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Update for Rates 2006Update for Rates 2006
kevinloans said: "Well like it was predicted, Prime Rate is still at 7.5% with Alan Greenspan gone, hopefully on decline however. People with a minimum of 620 FICO score are able to qualify for a 30 year fixed rate at around 5.875%-6.5%. Rates for a 15 year fixed are going right around 5.5%-6% while Option Arm Loans are becoming quite popular with the start rate rising to 2.4%. Looking at the rates in beginning of 2006 compared to the end of 2005, rates are on a gradual decline. The average 30 year fixed has dropped from 6.375% to 5.875%.
One trend that has ceased to decline is the sub-prime market. Those with FICO scores 580-620, are targeted with 7-8% rates on a 2 year arm. A 30 year fixed would result in a 8-9% rate, where it makes absolutely no sense to touch their exsisting loan. Rates of 9-10% are mainly consumed by people with 500-550 FICO scores, unless they have a relatively low loan to value ratio.
People that seem to be doing well in the market, even regardless of their FICO scores, are those who are able to keep their LTV below 65%. Rates are relatively low for even those who have a 500 FICO score, as long as their mortgage balance does not exceed 65% of their home value.
Debt consolidation continues to be a popular preference because of the comparisons of a 20% credit card, which normally take 3-5 years on avergage to pay off. Compared to a high rate of 8-9%, hundreds of dollars can be saved depending on the balances of the credit cards and the minimum payments."
sexione said: "Hi. We were pre approved for a 30 fixed for $225,000 interest rate 6.75% my fico middle is 670 and my husband is 630. No points and no money down...how does that sound? We are 25 yr olds and first time homebuyers. We are in Illinois and looking to buy in Carol Stream, IL. They were able to use my income and I have only been at my job for 9 months full time and before this I have not worked for 3 years and not even close to working in the same field. He said we were a level 4 when it comes to credit scores and thats because of my wondeful husband's :o score of 630 . Any suggestions?"
kevinloans said: "It sounds like they are giving you an FHA loan. Usually you can tell by the way they structured your loan. Most first time homebuyers have two mortgages called 80/20, but in your case 6.75% 30 Yr. Fixed on one loan is very good if they can deliver. I would definitely proceed going with the institution that has pre-approved this for you. Good luck!"
sexione said: "Thank you!"
goodkiller said: "[QUOTE=kevinloans]It sounds like they are giving you an FHA loan. Usually you can tell by the way they structured your loan. Most first time homebuyers have two mortgages called 80/20, but in your case 6.75% 30 Yr. Fixed on one loan is very good if they can deliver. I would definitely proceed going with the institution that has pre-approved this for you. Good luck![/QUOTE]
I lucked out on my FHA when rates were ROCK bottom. at the time, I was median 590 mortgage-enhanced FICO and still got 5.75% 30-year, fixed. I will NEVER touch that loan. *heh*"
nikfrz said: "Got a 30 yr fixed at 8.125 since 1999. Fico is 560 and hopefully on the way up thanks to all you guys. Have townhouse valued at apprx 160,000 and balance on loan is 50,000. I need to refinance around 81,000 to rid myself of some past dues, maybe less if I can work out settlements without being
1099'd. What are my chances of less than 8%, preferrably with no points, and who are reputable brokers that wont give me a big surprise at closing?"
goodkiller said: "[QUOTE=nikfrz]Got a 30 yr fixed at 8.125 since 1999. Fico is 560 and hopefully on the way up thanks to all you guys. Have townhouse valued at apprx 160,000 and balance on loan is 50,000. I need to refinance around 81,000 to rid myself of some past dues, maybe less if I can work out settlements without being
1099'd. What are my chances of less than 8%, preferrably with no points, and who are reputable brokers that wont give me a big surprise at closing?[/QUOTE]
less than 8, your chances are okay, 560 is a bit low, but Mortgage companies often want a "clean" current report, with no current delinquincies. You won't really know until a loan officer reviews your report. I don't have any brokers for you, but I would try some local "mom & pop" ones or credit unions first.."