your next loan will be low LTV & an ARM

The long-term fixed-rate mortgage is an asset that lenders do not want to keep on their books, Zigas said. They would rather force consumers to take on the interest rate risk. That's why adjustable-rate mortgages are prevalent in other parts of the world. With those loans, borrowers bear the risk of rates going up. Levitin said the jumbo market exists only because it piggybacks on the Fannie and... [more]

The long-term fixed-rate mortgage is an asset that lenders do not want to keep on their books, Zigas said. They would rather force consumers to take on the interest rate risk. That's why adjustable-rate mortgages are prevalent in other parts of the world. With those loans, borrowers bear the risk of rates going up. Levitin said the jumbo market exists only because it piggybacks on the Fannie and Freddie infrastructure. "The 30-year fixed-rate mortgage has been the bedrock of American housing finance from the Depression up until the beginning of the housing bubble," when borrowers went chasing after more exotic loans, Levitin said. "We have never seen a private mortgage market in the U.S. provide long-term, fixed-rate loans on a wide scale, and there's no reason to think it will." ------------------------------------- Standards are not likely to ease on the down payment front. Borrowers looking to take out FHA loans - the mortgage of choice in recent years for cash-strapped borrowers - could see the minimum down payment requirements rise from 3.5 percent, the administration said in a report to Congress last month. Also, Fannie Mae and Freddie Mac should gradually raise their minimum to 10 percent down, the administration suggested. Those regulators are close to proposing a plan that would extend that exception to all loans guaranteed by the government, including those backed by Fannie and Freddie. Here's where down payments come in: As part of that upcoming proposal, regulators plan also to exempt loans with down payments of at least 10 percent or 20 percent - the exact percentage to be decided after public comment is gathered. The costs to borrowers go beyond down payments. The administration has proposed that Fannie and Freddie raise their "guarantee fees" over the next several years. When borrowers fall behind or default on their loans, Fannie and Freddie use these fees to pay their mortgage-bond holders. The fees are usually included in interest rates paid by borrowers. The increase of one-quarter percentage point in annual premiums planned for FHA mortgages is scheduled to take effect April 18. For the vast majority of loans, the premium will rise from 0.9 percent to 1.15 percent. For a borrower who takes out a $170,000 mortgage, the average FHA loan size, the monthly payment would increase by $34 a month. http://www.washingtonpost.com/wp-dyn/content/article/2011/01/11/AR2011031103365_3.html?sid=ST2011031104789 [less]