Current Rates and UPDATES

FHA UPDATE: A cash-out refinancing is limited to 95 percent loan-to-value up to the program limits for an FHA loan. If you're not looking for a cash-out refinance, the maximum loan-to-value is 97.75 percent. The rules bounced around quite a bit in 2008, especially as they relate to the mortgage insurance premiums paid by FHA borrowers. But the minimum down payment is not 5 percent of the purchase price for a home purchase. Rather, the minimum down payment for a new FHA loan increased (effective Jan. 1, 2009) from 3 percent to 3.5 percent. Instead of private mortgage insurance, or PMI, an FHA loan carries a government guarantee. The typical FHA borrower pays for this guarantee in two ways: First, with an upfront payment of 1.75 percent of the loan amount. Second, with an annual insurance premium of 0.55 percent on the outstanding loan balance. The annual premium is spread over the year rather than being paid as a lump sum. In most cases, the annual insurance cost to the homeowner will drop off after five years or when the remaining balance on the loan is 78 percent of the value of the property, whichever is longer.

ADJUSTABLE RATE MORTGAGES: The LIBOR is among the most common of benchmark interest rate indexes used to make adjustments to adjustable rate mortgages. This page also lists some other less-common indexes.

LIBOR, other interest rate indexes Updated 2/4/2009

Click on the links below to find a fuller explanation of the term.

This week Month ago Year ago Bond Buyer's 20 bond index 5.16 5.24 4.39 FNMA 30 yr Mtg Com del 60 days 4.83 4.65 5.54 1 Month LIBOR Rate 0.45 0.42 3.22 3 Month LIBOR Rate 1.23 1.41 3.16 6 Month LIBOR Rate 1.78 1.77 3.11 Call Money 2.00 2.00 4.75 1 Year LIBOR Rate 1.98 2.02 2.82

FIXED RATE MORTGAGES: Rates change daily with the mortgage bond market.  Mortgage products are being deleted or changed with very little notice.  Conforming/non-conforming conventional mortgages and government products (FHA/VA/MHFA) have different advantages and fees.  Private mortgage insurers change their guidelines and fees often also.  There are many guidelines and standards so you need more than ever to work with a professional.

LINES OF CREDIT: The prime rate, as reported by the Wall Street Journal's bank survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the fed funds rate, which is set by the Federal Reserve. The COFI (11th District cost of funds index) is a widely used benchmark for adjustable-rate mortgages.

Prime rate, fed funds, COFI Updated 2/4/2009

Click on the links below to find a fuller explanation of the term.

This week Month ago Year ago WSJ Prime Rate 3.25 3.25 6.00 Federal Discount Rate 0.50 0.50 3.50 Fed Funds Rate (Current target rate 0-0.25) 0.25 0.25 3.00 11th District Cost of Funds 2.757 3.155 4.072