Dennis Norman
The Mortgage Bankers Association (MBA) released its weekly mortgage applications survey for the week ending October30, 2009. The report showed an decrease of 1.8 percent in mortgage loan applications for a home purchase from the week before in spite of the fact interest rates slipped back below 5 percent again on a 30-year fixed-rate mortgage.
For the past four weeks mortgage applications for home purchases is down 5.0 percent which indicates to me we are probably going to see home sales numbers for October drop from the September pace as well.
Homeowners refinancing their existing mortgages continue to dominate the mortgage application activity with 66.1 percent of loan applications for the week being refi’s.
Interest rates and fees for the week:
- 30 year fixed-rate mortgage interest rates decreased to 4.97 percent from 5.04 percent the previous week, with fees decreasing to 1.01 percent from 1.25 percent on loans that are 80 percent of the value of the home.
- 15 year fixed rate mortgage interest rates decreased to 4.33 percent from 4.53 percent with fees increasing to 1.33 percent from .78 percent on loans that are 80 percent of the value of the home.
- One-year ARM interest rates increased to 6.83 percent from 6.79 percent with fees decreasing to 0.31 percent from 0.29 percent for loans that are 80 percent of the value of the home.
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Can you please advise me as to where in Ohio the interest rate is below 5.0%?
After calling around today to banks and mortgage brokers heres what I found.
Banks avg rate 5.125%, with the average closing costs over $2200
Brokerage firms 4.875% average closing costs $4450. More than double the banks for only .25% better rate.
It does not seem to make since to me to go with the lower rate and higher cost.
Gordon,
The information that comes out from the MBA is based on national averages. Locally rates vary, sometimes significantly, and it appears this is what you are finding in Ohio.
As for your comparison between the bank rate and fees and brokerage rates and fees it is hard to determine which one is the best deal without knowing loan amount and the length of time you plan to stay in the home. However, assuming a loan amount of $250,000 the difference in payment between the two rates is about $27 per month ($1,350 vs $1,323)..there is an additional $2,250 in fees to get the lower rate, therefore it would take you 7 years of the lower payments just to make up for the additional cost of the loan….If it were me, unless I was sure I was staying put in the house for a long, long time, then I might opt for the lower rate, but If not I would save the cash and take the higher rate.
Good luck
Dennis