What’s up with mortgage rates? Jeff Lazerson of Mortgage Grader in Laguna Niguel gives us his take.
Rate news summary
From Freddie Mac’s weekly survey: For the first time in over a month, the 30-year fixed rate dropped below 4 percent, this week averaging 3.95. This is a nice seven basis point drop from last week’s 4.02 percent. The 15-year fixed averaged 3.19 percent, eight basis points better than last week’s 3.27 percent.
The Mortgage Bankers Association reported a 4.4 percent loan application volume increase from the previous week.
Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $424,100 loan, last year’s rate of 3.64 percent and payment of $1,938 was $75 less than this week’s payment of $2,013.
What I see: Locally, well qualified borrowers can get the following fixed rate mortgages at zero cost: A conventional 15-year at 3.25 percent, a Federal Housing Administration and Veterans Administration 15-year at 3.375 percent, a conventional 30-year at 4.0 percent, an FHA and VA 30-year at 3.50 percent, a conventional 15-year high-balance ($424,100 to $636,150) at 3.375 percent, a 30-year high-balance at 4.125 percent, an FHA and VA high-balance at 3.75 percent, a 30-year jumbo (over $636,150) at 4.50 percent.
What I think: Mortgage shopping is complicated, time-consuming and plenty tough to wrap your head around because you typically do it on such an irregular basis.
And, the stakes are high in terms of just getting approved, the amount of settlement charges you incur, how much mortgage interest you will pay over time, and overall experience satisfaction.
For example, a quarter-point interest rate difference on a $600,000 loan can cost you (or save you) nearly $32,000.
Borrower satisfaction is the highest when going with a loan officer referred by family, friends and co-workers, according the Stratmor Group’s most recent national borrower satisfaction index. Less satisfying were Realtor referrals and below that…