2009 and 2010 Mortgage Rate Trends

Economic forecasts from Fannie Mae and the Mortgage Bankers Association published in August 2009 show mortgage rate trends to be higher.

The Fannie Mae rate forecast for 30 year fixed rates show a trend of steady increases from the current quarter through the end of 2010, with an estimated rate of over 6% at that time.

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Availability of Home Mortgages

Treasury Department said 8-17-09 that the 22 largest recipients of government aid reported a 13% increase in new mortgages in June.

Most banks expect lending standards to remain tight until at least the second half of 2010. The majority of lenders say that sub-prime lending will be even tighter.

Mortgage executives maintain that they are still making new mortgage loans and credit lines to both consumers and businesses, despite complaints.

Mortgage Credit Scores May Change for Some Borrowers

FICO credit scores for determining mortgage rates have recently changed. This change may help or hurt depending on several factors. High credit card balances can be a potential credit score detriment to mortgage borrowers. Also, some credit card companies are reducing credit limits and closing accounts, which may impact the mortgage industry because of possible credit score changes.

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FHA Mortgage Insurance

FHA mortgage loans can be flexible on credit scores and debt ratios, but FHA loans also require an up-front mortgage insurance premium of 1.75%. In addition to the up-front premium payment, there is a monthly mortgage insurance premium of .5% added onto the monthly payment. This is similar to paying mortgage insurance on conventional home loans over 80% loan to value.

Current Mortgage Rates

Mortgage rate survey provides current mortgage rates from a selection of banks. A useful tool for a quick online search or to follow daily mortgage rate movements from multiple lenders on a single page.

Current Mortgage Rates

FHA Loans for Condos Getting More Difficult

FHA loan guidelines are changing for condos. HUD now says that no more than 30% of the total units in a condominium project can be purchased with FHA loans.

They also now say that at least 50% of the total project units must be sold before closing the first escrow using an FHA loan.

It seems odd that the federal government would make it more difficult to buy a home in a struggling real estate market, as well as create a new barrier for the home building industry.