Hart Mortgage Services wanted to share this article from the Fort Myers News-Press wth you in regards to Florida Mortgage Rates dropping below 5%. Please use our Free Florida Mortgage Rate Tracker or call us today at 239-437-4278.
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It’s a great time to get a mortgage as rates drop below 5 percent
By Tim Engstrom • tengstrom@news-press.com • January 16, 2009
The average rate on 30-year mortgages fell below 5 percent for the first time on record this week.
That has potential homebuyers lighting up the phones at area banks.
Freddie Mac reported Thursday average rates on 30-year fixed mortgages dropped to 4.96 percent this week, down from the previous record of 5.01 percent, established last week. It was the 11th straight weekly drop, and below the rate of 5.69 percent at the same time last year.
Rates at are their lowest since the company started its survey in April 1971.
Mortgage rates have been dropping since late November, when the Federal Reserve said it was going to pump money into the banking system by buying $500 billion in mortgage-backed securities to get banks to lend more money and perhaps aid the ailing U.S. housing market.
“We are getting a lot of shopping calls, but we are getting more calls than actual applications right now,” said Brenda O’Neil, chairwoman and chief executive of Preferred Community Bank in Fort Myers. “I think we are going to see that translate to business in the next few weeks because there are some tremendous deals out there right now.”
Scott Evenson, owner of Lee-Co Mortgage Inc., in Cape Coral, said he has seen a noticeable increase in business in recent weeks, especially in bargain-priced, entry-level homes and high-end second homes.
“It’s either on the high end or the low end,” Evenson said. “There is nothing in between.”
Evenson said he has seen rates as low as 4.625 percent for people with credit scores of 710 to 720 and above.
Buyers using Federal Housing Administration loan programs are seeing rates around 5.25 percent.
Cape Coral resident Chris McCarter closed on the mortgage for his first home just a few weeks ago.
“I have been working for two or three years to get into a house,” said McCarter, 41. “Prices have dropped to the point where you have to make a move.”
Average home prices in Lee County have been steadily falling for months as foreclosures have flooded the market.
The median sales price of an existing home in Lee County was $106,100 in November, down 53 percent from $228,100 in November 2007.
McCarter said his home off Gator Circle in north Cape Coral was a foreclosed home.
“I feel bad for the people who were foreclosed on, but they weren’t using it as their home,” McCarter said. “It’s our home.”
While falling home prices and low mortgage rates have sparked buyers, current homeowners thinking of refinancing may find it challenging.
Origination loans and refinanced loans are taking up an equal portion of loan activity at Fifth Third Bank, but not everyone who would like to refinance can make it work, said Ed Erickson, who leads the bank’s mortgage lending operations.
“With interest rates in the fours, that is driving interest, but in some cases, the values just aren’t there to allow the refinancing,” Erickson said.
Frank Nothaft, Freddie Mac’s chief economist, said mortgage rates have fallen as the Treasury Department and the Fed added more than $100 billion in liquidity to the mortgage market since September.
The average rate on a 15-year fixed-rate mortgage rose to 4.65 percent. That rate was 4.62 percent last week, the lowest point since June 2003, Freddie Mac said.
Freddie Mac and sibling company Fannie Mae own or guarantee about half the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the companies in September.
- The Associated Press contributed to this report
Here is the link for the story– http://www.news-press.com/article/20090116/RE/901160399/1076
