See below PMI story below as to how you can save big on home financing.
The focus of the markets took us for another trip to Europe this week. This time it is Cyprus that is making headlines as it needs help from the European Union. As usual when there is trouble somewhere there is a flight to safety, i.e. buying of US bonds. This bond buying helped keep rates in check this week. The Fed statement Wednesday talked about how the Fed plans to exit the from the current buying of mortgage back securities (MBS). This was viewed as negative by the markets and put upward pressure rates. In end it appeared to be a tie between Cyprus and the Fed as there was little change in mortgage rates for the week. As you can see in the credit spread below US treasury rates went down but mortgage rates didn’t follow leading to a widening of that spread.
Mortgage rates are just slightly lower than a week ago.
The 10-year US Treasury Note is at 1.92%, down .09 since last time.
Credit Spread (10yr UST vs. FNMA Current Coupon) 1.32, from 1.27 last time. Again a higher number than we have seen in a long time.
Current 30-year Fixed 3.625%. Jumbo 5/1 ARM 2. 50%.
Of note, the conforming 5/1 ARM is now at 2.25%, the 7/1 at 2.625%.
Who Likes PMI?
Not many it seems. It is definitely a good thing that we have it as it is what allows people to buy houses with less than 20% down. Still if there is a way to avoid the extra expense so much better. Many think that the 80/10/10 structure of financing is a thing of the past but it is still alive and well here at Mortgage Master. This is just one of several ways we can help a borrower avoid a monthly PMI payment. I was just reminded as to how valuable this is as I had a home buyer choose me over a Big Name Bank to help him finance his purchase this week. The client will save $300 per month compared to PMI solution he was offered elsewhere. $300 per month is the equivalent to 1% on the interest so it is as if he was able to get a loan for 1% less.
If you have any questions about 203K loans or other mortgage products, or need help with a pre-approval, I am always happy to be of service.