on Thursday, February 25, 2010.

Total Mortgage Services has been providing the New Jersey market for more than a decade. From Asbury Park to Cape May, from Bayonne to Cherry Hill, Total Mortgage provides the best combination of rates, customer service, and customized lending solutions you will see anywhere. To speak to one of our loan specialists, call 888-868-2509 today.

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Category: FHA, Fixed Rate Mortgages, Jumbo Mortgage, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Stimulus

Low Current Mortgage Rates Spur Home Sales
By Robert Hyder on September 8, 2009

As low current mortgage rates hover just above the near record lows the market experienced over the past few months, home sales are being driven higher as a result. For the sixth consecutive month, pending home sales increased during the month of July. Because the current mortgage rates are keeping homes affordable, homebuyers are coming back into the housing market and rekindling home sales.

The current mortgage rate for a conforming 30-year fixed-rate mortgage is on the threshold of 5% again, while the current mortgage rate for a 30-year fixed-rate jumbo mortgage actually fell below 6%.

Although the perception is mostly positive concerning the assessment of current mortgage rate trends, confidence in the rates remaining low should be markedly limited. Even though current mortgage rates have remained at approximately 5% so far in September, millions of Americans hoping to refinance or purchase a home earlier this spring and summer witnessed mortgage rates suddenly spike from the low-to-mid-4% range to the mid-5% range, almost overnight.

Despite the Federal Reserve’s purchasing of mortgage-backed securities keeping current mortgage rates at near historic lows, the thought of rates spiking again has generated much interest in potential homebuyers. In addition, as the deadline for the $8,000 tax credit for first-time homebuyers rapidly approaching on Monday, November 30, now is the time to refinance and benefit from the incredibly low current mortgage rates.

â€“Robert Hyder

Category: Current Mortgage Rates, First Time Home Buyer, Fixed Rate Mortgages, General, Jumbo Mortgage, Mortgage Rate Trends and Analysis, Purchase, Refinance, Stimulus
Jumbo Mortgage Loans By Portfolio Lenders
By BillSchettler on July 14, 2009
O Jumbo, O Jumbo Mortgage, Where for art thou?

Jumbo Mortgage Loans in Current Mortgage Landscape
A couple of years ago you could get a jumbo mortgage loan at a competitive rate no matter what size or â€˜shape’ your mortgage came in. If you were buying a $1 million property and could only put 5% or 10% down, no problem, there was a loan for you. Wanted a $5 million mortgage on a $10 million house? â€“ done. Fixed rate, Adjustable rate, Balloon, Interest Only, even Negative Amortization loans were available into the millions of dollars for most property types. The wisdom of these loan programs may be debatable but the fact that they have all but disappeared is indisputable. The large national lenders got out of the Jumbo mortgage business beginning in late 2007 and by the beginning of this year the Jumbo mortgage landscape was as bleak as anyone could have possible imagined. There simply was no outlet for a Jumbo loan.

If a borrower had a loan amount above the Conforming loan limit of $417K there simply were no outlets for their loan. This is due to many factors but primarily it became a question of demand. There was (and still is) no demand for the securities that are tied to the Jumbo mortgage product. The government has tried to address this problem in a fashion by adjusting the Conforming loan limit upwards in certain â€˜high cost’ areas of the nation. These increased loan limits allow for loan amounts up to as much as $729,750 to be underwritten and backed by Fannie Mae and Freddie Mac. While this has helped to some degree, there are still plenty of extremely qualified borrowers for whom these increased loan limits are inadequate.

Total Mortgage Still Services Jumbo Mortgage Loan
Luckily, there are a small number of “Portfolio” lenders who will still entertain the larger jumbo loan amounts. These are lenders who secure the loans they take against their own deposits rather than sell them on the secondary market. These lenders tend to be very particular about the quality of the loans they take and can be very exacting in their underwriting standards but also tend to offer superb rates to qualified borrowers. It is not every mortgage company that will provide you with access to these lenders. These “Portfolio” lenders are equally as discerning when choosing the mortgage companies that they do business with.

The Jumbo mortgage product has had a rough run lately but is poised to make a comeback as more and more lenders see the quality borrowers who are shut out by their loan size. I encourage any borrower who has found loan amount to be the roadblock to obtaining a great rate to contact our sales people today. We can likely find the product that meets your needs.

Learn Further About Jumbo Mortgage Loans
Category: Jumbo Mortgage
Jumbo Mortgages, They’re Still Here
6 By Darren Daneault on June 25, 2009

Jumbo Mortgages are still available today, but they are not as popular as they once were. With the economy in shambles right now, it has become more difficult for borrowers to purchase new homes. What an opportunity though; mortgage rates are still incredibly low, and home prices have dropped significantly. It’s no surprise that the jumbo mortgage market has definitely been hit harder compared to the conforming mortgage market, but, the good news is that there are plenty of jumbo mortgage loans available out there if you are in need.
Conforming mortgage rates have always been more favorable than jumbo mortgage rates. However, by historical standards, the jumbo mortgage market has never seen rates as low as they are today. Unfortunately, all of the housing stimulus programs introduced this year did not take the “jumbo” crowd into account. Perhaps the government felt that if someone could afford a jumbo mortgage they probably don’t require the same assistance as the â€˜conforming’ homeowner. Or, maybe the lack of stimulus in the jumbo market is the government’s way of minimizing further risk; by not trying to squeeze people into jumbo mortgage loans who might not otherwise qualify. Thankfully, those days of poor lending practices are behind us, due to the recent increase of mortgage regulation.
It’s unfortunate (and unfair) that some homeowners who carry a jumbo mortgage loan are unable to take advantage of the low interest rates, whether it is due to the home’s loss of value, or other financial hardships. In some areas of the country, the cost of living is much more than other parts of the country, pushing homeowners into the â€˜jumbo’ category by default. The bottom line is that mostly everyone is affected by the recent housing crisis in one way or another.
There are some encouraging signs out there now, that might suggest we will see a huge comeback in the jumbo mortgage market. Some of the major financial institutions have recently paid back TARP money, demonstrating that they are well capitalized. Banks now have money to lend again, or, we at least know that they may be more willing to lend again. At the start of the credit crunch, we saw mortgage guidelines tighten, as lenders wanted to avoid risk. With credit starting to flow more regularly, we may very well see the same guidelines (especially for jumbo loans) become more lenient again.
Soon the housing crisis will start to bottom out and eventually home values will return to pre-recession levels. This will help jumbo mortgage holder who have been looking to refinance. We can only hope mortgage rates will remain low for a while. For those homeowners needing a jumbo mortgage in order to purchase a new homeâ€¦well, there’s always the $8,000 tax credit for you. If you need a jumbo mortgage, whether it’s to purchase or refinance a home, you have come to the right place. If you have any questions, the professionals at Total Mortgage can answer all of your jumbo mortgage loan needs!

-Darren Daneault

Category: Adjustable Rate Mortgages, Current Mortgage Rates, General, Jumbo Mortgage, Mortgage Rate Trends and Analysis, Stimulus
Current Mortgage Rates Holding Steady
3 By Darren Daneault on May 8, 2009

Current mortgage rates have remained very low over the past several months. Refinancing is still very popular, and we’ve even seen non-conforming loans make a comeback thanks to jumbo mortgage rates becoming more and more attractive. Over the past few years, mortgage rates spiked a bit during the summer months and then dropped as we entered the fall and winter seasons. Some analysts predict that this year will display the same trend.

It’s hard enough to predict whether the current mortgage rates will be on the rise or decline in the future. Even day-to-day, mortgage rates can bounce around significantly. A borrower’s primary concern when looking for a mortgage is the interest rate since this is typically a 30 year commitment. Here are two chapter summaries taken from the Current Mortgage Rates 101 textbook, to provide a little more insight for borrowers as to why mortgage rates vary on a day-to-day basis.

Shelf Life of rate quotes-
Mortgage rates are adjusted everyday by lenders. More often than not, the rates can be updated several times throughout a day, depending on existing market conditions and volatility. This is the reason why when you are looking for current mortgage rates, you may get several different figures over the span of a day or two. The changes can range in severity, but most of the time the changes are minor. You might call in the morning, and find out a few hours later that the rate is no longer available. On the other hand, you might be able to get a lower rate if the markets improve. Just be mindful that the rate you were quoted on one day may not be the same in the near future.

Competition and Current Mortgage Rates-
You might think that banks want to remain competitive to some degree. This is generally true of most businesses, but during certain times, lenders do not want your business. When lenders have a sudden increase in volume, a common tactic is to temporarily increase mortgage rates. This is to deter business (at least until they catch up on their work), and to offset the cost of having to pay employees to take on the extra volume. Borrowers do need a healthy balance sometimes, especially those who are purchasing a home and need to close by a specific date. It may not do a borrower any good to save 1/8th on a rate if the lender takes several weeks to issue an approval or clear conditions due to their high volume. Don’t fret, if you are primarily concerned with obtaining one of the lowest mortgage rates, there will always be a lender out there to meet your needs.

Now that you have further understanding of how and why current mortgage rates jump around so frequently, you will be better prepared when it comes time to lock in your rate.

by Darren Daneault

Category: Adjustable Rate Mortgages, Current Mortgage Rates, FHA, Fixed Rate Mortgages, General, Jumbo Mortgage, Mortgage Rate Trends and Analysis
Jumbo Appeal
By Robert Hyder on April 15, 2009

by Robert Hyder

Jumbo mortgage loans are making a comeback. The considerable disparity in mortgage rates between jumbo and conforming mortgages is rapidly diminishing as mortgage lenders are freeing up more capital by making more conforming mortgage loans salable to both Fannie Mae and Freddie Mac. In addition, because investors are being particularly cautious with their money these days as a result of the existing credit crunch, banks are finding more and more resources in their coffers, resulting in more money to lend in the non-conforming mortgage arena.

Historically, jumbo mortgage rates have always been higher than conforming mortgage rates. Because of the recent housing crisis, the gap in rates widened significantly. Now, because Fannie Mae and Freddie Mac are purchasing more loans on the secondary market, and because consumers are being noticeably more cautious by no longer risking their investments on Wall Street, Americans are putting their money into much more secure and moderate investments, such as money market or savings accounts.

The end result of this additional liquidity provided to mortgage lenders is starting to spark interest for these lenders to keep jumbo mortgages on their books. When jumbo mortgage rates reached their peak at around 8% in October 2008, jumbo mortgages became virtually obsolete. With rates in the 6% range, and some even as low as the mid-5% range, the jumbo mortgage industry is again beginning to look particularly appealing. Why wouldn’t banks want those assets on their books?

Category: Current Mortgage Rates, Jumbo Mortgage, Mortgage Rate Trends and Analysis
Jumbo Mortgage Rates on the Decline
4 By Robert Hyder on April 6, 2009

by Robert Hyder

As the housing crisis broadened, jumbo mortgages predictably became harder to obtain. Already considered high-risk mortgage loans before the credit crunch began, jumbo mortgage rates climbed to excessive limits. The recent drop in conforming mortgage rates has also had an impact on jumbo mortgage rates.

Jumbo mortgages, as they are commonly referred, are non-conforming loans that are above the industry standard for conventional conforming loans that can be bought by Fannie Mae or Freddie Mac. The industry standard loan size that can be purchased by these two government-sponsored enterprises (GSEs) on a 1-unit property is $417,000, but can go as high as $729,750 in high-cost areas on the continental United States and $1,094,625 in high-cost areas in Alaska, Hawaii, Guam and the U.S. Virgin Islands.

A small number of prominent lenders recently began announcing jumbo mortgage rates in the low-to-mid 5% interest range. Industry experts expect more lenders to join in on this practice in the very near future.

At their peak, jumbo mortgage fixed rates reached almost 8% at the end of October 2008. Today, some mortgage lenders are being extremely aggressive with their jumbo fixed-rate mortgages, pricing as low as 5.25%. On a $1 million loan size, that could mean a savings of over $1,800 on a monthly mortgage payment.

Because mortgage lenders no longer have buyers for the jumbo mortgage loans that they approve, they are required to keep them in their portfolios. Since consumers are now being especially cautious with their money, they are no longer investing in the stock market and are putting it into much safer and conservative investments, such as savings and money market accounts. As a result, banks now have more money to lend.

Ultimately, when money comes in the front door, banks are then sending it out the back door as a mortgage loan. In addition, when homeowners are refinancing their conforming mortgages due to the record-low interest rates, banks are afforded more liquidity to offer jumbo mortgage loans.

Each lender will have different requirements than the next. Because there are no buyers for jumbo mortgages, each lender creates and maintains their own guidelines and pricing before placing it in their portfolio. A slow down in jumbo mortgage originations indicates a tightening of requirements and an increase in rates. Consequently, these extremely low jumbo mortgage rates may not be available for very long.

Category: Adjustable Rate Mortgages, Current Mortgage Rates, FHA, Fixed Rate Mortgages, Jumbo Mortgage, Mortgage Rate Trends and Analysis