Although vacations are over in Washington and the summer session has ended on Wall Street, a slow economic calendar combined with a holiday hangover kept trading activity light yesterday. Mortgage rates were mostly unchanged....AGAIN. I don't want to come across as upset about that in anyway. After a summer long battle with volatility it has been nice to work in a more stable environment. Lets just hope the recent range holds!  

It appears that consumers are getting out there to buy a home before the $8,000 first time home buyer tax credit expires in November. The Mortgage Bankers’ Association this morning released the weekly mortgage applications index.   This report measures the changes in mortgage applications at major lenders.  Also included with this report is a measure of refinance activity.  Higher refinance activity is another positive economic indicator as most people that refinance move to a lower interest rate and lower mortgage payment.  Today's data  shows that both purchase and refinance activity increased last week.   If you are a first time home buyer looking to take advantage of the tax credit, I would suggest that you get out there and find a home.  Many consumers will be trying to beat the deadline, and I suspect that volume at lenders will pick up as the deadline  approaches which can slow down the process.  If you close on December 1st, you do not get the credit so it will be extremely important that your application and processing go smoothly.  Call your loan professional and get them the required documentation as soon as possible even if you haven’t found a home yet.  Time is of the essence. 

At 1pm eastern, the U.S. Department of Treasury will conduct another auction today offering up $20billion in 10 year notes.  Yesterday’s $38billion of 3 year notes saw well above average demand and hopefully that trend will continue with today’s auction.  Despite record amounts of government borrowing, strong demand for our nation’s debt is helping to keep mortgage rates near historic low levels.  Matt and AQ will cover the auction on the MBS Commentary blog.

Reports from fellow mortgage professionals continue to show that the  30 year fixed rate conventional mortgage rate remains in the 4.875% to 5.125% range for well qualified consumers.  In order to qualify you must have a FICO score of 740 or higher, a loan to value at 80% or less and pay all closing costs including one point loan origination/discount/broker fee.  If you are seeking a FHA or VA loan, you should expect a rate between 5.00% to 5.25% with similar closing costs but to qualify you only need a FICO score of 620.  Some lenders are increasing the minimum credit score on FHA to 640 so it is more important than ever to make sure your FICO score is as high as possible. 

If you are considering buying a new home in the future, make sure you get a copy of your credit report from each one of the three credit agencies. HINT: Lately, because of a general back up at reporting agencies, credit reports are more likely show inaccurate information. To receive the best rate possible, it is important that corrections are made as soon as possible.   Once a year, you can get a free copy of your credit report directly from the agencies.  They will not provide you a score but they will send you the report so you can check it for accuracy.    Since the best rates only go to consumers with 740 or higher scores and with guidelines tightening, it is more important than ever to make sure your credit is as clean as possible.