Latest Interest Rate News

Latest Interest Rate News as reported by http://www.bankrate.com/ and RisMedia.

RISMEDIA, May 2, 2011—Mortgage rates remained below the 5 percent mark, with the benchmark conforming 30-year fixed mortgage rate inching lower to 4.95 percent, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.37 discount and origination points.

The average 15-year fixed mortgage stepped down to 4.14 percent, and the larger jumbo 30-year fixed rate reset the low point of the year at 5.40 percent. Adjustable rate mortgages were also lower, with the average 5-year ARM dipping to 3.69 percent and the 7-year ARM dropping to an even 4 percent.

Mortgage rates were lower this week, but the movement in mortgage rates continues to be tame. Mortgage rates have remained within a one-third percentage point band since mid-December. The Federal Reserve did little to rock the boat, holding interest rates steady and changing very little in the post-meeting statement. Fed Chairman Ben Bernanke’s initial press release was a historic event, but uneventful. While the Federal Reserve confirmed that they will halt their bond purchases at the end of June, this has been widely expected and any resulting volatility in bond yields or mortgage rates is far from certain.

Mortgage rates are closely related to yields on long-term government bonds.

The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.95 percent, the monthly payment for the same size loan would be $1,067.54, a difference of $174 per month for anyone refinancing now.

The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. The vast majority of panelists, 77 percent, don’t see much of any movement in mortgage rates over the upcoming week. The remainder are split, with 15 percent predicting an increase in mortgage rates and just 8 percent forecasting a decline in mortgage rates over the next seven days.

Fannie Mae has good news for investors

As of March 1, 2009, Fannie Mae increases its loan limits from 4 mortgages to 10.

Finally, investors are not snubbed, but being allowed to help in the housing recovery.

In the last 12 months Fannie Mae pulled its stamp of approval of investors with more than 4 mortgages for fear they were risky and toxic. True, some were. Many speculators did get in over their head and create some damage to the housing industry. Many of them used the subprime product, though.

But realistically, the investor with more than 4 mortgages, may have been the professional, savvy, and experienced investor that our economy needs. And we need them active, not with one hand tied behind their back. This is the period where foreclosures are rampant. Some cities are 1 in 34 homes are foreclosures. And some neighborhoods are 1 in 10. These are conditions that investors, people with money, willing to take chances, thrive in.

And when the housing market desperately needs risk taking buyers, these buyers were limited to 4 mortgages. Most of them using one for their Primary.

Not any more. These investors can jump in at auctions, use their capital, and refinance down the road if need be. They can refinance their current properties, that may have adjusted and been quite painful on their monthly budget.Making this change will allow more credit to flow, and release some toxic assets that banks need to get off their books.

OR SO WE HOPE!!! It's all up to the investors.

In short, here are the new guidelines:

720 credit score
25% downpayment for a 1-unit (30% for a 2-4 unit)
No mortgage delinquencies in the last 12 months
6 months of reserves for each investment property.

Fannie Mae Disclosure