2016 is a year for low mortgage rates, it seems.
For the sixth straight week, government agency Freddie Mac reports a drop in 30-year conventional fixed rate mortgage rates. Rates for the 15-year fixed rate mortgage and the 5-year adjustable rate mortgage (ARM) are lower, too.
The streak is making Wall Street (and consumers) look foolish.
It was widely predicted that mortgage rates would be higher in 2016. So far, those calls have been wrong. Rates have improved nearly every day since December 29 and we're rapidly approaching the lowest rates of the last 3 years.
Even better -- the streak may just be warming up.
Global economic weakness and a plunge in global equities markets have sparked a bout of safe-haven buying that seems to be self-reinforcing. It's a patten that's bad for your stocks, but great for your rates.
If you're buying a home or thinking of a refinance, current mortgage rates are currently in your favor.Click to see today's rates (Jun 30th, 2016)
The average 30-year conventional mortgage rate dropped 7 basis points (0.07%) last week, landing at 3.65%, according to Freddie Mac.
The Freddie Mac rate, which is based on a survey of 125 U.S. lenders, is an average of the interest rates made available to prime mortgage borrowers where a "prime borrower" is one with credit scores of at least 740; a verifiable source of income; and who is requested purchase loan with at least twenty percent down.
To lock the Freddie Mac reported rate requires an average of 0.5 discount points.
Discount points are one-time loan fees paid at the time of closing. Each whole discount point carries a cost of one percent of your loan size such that this week's average discount point cost of 0.6 would cost a San Francisco homeowner $3,753, assuming a loan at the local conforming loan limit of $625,500.
However, if you're actively shopping for a loan, you'll notice that today's live rates are a bit lower that what Freddie Mac reports.
The discrepancy between Freddie Mac's reported rates and today's "real" mortgage rates is a function of timing. Freddie Mac's survey concludes early in the week, and this week's mortgage rates made large improvements late in the week, after the close of the survey.
Conventional mortgage rates may be closer to 3.60%.
You may also see different rates if you're applying for a non-conventional mortgage (e.g.; FHA loan, VA loan, USDA loan, jumbo loan), or if you're doing a home loan refinance.
Refinance mortgage rates are often slightly above purchase rates; while rates for FHA, VA, and USDA loans are often lower.
Regardless, if you're shopping for a loan -- any loan -- expect to see the lowest mortgage rates in more than a year. Pricing is at a 12-month best and has trended better since the New Year.Click to see today's rates (Jun 30th, 2016)
With today's mortgage rates ratcheting downward, literally millions of U.S. homeowners are now eligible for a home mortgage refinance.
Many more are "in the money".
According to the government, a homeowner who is "in the money" has a loan balance over $50,000; has more than 10 years remaining on its mortgage; and has a mortgage rate 150 basis points (1.5%) above today's market rate.
Some of the more popular refinance programs among today's homeowners include:
The conventional mortgage refinance is the refinance of an existing mortgage to a loan backed by Fannie Mae or Freddie Mac. The loan you're refinancing can be of any type (e.g.; FHA, jumbo).
You can even refinance a home for which you paid cash and currently owe nothing.
Since 2012, as home values have climbed, the conventional refinance has been popular among current homeowners who used an FHA mortgage to purchase their home.
By refinancing their FHA loans into conventional ones, homeowners realized they could get rid of FHA MIP to save big money. A refinance like this works best for homeowners with at least 10% equity in their homes.
The FHA Streamline Refinance is an exclusive mortgage refinance program available to homeowners with mortgages insured by the FHA. The FHA Streamline Refinance requires very little paperwork, requires no home appraisal, and allows for low credit scores.
According to program guidelines, you can be in-between jobs and still get FHA Streamline Refinance-approved, so long as you've been paying your mortgage as agreed.
Because it waives most documentation and verifications, FHA Streamline Refinance loans can close quickly and with very little hassle.
The VA Streamline Refinance is available to homeowners with existing VA mortgages only. The program allows for unlimited loan-to-value and waives the paperwork typically required with a refinance.
Homeowners using the VA Streamline Refinance are required to show a history of making on-time payments and can use the program to take cash-out for certain home improvements.
VA mortgage rates are typically the lowest of all government-backed mortgage types.
The Home Affordable Refinance Program -- often called "The Obama Refi" -- gives homeowners whose homes have lost value since purchase an opportunity to refinance to today's low rates.
The HARP program is in its second iteration and today's mortgage guidelines are "easier" as compared to several years ago. If you applied for a HARP mortgage and were turned down in the past, it's a good time to try again.
HARP allows for unlimited LTV. The program expires December 31, 2016.
Missed last year's low mortgage rates? They're back. Mortgage rates are their best in a year and they're headed for the lows of 2013. It's an excellent time to comparison shop your rates.
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 (Jun 30th, 2016)
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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2016 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)