As rates for home loans hit new lows, underwriting remains tight
By Inman News, Thursday, October 4, 2012.
Demand for mortgages from homebuyers and homeowners refinancing continues to rise, as rates continue to find new record lows in the wake of the Federal Reserve’s latest round of mortgage bond purchases.
But mortgage underwriting standards — largely dictated by Fannie Mae, Freddie Mac and the Federal Housing Administration — remain tight, and mortgages are difficult to obtain for those with less than sterling credit.
Rates on the workhorse 30-year fixed-rate mortgage averaged 3.36 percent with an average 0.6 point for the week ending Oct. 4, down from 3.40 percent last week and 3.94 percent a year ago, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey. That’s a new low in Freddie Mac records dating to 1971.
For 15-year fixed-rate mortgages, popular with homeowners who are refinancing, rates averaged 2.69 percent with an average 0.5 point, down from 2.73 percent last week and 3.26 percent a year ago. That’s a new low in records dating to 1991.
Rates on five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.72 percent with an average 0.6 point, up from 2.71 percent last week but down from 2.96 percent a year ago. Rates on five-year ARM loans hit a low in records dating to 2005 of 2.69 percent during the week ending July 19.