What is up with mortgage rates right now?

[SusanBAnthony]

We were under contract at 3.25% in November, and backed out after inspection.  

I asked at the bank yesterday and they told me 3.25% for FHA, and 4.xx percent for conventional for 30 year term, less than 20% down.  What?  We were planning to put 5-10% down, as 20% would empty our savings.  May have to rethink things.  We haven't found another house yet, so we have a little time to wait it out.  

Is it because of the new lending fuels that went into affect, or is it a temporary blip, or are rates just going up?  

[jlt19]

I don't understand what the benefit of going conventional would be. Less out of pocket and a lower rate with FHA? Yes please! We've done both when buying and the FHA process was no different than the conventional.

[jenjen]

Jan 30, 2013 12:11:33 GMT -5 jlt19 said:

I don't understand what the benefit of going conventional would be. Less out of pocket and a lower rate with FHA? Yes please! We've done both when buying and the FHA process was no different than the conventional.

FHA has higher PMI (monthly and upfront) as well as a minimum number of years where PMI is required.

Op- I don't have any answers why. I think there were some positive housing numbers the other day. Something like values Up 5% not sure if that affects rates.

[SusanBAnthony]

There was positive housing news. I was afraid that was it, and higher rates are hear to stay.

DH works in a housing related industry and their stock is up. Yay job security. Boo house budget going down.

[sillygoosegirl]

Jan 30, 2013 12:11:33 GMT -5 jlt19 said:

I don't understand what the benefit of going conventional would be. Less out of pocket and a lower rate with FHA? Yes please! We've done both when buying and the FHA process was no different than the conventional.

Our agent pointed out a ton of things about our house (and many houses we looked at) that would have kept the house from qualifying for an FHA loan. And since it was a short sale, those things probably couldn't/wouldn't have been corrected before closing. For example, there was no working oven at closing, various "safety" things that looked to me like you'd really have to be trying to hurt yourself for them to be unsafe, etc.

[kadams767]

Jan 30, 2013 12:11:33 GMT -5 jlt19 said:

I don't understand what the benefit of going conventional would be. Less out of pocket and a lower rate with FHA? Yes please! We've done both when buying and the FHA process was no different than the conventional.

FHA inspection process is a lot stricter than conventional, for one thing.

For another, they have higher PMI rates and minimum required terms for PMI.  It doesn't always result in less money out of a buyer's pocket.

[SusanBAnthony]

When we sold our house, we had two offers,one FHA, one conventional. We picked the conventional offer just bc it was less of a pain in the butt and more likely to make it through closing without a hassle.

[vanillacourage]

FHA can be a PITA, as a seller if I had two competing offers I'd go with the conventional.

We locked our re-fi about 10 days ago; our agent has told us that rates have gone up since (not sure to what).

[calico]

When we re-fi'd in October, we had a conventional package and an FHA package. The PMI for the FHA was actually less than the conventional.

[jlt19]

That's interesting about the PMI difference. I guess I didn't notice it on our first house b/c we did an 80/20 loan, so no PMI.


I have noticed people complaining that refinancing has caused their PMI to go up, but we just refi'd in Dec and it actually went down $1/month.

We had no hoops to jump through to buy our current house and it had been recently foreclosed on. We bought it from the "flippers".

[LoveTrains]

Jan 30, 2013 12:11:33 GMT -5 jlt19 said:

I don't understand what the benefit of going conventional would be. Less out of pocket and a lower rate with FHA? Yes please! We've done both when buying and the FHA process was no different than the conventional.

With FHA you have to pay upfront mortgage premium insurance AND the monthly PMI is at least twice the cost of regular PMI. No thank you. 

[kaylie]

FWIW, we had to lock at 4.125% last April because our window was during a short-lived rate spike. They went down to 3.5% not long after we closed. They might go back down again.

[Deleted]

Starting this week we are within our 60 day lock-in window. Since the rates are up right now we chose to wait. Our mortgage guy can't tell the future but he suggested waiting a week or two and seeing what the rates do. 4th quarter GDP report cam out today and it is not good. This may cause some fluctuation in numbers that would benefit you (and me). I can't say for sure what it will do to numbers but I am waiting a week or two to decide.