Rates on Home Purchase Loans Hit Four Month Low
It's no secret that interest rates have been bouncing up and down for home mortgages. However, the MBA, or Mortgage Bankers Association, recently released a report which had some surprising information for both lenders and home buyers alike. One of the most surprising findings was that rates across the board for home loans fell to the lowest point since last June.
On average, a conforming 30 year fixed-rate mortgage fell to 4.39% from 4.46%. Likewise, a jumbo 30 year fixed-rate loan for home fell to 4.43% from 4.51%. 15 year fixed-rate mortgages saw their average interest rate fall to 3.51% from 3.53%. In all three cases, interest rates have not been this low in four months.
While this is definitely the type of news that mortgage lenders will want to stay on top of, it is also important information for potential buyers who are looking for the best possible rate when it comes to their new home loan or even for those individuals were looking to refinance their current loan with more favorable rates.
Although it is easy to make a list of the problems that have come since the housing crisis of 2007, there are also some interesting benefits that have actually strengthened the overall health of the housing industry. One of the most pronounced benefits is the fact that many individuals are better educated now about how interest rates and other lending costs affect their monthly budget than ever before. In the past, back then individuals who were seeking a loan were often interested only in purchasing the most expensive house that a bank would loan them money for. These days, however, many individuals understand how important it is to get terms that are as favorable as possible in order to ensure that they don't hurt the bottom line for their family just so that they can finally use their goal of home ownership.
While these low rates are not likely to continue to fall, it does make it more attractive now than at any point in the last few months for qualified individuals to seriously consider whether or not the time is right for them to finally purchase the home that they have always wanted. When an individual takes the time to negotiate other costs associated with the mortgage, they can actually get along that is dramatically less expensive now than if they had gone shopping for a mortgage just last spring.
While the MBA's refinance index has shown a recent decrease of 1%, ARM loans, or adjustable rate mortgages still account for 7% of all home purchase loan applications, up 1% from just a week earlier.