The bond market finished the week 31 points up – keeping rates basically the same, but improving the costs of a loan by approximately .25% of total loan amount. 30 year fixed par rates are still sitting at 4.75%. 15 year fixed FHA loans actually price so much better than 15 year fixed conforming loans – that it is more beneficial to go FHA – 15 year fixed FHA’s are starting at 3.75%. 5/1 ARMS still at 3.125% and 7/1 ARMS at 3.625%.
The Fannie Mae and Freddie Mac risked based pricing hits I warned about are now in effect with every lender that I have seen. Over 75% loan to value , lower credit scores, and cash out refinance customers will be all effected in a negative way.
In housing news, home sales showed a large increase in December. Unfortunately, it was also reported that home prices are at the lowest levels now since the housing crisis began. It’s a great time to buy now and get an unbelievable deal. It’s also a good time to refinance – with housing prices falling and pricing hits now in effect for higher loan to value loans, you could get a worse priced loan in the future simply by your home dropping in value.