Fixed Rate Mortgages

Michele and Russell Poland's credit was shot, but they managed to buy their suburban dream home anyway. After a business bankruptcy and a home foreclosure, they turned to a rare option in this era of tightfisted banking - a subprime loan. The Polands paid nearly $10,000 in upfront fees for the privilege of securing a mortgage at 10.9% interest. And they had to raid their retirement account for a 35% down payment. Most borrowers would balk at such stiff terms. But with prices rising, the Polands wanted to snag a four-bedroom home in Temecula near top-rated schools for their 5-year-old son. By later this year, they figure, they'll be able to refinance into a standard loan.

Low mortgage rates and job gains are continuing to boost the housing market, with sales of existing homes at the highest level in three years and new housing construction up 21.6% in November from a year earlier. Homes were being sold last month at an annual pace of 5.04 million, the National Assn. of Realtors said in an update Thursday. It was the highest rate of sales for November since 2009, when a federal housing tax credit was about to expire. Excluding that month, sales were the highest since July 2007.

However, interest rates on the most popular form of adjustable-rate mortgages edged up slightly, the Federal Home Loan Bank Board said. Conventional fixed-rate mortgages averaged 10.85% in early August, down from 10.96% the month before, the FHLBB reported. A year ago, fixed-rate mortgages averaged 12.62%. Rates for the most common type of adjustable-rate mortgage, one that has a cap on how much rates can increase, rose slightly in early August to 9.43% from 9.41% in July.

Sales of government-backed mortgage securities rose in November to the highest level in more than three years, stoked by a refinance boom and a rush by banks to avoid a fee increase from Fannie Mae and Freddie Mac. Nearly $176 billion in bonds backed by fixed-rate home loans were issued in November, up from $132 billion in October and the most since $229 billion in June 2009, MortgageDaily.com reported Monday, citing the data firm eMBS Inc. ...

The average interest rate on 30-year fixed-rate mortgages rose to 7.08%, up from 6.87% the previous week, Freddie Mac said. Fifteen-year mortgages, a popular option for refinancing, rose to 6.59%, up from 6.37% the week before. On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 5.08%, up from 5.07% the previous week. Last year this time, one-year ARMs averaged 6.29%. These rates do not include add-on fees known as points, which averaged around 0.

The average interest rate on 30-year fixed-rate mortgages edged down to 7.52% this week, marking the third straight weekly decline. The average was down from 7.58% last week, according to a weekly survey by Freddie Mac, the mortgage company. Mortgage rates, however, had been creeping up for the last two months. So far this year, they have varied from a low of 6.74% at the end of January to a high of 7.71% at the beginning of this month.

Fixed-rate mortgages averaged 8.70% last week, up from 8.63% the week before, according to a national survey released Friday by the Federal Home Loan Mortgage Corp. It was the highest rate in three weeks. On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 6.34%.

Lenders were offering fixed-rate 30-year home loans to solid borrowers at an average of 3.34% this week, the latest in a series of record low mortgage rates, according to home finance giant Freddie Mac. The borrowers would have paid 0.7% of the loan amount to the lender in upfront fees and discount points to obtain the rate, Freddie said Thursday in its weekly report . The previous record low, set the first week of October, was 3.36% with 0.6%...

Fixed-rate mortgages dropped to record lows again this week, with lenders offering the 30-year loan at an average of 3.62%, according to housing finance giant Freddie Mac. That was down from the previous record low of 3.66%, set during the last two weeks. Freddie Mac, which has been conducting the weekly survey since 1971, said the 30-year loan has hit or matched a record low in 10 of the last 11 weeks. Lenders were offering the 15-year fixed-rate mortgage at 2.89% this week, down from 2.94% a week ago and also a record low. The starting interest rates for adjustable-rate mortgages also were at or near record lows this week, Freddie Mac said.

Fixed-rate mortgages dropped to record lows again this week, with lenders offering the 30-year loan at an average of 3.62%, according to housing finance giant Freddie Mac. That was down from the previous record low of 3.66%, set during the last two weeks. Freddie Mac, which has been conducting the weekly survey since 1971, said the 30-year loan has hit or matched a record low in 10 of the last 11 weeks.  Lenders were offering the 15-year fixed-rate mortgage at 2.89% this week, down from 2.94% a week ago and also a record low. The starting interest rates for adjustable-rate mortgages also were at or near record lows this week, Freddie Mac said.  Freddie Mac said borrowers would have paid on average 0.8% of the loan amount to the lenders to obtain the 30-year loan at the record low rate and 0.7% of the amount on the 15-year loan.

The Treasury Department has sold the last of $225 billion in mortgage-backed securities it began buying during the financial crisis and announced the program designed to keep the housing finance market afloat made a $25 billion profit. The purchases of bonds from Fannie Mae and Freddie Mac started in October 2008 and continued through December 2009 as part of a series of unprecedented government interventions into the financial system. “The successful sale of these securities marks another important milestone in the wind down of the government's emergency financial crisis response efforts,” said Mary Miller, the Treasury's assistant secretary for financial markets, on Monday.

Mortgage rates are scraping along near historic lows, Freddie Mac says in its latest survey of what lenders are offering to well-qualified borrowers. The 30-year fixed-rate mortgage averaged 4.22% early this week, the same as the week before, and just above the 4.15% record low reached two weeks ago. The rate on a 15-year fixed mortgage dropped to 3.39% this week from 3.44% last week. Borrowers on average would have paid lenders 0.7% of the loan amount upfront to get a 30-year loan and 0.6% on a 15-year loan to get those rates, said Freddie Mac, the giant government-controlled finance company.

Will the move to dismantle Fannie Mae and Freddie Mac mean the end of the 30-year fixed-rate mortgage as we have come to know it? Many housing proponents say that it will. Without the government's backing, they contend that the 30-year mortgage will become a relic of a bygone era when mortgage money was cheap and easy to come by. But others say America's most popular home loan will still be available — if you can afford it. Before digging deeper into the debate, a short primer: Although the long-term fixed-rate mortgage was born with the Federal Housing Administration — the government agency established in 1934 to help stabilize the then-shaky housing market — it was taken to its greatest heights by Fannie and Freddie, the two government-chartered institutions that were created years later to keep the money flowing for home loans.

Mortgage rates creep higher this week but the average cost of the mainstay 30-year fixed-rate home loan remains under 5% a year, Freddie Mac reports. Mortgage rates crept higher this week but the average cost of the mainstay 30-year fixed-rate home loan remained under 5% a year, Freddie Mac reported. The government-controlled housing finance firm said 30-year rates offered by lenders averaged 4.86%, up from 4.81% last week and 4.76% the week prior. The rate briefly topped 5% in February.