Today's mortgage rates are higher as compared to last week, yet millions of U.S. homeowners remain "in the money" to refinance to lower rates and monthly savings.
Many mortgage applicants have been getting access to rates below the national average of 4.23 percent -- especially homeowners electing to refinance via "special" loan programs including the FHA Streamline Refinance, VA Streamline Refinance, and the Home Affordable Refinance Program (HARP).
Although rising, mortgage interest rates still sit near their lowest levels of 2014 and well below their average from one year ago.
If you've bought a home in the last 18 months, consider a home refinance. Lenders are pricing rates and APRs aggressively and attractively.
Mortgage rates have been on decline for the last nine months. The conventional 30-year fixed rate mortgage opened the year at 4.53 percent, on average, and slid lower month-by-month until current mortgage rates reached 4.10% on Labor Day.
Since the start of September, however, rates have been rising.
According to Freddie Mac, which polls 125 mortgage lenders weekly, the average 30-year fixed rate mortgage rate rose 11 basis points (0.11%) to 4.23 percent last week and, in doing so, did the following:
Mortgage rates also ended a period of relative calm. At 11 basis points, the change in last week's 30-year rates was equal to the change of the last 9 weeks combined.
The volatility is expected to continue.
At its sixth scheduled meeting of the year last week, the Federal Reserve voted to hold the Fed Funds Rate near zero percent for the 47th consecutive time since 2008; and said that the group would continue its "wait-and-see" approach to raising the benchmark lending rate.
With labor markets improving and inflation rates beginning to rise, Wall Street expected the Fed to offer more definitive language regarding its future policy plans. Until such language is provided, then, mortgage rates will likely change on the release of any data considered important to the economy.
For mortgage rate shoppers, we could be headed into a difficult few months of "trying to grab the lowest mortgage rate possible". Mortgage rates will likely rise and fall from week-to-week. For now, though, mortgage rates remain near their lowest levels of 2014.
Mortgage rates jumped to 4.23% last week, but not all mortgage borrowers will be subject to the increase. Consistently, certain mortgage programs offer mortgage rates below the national average, which means borrowers can borrow on the cheap.
If you qualify for any of the following programs, consider giving a refinance loan application. Millions of U.S homeowners remain refinance-eligible; and, the potential savings can be huge.
Using Freddie Mac data from the second quarter, for example, the typical refinancing household saves 31% monthly.
Conventional mortgage refinances are refinances done via Fannie Mae or Freddie Mac. And, while the average conventional mortgage rate is now 4.23% nationwide, some conventional borrowers get rates lower than that.
Borrowers with exceedingly high credit scores, for example, are likely to receive mortgage interest rates below the national average; as are borrowers requesting a low loan-to-value (LTV). High credit scores include scores over 740.
Important caveat: Conventional mortgages "up-charge" for multi-unit buildings and certain condos. To get the lowest rates offered, then, you'll likely need to be financing a 1-unit, detached home.
Homeowners using the FHA Streamline Refinance will typically benefit from rates below the average conventional mortgage rate. This is because loans via the FHA's flagship refinance program are insured by the federal government, and that insurance policy gives lenders reason offer lower interest rates.
The FHA Streamline Refinance is available to homeowners with an existing FHA loan -- either as a primary or investment property. Rates are currently close to 25 basis points (0.25%) lower than a comparable conventional refinance.
The VA Streamline Refinance is another mortgage program for which rates can be lower than the weekly published rate from Freddie Mac. This is because, like the FHA Streamline Refinance, the VA Streamline Refinance is backed by the government and gives U.S. lenders a "guarantee".
Because of this guarantee, the VA Streamline Refinance can be offered at mortgage rates below the national average, giving eligible borrowers access to extremely low rates.
In August, VA mortgage rates were the lowest of all common loan types.
Mortgage rates for the USDA Streamline Refinance fall below national mortgage rate averages, too. The program, which is still in its pilot phase, is available to select homeowners with an existing USDA mortgage.
USDA mortgages, like VA mortgages, are guaranteed by the U.S. government. Therefore, lenders can offers USDA loans at "low rates" as compared to conventional refinance loans. With USDA mortgages, lenders are protected against a portion of their losses and price their mortgage rates accordingly.
Current mortgage rates are higher as compared to last week. For some mortgage borrowers, though, mortgage rates are still available cheaply. Compare today's rates to your current rate and see what's possible. Many U.S. homeowners are saving big money via refinance loans.
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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.
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2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)