Nickel Mortgage News

In December we saw the yield on the 10-year bond drop to 2.16 due to the announcement of the FED's buying mortgage backed securities and 10-yr bond notes. This allowed the mortgage interest rates to be the lowest in years.  As of Feb. 4th 2009, the speculation of the purchasing of these long term notes are still perkulating, which would see the mortgage interest rates dropping possibly further. 

As interest rates fall, the opportunity for new home purchases will rise in atttempts to stimulate the economy.  As the demand grows this could allow longer turn around times at various lenders.  Most lenders will require a more complete underwriting package, which could delay the mortgage commitment letter.  In some cases it has been known that with a huge influx of business, that lenders may increase interest rates to catch up. 

There has been some changes in underwriting guidelines and will also see further restrictions in 2009.  Fannie Mae and Freedic Mac have instituted delivery fees for borrowers with credit scores below 740 on certain programs.  We are also seeing Loan to Value restrictions on cash out refinances.  FHA is now requiring a 2nd appraisal on borrowers that request a cash out loan over 85% of their home value. 

Let's hope with this stimulus plan that we will see the lower interest rates and the lenders open up their credit guidelines.  I would like to see a loan program for the self employed borrower. 

In this crazy environment, rates changes sometimes happen hourly, be patient.  As you get closer to a closing date, usually interest rates are slightly better.

April 30 2009 in the deadline to receive the tax credit for 1st time homebuyers.

As always if you have any questions, please feel free to contact me at (716)558-5200