Mortgage Rates : 30-Year Fixed Rate Hits 3.56% In Latest Weekly Survey

Mortgage rates know no bottom. For the fourth straight week, Freddie Mac reports 30-year fixed rate mortgage rates falling to a new all-time low. The average 30-year fixed rate mortgage rate dropped 6 basis points to 3.56%, on average nationwide.

The 15-year fixed rate mortgage rate fell to 2.86% -- also a new record.

Click here to get today's mortgage rates.

It's Time To Refinance That Mortgage (Again)

Freddie Mac's weekly mortgage rate report is compiled from more than 125 banks nationwide, across all five U.S. regions. Surveyed banks report back to Freddie Mac on their "going mortgage rate" plus the number of discount points required to get that rate.

Discount points are a one-time closing cost. 1 discount point is equal to one percent of your borrowed amount.

In general, the more discount points you pay, the lower your mortgage rate will be. This is one reason why Freddie Mac's weekly mortgage rate surveys show lower mortgage rates than, say, the Mortgage Bankers Association or HSH.com's report of the same -- Freddie Mac's surveyed banks report more discount points paid than either of the other two.

• Freddie Mac Survey : 3.56% mortgage rate + 0.70 discount points
• Mortgage Bankers Association Survey : 3.86% mortgage rate + 0.41 discount points
• HSH.com Survey : 3.96% mortgage rate + 0.29 discount points

For today's mortgage applicant, these three "published" rates are mostly the same. When you pay more closing costs, you get lower mortgage rates.

Click here to get today's mortgage rates.

This week, Freddie Mac reports that mortgage applicants paid, on average, 0.7 discount points for access to 3.56% mortgage rates. A borrower in Orange County, California, therefore, borrowing at the local loan limit of $625,500, would expect to bring an additional $4,379 to closing to account for discount points.

This is in addition to the "typical" closing costs that would apply. The same applicant borrowing at the Chicago, Illinois local limit of $417,000 would pay just $2,919.

These amounts may be "rolled in" to the mortgage or paid as cash at closing. They may also be waived entirely. Much like we saw with the Mortgage Bankers Association example above, mortgage applicants can always choose to waive their right to discount points in exchange for a higher mortgage rate.

When mortgage rates are this low, choosing to eschew discount points can help keep your loan size low and limit the risk that mortgage rates will be lower 6 months hence.

Click here to get today's mortgage rates.

15-Year Fixed Rate Mortgage Rate Falls To 2.86%

Freddie Mac's weekly mortgage rate survey showed the following national numbers :

• 30-year fixed rate mortgage : 3.56% with 0.7 discount points
• 15-year fixed rate mortgage : 2.86% with 0.7 discount points
• 5-year adjustable rate mortgage : 2.74% with 0.6 discount points

Note that the Freddie Mac survey does not differentiate between purchase money mortgages and a refinance. Sometimes, you'll find lower rates on 20% downpayment purchase transactions versus a comparable refinance.

The reverse can be true for specialized loan types including the HARP refinance program or loans for investors with more than 4 properties financed. Home buyers making low downpayments may also find mortgage rates to be slightly higher, on average.

These rates apply to conforming loans only. FHA rates follow a different pricing model.

Click here to get today's mortgage rates.