Trends in Mortgage Rates
Conforming Limits:
1 unit $417,000; 2 unit $533,850; 3 unit $645,300; 4 unit $801950
These rates do not reference a specific loan program; rather, they reflect general market conditions, which are subject to change at any time.
Credit risk pricing and how it impacts your interest rate/discount points (cost to buy rate down):
- Rates change daily – Mortgage loan interest rates and discount points are driven by the prices of Mortgage Backed Securities.
- Credit (fico) Scores – Lenders look at your mid credit score (typically 3 credit bureaus) to determine you credit risk. A+ credit would be 740 and above. From there they are categorized in 20 point increments (720-739, 700-719, 680-699, 660-679, 640-659, 620-640, no fico)
- Loan to value – Typically the lower the loan to value (LTV), the lower the risk. Loan to values of 60% or less are considered the lowest risk
- Transaction type – The risk level from low to high – Purchase, rate and term refinance, and cash-out refinance.
- Transaction type continued – The risk level from the low to high – Primary residence, second home and investment property
- Property type – Single family residence, PUD, condo then 2-4 unit properties.
- Escrow account – If your LTV is 80% or lower, then you have the option to waive escrows (taxes and insurance included in monthly payment), but it can affect your discount points.
| TERM | Rate Range |
| Conforming 30 Year Fix | Mid 4 – High 4 |
| Conforming 15 Year Fix | Low 4 – Mid 4 |
| Conforming 3/1 Arm | Mid 3 – Low 4 |
| Conforming 7/1 Arm | Mid 3 – High 3 |
| Non-Conforming 30 Year Fix | Low 5 – High 5 |
| Non-Conforming 15 Year Fix | High 4 – Low 5 |
| Non-Conforming 5/1 Arm | Mid 4 – High 4 |
| FHA 30 year fix | Mid 4 – Low 5 |
| FHA 5/1 Arm | Mid 3 to High 3 |
| VA 30 Year Fix | Mid 4 to High 4 |
| Rural Dev 30 year fix | High 4 – Low 5 |
THERE ARE NUMEROUS LOAN PRODUCTS AVAILABLE:
Conforming – Loans designed for primary, second and investment properties. There are restrictions in regards to loan amount (SFR is typically 417,000, but in some areas it may be higher).
Non-Conforming – . Typical loan amounts above 417,000.00.
FHA- 30 year amortized loan. 3.5% down required by the borrower (can be gifted by an acceptable source).
VA- Guaranteed by the federal government based on the amount of entitlement to the veteran in conjunction with the loan amount.
Rural Housing- Must be in rural housing area. 100% financing based on appraised value. Adjustable household income cannot exceed the maximum allowable income limits (currently suspended).
All-in-One Construction – one time close for both conforming and non-conforming.
Other products available
ANY QUESTIONS REGARDING THIS INFORMATION PLEASE CONTACT:
Jim Hungerford at 971-226-8403
