Mortgage Rates Inch Near All Time Lows

Mortgage Rates Inch Near All Time Lows

Mortgage rates fell again last week and continue to inch closer to historic lows. This is the third consecutive week in which home loans saw a decline, according to the latest survey by mortgage buyer Freddie Mac.  

The average rate for a 30-year fixed loan saw a minor change, moving slightly down from last week’s 3.43% to 3.41%. As it stands, loans are now just .1% away from the historic low reached in November, 3.31%, which was the lowest average for a 30-year fixed dating back to 1971.

The 30-year fixed wasn’t the only loan to see a slight dip. The average rate on a 15-year fixed mortgage also fell marginally, creeping slightly downward from last week’s 2.65% to 2.64%, which is now just a hair above (.01%) above the historic low.

Additionally, hybrid 5-year adjustable-rate mortgage went down from 2.62% from a week ago to 2.60%. The 1-year ARM, however, saw a slight increase week-over-week, moving up to 2.63% from last week’s 2.62%.

At the same time that mortgage rates are nearing all time lows some financing options of the past are being re-introduced.  One such option is the 3% Down, Conventional Loan Product.  This loan product gives the opportunity to finance 97% of a sales price or appraised value.  This product, first introduced over 20 years ago when Mortgage Insurance was readily available, is being re-introduced now that housing values have stabilized within many housing markets.  Here are the standards:

     Here are the highlights of the 3% Down Conventional Financing Program:

•   Minimum Credit Score of 680 or greater

•   Debt-to-Income Ratio of 43% or less

•   Owner-occupied properties only

•   No Second-Home or Investment Property purchases

•   Borrower must use their own funds for the downpayment  

•   Maximum Loan Amount is $417,000

•   Requires Mortgage Insurance approval
  

Unless there is an unexpected surprise, rates are expected to remain constant in the short term. This opportunity presents home buyers and people looking to refinance an opportunity to benefit from rates at near-historic levels. In this week’s Mortgage Rate Trend Index by Bankrate.com, 77% of the experts and analysts polled believe that rates will either continue downward or remain relatively unchanged over the next week.