For the fourth straight week, mortgage rates improved last week.
According to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS), the average 30-year fixed rate mortgage rate shed 0.02 percentage points to 3.41% last week. The gains comes one-week following the benchmark rate's largest one-week drop in 88 weeks.
The average 15-year fixed rate mortgage rate fell for the fourth straight week, too, easing 0.01 percentage points to 2.64 percent.
For as badly as January, February and March treated U.S. rate shoppers, April has been terrific. Recent gains have dropped rates to a 14-week best.
Conforming 30-year fixed rate mortgage rates dropped 2 basis points, on average, this week to fall to 3.41%. Not since March have mortgage rates climbed on a week-over-week basis. Mortgage rates have returned to early-year lows.
In addition to falling rates, banks are charging fewer discount points in order to lock low rates. As compared to last week, lenders are charging 0.1 discount points fewer to lock the weekly published rate.
Lenders now charge an average of just 0.7 discount points.
Because 1 discount point is equal to one percent of your loan size, 0.7 discount points adds $700 per $100,000 borrowed from the bank. On a loan at the national conforming loan limit of $417,000, 0.7 discount points adds a one-time $2,919 cost due at closing, along with whatever state, lender, and government closing costs apply.
At the 2013 jumbo loan limit of $625,500, then, for places like Loudoun County, Virginia; Bethesda, Maryland; and Los Angeles County, California, 0.7 discount points carries a one-time cost of $4,379.
The good news is that points are optional.
Mortgage rates are dropping, but dropping unevenly by region. Depending on where you live, you're likely getting different rates from the rest of us.
Today's cheapest mortgage rate-and-fee combinations, therefore, are being offered available to buyers and refinancing households in Minnesota, Illinois, Wisconsin, Michigan, and Ohio; and in California, Oregon, Washington, Nevada and Arizona.
The most "expensive" mortgages, by contrast, are those quoted to applicants in the Southwest Region, an area which includes New Mexico and Oklahoma.
Freddie Mac's survey will show more differences that just regional one.
For example, the rates shown are for purchase loans, but 80% of today's mortgage applications are linked to a refinance. Furthermore, the Freddie Mac rates are for prime borrowers. Mortgage applicants with average credit scores can expect slightly higher rates at closing.
Lastly, note that Freddie Mac's published mortgage rates are for conforming loan only. FHA loans, VA mortgages and USDA products follow different pricing models. The same is true for jumbo loans.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
Barry L. Systems Analyst
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2015 Conforming & FHA Loan Limits
Mortgage loan limits for every U.S. county,
as published by Fannie Mae & Freddie Mac, and the FHA.