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Lancelot Tucker
Lancelot Tucker
Articles (104) 

Taking a Closer Look at the Mortgage Market

May 06, 2015

Owning a piece of property is a valuable asset, especially when that property is prime real estate. In the past and up to the present, the mortgage market has fluctuated, leaving some investors wondering when things will level out.

BB&T Mortgage is offering to release loan assumptions for trending rates to their customers. While determining rates can be a daunting task for some people, the company offers expert advice to anyone who is interested in applying for a loan to buy property.

Since April 2015, the mortgage market failed to make a good impression on analysts, investors and property owners alike. It ended up falling 2.3% to 447.9 on the weekend of April 24. This decline hurt Fannie Mae and Freddie Mac most because their capitals are low at this time.

Since the government failed to properly steer the Government Sponsored Enterprises (GSEs) and cut back on interest rate risk resulting from bailouts, companies such as these two mentioned and others are feeling the repercussion. The bottom line is wrong Federal policy designed by the authorities in charge result in failure in the system.

For single families, the US mortgage market is the largest globally. Since March 2015, mortgages amounting to $9.8 trillion were still outstanding. Although the GSE seemed to falter, still they are trying to play their part. In March 2015, they end up guaranteeing $4.5 trillion single-family mortgages that were still outstanding. Of this impressive amount of funds that they end up guaranteeing, they own a capital total of $6.4 billion. To level the field, it is better that the GSE work with a stronger capital amount and they should retain a large enough earnings total so that they can absorb as well as better deal with losses incurred by them.

In April 2015, the 30-year-fixed-rate mortgage was bucking an average of 4.34%. Since April 9, the 30-year-fixed-rate mortgage was standing at 3.66% and carrying an average of 0.6 point. It fell from last week’s averaged figure of 3.70%. This week, the 15-year-fixed-rate mortgage is carrying an average weight of 2.9% and a 0.6 average point. In 2014, the 15–year-fixed-rate mortgage was remaining at 3.38%. The 5-year Treasury Index rate that is adjustable for this week is 2.83% and it has an average 0.5 point, which is a step down from 2.92% the previous week. In the previous year, the 5-year adjustable rate was seen to be at 3.09%. The 1-year adjustable rate mortgage went to 2.46% during this week and carried with it an average of 0.4 point, which is a step in the right direction from 2.41%.

Mortgage lending ended up lifting some weeks ago, making way for US banks to enjoy an increase in profits. As banks slacken their policy on mortgage loans, homeowners went ahead and borrowed money for home loans refinancing. As applications for refinancing massively poured in, the bigger banks such as JP Morgan Chase and Company as well as Wells Fargo and Company are the ones benefiting most.

As the US mortgage market continues to battle on, experts in the industry are wondering if the market will completely recover to show a stronger sign of financial growth. Although the US real estate market is steadily picking up pace, one can only imagine that the mortgage industry will follow its example.

About the author:

Lancelot Tucker
Lancelot Tucker is a freelance writer living in Jamaica. He often writes about finances and other business based articles.

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