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Payroll Tax Cut Impact on Rates

Over the holidays, you may have read that Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011. This measure/tax cut of 2% is paid for in part by increasing the fees that FNMA, FHLMC and FHA charge lenders (These fees are called Guarantee Fees or “G-Fees”). The payroll tax cut is a short-term benefit but the impact on G-Fees and FHA insurance costs could last a decade or more. These direct fees, in turn, will be passed on to lenders (us) and to you the borrower.

The impact to mortgage lending will be higher prices/rates for all Agency (Fannie & Freddie) & FHA loans as 98% of the loans originated are sold to these agencies. Lenders are already starting to “Bake” these increases into pricing using a drip approach so you don’t feel it as much. If you are in the process of refinancing or in escrow buying a home, we encourage you to lock your rates now.

Mortgage Rates:
Last Friday Standard & Poor’s downgraded the credit ratings of European nations except Germany. This historic downgrade helped keep rates at all time lows but for how long is anyone’s guess. Chances are if you are working with a retail loan officer, the rates offered are much higher than what we can offer. Give us call before you decide to lock a rate with another lender and we will provide you a no obligation free quote. Our underwriting is currently 24-48 hours. Ask about our interest only and portfolio products!Disclosure: These are our current conforming and High Balance rates based on primary residences only, your actual rate could be higher depending on several “Risk Factors” such as credit score, LTV, Cash-out, Investment prop, 2nd home, zero cost etc. Please call us for an accurate custom quote including jumbo loans up to $2 million and beyond

Current Conforming Rates (Pmyts based on a average loan amount of $250,000) for a historical perspective on rates please visit my blog on our website
Loan Program
Monthly Pmyt
Rate
APR
Points
30YF
$1175
3.875%
4.00%
0
20YF
$1466
3.625%
3.87%
0
10YF
$2442
3.25%
3.92%
0
15YF
$1741
3.125%
3.92%
0
5/1 ARM
$1004
2.625%
3.12%
0
7/1 ARM
$1037
2.875%
3.37%
0
FHA-30YF
$1157
3.75%
3.98%
0
FHA-15YF
$1756
3.25%
3.87%
0


Current High Balance Rates – Max Loan Amount $625,500 (Pmyts based on a avg loan amount of $550,000)
30YF
$2941
3.875%
4.00%
0
15YF
$4433
3.375%
3.87%
0
5/1 ARM
$2637
3.00%
3.12%
0
7/1 ARM
$2679
3.125%
3.37%
0
10/1 ARM
$2765
3.375%
3.87%
0
FHA-30YF
$2547
3.75%
4.00%
0



We appreciate the opportunity to work with you on your next refinance or home purchase transaction. Please pass this along if you think we can help any of your close friends or family.

SERVICE GUARANTEE:  
WE GUARANTEE A SMOOTH LOAN ORIGINATION PROCESS OR WE WILL REFUND UP TO $495 OF YOUR CLOSING COSTS

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