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February 26, 2013Due to the uncertainty of the economic condition that is happening in the market mortgage rate trends are not behaving exactly in the way mortgage professionals have predicted. However, if you are interested in knowing how mortgage rate trends predictions were got failed read on this article.
Will mortgage rates increase?
Since the federal government has reserved several millions of dollars into the mortgage backed securities the interest rates on the mortgages got lowered. In the recent past every mortgage expert predicted that the rate of mortgage will get increase in the upcoming years but the mortgages does not pose any sign of rise. One of the possible reasons must be the low demand. Since the economic condition is unstable people have stopped buying the mortgages.
Is demand got low really?
As per mortgage trend many people are rushing to refinance their mortgages who are offering even 4.75%. For most of the people the first mortgage rate is 5.9%. This clearly states that people are just scrambling to refinance the mortgages for lower interest rates. This behavior is normal one but this is not a normal economic time anyway. Many bank owned loans brought down the property value so if you see the long term fixed rate mortgages you can realize that the value of the mortgage got higher than their property value.
Federal Government Refinance assistance Program
In order to save the homeowners from getting ended up with the foreclosure federal government has launched a multimillion dollar programs. Through this home owner refinance assistance program a home owner can get the entire money to refinance their mortgage even if their financial situation gone upside down. This program actually helped nearly 2 million mortgage home owners in the span of 18 months.
FHA’s limited allowances
As far as traditional loans are considered if the seller is interested in helping the buyer then he can cut sown nearly 3% of the interest rate. This 3% is the sales price. In this case FHA acted very liberal which have removed nearly 6% of the interest rate. But after had a business meet with the other lenders it reduce d the interest rate allowance from 6% to 3%. So this sudden behavior has expelled many people from the mortgage market.
Jumbo loans
So many bank s today have tightened the formalities which are required for the traditional loan approval. Initially banks used to require nearly 25% of the down payment now the lenders have relaxed their down payment requirement to 20%. So if you are bit wealthier then you can get a loan very easily.
FHA new home mortgage
Since the mortgage rate trends are going unpredictable it is a peak time to get a new mortgage loan from the FHA. Although for refinancing FHA tightens up the requirements still it offers the very attractive interest rate for the new home mortgages. Yes, you can get a new mortgage with paying just 3.5% down payment. This rate is lowest down payment amount that you can find anywhere.
If you are wealthier and can get a home without taking up the loan it is a golden time to buy a new home now. Until the economic crisis gets over no can predict the mortgage trends.
Mortgage points
This term refers to the certain charges that need to be paid on a home when you acquire a mortgage. There are two types of mortgage points are available in the market. Origination points and discount points.
What this discount mortgage points refer is “it is the percentage of the interest you need to give it to the lender prior to purchasing the loan”. These points are limited to 3 to 4 mortgage points.
Origination points are not tax deductible and you need to pay this interest percentage for getting the loan alone.
