Mortgage Rates: The Calm Before the Storm?

Despite being just 3 1/2 weeks from the much anticipated end of government purchasing of mortgage-backed securities, mortgage rates remain steady.  

Conforming 30 year fixed mortgages were available at 4.75 percent all of last week to well-qualified consumers paying a standard .07 to 1 point origination.   

30 year fixed FHA loans were also available at 4.75 percent with a standard .07 to 1 point origination. Despite the interest rate and origination being the same, FHA loans are significantly more expensive due to MI and other fees charged by the FHA (Federal Housing Administration) at closing. For those buying homes with an FHA loan, a home-buyer tax credit of up to $8,000, applicable toward closing costs, is available until April 30th.  

Jumbo 30 year fixed rates, for true jumbo mortgages exceeding conforming jumbo loan limits, remain at 5.625. It should be noted, banks like Wells Fargo, and specialty jumbo lenders like TheGreatLoan.com currently offer 5.5 to those with an extremely low loan to value ratio of 60% or less.  

Are steady low mortgage rates a calm before the storm? Forecasts for the rise in long term fixed mortgage rates, to take place when government MBS purchases stop at the end of this month, range from slight to drastic. One thing is clear, nobody; including Fed Chief Ben Bernanke knows exactly what's going to happen to mortgage rates, which move opposite MBS prices when the purchasing stops. That's why the Fed has left the door open to re-starting government mortgage-backed securities purchasing if needed.

Today's Mortgage Rates:  

• 30 yr fixed rate - 4.750%

• 15 yr fixed rate - 4.25%

• 5/1 ARM rate - 3.625%   

MI and FHA mandated fees make FHA loans more costly despite origination being the same.

• FHA 30 yr fixed rate - 4.750%

• FHA 15 yr fixed rate - 4.50%

• FHA 5/1 ARM rate - 3.625%  

Jumbo 30 yr fixed rate - 5.625% - with a low enough LTV (about 60%) 5.5 is obtainable

Jumbo Conforming 30 yr fixed rate - 4.875%  

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