The 15-year FRM this week averaged 4.39 percent with an average 0.7 point, unchanged from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.48 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.00 percent this week, with an average 0.6 point, down from last week when it averaged 4.03 percent. A year ago, the 5-year ARM averaged 4.80 percent.

The 1-year Treasury-indexed ARM averaged 4.25 percent this week with an average 0.5 point, up from last week when it averaged 4.22 percent. At this time last year, the 1-year ARM averaged 4.77 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

“Mortgage rates on 30-year fixed loans have averaged about 5 percent over the first four months of this year, staying within a band of roughly a quarter percentage point and virtually matching 2009’s annual average,” said Frank Nothaft, Freddie Mac vice president and chief economist.” These low rates have been helping to moderate house price declines over the course of the year.

“Prices on existing homes showed a 12-month increase of 0.7 percent in February, which was the first annual increase since December 2006, according to the S&P/Case-Shiller® 20-city composite index [PDF]. In addition, nine cities experienced positive growth, matching the number in January. Further, the Census Bureau’s Constant Quality price index showed that new home prices rose 2.5 percent in the first quarter on an annual basis.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

TO READ THE ENTIRE REPORT ISSUED BY FREDDI MAC TODAY CLICK HERE.

Eligibility- Traditional versus reverse mortgage

Let us observe the difference between a traditional and reverse mortgage. When you are planning to take out a traditional mortgage, there are few factors that a lender will take into account prior to approving your mortgage application. These factors include the following –

1. Income

You will be required to provide details of your income. This is usually done to assess your repayment capacity and how much financial obligation you will be able to take on.

1. Employment

You need to have stable employment. You will be required to have a steady inflow of cash each month so that your chances of defaulting or falling behind on mortgage payments are minimized.

1. Collateral

In order to take out a mortgage, you need to provide collateral that can act as a safety net for the lenders. Should you fail to make mortgage payments; the lender can foreclose on your property to recover the loss.

1. Credit history

A ruined credit rating will prevent you from enjoying favorable rates on your mortgage. Following recession, lenders have become stringent in their lending habits. On the other hand, if you are able to maintain a good credit rating, you are likely to enjoy lower mortgage rates. And lower mortgage rates mean lower monthly mortgage payments.

1. Down payment etc

It is important to save enough cash for down payment. This gives assurance to the lender that his investment is safe and involves less risk.

If you fail to qualify for a traditional mortgage, try out reverse mortgage provided you are eligible. The qualifying factors are quite different as compared to traditional mortgages.

What are the factors that help you qualify for reverse mortgage?

There are several factors that decide whether you are eligible for a reverse mortgage. They are as follows –

1. Age

In case of reverse mortgage, you should be 62 years and above. This has been made mandatory as per norms laid down by the Department of Housing and Urban Development in the US.

1. Credit history

Credit history doesn’t affect your eligibility for taking out a reverse mortgage. You can still qualify for a reverse mortgage if you are able to satisfy the other parameters.

1. Equity in your property

You need to have sufficient equity in your property so that you qualify. Equity in your property should be enough to pay off your earlier debt obligation if any.

1. Your income

Your income is not taken into account when you apply for reverse mortgage.

1. Property type

In order to qualify for reverse mortgage, the house in which you are residing should be your primary residence.

It is evident that it is easier to qualify for reverse mortgage as compared to traditional mortgage. However, both have advantages and disadvantages and you need to weigh the pros and cons prior to settling for a mortgage.