Mortgage Rate Update for March 1, 2016

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Mortgage Rate Update
Zillow

Current mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow at 3.46 percent, down 1 basis point from last week.

The 30-year fixed mortgage rate hovered around 3.45 percent throughout the week before rising to the current rate.

“Last week, mortgage rates remained mostly flat in response to a relatively sedate week,” said Erin Lantz, vice president of mortgages at Zillow. “All eyes this week will be on Friday’s monthly jobs report. Forecasters are expecting a moderately strong report and disappointing data could push rates lower.”

Additionally, the 15-year fixed mortgage rate was 2.68 percent, and for 5/1 ARMs, the rate was 2.79 percent.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

*The weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

 

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Have a Massive Mortgage? Here Are Some Tips for Refinancing

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If you’re looking to refinance your home and pull out funds for home improvement, there’s good news. Lending guidelines were recently loosened on cash-out refinance transactions.

Here’s what you should know if your loan size exceeds $417,000.

First off, it’s going to cost more. Here’s why: When a mortgage loan exceeds this threshold, it moves from “conforming” to “conforming high balance” which contains a pricing adjustment for delivery to Fannie Mae or Freddie Mac. Additionally, when you elect to cash-out refinance, another pricing comes into the equation driving the terms higher than if your loan was lower and you weren’t looking to cash out your equity.

How the New Refinancing Guidelines Are Changing Costs

If you attempted a cash-out refinance on your home for a high-balance mortgage in 2015, you would have been limited to a 70% loan-to-value ratio (i.e. how much you want to refinance compared to the value of the property) with higher rates. To put this in perspective, the interest rate on a 30-year fixed-rate mortgage at the end of 2015 was 4%, assuming a loan done as “rate and term” (i.e. not pulling any money out). That same loan would cost a whopping 4.625% with a cash-out refinance, all other factors being equal. You heard that right. You’d pay 0.625% more in rate just for pulling cash out versus doing a rate-and-term refinance under the same 70% loan-to-value scenario. Freddie Mac offered the option of going as high as 80% loan-to-value with even heavier fees on loans in excess of $417,000.

The new guidelines allow competitive pricing all the way to a 75% loan-to-value ratio, with a minimum credit score of at least 700. Better credit scores, of course, always yield a better rate and fee combination as well. (You can check your credit scores for free each month on Credit.com to see where you stand.) These revised changes allow for lower loan adjustments for both the 75% loan-to-value and 80% loan-to-value ratios, to the maximum conforming high balance loan limit for your county. In the county of Sonoma, Calif., for example, this means cash-outs all the way to $554,300. Other counties such as San Francisco offer cash-out loan sizes up to $625,500.

How Jumbo Loans Come Into Play

Jumbo home loans are conforming high-balance loans that are $1 over the maximum county high-balance loan limit. In most U.S. counties, the threshold is the same $417,000 noted above, but can be higher in more expensive markets. Mortgage lenders examine the financial picture of applicants looking for big mortgages far more closely than Fannie or Freddie Mac loans, and for good reason – they are riskier to the banks.

Most jumbo mortgage loans will allow a cash-out refinance as high as 70% loan to value with at least a 700 credit score or better and good credit and income history.

Some other factors to consider when researching mortgage loan programs and cash-out scenarios:

  • If you are combining a first and second mortgage into one, be on the lookout.Fannie Mae and Freddie Mac consider second mortgages taken out after you bought the home to be cash out, and subject you to stronger home equity requirements. Loans insured by the FHA do not have this limitation and will go to a 97% loan-to-value if your intention is only to combine the first and second mortgages into one. Fannie and Freddie will refinance your loan as rate and term, which will allow a higher loan-to-value ratio (less equity) if the first and second mortgage was acquisition debt, meaning both the first and second mortgage were used to purchase the home.
  • If your first and second mortgage combined exceed $417,000, you may be able to be put on a jumbo mortgage loan program allowing you to refinance your loan as a rate-and-term refinance. You are not allowed to have made any draws or advances on your second mortgage in the past 12 months.

Before you decide on what type of refinance you want to pursue, be sure to ask questions, do your research and make sure you understand the fine print associated with the new loan.

 

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How to Get a Mortgage With Only 3% Down

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There’s potentially some good news for millions of Americans who have had trouble trying to get into a new home. Bank of America plans to offer a 3% down conforming loan aimed at giving low- and moderate-income homebuyers more access to mortgages, including counseling before and after the loan process.

Called the Affordable Loan Solution, the new mortgage product is available through a partnership with Self-Help Ventures Fund and Freddie Mac, and will let borrowers avoid private mortgage insurance (PMI), a product usually required for low-down-payment loans that can add significantly to monthly mortgage repayments.

“There is a need in today’s marketplace for more responsible mortgage products that enable creditworthy homebuyers, who meet certain income limits and other requirements, to become homeowners at an affordable entry point with comprehensive counseling,” D. Steve Boland, consumer lending executive at Bank of America, said in a statement.

While the lower down payment can be attractive to buyers without ample savings, it’s important to remember that you’ll typically pay more for the home through interest on a larger loan amount than you would with more cash down. (You can go here to figure out what your down payment should be.)

Here’s what you need to qualify for Bank of America’s new loan.

  • The 3% down payment.
  • You must purchase a primary, single-family residence, with no reserve funds required in most situations.
  • Borrowers may use secondary financing, such as an affordable second loan, grants, or even cash they have on hand. The program will also consider non-traditional forms of credit to demonstrate credit history.
  • Loan amounts will be within conforming loan limits (up to $417,000), and applicants’ income cannot exceed 100% of the HUD area median income.
  • Applicants must occupy the property, and first-time buyers will need to participate in homebuyer education through Bank of America counselors.

Bank of America said the loans will be available through all of Bank of America mortgage sales channels. According to The Wall Street Journal, the bank plans to ensure that applicants’ debt-to-income ratio of is no more than 43%.

The bank is partnering with Self-Help, which will provide post-closing counseling to any borrowers who might be experiencing payment difficulties. Loan servicing will be immediately transferred after origination to Self-Help’s designated specialty servicer, who will handle all loans regardless of future performance. Freddie Mac will purchase all of the eligible affordable mortgages originated via the Self-Help and Bank of America partnership.

Getting a Mortgage With a Low Down Payment

Lenders typically require prospective homebuyers to contribute a down payment equal to 3-20% of the sales price of the home. Loans below the 20% mark, including the 3.5% down payment mortgages offered by the Federal Housing Administration, generally require you to pay for PMI, though there are some federal programs in place that let qualified borrowers secure 100% financing. Veterans and current military members, for instance, may be able to utilize the VA loan program, which comes with no down payment or private mortgage insurance requirement.

Keep in mind, even with their relaxed or different credit standards, low down payment loans can be tricky to obtain – and, as previously mentioned, could prove expensive when it comes to fees and interest. Consumers should look into all options, including conventional financing, when buying a home. You should also check their credit scores, since a good one will generally entitle you to better terms and conditions on all home loan types. (You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your two free credit scores each month on Credit.com.) Tips for improving your credit include paying down high credit card balances, addressing unpaid collection accounts and disputing any errors with the major credit reporting agencies.

 

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Mortgage Rates Continues to Fall Hitting 3.45 Percent

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Zillow

Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow at 3.45 percent, up 2 basis points from last week.

The 30-year fixed mortgage fell to 3.37 percent on Thursday, then hovered around 3.43 percent before rising to the current rate.

“Mortgage rates were flat last week, holding near their lowest levels since 2013, on continued turmoil in global equities and oil markets,” said Erin Lantz, vice president of mortgages at Zillow. “While it’s hard to imagine mortgage rates falling much lower, putting them within striking distance of all-time historic lows, international economic news, speeches by Fed officials, and several U.S. data releases this week could continue the downward pressure on long-term rates.”

Additionally, the 15-year fixed mortgage rate was 2.71 percent, and for 5/1 ARMs, the rate was 2.69 percent.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

*The weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

 

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Mortgage Rates Fall Further, Hitting 3.50%

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans fell this week, with the rate borrowers were quoted on Zillow at 3.50 percent Tuesday, down 11 basis points from last week.

The 30-year fixed mortgage rate fell throughout the week, reaching 3.47 percent on Sunday before rising slightly.

“Mortgage rates fell last week, touching their lowest levels since mid-2013 before edging slightly higher on Monday,” said Erin Lantz, vice president of mortgages at Zillow. “This week, markets will look toward Friday’s monthly jobs report and should move upward if the data exceeds expectations.”

Additionally, the 15-year fixed mortgage rate was 2.72 percent. For 5/1 ARMs, the rate was 2.73 percent.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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Mortgage Rates Remain Low Despite Economic Uncertainty

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans rose slightly this week, with the rate borrowers were quoted on Zillow at 3.61 percent, up two basis points from last week.

The 30-year fixed mortgage rate rose to 3.63 percent on Friday and hovered there before retreating.

“Despite minor fluctuations, mortgage rates were roughly flat last week, holding near nine-month lows,” said Erin Lantz, vice president of mortgages at Zillow. “We expect more volatility this week with important GDP [gross domestic product] data on Friday and, more significantly, a Fed meeting mid-week which should provide the first read on the Central Bank’s reaction to recent financial turmoil.”

The 15-year fixed mortgage rate was 2.81 percent. For 5/1 ARMs, or adjustable-rate mortgages, the rate was 2.77 percent.

Check Zillow for rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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30-Year Mortgage Rates Continue to Trend Lower

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans fell this week, with the current rate borrowers were quoted on Zillow at 3.59 percent, down nine basis points from last week.

The 30-year fixed mortgage rate fell throughout the week, reaching 3.56 percent on Monday before rising slightly.

“Mortgage rates fell last week to their lowest levels since last April on the heels of falling oil prices and continued global turmoil surrounding growth worries in China,” said Erin Lantz, vice president of mortgages at Zillow. “With little U.S. economic data on the docket this week, more ‘flight-to-quality’ should dominate headlines until markets find a bottom.”

Additionally, the 15-year fixed mortgage rate was 2.79 percent. For 5/1 ARMs, or adjustable-rate mortgages, the rate was 2.66 percent.

Check Zillow for mortgage rate trends and up-to-the-minute rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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Mortgage Rates Fall Below 3.7%

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed home loans fell this week, with the current rate borrowers were quoted on Zillow at 3.68 percent, down 13 basis points from last week.

The 30-year fixed mortgage rate fell steadily until Friday, then hovered around the current rate for the rest of the week.

“Mortgage rates fell last week despite strong U.S. economic data as investors sought safe assets in the wake of stock market turmoil in Asia,” said Erin Lantz, vice president of mortgages at Zillow. “With rates near their lowest levels since late October, we expect rates to move cautiously upward this week.”

Additionally, the 15-year fixed mortgage rate was 2.87 percent. For 5/1 ARMs, or adjustable-rate mortgages, the rate was 2.97 percent.

Check Zillow for mortgage rate trends and up-to-the-minute rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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Mortgage Rates Still Low at 3.74%, But Volatility Likely

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans fell this week, with the rate borrowers were quoted on Zillow at 3.74 percent, down seven basis points from last week.

The 30-year fixed mortgage fell to 3.78 percent on Thursday, then hovered there before dropping to the current rate.

“Mortgage rates fell early this week as financial markets returned from the New Year’s holiday to a collapse in Asian equities, which pushed capital flows to safe assets including U.S. mortgage bonds,” said Erin Lantz, vice president of mortgages at Zillow. “We expect continued volatility this week leading up to Wednesday’s publication of the December Federal Open Market Committee meeting minutes and Friday’s all-important jobs report.”

Additionally, the 15-year fixed mortgage rate was 2.96 percent. For 5/1 ARMs, or adjustable-rate mortgages, the rate was 2.97 percent.

Check Zillow for mortgage rate trends and up-to-the-minute rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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Mortgage Rates Only Slightly Higher at 3.81% in Quiet Week

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans rose this week, with the rate borrowers were quoted Tuesday on Zillow at 3.81 percent, up six basis points from last week.

The 30-year fixed mortgage rose throughout the week, reaching 3.86 percent on Saturday before falling Monday.

“Mortgage rates increased modestly early last week, mostly due to market anomalies associated with the holiday-shortened week,” said Erin Lantz, vice president of mortgages at Zillow. “We expect another quiet couple of days in mortgage markets this week.”

Additionally, the 15-year fixed mortgage rate was 3.02 percent, and for 5/1 ARMs, the rate was 3.05 percent.

Check Zillow for mortgage rate trends and up-to-the-minute rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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