Conforming mortgage rates continue to drop.
For the second straight week, the 30-year fixed rate mortgage fell to a new, all-time low nationwide. According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage rate dropped 1 basis point to 3.83% this week for borrowers willing to pay 0.7 discount points plus a full set of closing costs.
The 15-year fixed rate mortgage also set a mortgage rate record, registering 3.05% with an accompanying 0.7 discount plus closing costs.
Discount points are a one-time, up-front closing cost, based on loan size. 0.7 discount points is equal to 0.7% of the borrowed amount. A home buyer in San Marcos opening a $200,000 mortgage and paying 0.7 discount points, therefore, would be subject to a one-time $1,400 fee paid at closing.
Borrowers wanting to avoid paying discount points can expect higher mortgage rates than Freddie Mac’s reported national average.
Falling mortgage rates are nothing new throughout California. Since peaking in February 2011, mortgage rates of all types have been in steady decline. The 30-year fixed rate mortgage has shed 122 basis points since that date, falling from 5.05%; the 15-year fixed rate mortgage has shed 124 basis points, falling from 4.29%.
Low mortgage rates give today’s home buyers additional purchasing power, stretching home affordability to new heights.
Low rates also help existing homeowners to lower monthly mortgage payments. For example, as compared to mortgage rates just 15 months ago, homeowners refinancing into today’s 30-year fixed rate mortgage stand to save 13.4 percent on their respective mortgage payments.
A comparison :
- February 2011 : $539.88 principal + interest per $100,000 borrowed
- May 2012 : $467.67 principal + interest per $100,000 borrowed
A homeowner with a $300,000 mortgage at February 2011 30-year fixed rate mortgage rates would save $2,600 annually with a refinance to this week’s low rates. Even accounting for discount points and closing costs, the “break-even point” on savings like that comes relatively quickly.
Mortgage rates can’t be predicted so there’s no guarantee of low rates forever. If today’s rates meet your budget, consider locking something in. Speak with your loan officer about your options.
After a brief surge north of 4 percent last month, mortgage rates have settled down, near their lowest levels of all-time.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, for applicants willing to pay 0.7 discount points plus a complete set of closing costs, the average 30-year fixed rate mortgage rate fell to 3.88 percent this week.
0.7 discount points adds $700 to your mortgage closing costs for each $100,000 borrowed.
Mortgage rates are down this week on “safe haven” buying. The move is triggered by Wall Street’s concern that Spain and Italy will have trouble servicing their respective sovereign debt. In response, investors are selling risk-heavy assets and using the proceeds to purchase U.S. government-backed bonds.
This creates demand for mortgage bonds which, in turn, pressures mortgage rates lower.
The storyline is similar to what transpired in Greece last year, and, at least for now, it gives Oceanside home buyers reason to cheer. So long as economic uncertainty remains, mortgage rates may stay low.
Of course, like all things in real estate, though, mortgage rates are local. Rates offered by banks varied by region.
Freddie Mac’s survey of 125 banks showed the following regional breakdown :
- Northeast Region : 3.88% with 0.8 discount points
- West Region : 3.85% with 0.8 discount points
- Southeast Region : 3.91% with 0.8 discount points
- North Central Region : 3.89% with 0.6 discount points
- Southwest Region : 3.90% with 0.8 discount points
The best mortgage “deals” are currently available to North Central Region residents. The most expensive loans are for those in the Southeast.
Relative to history, though, all mortgage rates look inexpensive. Conforming 30-year fixed rate mortgage rates have never been as low as they are today. It’s a bonus for home buyers because cheap mortgage rate yield cheap mortgage payments. Home affordability remains near all-time highs.
If you’re unsure of whether now is a good time to buy or refinance, the answer is yes. Talk to your loan officer to review your mortgage options.
After a brief run-up two weeks ago, mortgage rates are back below 4 percent. It’s good news for home buyers and mortgage rate shoppers of San Marcos because with lower mortgage rates come lower mortgage payments.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, the national, average 30-year fixed rate mortgage rate fell to 3.99 percent this week from last week’s 4.08 percent.
Last week had marked the first time since December 2011 that the benchmark rate crossed north of 4 percent — a span of 16 weeks.
And, it wasn’t just rates that got cheaper this week — closing costs dropped, too.
Freddie Mac’s survey showed that the average number of discount points to accompany a 30-year fixed rate mortgage fell one-tenth of a percent this week to 0.7, where one discount point is equal to one percent of your loan size.
As a real-life example, a $200,000 La Costa mortgage with an accompanying 0.7 discount points would be subject to an additional $1,400 one-time closing cost. Last week, that cost was $1,600.
Note, though, that these are average mortgage rates for the nation. On a local level, rates may be higher or lower, and so may the accompanying number of discount points.
For example, in this week’s Freddie Mac survey, each U.S. region boasts its own “average rate” :
- Northeast Region : 4.00% with 0.7 discount points
- West Region : 3.94% with 0.9 discount points
- Southeast Region : 4.01% with 0.8 discount points
- North Central Region : 3.99% with 0.6 discount points
- Southwest Region : 4.02% with 0.8 discount points
These rates are each well below the average rates of a year ago when the average 30-year fixed rate mortgage was 4.86%.
Low mortgage rates can’t last forever so if you’ve been wondering whether now is a good time to buy a home or refinance one; or whether rising rates will harm your monthly budget, the answer may be yes. A weak economy held mortgage rates low last year. An improving economy should push rates higher this year.
Talk to your loan officer and review your home loan options. Looking ahead to spring and summer, mortgage rates appear poised to rise.
Mortgage rates have troughed. Or, so it seems.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage is 4.00 percent nationwide — roughly the same rate as it’s been for 5 weeks.
During that times, rates have ranged between 3.97 and 4.02 percent with an accompanying 0.7 discount points, plus “typical” closing costs. Closing costs vary by state and 1 discount point is equal to 1 percent of your loan size.
In other words, to get the weekly, published Freddie Mac rate, borrowers in California should expect to pay a complete set of fees to their respective lenders. The larger the loan, the higher the costs. “Low-fee” and “no-fee” loans are available, too — typically in exchange for a slightly rate.
A breakdown of the Freddie Mac survey shows that interest rates and discount points vary by region. Typically, states in the West Region offer the lowest rates but with the highest costs. East Region states work in reverse; rates are often highest but the accompanying points are fewest.
The most recent mortgage rate breakdown by region shows :
- Northeast Region : 4.00% with 0.7 discount points
- West Region : 3.96% with 0.8 discount points
- Southeast Region : 4.06% with 0.9 discount points
- North Central Region : 3.97% with 0.7 discount points
- Southwest Region : 4.04% with 0.7 discount points
What’s most notable, though, is that in all 4 regions, rates are well below their 2011 highs. Since mid-April, mortgage rates have been in descent, dropping for 5 consecutive months before reaching to their current, “rock-bottom” levels in early-November.
Since then, however, rates have idled and the forces that combined to make rates low throughout Oceanside are subsiding. The U.S. economy is showing signs of a rebirth; the Eurozone is edging closer to solvency; and the housing market is recovering.
So, if you’ve been wondering whether now is a good time to refinance, or whether higher rates will harm home affordability, the answer is yes. Get in touch with your loan officer to review your home loan options because, looking ahead to 2012, mortgage rates look poised to rise.