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Weekly Arizona Mortgage Rates Roundup Week Ending June 27, 2008
Time for the regularly scheduled program of The Friday Edition of the Arizona Mortgage Rates Roundup brought to you by The Arizona Mortgage Team!
Weekly Mortgage Rates Recap:
Mortgage rates took a breather this week (after a runup in recent weeks), remaining largely unchanged after weeks of rising steadily. The average 30-year fixed-rate mortgage was unchanged at 6.62 percent.
The average 15-year fixed — a popular option for refinancing — slipped 1 basis point, to 6.19 percent. A basis point is one-hundredth of a percentage point. The average jumbo 30-year fixed ticked up 1 basis point, to 7.72 percent.
The one-year adjustable-rate mortgage moved up 5 basis points, to 6.27 percent. The (more) popular 5/1 ARM rose 4 basis points, to 6.28 percent.
Weekly Mortgage Applications Recap:
Mortgage applications fell for the fifth time in six weeks, according to the Mortgage Bankers Association. For the week ending June 20, applications fell a seasonally adjusted 9.3 percent when compared to one week earlier.
Applications for refinancing fell by 12.1 percent, while applications for new purchases slid 7.4 percent.
Weekly Mortgage Related Jaw Droppers:
California Sues Countrywide.
NY Fed loans JP Morgan 28 billion for Bear Stearns buyout.
Citi outlook gloomy as it is facing billions more in write-downs.
Mortgage Related Quote of the Week:
“No one can do what Countrywide can…” (Borrowed from Countrywide advertising of course)
Have a great weekend!
Will the Housing Rescue Bill Pass?
The New York Times reported today that it looks promising that the Senate will approve a bill that will help many homeowners with refinancing or purchasing options. It is important to note that this bill has not been passed yet, but it is guaranteed to be a hot topic in Congress. There is even the threat of keeping senators in session through the Fourth of July holiday next week. (There would definitely be a firework show!)
A few highlights include:
- First-time homebuyer tax credit: This credit would be granted to first time homebuyers who purchase unoccupied homes. These homebuyers could receive a 10% tax credit of the home’s value (up to $8,000).
- Rescue Refinancing: This plan would enable qualified borrowers to work with their lenders to refinance into a federal insured mortgage with a 30-year fixed rate. There is discussion that the lender would have to agree to reduce the principal balance down to 85% of the home’s market value in efforts of avoiding additional foreclosures.
- Fannie Mae and Freddie Mac Loan Limits: This bill would increase the loan limits from $417,000 to $625,000 permanently. (Currently these limits are only in place until December 2008.)
- Affordable Housing Trust Fund: This fund would be established to cover expenses related to the foreclosure rescue plan. This fund ($500 million to $900 million) would be funded by fees collected from Fannie Mae and Freddie Mac.
- Counseling Fund Expanded by $150 million: This would allow buyer’s to receive more counseling/education up front to avoid foreclosures and also so that borrowers in adjustable rate mortgages (ARMs) would have it disclosed what their future payments could look like in real dollar amounts ($$) instead of simple percentages( %%).
No one is in denial that there is a housing and credit crisis. Something has to be done both to respond and prevent these things from happening… but two major questions still remain: Who is going to pay for it all and will this be the turning point we’ve all been hoping for?
I like Shailesh’s simple answer to who is going to be stuck with the bill…
Are we really going to do this to our children?
What Happened to Student Loan Consolidation?
Recently I’ve had a few borrowers who have just graduated from college and are trying to buy their first home or refinance their current mortgage.
Unfortunately their debt-to-income ratio (DTI) is too high due to numerous student loans.
Years ago when I graduated from college, there were loan consolidation programs available — However, in April 2008, Sallie Mae announced that they will discontinue their federal loan consolidation program effective May 9, 2008.
There are a few private loan consolidation programs available so check with your lender to see if your program still qualifies some type of loan consolidation program.
Anyway, I called Sallie Mae to find out what options are available for recent graduates who need to lower their monthly debt obligations but can no longer do a loan consolidation and they gave me a few options that I thought would be worth sharing:
Light Rail Testing
I spent my morning drive from Southeast Chandler to Tempe thinking about the price of gas. FOUR BUCKS A GALLON ADDS UP TO A LOT OF MONEY! I was thinking about all of the different strategies I could use to get better mileage as I was pulling up to the office — and it dawned on me.
Actually, it drove by me.
Light rail is coming to town!
I am no expert, but it seems like this might be a great solution to my 4-bucks-a-gallon-and-35-miles-to-work problem.
Is it time to Buy, Sell or Refinance? (Answers upside down at the end)
If you live in Arizona and not under a rock (no pun intended of course), you are most likely fully aware that the real estate market is hurting. Sales are down, prices are down, gas prices are up and people are wondering if “driving until you qualify” makes any sense anymore.
What does this mean for you?
Well it depends on what you are thinking about – buying a new house, selling your house or refinancing your current loan.
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