Mortgage Rate Update 10/17/09

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Stronger than expected economic data, solid earnings reports, and upward revisions to the Fed’s growth forecast propelled the Dow stock index above the 10,000 level for the first time since October 2008. However, these same factors were unfavorable for mortgage rates, and they ended the week modestly higher.

This week’s economic data mostly surprised to the upside. With the end of the Cash for Clunkers program, Retail Sales declined, but by less than expected. Excluding autos, Retail Sales rose on a monthly basis. Industrial Production showed a nice increase, and the Empire State regional manufacturing index jumped to the highest level since May 2004. Weekly Jobless Claims fell to the lowest level since early January, indicating some improvement in the labor market.

On Wednesday, the minutes from the September 23 Fed meeting were revealed. At that meeting, the Fed announced that there would be no change in the size of the $1.25 trillion mortgage-backed securities (MBS) purchase program, but that it would be extended from the end of the year to the end of the first quarter of 2010. The purpose of the longer time frame was to gradually wind down the program and minimize disruptions to MBS markets, which heavily influence mortgage rates. The Fed minutes released this week showed that the MBS purchase program was one of the primary areas of discussion at the Fed meeting. Some Fed officials argued in favor of expanding the size of the MBS purchase program to stimulate the housing market and the overall economy, but the majority decided against it. Based on the minutes, it appears very unlikely that the Fed will change its announced position and increase the scope of its MBS purchases, unless the economic outlook deteriorates significantly.

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

Click here to send a secure online mortgage application.

Here are this week’s rates:

Friday, October 17th, 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 = 5.000% APR = 5.282%

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 = 4.750% APR = 5.293%

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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 16 – 22, 2009

Homebuyer Mortgage Plan:
Interest rate: 4.750 % (APR range 4.850 – 5.250%)
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: 4.750 % (APR range 4.850 – 5.250%)
Fees: Up to $2000 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

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