Many of our buyers are purchasing Bank Owned properties with substantial credits for closing costs.  Often we find that we have more seller credit than initial closing costs.  So, rather than buying down the rate we have been buying down the mortgage insurance.  It is pretty simple.  We pay a portion or even all of the mortgage insurance (MI) up front with the seller's money and reduce or eliminate the monthly MI.  This strategy can reduce the monthly payment about 5 times more than buying down the interest rate.

If you are putting less than 20% down ask about pre-paying MI.

The record run for rates was halted this week, pretty dramatically. Freddie Mac announced that for the week ending November 18, 30-year fixed rates averaged 4.39%, up sharply from 4.17% the previous week.

Yesterday we helped close the last of the first time home buyers who are eligible for the tax credit... or was that the end? Qualifying military personnel have another year and there is the extension to the extension.

Rates fell to their lowest levels since Freddie Mac started tracking them in 1971. Freddie Mac announced that for the week ending June 24, 30-year fixed rates averaged 4.69%, down from 4.75% the previous week. The average for 15-year fixed fell to 4.13%. Adjustables were also down with the average for one-year adjustables falling to 3.77% and five-year adjustables decreasing to 3.84%. A year ago 30-year fixed rates were at 5.42%. “Rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed loans in September 1991 and 5-year hybrid ARMs in January 2005. The record low for traditional 1-year ARMs of 3.36 percent oc curred during the week of March 25, 2004. Both new and existing home sales showed unexpected declines in May. Existing sales fell 2.2 percent, compared to the market consensus forecast of a 6.0 percent gain, based on figures published by the National Association of Realtors. Sales of new homes fell 32.7 percent to an annualized rate of 300,000 units, which was the largest monthly drop and slowest pace since records began in 1963, according to the Census Bureau." Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

First-time homebuyers looking to land an $8,000 federal income tax credit may have a little more time to close on their purchases if a Senate amendment unveiled Thursday makes it into law. As it stands now, homebuyers must have signed contracts by April 30 and must close the deal by June 30. They could be eligible for an $8,000 tax credit if they are first-time buyers or a $6,500 credit if they owned and lived in their previous home for five of the last eight years. The closing deadline, however, could be pushed back to Sept. 30 under an amendment offered by Senate Majority Leader Harry Reid, D-Nev., Sen. Johnny Isakson, R-Ga., and Sen. Chris Dodd, D-Conn. The senators said they want to make sure banks have time to process the transactions, especially short-sales, which is a more involved process. "By extending the transaction deadline, we ca n ensure that everyone taking advantage of this credit can complete the purchase of their new home, Reid said. It remains to be seen, however, whether the amendment will go anywhere. It’s part of a controversial jobs and tax bill that may be radically changed before the Senate approves it. Lawmakers are not scheduled to vote on the bill until next week at the earliest. Source: CNNMoney.com