Mortgage Rate Update 10/10/09

by Harriman Real Estate on October 10, 2009

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With a light schedule of economic data, Treasury auctions and comments from Fed officials were the primary influences on mortgage rates this week. Strong auction results on Tuesday and Wednesday pushed mortgage rates to the lowest levels seen in months. The final auction on Thursday, however, saw much weaker demand. Reacting to this, along with hints of tighter monetary policy from Fed Chief Bernanke Thursday evening, mortgage rates gave back their improvement and ended the week a little higher.

Investor demand was stronger than average for the 3-yr and 10-yr Treasury auctions, which made the weak results in the 30-yr auction a surprise. Longer-term Treasuries are comparable investments to mortgage-backed securities (MBS), which largely determine mortgage rates, so the results from 10-yr and 30-yr auctions are particularly important. To increase demand, yields must rise. This means that if weak demand for long-term Treasuries continues in future auctions, it would likely push mortgage rates higher as well.

Recently, Fed officials have sent mixed signals about how soon the Fed may need to begin to tighten monetary policy. Wednesday, the Fed’s Hoenig said that the Fed should begin raising interest rates “sooner rather than later,” and that this action wouldn’t end the economic recovery. He explained that the Fed has a long way to go just to return to a neutral monetary stance and that it will take a while for the impact of rate hikes to be felt. Thursday evening, Bernanke held with the stated view that low rates will likely be justified for “an extended period”, but he added that the Fed will be ready to remove stimulus as the economy recovers. When the Fed eventually indicates that it’s ready to act, mortgage rates will be likely to move higher.

For expert assistance with your financing needs, call our in-house mortgage executive, Rick Cannavaro, at (203) 672-2706.

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Here are this week’s rates:

Friday, October 9th, 2009

All rate quotes are for a 60-day lock with 0 points, 5% down payment, and a 720 FICO score.

Conforming limits are up to a $417,000 loan limit*

30 yr conforming fixed: rate = 5.125% APR = 5.322%

15 yr conforming fixed: rate = 4.750% APR = 4.954%

7/1 yr conforming ARM: rate = 4.875% APR = 5.225%

5/1 yr conforming ARM: rate = 4.375% APR = 4.614%

30 yr FHA Fixed : rate = 5.000 APR = 5.345%

30 yr CHFA w/ 1 pt : rate = 4.625% APR = 5.033%

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Jumbo loan limits range from $417,001 to $1,000,000*

30 yr jumbo fixed: rate = 5.375% APR = 5.652%

15 yr jumbo fixed: rate = 5.000% APR = 5.317%

7/1 yr jumbo ARM: rate = 4.875% APR =5.225%

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CHFA (Connecticut Housing Finance Authority) rates for the week of October 8 – 15, 2009

Homebuyer Mortgage Plan:
Interest rate: 4.625 % (APR range 4.725 – 5.125%)
Fees: Up to One Point (1% Origination Fee) * Payable to Lender
Term – 30 years, fixed rate

Downpayment Assistance Program (DAP)
(Rate listed is for DAP loans with Homebuyer Mortgage Program financing.)

Interest rate: 4.625 % (APR range 4.725 – 5.125%)
Fees: Up to $200 Application Fee * Payable to Lender
Term – 30 years, fixed rate

(NOTE: If at any time the interest rate for the Homebuyer Mortgage Program exceeds 6%, the DAP interest rate will be capped at 6%.)

* Additional fees may apply

*Conforming loan limits listed above are for a single-family owner occupied residence.
Courtesy of The Harriman Team and William Raveis Mortgage

*All rates are subject to change. Minimum down payment and credit score requirements may apply. All information provided is deemed reliable but is not guaranteed and should be independently verified .

William Raveis Real Estate, 465 S. Main St., Cheshire, CT 06410