Interest Rates Decline for 3rd Straight Week

As of January 22nd Interest Rates again have declined to 4.99% for a 30 year fixed rate mortgage. This is an end result of the Fed pumping funds (1.25 Trillion) in to mortgage backed securities. This is not going to last forever so if you are thinking of buying you had better get with it and lock in a rate with your lender.

FHA lending however is going to be tougher to come by. In an effort to recover funds the FHA will be tightening guide lines for lending. MIP (Mortgage Insurance premium) will be increased to 2.25%. Minimum FICO score to qualify set at 580 with most lenders setting the bar even higher. They will also limit the “seller contribution” to no more than 3% of the purchase price vs. the 6% allowed currently. These changes are set to go in effect as early as this summer.

The window of opportunity is here now. Let’s not forget the Federal Tax breaks that are still available ($8,000 & $6500) with any contracts signed up to April 30th and closing no later than the end of June. I cannot further stress that time is of essence in today’s market.