Current Mortgage Rates: Next Week's Mortgage Rates Forecast: Cloudy. FHA and Jumbo Loan Market Watch

August 8, 5:03 PMLA Mortgage Industry ExaminerEd Ferrara

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Mortgage Rates Forecast for Next Week: Cloudy.

30 Year Fixed Mortgage Rates may spike Monday morning. Though treasury yields shot through the roof last week lenders were hesitant to raise rates accordingly for 30 year fixed mortgages.

Why?

It may have to do with market stabilization. With home prices stabilizing newly originated loans are less risky. With a lower number of defaults lenders can profit with offering lower interest rates. In other words they can give a better deal and still make money.

FHA loans remain super popular as people try to take advantage of the new home buyer tax credit before it expires later this year. June was a new record for FHA loans originated. Most likely that record will be broken again in July as pending sales of existing home were up.

Jumbo loans remain a problem. Rates are actually pretty low but only for top qualifiers. You must have a lot of equity and a 700 plus credit score along with a heck of a monthly cash flow to refinance into a low rate jumbo loan. In other words if you don't really need it they're willing to give it to you. The major problem in jumbo financing is the collapse of the high end home market. When higher end home prices stabilize you can expect lenders to loosen up standards on jumbo loans.

The forecast for mortgage rates next week. Cloudy.

What could stop rates from going up? The government.

The fed auctions off a huge amount of long term treasuries next week. Bond demand has been flat as the stock market looks more profitable by the day. If the Fed's long term bond auctions bring high demand next week it's possible that will drive yields down and improve mortgage rates slightly.

Other notes: My research into mortgage net branch programs still determines the best is Supreme Lending. FreeRateUpdate.com now offers a free mortgage rate widget so if you have a website you can display mortgage rates free to your visitors.