16Nov2012
Dan Green
Author
Dan Green
Filed Under
Mortgage Rates

Mortgage Rates : 30-Year Fixed Rate Hits New Low At 3.36%

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30-year mortgage rates fall to 3.34% post-U.S. elections -- a new all-time low

Finally, mortgage rates break lower.

For the first time in 7 weeks, the average 30-year fixed rate mortgage rate moved to a new all-time low. Prior to this week, rates had made new all-time lows every other week, on average, since the start of the year.

Click here to get today's mortgage rates.

The Refinance Boom Continues Nationwide

According to Freddie Mac's weekly Primary Mortgage Market Survey, the national 30-year fixed rate mortgage dropped to a record-low 3.34% this week, on average -- an improvement of 0.06 percentage points from the week prior.

The 15-year fixed rate mortgage rate fell to 2.65%, on average. This is also an all-time low.

Mortgage rates have been in decline since late-2011, a run that's brought mortgage rates from the mid-4s to the low-3s. At the same time, mortgages for underwater homeowners have been proliferating.

HARP 2 has been introduced, the FHA Streamline Refinance has been softened, and the USDA has released its own no-appraisal refinance program in a pilot phase.

The Refi Boom is ongoing.

According to the Mortgage Bankers Association, refinance applications jumped 13 percent this week as compared to the week prior. The lowest mortgage rates in forever have a way of making that happen.

Click here to get today's mortgage rates.

You May Not Want The 3.34% Freddie Mac Rate

30-year fixed rate mortgage rates dropped to 3.34% this week, on average, but you may not want to lock it. This is because Freddie Mac's mortgage rates are printed with the assumption that refinance applicants will want to pay discount points.

Getting access to the 3.34% rate will require 0.7 discount points paid at closing.

By way of definition, discount points are an optional, one-time closing cost used to "buy down" a mortgage rate. 1 discount point is equal to one percent of your loan size. In general, the more discount points you choose to pay at closing, the lower your mortgage rate can be.

Freddie Mac's use of discount points in its survey is one reason why the Primary Mortgage Market Survey often shows lower mortgage rates as compared to other weekly mortgage rate surveys.

Compare them for yourself, keeping in mind that more discount points yields lower rates :

  • Freddie Mac Survey : 3.34% mortgage rate + 0.70 discount points
  • Mortgage Bankers Association Survey : 3.52% mortgage rate + 0.41 discount points
  • Bankrate.com Survey : 3.54% mortgage rate + 0.39 discount points

These three "published" rates say nearly the same thing. Freddie Mac's published rates aren't any lower, considering that Freddie Mac's survey shows the most required discount points.

When you pay more discount points, you get lower mortgage rates.

Click here to get today's mortgage rates.

15-Year Fixed Rate Mortgage Rate Falls To 2.65%

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

  • 30-year fixed rate mortgage : 3.34% with 0.7 discount points
  • 15-year fixed rate mortgage : 2.65% with 0.7 discount points
  • 5-year adjustable rate mortgage : 2.74% with 0.6 discount points

The Freddie Mac survey does not differentiate between purchase mortgages and refinance ones. Mortgage rates may be higher or lower depending your loan's unique characteristics.

Furthermore, specialized loan types including the Delayed Financing program for cash buyers, and loans for investors with more than 4 properties financed may be assigned slightly higher mortgage rates to account for slightly higher lender risk.

Lastly, these rates are for conforming mortgages only. FHA, VA and USDA mortgage rates follow different pricing models, as do jumbo and super jumbo home loans. All rates are better since last week.

Click here to get today's mortgage rates.

About the Author

Dan Green is a mortgage market expert, providing over 10 years of direct-to-consumer advice. NMLS #1019791. You can also connect with Dan on Twitter and on Google+.

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