Mortgage rates couldn't fall forever, it seems.
This week, for the first time since mid-June, the 30-year fixed ratemortgage rate climbed on a week-over-week basis, moving 6 basis points to 3.55%, on average, nationwide.
According to Freddie Mac, 3.55 percent is the highest average rate at which the benchmark product has been offered in close to 4 weeks.
The Freddie Mac published mortgage rate is available for prime borrowers willing to pay a full set of closing costs plus an accompanying 0.7 discount points.
Discount points are a one-time, upfront mortgage loan fee to be paid at closing where 1 discount point is equal to one percent of your loan size. In this way, a home buyer who pays one discount point at closing will be responsible for an additional $1,000 in closing costs per $100,000 borrowed.
However, although Freddie Mac says that the average mortgage rate is 3.55%, not everyone who applies for a conforming mortgage will get access to that rate. This is because Freddie Mac's published rates are the ones offered to "prime" borrowers, the definition of which often includes :
- Top-rated credit scores, typically 740 or higher
- Verifiable income using two year's of tax returns
- Home equity of at least 25%
Borrowers not meeting the above criteria should expect slightly higher mortgage rates and/or discount points. In some cases, such as when an applicant's credit score is below 680, mortgage rates may be higher by as much as 0.500%.
Although mortgage rates are up this week, though, the impact on home affordability is muted. Mortgage payments rose just $3 per month per $100,000 borrowed this week as compared to last week. 3.55% remains the third-lowest Freddie Mac rate of all-time.
Mortgage rates remain unpredictable and there's no guarantee for low rates to last forever -- much less through August. If today's mortgage rates meet your needs, therefore, consider locking something in.
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