Mortgage Rate Update 8/28/09

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There were few surprises in the economic data released this week, and the record $109 billion in Treasury auctions went smoothly. As a result, it was a quiet week for mortgage markets. This week’s economic data showed signs that the economy is gradually improving, while inflation is not a concern right now. Demand remained solid for the Treasury auctions. Mortgage rates ended the week nearly unchanged.

Last week, the Fed increased its weekly mortgage-backed securities (MBS) purchases to about $25 billion, and it maintained that level this week. Prior to that, the Fed had purchased roughly $20 billion per week for a couple of months. The current pace would lead to total purchases of the authorized $1.25 trillion by the end of the year, which is when the program is scheduled to expire. Mortgage rates are largely determined by MBS prices, and the added demand from the Fed has helped to keep mortgage rates low. In a speech this week, the Fed’s Lacker suggested that with the economy improving the Fed may not need to purchase the entire $1.25 trillion of MBS. Lacker’s comments caused little reaction, as his views are often contrary to those of the other Fed officials, but if that were to happen, then mortgage rates would almost certainly move higher. Mortgage investors will be closely watching the Fed’s plans for this program.

The housing data released this week was again positive. July new home sales rose 10% from June to the highest level since September. Inventories dropped to a 7.5-month supply, which was the lowest level since April 2007. This data follows a similar rise in July existing home sales announced last week.

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, August 28th, 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 = 5.250% APR = 5.530%

15 yr conforming fixed: rate = 4.750% APR = 4.990%

7/1 yr conforming ARM: rate = 5.125% APR = 5.425%

5/1 yr conforming ARM: rate = 4.500% APR = 5.014%

30 yr FHA Fixed : rate = 5.250% APR = 5.493%

30 yr CHFA w/ 1 pt : rate = 5.125% APR = 5.488%

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

30 yr jumbo fixed: rate = 5.750% APR = 6.022%

15 yr jumbo fixed: rate = 5.500% APR = 5.725%

7/1 yr jumbo ARM: rate = 5.125% APR =5.405%

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CHFA (Connecticut Housing Finance Authority) rates for the week of August 27 – September 2, 2009

Homebuyer Mortgage Plan:
Interest rate: 5.125 % (APR range 5.225 – 5.625%)
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: 5.125 % (APR range 5.225 – 5.625%)
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

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