Falling mortgage rates make owning a home more affordable. Mortgage rates are directly tied to monthly mortgage payment so as mortgage rates drop, so does the cost of home-ownership.
It’s a money-saving time to buy a home in Worcester County area — or to refinance one. Mortgage rates have never been this low in history.
According to Freddie Mac, last week, the average 30-year fixed rate mortgage fell to 3.87% nationwide for borrowers willing to pay an accompanying 0.8 discount points plus closing costs. 0.8 discount points is a one-time closing cost equal to 0.8 percent of your loan size, or $800 per $100,000 borrowed.
For buyers and refinancing households throughout Massachusetts , adjustable-rate mortgages are a relative bargain as compared to fixed-ones.
According to Freddie Mac’s weekly survey of more than 125 banks nationwide, Worcester mortgage applicants electing for a conventional ARM over a conventional fixed-rate mortgage will save 105 basis points on their next mortgage rate.
“Conventional” loans are loans backed by Fannie Mae or Freddie Mac.
Today’s average, conventional 30-year fixed rate mortgage rate is 3.91% plus points and closing costs. The average rate for a comparable 5-year ARM is 2.86%, plus points and closing costs.
In other words, for every $100,000 borrowed, a conventional 5-year adjustable-rate mortgage will (more…)
As mortgage rates drop, so do housing payments. It’s a good time to consider refinancing your home, or making an offer on a new one. Mortgage payment affordability has never been so high in history.
According to Freddie Mac, the average 30-year fixed rate mortgage rate is now 3.94 percent — an all-time low — with an accompanying 0.8 discount points. This means that in order to get access to the 3.94 percent rate, Worcester homeowners and home buyers should expect to pay a loan fee equal to 0.8% of the borrowed amount, plus “normal” closing costs.
Last week, the average 30-year fixed rate mortgage rate was 3.99 percent with an accompanying 0.7 discount points.
Mortgage rates in Massachusetts have been in decline for most of the year. Since peaking in early-February, the average home owner’s principal + interest payment on a 30-year fixed rate mortgage had now dropped by 12.2 percent.
Here is how mortgage payments compare, then and now, not accounting for your individual tax-and-insurance escrow :
February 10, 2011 : Payment of $539.88 per $100,000 borrowed
December 15, 2011 : Payment of $473.96 per $100,000 borrowed
For existing homeowners, the dramatic drop in payments is reason to reach out to your loan officer. A refinance could save you tens of thousands of dollars over the life of your loan — especially if you chose to refinance your mortgage into a 15-year program.
For home buyers, today’s low rates present an interesting opportunity.
Mortgage rates are the key factor in determining your monthly housing payment so, with average mortgage rates below 4 percent, it’s no wonder home affordability is cresting. However, the housing market is showing signs of recovery. Home supplies are dwindling, buyer demand is rising, and the economy appears to be mending.
Home prices are expected to rise in 2012 and, as they do, they’ll take housing payments with them. The best time to buy a home may be now; before the recovery completes.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage is 4.00 percent nationwide — roughly the same rate as it’s been for 5 weeks.
During that times, rates have ranged between 3.97 and 4.02 percent with an accompanying 0.7 discount points, plus “typical” closing costs. Closing costs vary by state and 1 discount point is equal to 1 percent of your loan size.
In other words, to get the weekly, published Freddie Mac rate, borrowers in Massachusetts should expect to pay a complete set of fees to their respective lenders. The larger the loan, the higher the costs. “Low-fee” and “no-fee” loans are available, too — typically in exchange for a slightly rate.
A breakdown of the Freddie Mac survey shows that interest rates and discount points vary by region. Typically, states in the West Region offer the lowest rates but with the highest costs. East Region states work in reverse; rates are often highest but the accompanying points are fewest.
With mortgage rates at all-time lows, you may be asking “Is now a good time to refinance?”. This short interview from NBC’s The Today Show offers good insight.
Refinancing a mortgage is about more than just “low rates”. For example, there are costs associated with giving a new mortgage and even with the average, 30-year fixed rate mortgage near 4 percent, the costs of a such a move can outweigh the benefits — both in the short- and long-term.
The video originally ran in September when mortgage rates averaged 4.09%. Rates are different today, but the offered advice remains relevant.
The lowest rates come with the highest costs. Consider a slightly higher-rate option from your bank.
Falling home values may make it harder to qualify for a refinance in the future. Your best time to act may be now.
If you’re many years into a 30-year loan, you can consider switching to a 15-year mortgage to avoid “resetting” your term.
And, lastly, the interviewee makes a strong point that your refinance should save you enough money to make paying the closing costs “worth it”. Make sure the break-even point on your closing costs versus your monthly savings occurs within a reasonable time frame.
At 4 minutes, the The Today Show video is short, but dense with quality information. For follow-up on whether a refinance makes sense for your situation, be sure to talk with a qualified loan officer. Feel free to contact me any time to discuss your options and I can put you in contact with a dependable, trustworthy and experienced loan officer. Don’t just pick a company or individual off the internet or from a radio ad. Work with a local loan officer that will be accountable to you.
For the first time in more than 40 years, data from Freddie Mac’s weekly Primary Mortgage Market Survey shows the average 30-year fixed rate mortgage falling below 4 percent, dropping to 3.94 percent nationwide. It’s the lowest average 30-year fixed reading in the survey’s history.
In addition, Freddie Mac shows the 15-year fixed and 5-year ARM making new all-time lows, too, falling to 3.26% and 2.96%, respectively.
It’s a great time to be shopping for a mortgage or buying a home in Worcester. Because mortgage rates are dropping, housing payments are dropping, too. As compared to 8 months ago, for every $100,000 borrowed, homeowners now pay $66 less principal + interest each month.
On a $300,000 mortgage, that’s $71,280 saved in 30 years. (more…)
For buyers and refinancing households throughout Massachusetts , adjustable-rate mortgages are a relative bargain as compared to fixed-ones.
