Maryland Mortgage Market Update for March 8, 2010

Thirty year fixed rates dipped last week below 5% with 0 points for just a few hours, but toward the end of the week they started to climb again in the wake of released unemployment reports showing the unemployment rate stabilizing.   For the moment a well qualified purchaser can still obtain a 30 year fixed money loan at 5% for 0 points.   FHA and VA loans are still about the same as their Fannie Mae and Freddie Mac counterparts, but it will be important to watch the 10 year treasury index (TNX) this week.  Once this index moves over 39.50, most leading economists believe mortgage rates will begin again to climb.

Some rather important dates pertaining to home loan changes are on the horizon.  There is less than one month left before FHA's upfront mortgage insurance rate will be raised from 1.75% to 2.25%.  In order to secure the lower premium for clients, there must be a FHA case number ordered before April 5th. On a $300,000 mortgage this mortgage insurance premium change would result in an increase of $1,500 in costs.

Other big changes for FHA loans are in the works.  The first change is the reduction of a maximum seller concession from 6% down to a max of 3%.  Although the timing of this change has not been confirmed, it is likely to be implemented sometime between late spring and mid-summer.  Once the policy is formally announced there will be a mandatory 30 day Q&A/comment period before implementation.  The other major FHA loan changes will be establishment of a minimum credit score and an increase of the mandatory down payment.  It is not yet know when these changes will become policy, but it may correspond with the late spring to mid-summer timeframe of the anticipated changes above.  

Finally, as many readers are likely already aware, the Federal Homebuyers Tax Credit is ending very soon.  To qualify for the credit, buyers must have a signed contract by April 30th and settle no later than June 30th. With less than 60 days to complete contracts, the race is on for value priced properties in the $200k-$300k range. If you have any questions about the specifics of this program go to http://www.federalhousingtaxcredit.com or please contact me any time.

Some information in this market update was provided by Brent Ellwood, Regional Manager of PCR Mortgage Services, who can be contacted at (410) 991-9595.