San Jose Mortgage Rates & Market Commentary 1/24/10

Your weekly dose of San Jose Mortgage Rates and Market commentary.

The week that was:

  • Freddie Mac reported in its Primary Mortgage Market Survey that 30-year fixed-rate mortgage averaged 4.99 percent with an average 0.7 point for the week ending January 21, 2010, down from last week when it averaged 5.06 percent. The 5-year adjustable-rate mortgage (ARM) averaged 4.27 percent this week, with an average 0.6 point, down from last week when it averaged 4.32 percent. Note that these averages are for conforming loan amounts $417,000 and lower.
  • Wall Street Journal reported that California's inventory of unsold, previously owned homes shrank to a five-year low in December, in another sign that the state may be coming out of its worst housing slump in decades. The supply of unsold single-family homes dropped to 3.8 months from 5.6 months a year ago and 16.6 months in January 2008. The inventory levels are now at their lowest level since 2005, resulting in frenzied sales with multiple offers in some cities. In Santa Clara County, inventory has dropped to 50 days from 243 a year ago.
  • One of the most surprising developments last week was the way the Senate is back-peddling the confirmation of Ben Bernanke for his second term. Greenspan, Paul Volker, Warren Buffett, most former Fed officials; and last but not least, investors want Bernanke confirmed but now its populist movement for weak minded politicians that are increasingly worried they too may be tossed on the unemployed rolls in Nov that has weakened Bernanke support.


Changes to FHA Down Payment, Credit Score and Seller Contribution requirements

FHA announced a series of changes to their Down Payment, Credit Score, Seller Contribution and Mortgage Insurance guidelines. Credit Score/DownPayment Guideline Change : New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%. This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer. Effect of this change…continue reading →

Increase in FHA Mortgage Insurance for Bay Area Home Loans

FHA today increased it's upfront mortgage insurance premium requirements for Bay Area FHA Home Loans. Upfront Mortgage Insurance is the money that FHA collects at the time of closing a mortgage to insure the loan against default. Currently, this premium is 1.75% for most purchase and refinance transactions. However, effective April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent for purchase money and refinance transactions, including FHA-to-FHA‚ streamlined refinance transactions. Below is the breakdown of FHA upfront mortgage insurance for different loan programs: Purchase Money Mortgages and Full-Credit…continue reading →

San Jose Mortgage Rate & Market Commentary 1/18/10

Weekly dose of economy and mortgage market news that affects mortgage rates for San Jose Home buyers and Home owners. The Week that was: Economic data last week confirmed once again that inflation fears are way overblown; Dec CPI up just 0.1%. Factory use and industrial production improved again as the economy is bottoming, at least based on recent reports. Somewhat disturbing, and adding to last week's bounce in rates; Dec retail sales were lower, down 0.3% in a month. Consumers, the housing industry and the unemployment rate, now at a whopping 17%…continue reading →

FHA waives 90-day flipping rule for Bay Area mortgages

Great news for First Time Home Buyers - FHA is eliminating the 90 day flipping rule for mortgages on San Francisco (SF) Bay Area homes. With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. Currently such homes are mostly bought by investors with large down payments or an all cash transaction. Due to lack of financing options Bay Area First Time Home Buyers were not able to make offers on such homes. This temporary waiver will give FHA borrowers access to…continue reading →

California proposes new $10,000 First-Time Home Buyer Tax Credit

In the final state of the state address of his gubernatorial career, Gov. Arnold Schwarzenegger proposed a second round of $10,000 first time home buyer tax credit. The previous tax credit depleted eight months before the deadline after benefiting almost 10,700 California home buyers. The Franchise Tax Board stopped taking new applications at the start of July, 2009. What this means is if this proposal is indeed passed California First Time Home Buyers can potentially get $18,000 in Tax credits. At a press conference in Fresno this is what the Governor has to…continue reading →

Good Faith Estimate (GFE) 2010 is here for Bay Area Borrowers

After more than 4 years of discussions with various trade and consumer groups, HUD implemented the new Good Faith Estimate (GFE) on January 1, 2010 for San Francisco (SF) Bay Area borrowers. The goal was greater clarity and transparency for borrowers. I do not want to get into the details of every single field of this 3 page document, and make this a 10 page post. I would rather write about what I like about the New Good Faith Estimate form and what I don't like. Here we go! Things I like: All…continue reading →

San Jose Weekly Mortgage Market Commentary 01/03/2010

Your weekly dose of economy and mortgage market news that affects mortgage rates for San Jose Home Home owners and buyers. The Week that was: Another bad week for the bond and mortgage markets. The 10 yr treasury note and mortgage rates have now increased 60 basis points in the past three weeks. Freddie Mac reported in its Primary Mortgage Market Survey that 30-year fixed-rate mortgage (FRM) averaged 5.14 percent with an average 0.7 point for the week ending December 31, 2009, up from last week when it averaged 5.05 percent. The 5-year…continue reading →

Mortgage Rates go up sharply for Bay Area Homes

In last 3 weeks, 30 year fixed mortgage rates have gone up 34 basis points for San Francisco (SF) Bay Area homes. In the latest results of its Primary Mortgage Market Survey® Freddie Mac reported 30-year fixed-rate mortgage averaged 5.05 percent with an average 0.7 point for the week ending December 24, 2009. The 15-year Fixed Rate this week averaged 4.45 percent with an average 0.6 point. The 5-year adjustable-rate mortgage (ARM) averaged 4.40 percent this week. These rates are for conforming loan amount $417,000 and lower. Higher loan amounts come with higher…continue reading →

FHA Energy Efficient Mortgages for California Homes

FHA's Energy Efficient Mortgage program (EEM) helps California homebuyers or homeowners save money on utility bills. This is done by enabling them to finance the cost of adding energy efficiency features to their house as part of their FHA insured loan. EEMs recognize that reduced utility expenses can permit a homeowner to pay a higher mortgage to cover the cost of the energy improvements on top of the approved mortgage. FHA EEMs provide mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy efficient improvements…continue reading →