Question:

How are the 30 yr fixed mortgage rates doing?

Answer:

The 30 yr fixed mortgage rates are now comparable to a 5 yr ARM - slightly above 6%. Interest rates for fixed rate mortgages are going up compared to ARMs.

Also, the FHA 30 yr fixed mortgage loans rates and terms seem to become more attractive to low credit consumers given that subprime funding is difficult to get. Earlier, when subprime lending was everywhere and 100% LTV was allowed, the FHA 30 yr fixed mortgage rates and terms did not seem as attractive.

Recently, news came out from Fannie Mae that they will charge additional fees for mortgage loans with different features. For example, a fee of 0.5% of the loan amount will apply to a cash-out refinance and a borrower with credit score of 720+. If the borrower refuses to pay the fee in cash, it will translate into a rate increase. The lower the score, the larger the fee.

Thus, FHA with their variety of loans, including the classic 30 yr fixed mortgage are moving back into the spotlight, especially when high cost area loan limits have been adjusted.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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