Mortgage Rates Go down again, especially Jumbo rates

Interest rates have gone down a bit over the last week, and mortgage rates for Jumbo loans are particularly attractive, down to the low 5% level.The following are some excerpts from this week’s newsletter on interest rates from HSH Associates :

“Mortgage rates remain at the most favorable levels of the year, not that buyers are exactly flocking to snap up cut-price homes. Given the wide differential in interest rates ( between shorter term mortgages and 30 year mortgages ), at least some borrowers should be considering hybrid 5/1 ARMs; whose a five-year fixed periods now average just 3.52%, down two hundredths of a percentage point from last week. Certainly, there are savings to be had for borrowers willing to accept some future interest-rate risk.”

“Mortgage rates are low and favorable and affordability is great. Few folks seem to care, save some late-to-the-game refinancers. There doesn’t seem to be anything on the immediate horizon to drive them strongly in one way or the others, so we will probably see very little change in rates again next week.”

There is speculation that the next move by the Federal Reserve may be to increase the federal funds rate which is now close to zero. If this occurs, short term interest rates will rise, but may have little effect on mortgage rates. Any move to change existing policy by the Federal Reserve, however, is not likely until the end of the year or if inflationary indictors begin to move upward.

The following are interest rate quotes from Al Hermann of American/California Financial Services ,

The following are interest rate quotes from Jan Schott Bank of America, Home Loans [email protected] 310-802-2300 :

“PURCHASE” SPECIALS

Friday, May 20, 2011

Conforming 15/Year Fixed to $417,000

3.750% @ .875/pts 4.000% @ 0/pts

Conforming 30/Year Fixed to $417,000

4.750%@ .875/pts 5.000% @ 0/pts

Conforming High Balance 30/Yr Fixed to $729,750

4.875% @ .250/pts 5.000% @ 0/pts

Jumbo 5-Year Fixed ARM to $2,000,000

3.500% @ 1.000/pts 3.750% @ 0/pt

Jumbo 30/Year Fixed to $2,000,000

5.000% @ 1.000/pts 5.250% @ 0/pts

FHA Fixed to $729,750

4.750% @ 0/pts