Ken Pederson, Certified Mortgage Planner

Mortgage rates are volatile and can turn on a dime these days. Up one morning and down in the afternoon and vice versa. There has been some good movement and general "trending" since earlier in August though which could be a positive sign for mortgage rates as we head into the fall.

Click Here for a quick synopsis on what happened last week and what's in store for us in the week ahead.

Courtesy of:
Ken Pederson
Certified Mortgage Planner, CMPS
FAIRWAY Independent Mortgage Corp.
717-431-9299

PA's Top Lender

Check out the bond chart below. As bond prices go down (see the red), mortgage rates go up. As bond prices go up (see the green), mortgage rates go down. (please note, there are many factors that push rates one direction or the other, but mortgage rates do tend to move adversely to bond prices) Note the volatility of the ups and downs over the past 3 months. Now, notice all the green since August 11th and the "break-out" above several of those downward trending lines which had been acting as "ceilings of resistance." Nobody knows what will happen with mortgage rates, but I do like the trend of the past 20 days or so. Other good news: Gas prices have fallen and the dollar has strengthened.

Information is courtesy of
Ken Pederson
Certified Mortgage Planner, CMPS
PA's Best Lender

FHA financing is undergoing some changes as a result of the "Housing and Economic Recovery Act" or HERA. Here are a few of the major changes.

*No more seller-funded Down Payment Assitance programs. Grants and gift money is still OK.
*Buyer contributions will be increased from 3% to 3.5%
*The recent credit-score driven mortgage insurance costs are being postponed.
*For most FHA home purchases and refinances, there is a small bump from 1.5% to 1.75% for the Upfront Premium that is financed and the monthly renewal cost is increasing from .50% to .55%. This is a minor change that won't alter qualifying or anyones ability to qualify for a home.

FHA home financing has dramtically increased their market share of loans due to the HUGE tightening changes that conventional (FNMA and FHLMC) and private mortgage insurance companies have initiated over the past 10 months. FHA is flexible, has more credit score flexibility and more down payment options and similar and even sometimes lower interest rates.
Primary benefits of FHA:
*6% seller concession is allowed
*3.5% buyer contribution may be gifted to the buyer
*Non-occupying co-borrowers are allowed to help with qualifying
*FHA says they have no minimum credit score, but most investors have their own limitations, often in the 580 range.
*1-4 unit properties, owner-occupied only, may be purchased with small down payment

Luckily for me, FAIRWAY Independent Mortgage is a fully approved FHA Lender which gives us many advantages over mortgage brokers that are not approved FHA lenders or acting as a broker. Be safe, work with a fully approved FHA lender and mortgage banker.

PA's Best Lender
Ken Pederson
Certified Mortgage Planner, CMPS
717-431-9299