PRICING IMPROVES:       The bond market finished this week 53 points up – improving pricing/costs on available loan products.  30 year fixed loans are available for a portion of a point at 4.875%. 

ARMS BECOMING BETTER OPTION:     5/1 and 7/1 ARMs are becoming increasingly popular right now.  The average difference in a rate between a 5/1 ARM and a 30 Year Fixed loan right now is 1.5%.  This historically large difference (typically .5%) is causing more people to consider ARMs as they could be saving $20,000 in payments over a 5 year period of time.  I have a CNN article on this trend at the bottom of this email.

BIG NEWS WITH FHA LOANS:  FHA is about to become more expensive in costs and payment.  FHA is increasing the mortgage insurance monthly and upfront required to do the loan.  The price increase will raise payments (on a 200,000 loan) about 42 per month and over $500 per year.