In the sixth straight week of decline, the 30-year fixed-rate mortgage averaged 3.82% for the week of May 30. This is down from 3.99%. It was the lowest level since September 2017. Borrowers are receiving exceptional rates compared to last year at this time, when 30-year mortgages were averaging 4.54%. The monthly payment on a $200,000, 30-year fixed-rate mortgage at 3.82% is about $934 — versus $1,018 at 4.54%. The 30 year fixed rate has averaged 4.24%, down from 4.54% a year ago. The 15-year fixed-rate mortgage averaged 3.28%, down from 3.46%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.52%, down eight basis points.
A fixed rate mortgage charges a set rate of interest that does not change throughout the life of the loan. Although the amount of principal and interest paid each month varies from payment to payment, the total payment remains the same, which makes budgeting easy for homeowners. The interest rate for an adjustable rate mortgage is a variable one. The initial interest rate on an ARM is set below the market rate on a comparable fixed rate loan, and then the rate rises as time goes on. If the ARM is held long enough, the interest rate will surpass the going rate for fixed-rate loans.
Freddie Mac Chief Economist Sam Khater has stated that most mortgages taken out in 2018 are now eligible to be refinanced. With more than $2 trillion of outstanding conforming conventional mortgages, refinancing now can save homeowners hundreds and sometimes thousands on their loan term.
While the low rates are in place, you need to do some comparison-shopping to get the best possible rate. It’s best to get at least 3 or 4 mortgage quotes. You might feel as though you have to avoid doing this because too many inquires will lower their credit score, however, this is not the case. FICO allows for multiple credit inquires when consumers are shopping for a loan.
Many consumers have an unrealistic notion of what is required to take out a home loan. Most people believe the minimum FICO score lenders require for mortgages is 650. A credit score as low as 580 may still qualify you for a mortgage. Potential home buyers also think the minimum down payment required is 10 – 20%. The truth is many types of loan allow borrowers to make down payments as low as 3%.
According to the Mortgage Bankers Association, mortgage applications are picking up. They increased 1.5% last week, while refinancings jumped 6%.
Buyers who find the right home at the right price are likely to see steady and possibly lower mortgage rates throughout 2019. The Federal Reserve has no intention of raising rates anytime soon, and there’s been conversations about another rate cut. If you’re considering purchasing a home this year, you’ll want to calculate what your monthly mortgage payment would be, and there are many online calculators that can provide you with this guesstimate.
First Florida Mortgage Can Help
At First Florida Mortgage, we are a Florida-based mortgage company. We want to help you through every step of financing your new home. Fill out the quick contact form or call First Florida Mortgage today at 1-800-501-2131 to speak with one of our Florida mortgage specialists and get a free good faith estimate.