Interest Rate Update

It’s been a little while since we’ve posted an interest rate update. For the most part the news is still outstanding although rates have crept up just a little bit. According to Freddie Mac’s official press release this past week (Feb. 14th) the 30-year fixed-rate mortgage averaged 3.53% with an average 0.8 points. That number was unchanged from the week prior (but slightly up from a few weeks back) and lower than a year ago when the rates averaged 3.87%. A 15-year fixed-rate mortgage averaged 2.77% with an average 0.8 points, which is down from 3.16% a year ago.

In other mortgage related news, the USDA program which offers 0% down financing for rural areas is set to have its boundaries change at the end of March. This would make areas such as Sahuarita, Green Valley, Vail & Gladden Farms ineligible unless Congress acts to keep the boundaries unchanged. We’ll monitor the situation and see what happens, but this program is certainly a benefit to the housing market’s recovery so we hope it doesn’t get taken away from these areas. Thankfully other options are out there which make it easier for those with little money to put as down payment find a home, most notably VA loans, FHA (3.5% down) and the Pima Tucson Homebuyer’s Solution Program which offers up to 4% for down payment assistance/closing costs to qualified buyers.

On the other end of the financing spectrum is news that jumbo loans (normally defined as loans over $417,000) are once again becoming increasingly obtainable. For quite some time these loans were nearly impossible to get as lenders tightened their belts and underwriting standards grew exceptionally restrictive. Now jumbo loans can be had for as little as 10% down and some institutions will even allow qualified buyers to not put cash down but rather pledge their qualified investments. This typically is between 20-40% of the purchase price which would be pledged and allowed to still earn a return through its investment vehicle, making it attractive for buyers who can often outperform the interest rate on the loan and avoid capital gains taxes that would result from pulling this money from the investment.

Again, please contact Team Woodall if you have any questions and we’ll point you in the right direction.

Stephen Woodall

REALTOR, GRI @ Long Realty Company

Stephen has made real estate his full-time career and passion since 2008, primarily specializing in the Foothills & the Northwest Tucson areas of Oro Valley and Marana. He is a multi-million dollar producer, representing both sellers & buyers. Stephen has tremendous experience in new home sales, listing & selling primary residences, listing & selling vacant land, listing & selling luxury homes, investment properties, rentals, and real estate development parcels.