Mortgage rates fall again, 30-year near record low.

Mortgage rates fall again, 30-year near record low

Mortgage Rate Trend Index

Experts polled by Bankrate.com this week remain divided on the short-term fate of mortgage rates. An equal number (36%) expect a decrease or, at least, no change. The remaining 28% foresee an increase.

WASHINGTON – Aug. 12, 2011 – Fixed mortgage rates fell to at or near record lows. That’s good news for the few who can afford to buy a home or are able to refinance. But the rates have done little to lift the ailing housing market.

Freddie Mac said Thursday that the average rate for the 30-year fixed mortgage fell to 4.32 percent this week from 4.39 percent. The 30-year loan hit a record low of 4.17 percent in mid-November.

The average rate on a 15-year fixed mortgage, a popular refinancing option, fell to a record low of 3.50 percent, from last week’s record rate of 3.54 percent.

Mortgage rates tend to track the yield on the 10-year Treasury note. A weakening U.S. economy has led many investors to shift money from stocks to bonds, which are seen as safer bets. That has pushed Treasury yields to historic lows.

In theory, low mortgage rates should provide a boost to the troubled housing market. But so far they haven’t helped much.

Sales of previously occupied homes fell in June for a third straight month to a seasonally adjusted 4.77 million. The pace is lagging behind the 4.91 million homes sold last year – the fewest since 1997.

New-home sales also declined in June and are trailing last year’s sales, which were the worst on records dating back nearly half a century.

Many people can’t take advantage of the low mortgage rates. Banks are insisting on higher credit scores and larger down payments from applicants. Others have too little equity invested in their homes to qualify for loans.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week.

The average rate on a five-year adjustable-rate mortgage fell to 3.13 percent, its lowest level on records that go back to January 2005. Last week’s reading of 3.18 percent also was a record low.

The average rate for one-year adjustable-rate loans plunged to 2.89 percent from 3.02 percent last week. That’s a record low dating back to 1984.

The rates do not include extra fees known as points. One point is equal to 1 percent of the total loan amount.

The average fees for the 30-year and 15-year fixed loans was 0.7 point and the five-year and one-year adjustable-rate loans was 0.5 point.
Copyright 2011 The Associated Press, Derek Kravitz (AP Business Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed
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How to get help with down payment to buy a home.

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Most home buyers’ biggest hurdle is coming up with the cash for a sensible down payment. Gone are the days of zero-down loans, so if that was your plan, you’re going to need a new one! Coming up with a down payment for a home is a challenge because it’s not chump change we're talking about, here. The down payment on a $200,000 house, for example, will run you anywhere from $7,000 (on an FHA loan) to $40,000!

That might seem like an insurmountable amount of coin to come up with, but it’s actually more doable than you might think. Some buyers will simply save up their own cash, even if it takes many, many moons. The good news is that if you still need some help to boost your down-payment savings, there are resources you can harness to power your home-buying pursuit.

1. The FHA Bridal Registry works like a traditional registry, but is more flexible. The registrants visit their choice of FHA mortgage lenders and set up what essentially is a custodial savings account for the sole purpose of funding their down payment. The couple’s (or individual’s) family and friends can either deposit funds directly into the account or give the cash or check to the couple or individual, who then deposits it into the account. The account’s flexibility also goes beyond that of traditional down payment gift rules that are applicable to FHA loans, which are detailed below in insider secret #2. With the FHA Bridal Registry Program, the only gift documentation required is “lender and borrower certification of the funds.”
2. Family gifts.  Most lenders will allow home buyers to apply gift money from family members toward their down payment - within guidelines, that is. First, the lender will require a letter from the giver verifying that it in fact is a gift and not a loan. (They generally frown upon it being a loan because it would add to the buyer’s debt and change their debt-to-income ratio.) And second, the person giving you the money must be a relative. The reasoning here is that a friend will most likely expect you to repay the money, whereas a relative won’t.
3. FHA loans will allow the gift to make up any portion or all of the buyer’s down payment, many conventional (non-FHA) loan programs will restrict the proportion of a buyer’s down payment that can come from gift money.  The lender may also have specific ways they want to see the money go into and out of your accounts. Before you accept a gift toward your down payment, be sure to check with your mortgage broker or loan rep to be sure that you’re dotting all the right i's and crossing all the right t's.Your Employer.  Some companies offer assistance programs to employees. Most are government, university, large company and financial industry employers. One example is safety workers: n some areas, safety workers like firefighters and police can have access to down payment grants from their employers if they buy properties in the city where they are on-call as first responders. Also, many large colleges and universities, very large companies and banks and lending institutions offer down payment help and have below-market-rate mortgages set up for faculty members and staffers.  Check with yFor more information of homes for sale of river front homes, ocean front homes, foreclosures, condominiums or cheap homes go to http://www.beachhomesdaytona.com/
4. City/County/State Programs.  Some states, counties and cities still offer programs that lend or give home buyers some assistance for down payments. These programs vary widely in scope - for instance, many target buyers with low and moderate incomes, while some seek to help the buyers of foreclosed or fixer-upper type homes. Some don’t have to repaid - meaning they are given as grants and are forgiven entirely if the buyer lives in the property for 30 years, but must be repaid if the buyer sells or rents the home out before the 30 years elapses. The programs pretty much all have some sort of homeowner education component that requires applicants to take personal finance and homeownership preparedness classes before they can receive funds. To learn more, visit your city, county and state websites to learn about programs that might be able to help you.
5. Your Human Resources department to see if any such program is available to you.
6. Your Retirement Funds.  Many financial advisors would advise against this, but if you have a 401K or Roth IRA account and some years to go before retirement, you might be able to tap into it or even borrow against your own funds for your down payment. Currently, you can take up to $10,000 out of your Traditional IRA with no penalty to put toward the purchase of your first home, but you will be taxed.  You can take as much as you want out of your Roth IRA contributions with no penalty or taxes, though, and as much as $10,000 from your earnings penalty-free for your down payment.  The rules get a little tricky, here, so definitely check in with your tax and financial advisors.
7. And while you can’t similarly draw from your 401K, many retirement and pension plans will allow you to borrow the money against your funds, then repay it to yourself – at interest. So the choice there comes down to paying your lender back with interest or paying yourself with interest. That choice should be you! But first, get some advice from your CPA or financial planner. This option might not make financial sense for your particular situation.

Why should you hire a realtor?

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