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Mortgage Rates Just Keep On Dropping
Continuing this year's extend rally, conventional 30-year fixed-rate mortgage rates dropped 4 basis points (0.04%) last week to reach 3.57% nationwide, on average.
Mortgage rates are now at their lowest point since 3 years ago.
All of this is unexpected.
Mortgage rates had been forecast to reach five percent this year, at least. Now, with the right set of circumstances, it appears as if 30-year fixed-rate mortgage rates could quickly reach the 2s.
If you've been wondering whether it's a good time to lock a mortgage rate or to start that mortgage refi, the answer is "yes". Mortgage rates may continue to drop in the future, but what if they don't?
Freddie Mac: 30-Year Rates Average 3.57%
According to Freddie Mac's weekly survey of 125 banks nationwide, conventional 30-year fixed rate mortgage rates now average 3.57%.
Rates are available to prime borrowers willing to pay an accompanying 0.5 discount points at closing, where one discount point comes at a cost of one percent of your loan size.
In Seattle, Washington, where the local conforming loan limit is $567, 500, paying 0.5 discount points to get this week's 30-year rate of 3.59% costs $2, 838.
Points, though, are treated by the IRS as "prepaid mortgage interest". Check with your tax preparer. You may be able to deduct a portion, or all, of the discount points you pay at closing.
Mortgage rates are at their best levels since May 2013.
Could 30-Year Mortgage Rates Fall Into The 2s?
As last year came to a close, the near-unanimous consensus among analysts on Wall Street was that 2016 mortgage rates would rise toward 5 percent, and likely even surpass it.
Today, though, already five months into the New Year, those calls look overblown.
Mortgage rates have dropped through 14 of the first nineteen calendar weeks of the year; and, rates have shed more to start 2016 than during any year since the 1990s.
This isn't how mortgage markets were supposed to go.
As 2015 came to a close, the jobs market showed improvement, consumer spending looked strong, and the Federal Reserve (finally) raised the Fed Funds Rate from its range near zero percent, where it had been since late-2008.
Mortgage rates climbed on the news.
Then, China's equities market sank. And, oil prices tanked. And, fear set in. And, inflation rates fell short. Safe-haven buying picked up.
Now, mortgage rates are at their lowest levels in 157 weeks and pricing is likely to improve in the weeks ahead, too.
Markets not only question whether the Fed will raise the Fed Funds Rate two more times this year, as had been forecast; but, they question whether the economy could even withstand it.
So long as there are doubts about the future of the U.S. economy, mortgage rates are expected to stay low. The larger those doubts, the more that rates could drop.
If you haven't compared mortgage rates lately, today's a good day to take a look.
Refinance Openings For VA Loans & FHA Loans, Specifically
With mortgage rates down, there are new purchase and refinance opportunities for U.S. consumers. Lower rates means lower payments.
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How to get the best mortgage rates - Quora
I agree with Michael Cheng. If you have a great credit score, stable, verifiable income, verifiable cash on hand or assets, you are a dream client. By comparison shopping, you will be able to obtain a Loan Estimate from at least three different types of lenders: Talk with the mortgage department of where you currently bank. You already have a banking relationship with them. This is a good place to start. Next, apply with a local, licensed non-bank mortgage lender. Somebody located in the town in which you live. Last, apply with a local mortgage broker.