Weekly Mortgage Update: 30yr Fixed - 4.5%; 15yr Fixed - 3.5%

Posted by Emily Ray-Porter Group on Monday, December 16th, 2013 at 8:26am.

JANUARY MORTGAGE CHANGES COMING – FHA Loan Limit Increase:  more to come every week

  • FHA on January 1st will be increasing it Maximum Loan Limit to $287,500 from $271,050

  • This makes the Maximum Sales Price $297,900 if our clients want to use the minimum down payment of 3.5%

  • Remember FHA has Mortgage Insurance for the life of the loan regardless of Down Payment

  • FHA Allows all the Down Payment and Closing costs to be a Gift from Family or close verifiable relationship

  • FHA Allows the Seller to Pay up to 6% of the sales price for closing costs.


Mortgage rates improved early in the week before worsening midweek alongside of speculation that the Fed may announce the tapering of its asset purchases in next week’s meeting of the Federal Open Markets Committee (FOMC).  While Congress approved a two-year budget deal on Thursday, pending approval from the Senate, speculation that the deal may allow the Fed to more easily begin policy-tapering put further pressure on mortgage rates. 

Dallas Fed President, Richard Fisher, stated early in the week that Fed-policy tapering needs to start soon, while St Louis Fed President, James Bullard, stated that any reduction in the Fed’s monthly asset purchases should be modest.  Stanley Fischer, former governor of the Bank of Israel, became the leading candidate for Vice Chair of the Federal Reserve late in the week.  While Fischer’s career has been widely regarded as successful, he has not yet been characterized as a hawk or dove, regarding Fed-policy tapering. 

While economic releases were light this week, Initial Jobless Claims were much worse than expected at 368,000, versus their 320,000 estimate, spiking above its 350,000 cap for an improving employment outlook.  The monthly change in Retail Sales Advance was slightly better than expected while the monthly change in the Producer Price Index (PPI) was slightly worse than expected.   


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