30-year mortgage falls below 4% again Rates on adjustable-rate mortgages up in latest survey: Freddie Mac

Nov. 10, 2011, 10:52 a.m. EST

30-year mortgage falls below 4% again

Rates on adjustable-rate mortgages up in latest survey: Freddie Mac

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — Average rates on 30-year fixed-rate mortgages fell below 4% for the second time this year, according to Freddie Mac’s latest survey of conforming mortgage rates.

Rates on the 30-year mortgage averaged 3.99% for the week ending Nov. 10, down from 4% last week and 4.17% a year ago, McLean, Va.-based Freddie Mac said Thursday.

Rates on 15-year fixed-rate mortgages also dropped slightly, averaging 3.3% this week, down from 3.31% last week and 3.57% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.98% this week, up slightly from 2.96% last week. The ARM averaged 3.25% a year ago.

And 1-year Treasury-indexed ARMs averaged 2.95% this week, up from 2.88% last week. The ARM averaged 3.26% a year ago.

To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 of a point, the 15-year fixed-rate mortgage required an average 0.8 point and the ARMs required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

“Fixed mortgage rates were little changed this week amid a mix of economic data reports,” said Freddie Mac chief economist Frank Nothaft in a news release.

“The economy added 80,000 net jobs in October, below the market consensus forecast, but employment gains over the prior two months were revised up by 102,000 and the unemployment rate fell to 9%, the lowest in six months. Factory orders improved in September, yet the expansion in the service industry slowed in October,” he said.

Low home prices and mortgage rates have kept affordability high, Nothaft said, adding that the National Association of Realtors’ housing affordability index in September hit its third highest reading on record. 

Survey Reveals 5 Home Buying Myths

I saw an article about the 5 main areas of confusion with Home Buying, This was a survey done by Zillow, and they used the response of 1,000 potential home buyers.

1.      Appreciation:

About 42 percent of home buyers believe home values will appreciate by 7 percent a year.

 Reality: Historically, home values in a normal market appreciate by 2 to 5 percent in a year.

2.      Mortgage insurance:

 41 percent of buyers think they will have to purchase private mortgage insurance, regardless of the amount of their down payment.

Reality: Buyers only need to purchase PMI if their down payment is less than 20 percent of the home’s purchase price.

3.      Appraisals:

56 percent of the buyers said the purpose of the appraisal was to determine if a home was in good condition.

 Reality: That’s the purpose of a home inspection; an appraisal estimates fair market value.

4.      Home owner’s insurance:

37 percent of home buyers said that buying home owner’s insurance is optional.

Reality: Lenders require homebuyers to purchase homeowner’s insurance.

5.      Ownership:

 47 percent of home buyers said a prospective buyer owns a home after the purchase contract is signed.

Reality: The purchase and sales agreement is the beginning of the closing phase, but it can be a long process until they finally take ownership

If you have any questions about buying a home please let me know,

Maureen