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March 7th, 2012

Mortgage rates lower, FHA refinance costs drop

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Refi ApplicationRates on the most popular types of mortgages declined slightly, according to HSH.com’s Weekly Mortgage Rate Radar. The average rate for conforming 30-year fixed-rate mortgages fell by a single basis point (0.01 percent) to 4.04 percent. Conforming 5/1 hybrid ARM rates decreased by 2 basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.94 percent.

FHA refinance costs slashed

“Mortgage rates remain both stable and favorable, and opportunities to buy or refinance a home have been pretty strong for a few months,” said Keith Gumbinger, vice president of HSH.com. “However, there are costs to refinancing which can be a deterrent for some borrowers who lack the cash to participate in the market.”

On Tuesday, President Obama announced a lowered-cost streamline refinancing program for certain homeowners with existing Federal Housing Administration-backed loans. Fees to transfer an old FHA loan to a new FHA loan have been substantially reduced. The upfront insurance cost to the borrower will be a fee of just 0.01 percent of the loan amount, and recurring annual premiums will be 0.55 percent, or half of the existing cost for many FHA borrowers. These new streamline refinance premiums take effect on June 11.

“Previously, FHA borrowers faced a full percentage point as the upfront fee to get into the FHA program and recurring annual fees of 1.10 percent. The new program will save many homeowners a bundle of cash both at the closing table and for years to come compared to what they would have spent. This looks like a good deal,” said Gumbinger. Gumbinger noted, however, that the FHA is increasing both upfront and recurring insurance premiums for new borrowers entering the FHA insurance program starting April 1.

Mortgage rates edged downward

Average mortgage rates and points for conforming residential mortgages for the week ending March 6 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

    Average rate: 4.04 percent

    Average points: 0.26

Conforming 5/1-year adjustable-rate mortgage

    Average rate: 2.94 percent

    Average points: 0.23

Average mortgage rates and points for conforming residential mortgages for the previous week ending February 28 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

    Average rate: 4.05 percent

    Average points: 0.25

Conforming 5/1-year adjustable-rate mortgage

    Average rate: 2.96 percent

    Average points: 0.24

Methodology
The Weekly Mortgage Rate Radar reports the average rates and points offered on conforming 30-year fixed-rate mortgages and conforming 5/1 ARMs. The weekly mortgage rate survey covers a large sample of mortgage lenders and is conducted over a Wednesday-to-Tuesday cycle, with data released every Wednesday. HSH.com’s survey helps consumers find the best rates on home loans in changing market conditions. Unlike mortgage rate surveys that report average rates only, the Weekly Mortgage Rate Radar’s inclusion of both average rates and average points provides a more accurate view of mortgage terms currently offered by lenders.

Every week, HSH.com conducts a survey of mortgage rate data for a wide range of consumer mortgage products including ARMs, FHA-backed and jumbo mortgages, as well as home equity loans and lines of credit from hundreds of direct lenders in the U.S. For information on additional loan products, visit HSH.com.

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2 Responses to “Mortgage rates lower, FHA refinance costs drop”

  1. Meet the 203(k) loan! – North Attleboro, MASS « North Attleboro Real Estate & North Atttleboro, MA Info by Tifwetherbee Says: March 8th, 2012 at 11:39 am

    [...] Mortgage rates lower, FHA refinance costs drop (hsh.com) [...]

  2. Sam Direct Says: March 8th, 2012 at 2:53 pm

    With mortgage rates at an all time lower. We should tell congress how important it is to own a house. Help tell congress in the Million Key Cause event:https://www.entitledirect.com/register/facebook/key_cause_landing_page.jsp

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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