Janna Rankin Scharf, GRI, CLHSM, SFR - Coeur d'Alene Idaho Real Estate
If you expect to be in the market for a home anytime soon, you need to be aware that the longer you delay, the more you'll pay - both in interest rates and loan costs.
The most recent weekly Primary Market Survey released by Freddie Mac showed both long-term and short-term interest rates rising.
The 30 year fixed-rate average was 5.05% with an average 0.7 point. That was up from 4.81% the week before, and 4.97% at this time last year. This was the highest it's been since April, 2010.
The rate for a 15-year fixed rate mortgage rose, too. It was up from 4.08% to 4.29%, but still lower than the 4.34% from last year at this time.
Along with the rising interest rates, other costs associated with a mortgage are increasing.
Last fall USDA raised their Guarantee Fee from 2.0% to 3.5%. Also last fall, FHA Lowered their Upfront Mortgage Insurance Premium to 1.0% BUT RAISED their Monthly Mortgage Insurance from .55% to .90%. As of April 1st FHA is RAISING their Monthly Mortgage Insurance AGAIN from .90% to 1.15% (.25 bps)
As of April 1st, Fannie Mae & Freddie Mac have increased the cost of a Conventional mortgage by an average .25bps based on Fico scores and LTV's. You must now have a 740 Fico AND 25% down to avoid these adjusters.
And now, the Obama administration is calling for down payments on conventional loans to be increased to a minimum of 10%. The median down payment during the last quarter of 2010 was already the highest since 1977 at 22%.
The bottom line, for anyone sitting on the fence, is that rates are forecast to continue to rise. How much, nobody knows. But it seems reasonable to assume that your purchasing power for the dollar is going to weaken as time goes by. And along the way, costs are rising and requirements are tightening. Perhaps it's time to jump off that fence and get moving!
Janna Rankin Scharf provides a superior level of real estate services to home buyers and sellers in Coeur d'Alene and Kootenai County, Idaho. Visit Janna.ServingNorthIdaho.com to search for homes in the Coeur d'Alene MLS for anywhere in spectacular North Idaho.
No matter how grand or modest your real estate dreams may be, you can turn to me in confidence. Give me a call today and let me know what I can do to be of service to you!
Janna Rankin Scharf AB, GRI, CSP, CNS, CLHMS 208.651.9700
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Tick...Tick...Tick...
That is not a clock. That is the sound of interest moving upwards for homebuyers who continue to wait for the "bottom" of the market. For mortgage rates...we have seen the bottom and we are moving up.
Should be easier to buy a home because of the drop in house prices despite the interest rates.
<a href="http://montrealqualitysitedesign.com">John</a>
Great post. Informative. thank you for sharing with us Janna!
Excellent piece Janna. MMI is going up with FHA loans and interest rates are still amazing right now. It is certainly time to put pencil to paper if you are thinking of buying.
What went down, has to go up....hoping this lands somewhere in the middle....better than fogging a mirror to get a mortgage and less than pledging your first born for a down payment....the middle is a good place to be.