Conforming and FHA Mortgage Rates Sub-4 Percent: Is it time to Refinance?

Conforming and FHA Mortgage Rates Sub-4 Percent: Is it time to Refinance?

Freddie Mac PMMS average rates

Mortgage rates have dropped past 4 percent.

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 refinancing a mortgage or buying a home in Pleasanton. 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.

Mortgage rates have been lower for several reasons, some of which include :

  • U.S. economic growth has been slower-than-expected
  • Uncertainty surrounds Greece and the Eurozone
  • The Federal Reserve’s “Operation Twist

The Cost of Low Rates

In general, demand for mortgage bonds has been high and that’s caused mortgage rates to fall. It should be noted, however, that although the 30-year fixed rate mortgage fell below 4 percent this week, the amount of discount points required to lock that rate rose by 10 basis points, or $100 per $100,000 borrowed.

As you shop for a mortgage, pay attention to more than just rates. Low rates are great, but not when they come with high costs.

Have a Plan for your Purchase or Refinance in the Bay Area

I love to work with readers that find my information on the Mortgage and Housing Market helpful in your decision making process. As a Mortgage Planner at Vintage Mortgage Group in Pleasanton I am in a unique position to help you capitalize at any point in the market. Contact me below today to help you with your purchase or refinance.

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