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Mortgage Rates Will Reach 5.8 Percent By The End of 2011, MBA Predicts
By Michael Kling on March 4, 2011

Mortgage rates will climb to 5.8 percent by the end of 2011, predict analysts at the Mortgage Bankers Association.

Mortgage rates will then rise above 6 percent in 2012, write MBA’s Michael Fratantoni, vice president of research and economics, and Joel Kan, the trade group’s director of economic forecasting, in their Economic Commentary today.

Mortgage rates for the 30-year fixed-rate mortgage averaged 4.79 percent in January, down slightly from the previous month, but have increased since then and are currently around 5 percent, they note. Increasing rates will prompt mortgage refinance volume to fall. Overall mortgage lending volumes will decline, despite more purchase money mortgages, the researchers predict.

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Category: Mortgage Rates
Fed Ponders Ending QE2 Interest Rate Easing Effort
By Michael Kling on March 2, 2011

US Federal Reserve

Will the Federal Reserve end its effort to lower interest rates, know as QE2, early or continue it through June as first planned?

The Fed is about half way through its second round of quantitative easing, or QE2, plan to lower current mortgage rates and other long-term interest rates by purchasing enormous amounts of U.S Treasury bonds. Since the Fed started, QE2 last November the stock market has rebounded and unemployment has fallen from about 10 percent to 9 percent, although the housing market is still struggling.

“It’s been a success,” Bill Gross, manager of Pimco Fund, told CNBC. After all the stock market is up 25 percent, said Gross, who had criticized QEC earlier. Ending it could be tough. “At the end of June, the biggest bond buyer steps away,” he said. “The markets could have a shock in store.”

St. Louis Federal Reserve President James Bullard told CNBC should ease off its interest-rate easing plan to see how the economy would fare without it. The Fed could stop slightly short of completing the program and pause while gathering information on how the economy is doing. Continue Reading…

Category: Mortgage Interest Rates
Low Mortgage Rates Available at Total Mortgage
By Staff on February 2, 2011

Total Mortgage has continuously offered some of the lowest mortgage rates in the United States. Mortgage rates are still considerably low, creating a great opportunity for both homeowners to refinance their existing higher mortgage loans to a lower mortgage rates and homebuyers to lock in low rates while purchasing houses. The Mortgage Bankers Association (MBA) reported in its Weekly Survey this morning that mortgage applications increased last week. Though mortgage rates were slightly up, both purchasing and refinancing activities went up. Borrowers have started to either purchase or refinance before mortgage rates climb even higher.

If you are a homeowner looking to refinance or a homebuyer looking to purchase a home, Total Mortgage has some of the most competitive rates. Currently at Total Mortgage, a 30 year fixed rate mortgage is available at a 4.375% mortgage rate with 4.581% APR and 20 year and 15 year fixed rate mortgages are available at a 4.250% rate (4.5325 APR) and a 3.750% rate (4.106 % APR) respectively.

Total Mortgage also specializes in FHA mortgages. A 30 year fixed FHA mortgage is available at a 4.375% interest rate and 5.775% APR.

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Category: Mortgage Rates
Improving Sentiment On The Economy Is Increasing Mortgage Rates
By Michael Kling on December 14, 2010

More confidence that the economy will improve has pushed up mortgage rates recently.

Investors have been shifting their money out of ultra-safe U.S. Treasury bonds, which pushes their prices up and yields down, and into the stock market. They’re betting that an improving economy will boost business profits and stock values. Since mortgage rates are largely based on Treasury yields, they have also increased.

Increasing mortgage rates means homeowners considering refinancing should lock in a mortgage rate before rates increase even more. Although rates have been increasing over the last month and are the highest they’ve been since the summer, they’re still historically low. Check current mortgage rates.

Then again the recent up tick in mortgage rates and the stock market could be just weekly aberration that will disappear when investors realize that the unemployment rate will not immediately fall below 9 percent. Investors may be more hopeful now, but a new dismal economic report could destroy those hopes. And send both stocks and mortgage rates down. Continue Reading…

Category: Current Mortgage Rates, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates
Today’s Mortgage Rates in Stamford, CT
By Staff on December 9, 2010

As of December 9, Total Mortgage is offering some of the best mortgage rates in Stamford, CT, and across the nation. Whether you are looking for fixed rate mortgages, adjustable rate mortgages or jumbo mortgages, Total Mortgage has something to offer for everyone at some of the most competitive mortgage rates available in the market.

A 30 year fixed rate mortgage is available today at Total Mortgage to qualified borrowers in Stamford, CT with a 4.125% interest rate and 4.328% APR. Other 30 year mortgage loans available at Total Mortgage are the 30 year fixed FHA and the 30 year fixed jumbo mortgages.

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Category: Mortgage Rates
Mortgage Rates Will Remain Low Into Next Year, Predicts Freddie Mac Economist
1 By Michael Kling on December 7, 2010

Mortgage rates will remain low into next year, predicts Freddie Mac Chief Economist Frank Nothaft. The Federal Reserve will keep the federal funds rate at its current 0 percent to 0.25 percent range for all or most of next year, so relatively low mortgage rates will continue, Nothaft wrote in his blog yesterday.

The rates for fixed-rate mortgages will increase a bit, but rates for the 30-year fixed-rate mortgage will probably remain under 5 percent through the year, Nothaft predicts. Initial rates for 5/1 adjustable-rates mortgages will probably stay below 4 percent.

In addition, the housing and mortgage markets will gradual recover in 2011, with more home sales next year. Housing markets with a surplus of houses for sale and bank-owned properties will continue to have trouble, but national housing indexes are close to bottom, he asserts. Most experts expect indexes for single-family homes to bottom out in the first half of 2011.

The good news is that houses are more affordable than they’ve been in years. In fact, the National Association of Realtors’ Affordability Index for the third quarter reported one of the most affordable housing markets since the 1970s. Those low prices will attract more first-time home buyers to the market, Nothaft predicts.

While purchase-money mortgages will increase, refinance mortgages will decline, he forecasts. Many homeowners have already refinanced or are now refinancing. Plus, the Home Affordable Refinance Program is set to expire June 30, and mortgage rates will begin gradually increasing during the year. Continue Reading…

Category: Adjustable Rate Mortgages, Fixed Rate Mortgages, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates
Bernanke Says QE2 Might Not Be Enough To Lower Mortgage Rates
2 By Michael Kling on December 6, 2010

The Federal Reserve might try even harder to lower mortgage rates to get the economy going.

In what’s called quantitative easing II or QE2 for short, the Fed plans to buy $600 billion of U.S. Treasury bond through next summer to lower mortgage rates and other interest rates to improve the economy. Check current mortgage rates.

But now Federal Reserve Chairman Ben Bernanke is saying the Fed might need to purchase even more Treasury bonds. “It depends on the efficacy of the program. It depends on inflation. And finally it depends on how the economy looks,” he said on the 60 Minutes TV program shown on CBS last night.

So we might be talking about a QE3.

The Fed hopes that purchasing large amounts of government bonds will decrease mortgage rates, which will in turn prompt homeowners to refinance into lower rates. Money that homeowners save through lower monthly payments would pump money into the economy and help decrease unemployment. Lower interest rates for business loans and other types of consumer loans will also help improve the economy. Avoiding deflation, in which prices and wages fall, is another motivation for QE2. Continue Reading…

Category: Mortgage Rate Trends and Analysis, Mortgage Rates
The Fed Must Lower Mortgage Rates
By Michael Kling on November 19, 2010

Criticisms of the Federal Reserve’s plan to jump start the economy with its second quantitative easing are generally bogus. Lowering interest rates, especially mortgage rates, is the best way to decrease unemployment, and purchasing large amounts of Treasuries has best chance of doing that.

Critics say the Fed’s plan say it will cause inflation. Yet inflation, now at about half a percent is no where in sight. The opposite problem – deflation – is the current threat to the economy. The economy is in danger of falling into a troublesome cycle of falling prices. We could descend into something like Japan’s deflationary “lost decade” of financial stagnation.

If inflation did become a problem, which is unlikely, all the Fed has to do is increase its interest rate. That’s about as difficult as holding a meeting and taking a vote.

But the fact is that some inflation is preferable to our current state of unemployment at over 9 percent. Inflation of 3 percent, which now seems outrageously high, would be quite tolerable and better than what we have now.

Incredibly, Mike Pence, a Republican Congressman from Indiana, said he will introduce legislation to remove the Fed’s job of fighting unemployment. His argument is that the Fed should not try to fight high unemployment because it is still high.

Critics also maintain the plan won’t work — an argument which contradicts their assertion that it will be inflationary. Continue Reading…

Category: Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates
First-time Home Buyers Take Over Home Purchases
By Michael Kling on November 8, 2010

Half of all home purchases involved first-time home buyers this year, the largest portion since the National Association of Realtors started keep records in 1981.

Last year 47 percent of home purchases were by first-time home buyers, according to NAR’s Profile of Home Buyers and Sellers. The previous largest share of first-time home buyers was 44 percent in 1991. Learn about tips for buying your first home.

The first-time home buyers’ tax credit, which has now expired, was a major reason for their large share of home purchases. Almost all first-time home buyers, or 93 percent, used the tax credit.

Almost all of first-time home buyers, or 95 percent, used fixed-rate home loans. Check mortgage rates for fixed-rate terms.

Most, 74 percent, used savings for their down payment, while 27 percent used a gift from friends or relatives, slightly more than last year. That increases shows that more parents helped their children take advantage of the tax credit and extremely affordable housing, said Paul Bishop, NAR vice president of research.

Also, 56 percent of first-time home buyers used FHA home loans to finance their home purchase. NAR also reported that 52 percent of the home buyers said obtaining a mortgage was more difficult than they had expected and 9 percent were rejected by a lender. Find tips for getting mortgage approval.

The median down payment for home buyers was 8 percent, including 4 percent for first-time buyers to 14 percent for repeat buyers. First-time may have used FHA loans, which allow down payments as low as 3.5 percent. How to purchase a house with an FHA mortgage and current FHA mortgage rates.

NAR’s survey shows that the median age of first-time buyers was 30 and their median income was $59,900. The typical first-time buyer bought a 1,540-square-foot house for $152,000. The typical home sold for 96 percent of the listing price, compared to 95 percent the group’s survey last year.

Category: First Time Home Buyer, Fixed Rate Mortgages, Purchase
Low Mortgage Rates Will Disappear Next Year, Trade Group Says
By Michael Kling on October 27, 2010

Mortgage rates will begin increasing next year, the Mortgage Bankers Association predicts.

Mortgage rates, recently down to about 4.5 percent for the 30-year fixed-rate mortgage, will rise to 4.8 percent in the second quarter of 2011, then to 5 percent in the third quarter before surpassing the 5 percent mark by the end of next year, according to the MBA’s Mortgage finance forecast released yesterday at a the group’s annual convention in Atlanta. Find current mortgage rates.

Mortgage rates for the 30-year fixed, probably the most common home loan product, will continue increasing through out 2012, rising to 5.7 percent.

The Federal Reserve plans another round of quantitative easing, a fancy phrase for pumping more money into to the economy, in at attempt to drive down interest rates and stimulate the economy. The Fed is expected to purchase large amounts of U.S. Treasuries to decrease mortgage rates and other types of interest rates. But the Fed’s actions are already priced into mortgage rates, said Jay Brinkmann, the MBA’s chief economist. The Fed, according to Brinkmann, would have to make an unexpected “blockbuster” announcement to push mortgage rates much lower.

If the MBA prediction is correct, this year is the best time for homeowners to refinance their mortgages into lower rates.

Existing-home sales will increase slowly through 2011, rising from 4,026 in the third quarter of 2010 to 5,051 to the fourth quarter of 2011, the MBA predicts.

The national average for home prices will probably fall slightly next year, but that figure is being weighed down by severely distressed housing markets, such as Florida and some areas of California. Some areas, Brinkmann said, are showing signs of increasing home prices. Learn about mortgage for purchasing a home.

The median price of existing homes, at $218,900 in the second quarter this year, will increase to $173,500 by the end of next year.

The MBA predicts that the volume of mortgage refinancings will reach 921 billion this year and 370 billion in 2011. Mortgages for home purchases will amount to 480 billion this year and 626 billion in 2011.

Yields for the 10-year Treasury, which are typically used to set mortgage rates, will increase to 3.3 percent by the end of 2011.

Category: Fixed Rate Mortgages, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Refinance