Mortgage rates have come down a bit from last week, as this chart from bankrate.com demonstrates:
|Mortgage Type||TODAY||+/-||LAST WEEK|
|30 yr fixed mtg||5.80%||5.91%|
|15 yr fixed mtg||5.52%||5.62%|
|5/1 jumbo ARM||6.15%||6.38%|
There remains a large gap between conventional mortgages (the rates above on the first line labeled “30 yr fixed mtg” are for less than $417,000) which are still available due to continued funding from Fannie Mae and Freddie Mac, and jumbo mortgages (those over $729,750). Prior to the credit melt-down this summer, the difference between conventional mortgage rates and jumbo loans was abou two-tenths of one percent, but is now about 1.4 percent. This large gap will remain until new sources of funding for jumbo loans develop. The previous method of funding jumbo loans through the sale of mortgage backed securities is completely dead for the foreseeable future. Rates for the so-called “expanded conventional” loans (between $417,000 and $729,750) are somewhere between those of conventional mortgages and jumbo loans.
Underwriting standards have become much tougher and it is much more difficult to qualify for a loan today. “Stated Income ” loans, where the borrower did not have to provide support for their quoted income, are pretty much unavailable now. Most lenders also require a minimum 20% down payment, although there are still some programs available for lower down payments.
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