Although interest rates have risen since last year, rates are still considerably low in comparison to previous years
Chicago, IL (PRWEB) June 07, 2014
CF Funding is pleased to share that mortgage credit is becoming more available, according to the Mortgage Credit Availability Index (MCAI). In the month of May, mortgage credit availability increased by about 1.4 percent, from 113.8 in April to 115.1. Some investors have lowered credit score requirements for FHA loans, which had an effect on the score. JUMBO loans also become slightly more available in May.
As seen in the graph, the index benchmarked to 100 in March 2012. The Mortgage Credit Availability Index did not exist during the housing boom, but an expanded historical chart has been released which reveals credit availability scores as high as 850 in 2006. Scores quickly dropped from October 2006 to October 2008 to levels near 100, and have remained close to 100 for the past six years. CF Funding is happy to see credit availability increase, although the pace is slow.
The MCAI uses several factors to calculate credit availability, including credit scores, loan types, LTV ratios, and other factors. Underwriting data from over 85 lenders and investors are used to create the index.
In other mortgage news today, interest rates were relatively unchanged in response to the Employment Situation Report. Total nonfarm payroll employment increased by 217,000 in May, but the unemployment rate remained at 6.3 percent. Most major worker groups (adult men, adult women, whites, blacks, and Hispanics) showed little to no change in unemployment in May. The number of long-term unemployed was nearly unchanged as well. As a response, the most prevalently quoted conforming 30-year fixed rate remained at about 4.125 to 4.25 percent, shown on Mortgage News Daily. Best-execution rates for FHA/VA today are near 3.75 percent, and 15 year fixed rates are near 3.375 percent. Interest rates for a 5-year adjustable rate mortgage are about 3 to 3.5 percent, depending on the lender. These rates are calculated based on an ideal scenario and may vary based on credit scores and other factors.
Although interest rates have risen since last year, rates are still considerably low in comparison to previous years. Over the past 20 years, the rate for a 30-year fixed rate mortgage reached as high as 8.5 percent (in 2000) and 8.8 percent in 1995.