Wells Fargo Home Mortgage reports today that mortgage rates are the same in every category except for 30-Year Fixed Rate Conforming Loans. Those rates rose slightly since yesterday to 5.000%.
For other mortgage loans, Wells Fargo Home Mortgage is offering a 30-Year Fixed-Rate FHA loan at 5.500% interest or 6.245% APR with one point. A 15-Year Fixed-Rate loan is available at 4.250% interest or 4.573% APR with one point. The conforming 30-Year Fixed-Rate mortgage at 5.000% has an APR of 5.191% with one point.
The difference between yesterday's 30-Year Fixed-Rate loan APR of 5.065% and today's APR of 5.191% means that on a $175,000 mortgage the monthly principal and interest payment will rise from $926.12 to $939.44. The interest rate change will be more significant on larger loan amounts.
One other mortgage rate also changed overnight. The interest rate on Five-Year Adjustable Rate Mortgages (ARMs) went from 3.875% to 4.000%. Today's interest rate increase brings the APR to 3.610% with one point. On a $175,000 loan, the payment would increase by less than $13 per month.
Real estate industry analysts and economists anticipate that mortgage rates will rise to 6% or higher later in 2010, when the federal government reduces its support for the mortgage market.
FHA-insured loans are also expected to become more difficult to qualify for later in the year, with more expensive upfront mortgage insurance costs and stricter credit standards. The changes to the FHA program are in response to reports of rising default rates on FHA mortgage loans, which have caused the government agency's reserve funds to drop below the required level.
FHA loans, which used to represent just 3% of mortgage applications, have now become a significant share of the mortgage market with more than one-third of all loans FHA-insured. The loans currently require a down payment of just 3.5%, while conventional lenders typically require at least 5%, but usually will qualify borrowers only if they have 10 to 20% of the sales price of a home available for a down payment.
Written by Michele Lerner
HULIQ.com
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