It's hard to window shop for mortgage rates anymore. Markets have changed and so do rates -- sometimes four or five times per day.
So, when you're looking for "ballpark mortgage rate", where do you do turn?
A great mortgage lender will want your information before giving you a quote, because great lenders know rates depend on factors like loan amounts, property types and credit scores.
And, bad lenders -- well, nobody wants to work with a bad lender.
Because it's so hard to get real-time mortgage rate information, lots of sites have popped offering this information. These "mortgage rate surveys" claim they're providing today's interest rates.
However, mortgage rates can vary by as much as 50 basis points (0.50%) between mortgage rate surveys, and rates are rarely in-line with an actual rate quote from an actual mortgage lender.
So, why the differences? Why do mortgage rate surveys show so such different rates? And which can you believe?Click to see today's rates (Jan 16th, 2017)
Mortgage rates differ between home lenders. The same borrower may be offered many different rates by competing lenders, even for exactly the same loan. That's because lenders are competing businesses with individual pricing policies.
Mortgage rates also differ between borrowers. The same mortgage lender may offer varying interest rate quotes to different applicants -- even for the same loan product. That's because every borrower carries an individual risk profile.
Home loan rates can vary by property type and other risk factors. For example, a mortgage secured by a rental or investment home is more likely to go into foreclosure than the same loan for a primary residence. For this reason, rates for investment property are higher.
The home loan program also affects the rate you get. VA loans, for example, are guaranteed by the Department of Veterans Affairs. This means that banks are unlikely to take a loss. By contrast, conventional (non-government) loans are not guaranteed. Less risk means a lower rate.
You are different from your neighbor, after all, so your loan will be different from your neighbor's.
But if you insist on finding a "ballpark" interest rate, you can find a ton of them online -- those mortgage rate surveys.
Mortgage rate surveys are snapshots of the market. They're like lists:
(1) an average mortgage rate
(2) for a specific mortgage borrower type
(3) for a given period of time
Most of them have a lot of really, really fine print at the bottom. It might state that the quotes only apply to borrowers with loan amounts under $424,100, putting at least 20 percent down, with FICO scores exceeding 740. Or it might simply indicate that the survey cannot guarantee the accuracy of the posted information.
Furthermore, mortgage rates change all the time -- several times daily, even. So, even if you meet the assumptions made by mortgage rate survey online, you're going to miss the timing of it.
The rate you see online may have already expired. The rate you get "right now" is the rate you can take to the bank.Click to see today's rates (Jan 16th, 2017)
There are a large number of mortgage rate surveys available online and in print. This is a review of some of the more common ones.
Freddie Mac is a government- backed entity which buys mortgages from banks and sells them to investors.
The organization is highly qualified to answer the question, "What are today's mortgage rates?" if you want general information or trends.
Here's how they do it.
Each week, Freddie Mac surveys about 125 lenders and asks them about their going rate for borrowers buying a detached single-family home with 20 percent down, a conventional loan and excellent credit scores.
Most banks reply to Freddie Mac no later than Tuesday afternoon. Results are published Thursday morning. This two-day delay means the survey data has little to do with what you could actually get from an actual lender.
Freddie Mac data only applies to loans with twenty percent down, and does not consider government-backed mortgages either.
The Mortgage Bankers Association (MBA) is the largest mortgage banker trade group and, since 1990, it too, has produced a rate survey.
However, the MBA does its survey a little differently.
For the MBA's mortgage rate survey, actual mortgage application information is collected from member banks over the course of a week (Saturday through Friday).
The MBA then calculates the "average contract rate" for many loan types. They include fixed-rate and adjustable mortgages, conforming (Freddie Mac and Fannie Mae) home loans, jumbo mortgages, and government-backed home loanprograms like FHA and VA.
According to the trade group, "more than 75 percent of U.S. mortgage applications" make it into their weekly survey.
The survey is released Wednesdays after a 5-day delay.
An advantage of the MBA survey is that it includes many different loan types. The downside, aside from the fact that the information is five days old, is that the source is loan applications, not loans closed.
Mortgage rates can change a great deal between the application and closing dates.
Mortgage-software provider Ellie Mae publishes a mortgage rate report, too, known as the Origination Insight Report.
Using data from the millions of mortgage applications it helps mortgage lenders to process each year, Ellie Mae publishes average rates for actual closed mortgage loans for most common borrower types, and for many popular products.
For example, the Origination Insight Report shows the average rate FHA borrowers received; and VA borrowers received; and, rates for conventional mortgage loans, too.
Of all the published surveys, the Origination Insight Report is likely the most accurate report, but it's only published monthly, and the data are weeks out of date.Click to see today's rates (Jan 16th, 2017)
Daily and weekly mortgage rates can also be found on common consumer news websites such as Bankrate.com, HSH.com, Zillow, and in the sidebar of just about every personal finance business out there.
These rates are typically "advertised" mortgage rates, though, and -- like the MBA survey -- don't account for actual rates on closed loans.
That said, for ballpark shoppers, advertised rates can be more helpful than "closed rates" from Ellie Mae. When you want to know "what are mortgage rates doing today", tracking real-time changes can let you know if rates are rising or falling, at least.
Caveat: Be sure to check assumptions!
Sometimes, online mortgage rate advertisements get "loose" with their interest rate assumptions. If you're shopping for a low-downpayment loan, make sure your preferred online site isn't showing you a loan with 20 percent down.
Mortgage rates can vary wildly.
It can be tough to shop for mortgage rates online and mortgage rate surveys do little to simplify the process. It's often best to right to the source.
Get today's live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.Click to see today's rates (Jan 16th, 2017)
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)