Mortgage closing costs are on the rise across the nation and are up 8.8% over the last twelve months. Origination and title fees on a $200,000 home loan average $4,070 nationally according to Bankrate Inc.’s 2011 Closing Costs Survey.
Banks are requiring extra employment verification and the like to keep loans in shape for Fannie Mae and Freddie Mac, and although these regulations “have been in place for a couple of years already, the mortgage industry takes them more seriously now. New forms and regulations that are still in discussion are influencing lenders already.”
Bankrate said, “On average, lenders charge about $1,614 in origination fees this year, up 10.3 percent from last year. Origination fees include lender charges for services, such as underwriting and processing.”
“Interest rates get a lot of attention, and rightfully so, but it’s also important for consumers to compare lender fees when shopping for a loan,” said Greg McBride, CFA, senior financial analyst for Bankrate Inc.
Is lending passing on a cost that should have been built in to start with? What do you think of the rising closing costs? Click the comment link below to sound off.
Consider the following four things when deciding whether or not to lock in your mortgage interest rate:
- Lock in your rate as soon as you know you have a good deal in front of you, and you know roughly when you can close (30 to 60 days should be the longest lock period).
. - Lock it in with a lender who has the option of a “float down” if possible. If rates get better, you can participate in a portion of that improvement.
. - Lock it in with a lender who has a liberal rate-lock extension policy. No rate-lock extensions are free. Some even expire beyond the ability to extend. Make sure, whenever possible, that you work with a lender who will allow you to extend your lock if for some reason your deal takes a little longer to close than anticipated.
. - Don’t think about it very long. The rates go up a whole bunch faster than they come down. If the above is to your liking, lock!
No one can time the market. No one knows – plain and simple. If anyone tells you what will happen to interest rates in the future, consider not working with them – they think they know things they could not possibly know.
We do know what moves rates. We can even know anecdotally (after the fact) what did move rates. But then, we also know who won the Super Bowl – on Monday morning. We even know why, almost exactly why.
But, we never know what will happen to them. Lock in your interest rate with the above options as soon as you are able to.
If you have questions about locking in interest rates, use the comment link below to contact us with your questions and we’ll get back to you with answers.
The interest rates on mortgage loans have been moving in a downward direction for the past few years. Recently, the rates even fell below the five percent mark, coming in at about 4.92 percent on average for a 30-year fixed rate loan. This leaves many financial experts and consumers alike wondering if the interest rates on mortgages have finally reached rock bottom. Unfortunately, there is no crystal ball revealing this information, but you can take a look back on the behavior of interest rates to come to your own conclusion as to what rates will do during 2011.
The lowest point for the interest rates on mortgage loans was in the middle of November in 2010. After reaching the lowest point for the year, interest rates continued to go back up for the remainder of the year. According to HSH Associates, which publishes information on mortgage loans and other consumer loans, “There is a good chance we have peaked, give or take a few basis points” when speaking about interest rates.
The Mortgage Bankers Association predicts that the average 30-year fixed rate on mortgage loans will reach 5.1 percent by the end of 2011. The organization’s predictions also reach into 2012, when it predicts that the 30-year fixed rate will increase again up to 5.7 percent. According to the chiefe economist of Freddie Mac, Frank E. Nothaft, “While some rise in fixed-rates is expected, 30-year fixed-rate loans are likely to remain below 5 percent” throughout 2011.
Low home prices and mortgage rates combined to bring housing affordability to its second-highest level ever, according to a new report from the National Association of Home Builders.
For the third quarter of the year, the association’s Housing Opportunity Index rose to 72.1, indicating the percentage of homes sold that were affordable for those earning the national median income of $64.400. That mark was just below the all-time low of 72.5 percent from early last year, and it was the seventh straight quarter above 70.
“With interest rates remaining at historically low levels, and house prices starting to stabilize, homeownership is within reach of more households than it has been for almost 20 years,” said NAHB chairman Bob Jones.
Housing affordability has remained high even as personal incomes have failed to grow. According to the Department of Commerce, the average personal income dropped by 0.1 percent in September.
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