Mortgage Rates hit NEW Record Low

All-Time Low: 30-Year Fixed-Rate Mortgage Averages 3.40 Percent

Minneapolis, MN:  Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates breaking their previous average record lows helping to keep homebuyer affordability high and refinancing strong to support an already improving housing market. All mortgage products, except the 5-year ARM, averaged new all-time record lows.

News Facts

  • 30-year fixed-rate mortgages averaged 3.40 percent with an average 0.6 point for the week ending September 27, 2012, down from last week when it averaged 3.49 percent. Last year at this time, the 30-year FRM averaged 4.01 percent.
  • 15-year fixed rate mortgages this week averaged 2.73 percent with an average 0.6 point, down from last week when it averaged 2.77 percent. A year ago at this time, the 15-year FRM averaged 3.28 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.71 percent this week with an average 0.6 point, down from last week when it averaged 2.76 percent. A year ago, the 5-year ARM averaged 3.02 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Fixed mortgage rates continued to decline this week, largely due to the Federal Reserve’s purchases of mortgage securities, and should support an already improving housing market. For instance, the S&P/Case-Shiller® 20-city home price index rose 1.2 percent over the 12 months ending in July, reflecting the largest annual increase since August 2010. Moreover, 16 of the cities saw positive growth, led by Phoenix’s 16.6 percent gain. Additionally, new home sales in July and August had the strongest two-month pace since March and April 2010.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.


How long will interest rates remain low?

Minneapolis, MN:  Mortgage interest rates and refinance rates are as of this posting are at record lows. This little jump lower is a direct effect from last weeks announcement by the FED of QE3.

First, understand that the FED does NOT control mortgage interest rates. They only control the Fed Funds Rate, which simply put, is what the banks pay in interest rates to borrow money from the Federal Reserve. Long-term mortgage rates are based on the bond market. The bond market does react to what the Fed says and does, so many people wrongly believe the change in actual rates is because of what the Fed did or didn’t do.

So just what does QE (Quantitative Easing) mean anyway? Well, in short – normally when the economy is struggling the Federal Reserve will reduce short term interest rates to encourage more lending and spending. However, interest rates have already been cut as low as they can go- so what to do? Well, that’s where quantitative easing comes in.

Since the Federal Reserve can essentially create money, it can buy up assets like long-term Treasuries or mortgage-backed securities from commercial banks and other institutions. This pumps money into the economy and reduces long-term interest rates further. When long-term interest rates go down, investors have more incentive to spend their money now. In theory.

Haven’t We Tried This Before?

The central bank has tried using quantitative easing twice before- in November 2008 and again in October 2010 (known as QE1 and QE2). So did it help? There has been plenty of research on this question. The first round of quantitative easing appeared to be effective in preventing the economy from sinking into a giant depression. Economists say this was because everyone realized the Fed would do whatever it takes to avoid deflation. It was essentially a giant confidence boost. The economy stopped sliding and inflation slowly rose. But the effects seemed to dwindle as the years went by. Experts are much more divided on how much QE2 has helped.

In theory, quantitative easing should work in two ways. First, it injects more cash into banks, allowing them to lend more. And second, it lowers interest rates — if the Fed buys up a bunch of mortgage-backed securities, for example, that should make it cheaper to borrow money to buy a house. In practice, interest rates do drop. But it’s hard to figure out whether this translates into a boost in the actual economy.

So now back to how long interest rates will stay low in the near future….

The Federal Reserve has actually done two things to try and improve QE3. First, the Fed said they will keep the rates banks pay for money low until mid-2015. Second, the central bank will buy up $85 billion worth of assets each month between now and the end of the year. But, unlike QE1 or QE2, this new round of purchases will be more open-ended. That’s an important change. Here’s the key bit from the Fed statement:

“If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved”

The purchases will continue until morale improves. What’s more, the Fed noted that it will continue its policy of easy money “for a considerable time after the economic recovery strengthens.”


Mortgage Rates Back To Record Lows

Minneapolis, MN:  Freddie Mac  today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates at or near their all-time record lows helping to keep homebuyer affordability high. The average 30-year fixed rate mortgage matched its all-time record low at 3.49 percent, and the average 15-year fixed fell to a new all-time record low at 2.77 percent.

News Facts

  • 30-year fixed-rate mortgagese averaged 3.49 percent with an average 0.6 point for the week ending September 20, 2012, down from last week when it averaged 3.55 percent. Last year at this time, the 30-year FRM averaged 4.09 percent.
  • 15-year fixed rate mortgages this week averaged 2.77 percent with an average 0.6 point, down from last week when it averaged 2.85 percent. A year ago at this time, the 15-year FRM averaged 3.29 percent.
  • 5-year adjustable rate mortgages (ARM) averaged 2.76 percent this week with an average 0.6 point, up from last week when it averaged 2.72 percent. A year ago, the 5-year ARM averaged 3.02 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Following the Federal Reserve’s announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery. New construction on one-family homes rebounded in August, rising by 5.5 percent to the fastest pace since April 2010. In addition, existing home sales increased by 7.8 percent in August to its strongest pace since May 2010.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.


Mortgage Rates Hold Steady while waiting for further stimulus

Mortgage Rates Hold Steady as Markets wait on Further Stimulus News

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates holding steady from the previous week and remaining near their all-time lows. The average 30-year fixed-rate mortgage has been below 4.00 percent all but once this year and the average 15-year fixed, a popular choice among refinance borrowers, has been below 3.00 percent since the last week in May.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.55 percent with an average 0.6 point for the week ending September 13, 2012, the same as last week. Last year at this time, the 30-year FRM averaged 4.09 percent.
  • 15-year fixed rate mortgages this week averaged 2.85 percent with an average 0.6 point, down from last week when it averaged 2.86 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.72 percent this week with an average 0.6 point, down from last week when it averaged 2.75 percent. A year ago, the 5-year ARM averaged 2.99 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Despite a lackluster August employment report, Treasury bond yields and mortgage rates were little changed this week with the financial markets speculating on further monetary stimulus from the Federal Reserve. The economy added 96,000 net new workers in August, while revisions subtracted 41,000 from the prior two months; manufacturers cut 15,000 employees in August which represented the largest decline since August 2010. Meanwhile, approximately 368,000 people left the workforce thereby lowering the unemployment rate to 8.1 percent.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.


Should you refinance, modify, buy, or run away?

Saint Paul, MN: These are certainly trying times, and 70% of homeowners have some sort of financing on their home. The economy is hurting, and fear of job loss is on many minds. But what you should be doing in today’s market isn’t always clear.

The economy is hurting largely because of the initial wave of foreclosures and high gas prices of earlier in 2008. This has spilling over into all aspects of American lives, but is it really as bad as the constant beat of the media drum has one to believe?

Unemployment nationwide is averaging in the 8% range. This is significantly below the highs of years past. Foreclosures are still at historic high levels. These reports sound bad, but sit back and take a look at your own individual lives to examine if it really is bad for you and what you should be doing.

For example, while possible job loss is on a lot of minds, examine your own ability to market yourself? No job is guaranteed. If you did lose your job, how quickly can you replace it with a similar income, even if in a different field.

I am in the mortgage business, which clearly is suffering. I don’t worry about my home or income, because I know that if needed, I would take two or three jobs (even menial jobs) to always make sure my family has the three most important items: Shelter, food, and clothing. I know I can cut off cable TV, sell cars, cut expenses, and go into survival mode and that I will always be able to provide the basics.

If unemployment is averaging 8%, this means 92% of people are working. If foreclosures are averaging 10% of homes, this means 90% of people are OK. Turn off the TV, stop reading the paper. If you didn’t hear and read all the “bad news”, how would YOU personally view your situation?

BUYING A HOME: We all need a place to live. Home prices are extremely attractive, with great deals to be found everywhere. Mortgage rates are near historic lows. If you have OK or better credit, can come up with a small down payment, plan on staying in the home for at least four years, you are almost foolish to not buy something TODAY.

MODIFYING YOUR EXISTING LOAN: Many people bought homes they shouldn’t have and took risky loans to do so. Simply because a lender said yes, doesn’t mean you should have. Even more people who originally bought right used their homes as ATM machines, with a constant “cash out” refinance to pay credit cards and live lifestyles they couldn’t afford. I just spoke with a customer who bought this home 15-years ago for $85,000 who is losing it to foreclosure owing $300,000.

As little as two years ago, getting a bank to modify your loan was rare, and required you to be seriously behind in payments. Today, banks are very willing to help keep you in your home by modifying your payments. Workouts vary greatly depending on many variables, but the best ones we see lower your rate to around 3% for 5-years. Then the rates start adjusting back to where they originally were.

Unfortunately, we are seeing two problems emerge with modification. The first, is many people who got loan modifications fairly quickly fall behind again. While no one wants to lose a home, you must be realistic. Many times I speak with people where I calculate a payment based on ZERO percent, and they still tell me they can’t make the payment. Modifying only delays the inevitable. Getting out completely and into a situation you can afford releases untold weight off your shoulders.

REFINANCING YOUR EXISTING LOANMinnesota refinance rates are currently hovering near historic lows and it is well worth thinking about getting something better if you qualify. The basic criteria is that if you can lower your rate and you’ll be there long enough to at least break even on the closing costs, then it is a smart move.

Today, programs like VA IRRRL streamline refinancesFHA streamline refinances, and HARP 2.0 loans make refinancing available to most people.

So, should you be buying a home, modifying your existing loan, refinancing, or running away? It all depends, but I suggest we all stop living in fear, properly analyze our lives and personal situations, take our heads out of the sand, and make well educated decisions to put our lives in a better place.

An original article by Joe Metzler (C) 2012 Metzler Enterprises, LLC for www.MnRealEstateDaily.com


Mortgage Rates Change Little, Remain Near Record Lows

Mortgage Rates Change Little, Remain Near Record Lows

Minneapolis, MN:  Freddie Mac today released the results of its Primary Mortgage Market Survey® , showing fixed mortgage rates declining or remaining the same from the previous week amid mixed economic data, and continuing to hover around their all-time record lows.

News Facts

  • 30-year fixed rate mortgage averaged 3.55 percent with an average 0.7 point for the week ending September 6, 2012, down from last week when it averaged 3.59 percent. Last year at this time, the 30-year FRM averaged 4.12 percent.
  • 15-year fixed rate mortgages this week averaged 2.86 percent with an average 0.6 point, the same as last week. A year ago at this time, the 15-year FRM averaged 3.33 percent.
  • 5-year adjustable mortgages (ARM) averaged 2.75 percent this week with an average 0.7 point, down from last week when it averaged 2.78 percent. A year ago, the 5-year ARM averaged 2.96 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates were little changed over the holiday week amid mixed economic data releases. Although consumer spending rose 0.4 percent in July, representing the largest gain in five months, the core price index was unchanged suggesting little threat of inflation. Consumer confidence picked up slightly in August according to the University of Michigan, but remained below this year’s peak in May. And the manufacturing industry contracted for the third consecutive month in August.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.

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Fixed Mortgage Rates Ease Going Into The Labor Day Weekend

Fixed Mortgage Rates Ease Going Into The Labor Day Weekend

Minneapolis, MN:  Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates pulling back and following bond yields lower after gradually moving higher over the past month.

News Facts

  • 30-year fixed-rate mortgages  averaged 3.59 percent with an average 0.6 point for the week ending August 30, 2012, down from last week when it averaged 3.66 percent. Last year at this time, the 30-year FRM averaged 4.22 percent.
  • 15-year fix rate mortgages this week averaged 2.86 percent with an average 0.6 point, down from last week when it averaged 2.89 percent. A year ago at this time, the 15-year FRM averaged 3.39 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.78 percent this week with an average 0.6 point, down from last week when it averaged 2.80 percent. A year ago, the 5-year ARM averaged 2.96 percent.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

  • “Treasury bond yields fell, allowing mortgage rates to follow, after the release of the July 31st and August 1stminutes of the Federal Reserve’s monetary policy committee. Committee members agreed that economic activity had decelerated more in recent months than they had anticipated at their last meeting in June. Some members even saw room for additional stimulus fairly soon if needed.
  • “Nonetheless, the housing market continued to show improvement over the past few months. New home sales rose 3.6 percent in July matching May’s pace as the strongest month since April 2010.  Similarly, pending existing home sales also rose in July to its highest rate since April 2010. And, the S&P/Case-Shiller® National Home Price Index rose 1.2 percent between the second quarter of 2011 and 2012, reflecting the first annual increase since the second quarter of 2010.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points.

Follow this link to view today’s MN and WI best mortgage interest rates.

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Fixed rates mortgages move higher for third straight week

Fixed Mortgage Rates Move Higher For Third Consecutive Week

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates following long-term Treasury yields higher. This marks the third straight week of fixed mortgage rates moving higher.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.62 percent with an average 0.6 point for the week ending August 16, 2012, up from last week when it averaged 3.59 percent. Last year at this time, the 30-year FRM averaged 4.15 percent.
  • 15-year mortgages this week averaged 2.88 percent with an average 0.6 point, up from last week when it averaged 2.84 percent. A year ago at this time, the 15-year FRM averaged 3.36 percent.
  • 5-year adjustable-rate mortgage (ARM) averaged 2.76 percent this week with an average 0.6 point, down from last week when it averaged 2.77 percent. A year ago, the 5-year ARM averaged 3.08 percent.
  • 1-year ARM averaged 2.69 percent this week with an average 0.4 point, up from last week when it averaged 2.65 percent. At this time last year, the 1-year ARM averaged 2.86 percent.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“The latest economic indicators point toward low inflation but gradually stronger economic activity which placed further upward pressure on long-term Treasury yields and, in turn, fixed mortgage rates. For example, inflation remains in check with 12-month growth in the core consumer price index falling for a second month to 2.1 percent in July. At the same time, industrial production rose 0.6 percent in July compared to a 0.1 percent increase in June and retail sales jumped 0.8 percent in July from a 0.7 percent decline in June.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points.

Follow this link to view today’s MN and WI mortgage interest rates.

 

 


95% of refinances are fix rate loans

More Than 95 Percent Of Refinancing Borrowers Choose Fixed-Rate Mortgages

Thirty Percent Shorten Loan Term When Refinancing

In the second quarter of 2012, fixed-rate loans accounted for more than 95 percent of refinance loans, based on the Freddie Mac Quarterly Product Transition Report released today.

Refinancing borrowers clearly preferred fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or a fixed-rate.

News Facts

  • Of borrowers who refinanced during the second quarter, 30 percent reduced their loan term, while 67 percent of borrowers kept the same term as the loan they had paid off.
  • Eighty-one percent of borrowers who had a hybrid ARM chose a fixed-rate loan during the second quarter, the highest share since the second quarter of 2010, while the remaining 19 percent chose to refinance into the same type of product.
  • Borrowers who refinanced under the Home Affordable Refinance Program (HARP) were more likely to take out a long-term, fixed-rate mortgage. For example, 25 percent of HARP borrowers shortened their loan term when they refinanced during the second quarter, compared with 30 percent of borrowers who refinanced outside of HARP. Further, 95 percent of borrowers who were refinancing out of an ARM under the HARP program chose a fixed-rate mortgage. In contrast, borrowers who had an ARM, but did not refinance through HARP, about one-half opted for another hybrid ARM.

Rates for the week

  • Fixed mortgage rates averaged 3.79 percent for 30-year loans and 3.04 percent for 15-year product during the second quarter in Freddie Mac’s Primary Mortgage Market Survey®, well below long-term averages and the lowest quarterly averages recorded in our survey. The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.0 percent during the second quarter of 2012. It’s no wonder we continue to see strong refinance activity into fixed-rate loans.
  • “Compared to a 30-year fixed-rate mortgage, the interest rate on a 15-year fixed was about three-quarters of a percentage point lower during the second quarter. For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. Further, a shorter-term, fully amortizing loan reduces the loan balance faster and builds home equity sooner.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Follow this link to view today’s MN and WI mortgage interest rates.

 


Dealing with an Underwater Mortgage

Nearly 11 million Homeowners are Underwater, which means they owe more on their mortgage than their property is worth. Below are some of your options for dealing with an underwater mortgage.

Wait It Out:  If you are just depressed at the thought of owing more than it is worth today, but really don’t have any intentions of moving. Stop worrying about it. You have to live somewhere. Although short sales and foreclosures have brought down values, the housing market is slowly recovering, especially here in the Minneapolis, St Paul metro area. If you are able to continue to make payments – do it. It will save your credit score and keep your morale intact.

Refinance: If your loan is owned by Fannie Mae or Freddie Mac, and that loan was taken out before June2009, you have no late payments in the past six months and no more than one late payment in the past 12 months, you may qualify for the HARP – Home Affordable Refinance Program. If you have an FHA loan, or a VA loan

, you may qualify for a FHA streamline refinance, or a VA IRRRL streamline refinance. Both of these program may not need an appraisal.

Short Sale: If you truly cannot pay your bills, or need to move, you may need to consider a short sale in order to avoid foreclosure. Work with an experienced short-sale Realtor to get the best offer.

Become a landlord: A popular option is to turn the property into a rental. Being a landlord isn’t overly difficult. If you don’t want to deal with it, there are plenty of reliable rental companies that will take care of everything for you. There are special requirements for getting a new home mortgage loan when turning your existing home into a rental, so be sure to discuss this with a licensed mortgage professional, not just a bank application clerk,

 


Mortgage closing costs up because of government rules

Closing costs have NOT gone down!

St Paul, MN:  Recent news releases from the government have been claiming that mortgage closing costs have gone down 7% due to new mandated government procedures that make it necessary for lenders to be more accurate when making estimates for borrower’s closing costs.

The spin masters are wrong on two fronts.

First, most lenders were already accurate in their initial closing cost disclosures, and the items that caused them to re-adjust their estimate later on are still there.  The only significant difference is the incredible burden of new paperwork, and disclosures that make absolutely no difference to the customer, or their bottom line.  For example, the old easy to read and understand one page Good Faith Estimate has been replaced with an incredible confusing three page Good Faith Estimate. The new form has been so badly received, that the Consumer Financial Protection Bureau is already working on a new form to replace the new form! Furthermore, re-disclosing forms for minor changes with mandatory wait times before a client can close on their loan has done more harm than good, and has significantly increased lender costs, turn times, and client frustration.

Secondly, due to the new rules, industry insiders have proven that closing costs have actually risen about $1200 per client.  Where the government spins it is that under the new rules, lenders are now forced to give home owners more “lender credits towards closing costs”. This sounds great, and it does actually lower the OUT-OF-POCKET average closing cost for many people. But, what is actually happening is that the client now has reduced options, and is being forced to pay more over time with a higher interest rate in exchange for those lender credit.

The bottom line?  Don’t be fooled by the spin. The government has mandated more rules, more paperwork, and less consumer choice all while claiming victory in reduced costs. The reality is it cost consumers significantly more in a higher mortgage interest rate over the length of the loan than they ever saved in initial closing costs.


Fixed Rates Move Higher for 2nd week in a row

Fixed Mortgage Rates Move Higher for Second Consecutive Week

St Paul, MN: Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates moving higher following stronger-than-expected employment reports. The 30-year fixed averaged 3.59 percent, and the 15-year fixed averaged, 2.84 percent, still near the historic low.

News Facts

  • 30-year fixed rate mortgage (FRM) averaged 3.59 percent with an average 0.6 point for the week ending August 9, 2012, up from last week when it averaged 3.55 percent. Last year at this time, the 30-year FRM averaged 4.32 percent.
  • 15-year mortgage rates this week averaged 2.84 percent with an average 0.6 point, up from last week when it averaged 2.83 percent. A year ago at this time, the 15-year FRM averaged 3.50 percent.
  • 5-year adjustable-rate mortgage (ARM) averaged 2.77 percent this week with an average 0.6 point, up from last week when it averaged 2.75 percent. A year ago, the 5-year ARM averaged 3.13 percent.
  • 1-year ARM averaged 2.65 percent this week with an average 0.4 point, down from last week when it averaged 2.70 percent. At this time last year, the 1-year ARM averaged 2.89 percent.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

  • “Fixed mortgage rates inched up again this week following stronger-than-expected employment reports. The economy added 163,000 jobs in July, well above the market consensus forecast of 100,000, and the largest increase since February. In addition, the number of announced corporate layoffs fell 45 percent in July compared to last July and was the third time this year that announced layoffs were less than the same month in 2011 according to The Challenger Report. This suggests further net gains in employment are likely in the near future.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Follow this link to view today’s MN and WI mortgage interest rates.

 


Ways to pay off your mortgage debt faster

St Paul, MN: If you surf the cable TV channels, listen to talk radio, or search online, you will find numerous financial and debt management experts offering tips and tricks on managing debt such as mortgage, credit card debt, student loan and so on.

However, it is important to evaluate one’s own personal financial situation before implementing any such debt relief tips. This is to ensure that you benefit from such advice and not further pile up debts that you become responsible for. So, here are 5 strategies to repay your Minnesota  mortgage faster.

Make Extra Payments: If there is no pre-payment penalty, you can make extra payments on the mortgage loan. The extra amount of money is taken off from the principal mortgage amount. For example, a $400,000 loan at 4% rate for 30 year fixed will pay off in only 25 years if you make $200 extra payment every month.

Make Bi-Weekly Payments: Bi-weekly payments on Minnesota mortgage loans are better than a monthly payment. In doing so, at the end of the financial year, you are paying one month extra payment. Therefore, the extra month’s payment will shorten the term of the mortgage. Every penny counts when you’re repaying any sort of debt. For example – Using the same numbers as above, by making bi-weekly payment you would pay off the loan is 25.8 years instead of a regular 30 years.

Get a shorter-term refinance loan: This financial strategy has gained in popularity among the borrowers in Minnesota. The rate of interest has nose-dived and it is much simpler for the homeowners to repay their mortgage debts. The advantage of this refinance loan is that by paying high monthly payments you pay off the loan in considerably shorter period of time. For example – Instead of taking a regular 30 Year Fixed mortgage, consider taking a 20, 15 or a 10 year mortgage. If you can afford the payment, you save on interest cost and also pay off the loan much quicker. A few mortgage lenders even let you pick whatever mortgage amortization term you want, from 8 – 30-years. For example, if you have only 12-years left, you can get a new 12-year mortgage loan.

Make a One Time Big Payment: If you get inheritance, gift or a big bonus, you can make one large lumpsum payment. That will reduce your principal balance substantially and thus pay off the loan quicker. You can also ask the lender to “recast” the loan and reduce the monthly payment without refinancing. Don’t just make the extra payment. Talk to your lender first.

The ideas mentioned here are not meant to be a tax advice. You are encouraged to contact your CPA/Financial Adviser before making any significant money decision.

 


30-year Fixed-rate Mortgage Moves Up, Averages 3.55 Percent

30-year Fixed-rate Mortgage Moves Up, Averages 3.55 Percent

For the week ending Aug. 2, 2012

Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgages rates breaking their streak of record-breaking lows and moving higher on mixed Eurozone and domestic economic data. Before this week, the average rate on the 30-year fixed had fallen to or matched record-low levels in 13 of the past 14 weeks.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.55 percent with an average 0.7 point for the week ending August 2, 2012, up from last week when it averaged 3.49 percent. Last year at this time, the 30-year FRM averaged 4.39 percent.
  • 15-year FRM this week averaged 2.83 percent with an average 0.6 point, up from last week when it averaged 2.80 percent. A year ago at this time, the 15-year FRM averaged 3.54 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.75 percent this week with an average 0.6 point, up from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 3.18 percent.
  • 1-year Treasury-indexed ARM averaged 2.70 percent this week with an average 0.4 point, down from last week when it averaged 2.71 percent. At this time last year, the 1-year ARM averaged 3.02 percent.

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Follow this link to view today’s MN and WI mortgage interest rates.


Mortgage Rates break record low

30-Year Fixed-Rate Mortgage Averages a Record-Breaking 3.49 Percent

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgages rates continuing their streak of record-breaking lows. The 30-year fixed rate mortgage averaged 3.49 percent, more than a full percentage point lower than a year ago when it averaged 4.55 percent. Meanwhile, the 15-year fixed-rate mortgage, a popular choice for those looking to refinance, also set another record low at 2.80 percent.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.49 percent with an average 0.7 point for the week ending July 26, 2012, down from last week when it averaged 3.53 percent. Last year at this time, the 30-year FRM averaged 4.55 percent.
  • 15-year FRM this week averaged 2.80 percent with an average 0.7 point, down from last week when it averaged 2.83 percent. A year ago at this time, the 15-year FRM averaged 3.66 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.74 percent this week with an average 0.6 point, up from last week when it averaged 2.69 percent. A year ago, the 5-year ARM averaged 3.25 percent.
  • 1-year Treasury-indexed ARM averaged 2.71 percent this week with an average 0.5 point, up from last week when it averaged 2.69 percent. At this time last year, the 1-year ARM averaged 2.95 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage.

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Follow this link to view today’s MN and WI mortgage interest rates.


Low Mortgage Rates Continue

Low Mortgage Rates Continue

Minneapolis, MN: Week over week mortgage rates continue to remain at or near historic lows, offering home buyers and mortgage owners interested in refinancing a chance to get amazing interest rates on their home loans.

According to the weekly survey by Freddie Mac, 30-year fixed rate mortgages have reached an average of 3.53% this week, a 0.03% decline under last week’s 3.56% average, and almost a full percent drop from this time last year’s rate, which was 4.52%. Meanwhile, 15-year fixed rate mortgages also dropped, reaching an average of 2.83% under last week’s 2.86% average, and well below last year’s average at this time which was 3.66%.

Treasury-indexed hybrid 5-year adjustable rate mortgages averages 2.69% under last week’s average of 2.74% and below last year’s average at this time which was 3.27%. 1-year treasury-indexed adjustable rate mortgages are at 2.69%, under last year’s average rate of 2.97%.

Vice president and chief economist for Freddie Mac, Frank Nothaft made a statement about the continued drop in mortgage interest rates, indicating a correlation between U.S. Treasury bond yields staying “in check” by the Federal Reserve’s “Operation Twist.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Follow this link to  view today’s MN and WI mortgage interest rates.